20 Real Estate Terms You Should Know

Dated: October 19 2020

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There is a lot of terminology that is used in the real estate industry. Whether you are buying a home for the first time, or you are just unsure of something, we compiled a list of terms and their definitions.

Adjustable Rate Mortgages vs. Fixed Rate: interest rates with an adjustable rate mortgage can fluctuate, and will usually start at a lower rate than fixed rate mortgages. Fixed rate mortgages are set when you take out a loan.

Amortization: a system of paying off a mortgage that combines interest and principal for your payments, instead of paying off the interest first

Appraisal: an estimate of the home's value based on comparable area homes and an investigation of the property (required by your lender)

Buyer's Agent vs. Listing Agent: There are typically two agents involved in a home purchase. When you are buying home, the "buyer's agent" represents you, and the "listing agent," who represents the home seller.

Closing: completing the sale of a property by meeting, signing documents, and exchanging funds

Closing costs: fees associated with purchasing a home. (typically 2-5% of the purchase price of the home, not including the down payment)

Contingencies: conditions that must be met before your deal can go through (financial contingencies, appraisal contingencies, inspection contingencies)

Contracts & offers: when you find a home that fits your needs, you place an offer. A contract is made when the offer is accepted.

Earnest money: a refundable deposit given with an offer; a payment to the seller to show that you are serious about buying the home.

Equity: the amount of your home you actually own, the difference between the home's market value and the unpaid balance of the mortgage

Home warranty: fee paid to protect against future problems (heating, plumbing, other maintenance) 

Inspection: an examination of a home's plumbing, electrical, walls, foundation, HVAC, appliances, and etc. An inspection is scheduled after you make an offer, and typically costs between $500 - $800.

Listings: homes that are currently for sale

MLS: Acronym for Multiple Listing Service. It is an organization that gathers and distributes home and property information to its private members.

Pre-approval: a letter from the bank that provides an estimate of how much they will lend you. You should obtain this before you even look for a home.

Private mortgage insurance: premium paid by the buyer to protect the lender if you cannot pay your mortgage. 

Real estate agent: a professional who has earned a real estate license. Agents work under the supervision of a broker. View the Tennessee requirements here.

Real estate broker: a real estate agent that has passed a state broker's exam, and has met the minimum transaction amount required by their state

REALTOR®: a real estate agent that is a member of the National Association of REALTORS®. REALTORS® uphold standards and the code of ethics set out by the organization.

Title insurance: an insurance policy that protects owners and lenders against loss or or damage

Do you have questions about real estate? Are you looking to buy or sell a home? Maybe you are even looking to start a new career! We would love to hear from you. Reach out to us, 615.815.1295

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Holden Parker

Meet Holden. Holden is the Director of Digital Marketing at Music City Experts. He’s the face behind social media, blog articles, website content, and graphic design for the firm. He has been with t....

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