Even if you’ve sold a home before, deciphering real estate jargon can still seem impossible. There’s a lot of unique terminology you should know if you want to make the most of your sale, which means it’s crucial to be well-versed in some of the most common home selling terms before you list. If you’re still confused by contingencies or trying to decode disclosures, our glossary of real estate terms is here to get you on track.
15 Home Selling Terms, Explained
Here’s our A to Z list of the most important home selling vocab every Raleigh area seller should be familiar with. If you don’t see a specific term listed here, feel free to give our team a call at 919-235-0007—we’d love to answer your questions!
Appraisal
The estimated market value of your property. Oftentimes a buyer will need to have a home appraised in order to secure financing.
As-Is
Listing a home “as-is” means that you’re selling it in its current state. This term tells buyers that you aren’t willing to make any changes or take money off the price—they will be responsible for handling all repairs.
Closing Costs
This blanket term describes all the extra fees that come with closing on a home, which are usually deducted from the profit you make on the sale. Common closing costs include agent commissions (for you and the buyer), title fees, loan payoff costs, and any outstanding taxes or expenses.
Commission
This is what you’ll pay your agent (and the buyer’s agent) for their services. Commission is often negotiable and tends to be 5 to 6% of a home’s sale price, with around 3% going to each agent.
Comparative Market Analysis
Often abbreviated as CMA, this detailed evaluation of your home’s value is based on similar properties that have recently sold in your neighborhood.
Contingency
A contingency is a certain condition that must be met before a home is sold. If a contingency is not met, the buyer or seller can exit the deal, typically with no penalties. Financing, home inspections, and appraisals are just a few common contingencies.
Disclosures
Disclosures refer to any specific defects in a home that you’re legally obligated to share with a buyer. Required disclosures vary from state to state and even town to town, but your agent should be familiar with the most common types in your area.
Earnest Money
This is a security deposit submitted by a buyer after they’ve put in an offer to show that they’re serious about purchasing your home. The money is typically applied towards their closing costs if the sale moves forward.
Escrow
An escrow account is normally set up by a lender to hold earnest money until the sale of a home. However, escrow accounts can also be used by lenders to hold real estate taxes and insurance premiums as you pay off your mortgage.
For Sale by Owner
Sometimes abbreviated as FSBO, this is when a homeowner tries to sell their property without the help of an agent, usually to avoid paying commission.
Real Estate Agent
A real estate agent is someone who has passed a real estate exam and possesses a license that allows them to buy or sell homes in a specific area.
Real Estate Broker
Real estate brokers are agents who have received additional education, passed a broker exam, and completed a certain number of transactions. Most agents work under the supervision of a broker.
Realtor®
A Realtor® is an agent or broker who is a member of the National Association of Realtors. Realtors® are required to follow a strict code of ethics and pay annual membership dues.
Staging
Staging is the process of styling and updating your home for potential buyers. It can involve cleaning, repainting, decluttering, making repairs, and moving around furniture to make your space look its best.
Under Contract
When a home is under contract, the seller has accepted an offer from a buyer, and that buyer has the exclusive right to purchase the property.
Thinking About Selling Soon?
If you’re getting ready to list your home, Linda Craft & Team can help you navigate every step of the process. Just reach out to us at 919-235-0007 to learn more about the services we offer to our sellers, and let us know if you have any questions. We’d be happy to lend you our 350 years of combined expertise!