Yes, you don’t necessarily need to have a real estate license to find your dream home, but it helps to understand the terms if you’re going to contact a real estate agent in the market, whether they are yours or the sellers. With the help of this guide, you will become fluent when it comes to real estate jargon in no time!
- Comparative Market Analysis (CMA): This is an in-depth analysis conducted by a real estate agent to determine the approximate value of a home-based on other homes of similar conditions, size, features, and age sold that are also located in the same area.
- Approved for Short Sale: This term essentially means that the homeowner’s bank has significantly reduced the listing price on a property and is now ready for resale.
- Buyers Market: This refers to specific market conditions for homes when they outnumber buyers in the market. As such, homes sitting on the market for some time experience price drops.
- Comps: Also known as comparable sales are properties in any area that have been sold in the last six months that reputable real estate agents use to determine the value of a home.
- Days On Market (DOM): DOM refers to the number of days a house listing has been active.
- Short Sale: A short sale occurs when the homeowner cannot pay the lender back and owes more than the home is worth. And as such, to avoid foreclosure, both parties have agreed to lower the property’s listing price to sell it.
- Back-End Ratio: This is one of the two debt-to-income ratios that the lender analyzes to see if a borrower is qualified to apply for a home loan.
- Listing Price: This is the property price that the seller or the lender sets.
- Multiple Listing Service (MLS): Real estate agents use this database to list properties for sale.
- Sellers Market: This refers to a market condition in which buyers outnumber homes for sale. In this market, bidding wars are quite common.
- Depository Institutions: These are banks, whether savings and loans or credit unions. They are responsible for underwriting and for setting the home loan pricing.
- Debt-to-Income Ratio: This ratio compares the homebuyer’s expenses to their gross income.
- Housing Ratio: This is one of the two debt-to-income ratios analyzed by the lender to see if a borrower qualifies for a home loan.
- Loan Estimate: This is a three pager sent to the loan applicant approximately three days after applying for a loan and contains loan terms, monthly payment, and closing closets.
- Loan-to-Value Ratio: This is the loan amount divided by the house’s overall value. Lenders generally offer lower LTV ratios.
- Foreclosure: This is a property that is taken back by the bank or lender when the owner has failed to make significant payments.
- Mortgage Broker: This is a licensed individual working on behalf of the home buyer to obtain financing for the property through a lending institution or a bank.
- Origination Fee: This fee is charged by either the lender or the broker to first initiate and complete the property loan application process.
- Pre-approval: This is a thorough assessment based on the borrower’s income, assets, and other data to determine the amount of loan he qualifies for. Real estate agents also help homebuyers get preapproval from banks closer to the closing date.
- Underwriting: In this process, a lender accesses the home loan applicant’s total income, assets, credit scores, and any risk involved in approving the mortgage application.
- Conventional Loan: A government agency does not guarantee this property loan.
- Down Payment: It’s a significant chunk of the home’s original value paid by the buyer upfront or over the course of the construction period if it is a pre-construction property. The amount is set based on the minimum required by the loan type.
- Piggyback Loan: This is a series of loans bundled together to avoid obtaining private mortgage insurance. While one loan would cover about 80% of the home’s value, the other loans would cover either 10% or 15%, leaving the rest to be contributed by the buyer.
Are you ready for your next home in Alpharetta? Reach out to our real estate team at AlpharettaZen now to get started.