6 More Real Estate Terms Everyone Should Know

Whether you’re studying for the real estate license exam, an agent refreshing their lingo, or a first-time buyer who wants to understand what goes into buying and selling a house, it’s important to understand the industry terms. This way you can get the best deals, know what you’re doing, and thrive in the fast-paced real estate industry.

As-Is

If you hear about a property being sold as-is, you’re looking at a house that will likely need repairs after purchase. The seller is unable or unwilling to make the repairs themselves before selling the house, and is usually selling the house at a reduced price because of it. This could be because the repairs are too expensive, could hold up the sale when the market is hot, or any other number of reasons.

It’s important to be aware that, under Massachusetts law, the seller doesn’t actually have to disclose all of the issues a house has, even if selling it as-is. However, home inspections will typically reveal the issues, so if you’re selling a house as-is, it’s better to be upfront and fair with your pricing. 

Blind Offer

A blind offer is when a buyer makes an offer on a property they haven’t seen. It doesn’t matter if they could have or not – they’re willing to pay for the house despite not coming to see it themselves. This often occurs when the market is extremely hot or if the home is in a highly competitive area. The buyer wants to buy it right away.

Closing Costs

Closing costs are an assortment of fees paid by both buyers and sellers at the close of a real estate transaction. They can be charged by a lender, the title company, attorneys, insurance companies, taxing authorities, homeowner’s association, real estate agents, and other closing settlement related companies.

These costs can range from around 1% to 7% of the sale price, but sellers typically pay anywhere from 1% to 3%.

Lien

A lien is a claim or charge on a property for the payment of a debt. If you don’t make mortgage payments, the lender has the right to take the title to your property.

Mortgage

A mortgage is a type of loan used to purchase or maintain a piece of real estate, most commonly a house or piece of land. The borrower agrees to pay the lender – often a bank – regular payments over time. These payments are typically divided into manageable chunks that accrue interest so the lender makes a profit. A borrower must apply and be approved for the mortgage loan, and the property itself serves as collateral to secure the loan.

Pre-Approval

A pre-approval requires a potential home buyer to fill out an application that allows the lender to assess their financial situation before agreeing to lend them money. The lender looks over their debt-to-income ratio, ability to repay the loan, and their creditworthiness. If they meet the criteria, the lender can give the home buyer a letter stating the exact amount they have been pre-approved for in regards to the loan.

Real estate terms can seem intimidating to some, but they’re extremely important to know when you’re involved in the industry. Always keep your knowledge of the latest buzzwords up to date and you’ll become a pro buying and selling houses in Massachusetts.