Unraveling Real Estate:
Key Terms Every Buyer and Seller Should Understand

Demystifying real estate terminology is akin to unlocking a new level of home buying or selling confidence. By having these terms in your vocabulary, you're not just speaking the language; you're also equipped to make informed, strategic decisions. Whether you're collaborating with agents, diving into valuations, navigating legalities, or safeguarding your investment, these nuggets of knowledge are your compass. So, buyers and sellers, march into your real estate ventures with these terms at your fingertips, ready to embark on a transparent and thrilling property journey.

Meet the Agents: Listing Agent and Buyer's Agent

• The Listing Agent, or the Seller's Agent, represents the seller in a real estate transaction. They are responsible for marketing, showcasing, and negotiating deals for the property on the market.

• On the flip side, the Buyer's Agent is the buyer's guide, advocate, and negotiator, dedicated to the search for the perfect home and ensuring the buyer's interests are front and center.

Financial Head Start: Mortgage Pre-Approval

• This involves a lender assessing a prospective buyer's financial background to establish their eligibility for a specific loan amount to purchase a property. This step offers buyers a definitive budget range and should be completed before you begin searching for homes. In New York City, if you were planning on taking out a mortgage, you would not submit an offer without an accompanying pre-approval letter.

The Safety Nets: Contingency

• These are contractual conditions that need to be satisfied before any dotted lines are signed. Whether confirming financing, the appraisal, or waiting on a home inspection, contingencies are fail-safes meant to protect both parties in a transaction.

Vetting Your Investment: Home Inspection

• A 'Home Inspection' is an evaluation conducted by a professional to assess a property's condition and safety. It's an indispensable step for buyers, offering insights into potential issues that could warrant renegotiations or even rescinding an offer. Ideally, an inspection reaffirms that you have chosen the right property.

The Art of Valuation: Appraisal

• Think of an appraisal as a property's financial health check conducted by a licensed professional, establishing its market value objectively. It's a critical checkpoint for lenders to greenlight the loan amount.

Sealing the Deal: Closing Costs

• These are the assorted fees and expenditures you'll encounter during the home buying or selling finale. From legal fees to loan processing charges, closing costs encompass a variety of expenses integral to sealing the deal.

Securing Intent: Earnest Money

• In NYC, the earnest money deposit is typically 10% of the purchase price, made out by the buyer and delivered to the seller’s attorney along with a signed contract. The money is deposited after the seller has counter-signed and fully executed the contract and is safeguarded in an escrow account until closing.

Neutral Territory: Escrow

• Imagine a secure holding area where all transaction elements, from funds to documents, are kept safe while the buyer and seller work things out. That's escrow for you - ensuring every box is checked before keys change hands.

Ownership Transfer Document: Deed

• The 'Deed' is the official document transferring property ownership. Both buyers and sellers must understand its legal implications and the necessity of its accurate, formal execution to finalize a sale.

Measuring Homeownership: Equity

• 'Equity' is a homeowner's financial stake in a property, calculated as the difference between the home's market value and the unpaid mortgage amount. This term is vital for homeowners considering refinancing or selling, as it determines potential profit or next-home purchasing power.