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Real Estate Terms You Should
Know
Get familiar with these commonly
used terms in the real
estate industry.
If you are involved in buying or
selling real estate. Or, just
for your general knowledge.
There are numerous terms,
commonly used jargon, in the
real estate industry that make
up a peculiar language all its
own, which would be beneficial
for you to learn.
This jargon isn’t difficult to
master, but there is real danger
of hearing and using words you
don’t fully understand.
Following are some basic terms
that are often misunderstood:
MLS—Multiple Listing Service
An organization that
collects, compiles, and
distributes information about
properties listed for sale by
its members,
who are real estate brokers.
Membership isn’t open to the
general public, although
selected MLS data may be sold to
real estate listing websites.
MLS’s can be local or regional.
There is no “one” MLS covering
the entire nation. |
PITI
Principle, interest,
taxes and insurance (PITI) are the
four components of a monthly
mortgage payment. Principal refers
to the part of the monthly payment
that reduces the remaining balance
of the mortgage. Interest is the fee
charged for borrowing the money.
Taxes and insurance refer
to the amounts that are paid into an
escrow account each month for
property taxes and mortgage
and hazard insurance.
CMA
Comparative Market
Analysis. A CMA is a report that
shows prices of properties that are
comparable to a subject property and
that were recently sold, are
currently on the market or
were on the market, but not sold
within the listing period.
Closing
Costs
The entire package of
miscellaneous expenses paid by the
buyer and seller when the
transaction closes. These costs
include the brokerage commission,
mortgage-related fees,
escrow or attorney’s charges,
recording fees, title insurance,
etc. Closing costs generally
are paid through escrow.
Contingency
provision of an agreement
that keeps the agreement from being
fully legally binding until a
certain condition is met. One common
example is a buyer’s contractual
right to obtain
a professional home inspection
before purchasing the home.
Title
Insurance
An insurance policy that
protects a lender’s or owner’s
interest in real property from
assorted
types of unexpected or fraudulent
claims of ownership. It’s customary
for the buyer to pay for the
lender’s title insurance policy.
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For Buyers |
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