CMA, ARM, Conventional Loan, HOA—are you confused yet? Don’t worry; most people are confused by the myriad of Real Estate terms.
We recently came across this great article explaining 14 of the most common real estate terms and thought we’d add a few of my own to the list:
Commission: The amount of money paid to the buyer's agent (if there is one) as well as the seller's agent (if there is one). These amounts are negotiable and compensate the agent for their work.
Dual Agency: When an agent represents both the buyer and the seller in the transaction. If this is to occur, it requires permission from all parties involved.
Executed Contract: This means the contract has been signed by all parties involved (usually the buyer and seller). Until the contract is signed by all parties, it is not valid or enforceable, so it’s important everyone signs the contract quickly.
REO: Real Estate Owned means the home is typically owned by the bank.
Short Sale: When a person puts their home on the market and the property’s market value is less than the balance of the money owed on the mortgage. This is usually associated with drastic falls in the market value of the property. Basically, this means that the seller owes more money to the bank than the home can be sold for in today’s market. It’s a tough break for sellers, but can be a great opportunity for buyers. The downside to short sales is that they can take a very long time to close (6-12 months), and there is no guarantee they will close, as any banks involved have to agree to take less money for the house than they are owed by the seller.
Have a question about a common real estate term? Send an email or call! [email protected] or (515) 249-5560
