A Few Important Real Estate Terms to Understand Before Buying a Home

If you’ve never bought a home or it has been a while, it may be time to learn a few of the real estate terms you will likely encounter. Just like any other business, the real estate industry has its’ own language. For first-time home buyers, it can get confusing fast. Here are a few of the top terms you should understand before buying a home.

Active Listing

When a home is going to be sold, it goes through many stages. Active Listing means the home is up for sale and an offer has not been accepted yet.

Open House

A very common term referring to an event held to introduce the home to those interested is known as an Open House. Tours of the home are available and anybody can stop by to enjoy a peek at the home during an open house.

Seeking Backup

If someone has signed a contract on a home, also known as an offer has been accepted, the sellers’ agent may look for a backup option. This is an offer that will likely be accepted if the current offer backs out for any reason. Sellers are allowed to sign multiple backup options as long as the buyer understands which position they are in a backup.

Disclosures

Certain things the seller has to tell the buyer are known as disclosures. As a buyer, you want to make sure you read and understand all of the disclosures before making an offer.

Escrow

After a seller has signed a contract with the buyer, the home goes into what is called escrow. An escrow officer will act as a neutral third-party in the transaction to ensure the contract is fulfilled by the assigned deadline. The home won’t be considered sold until the escrow has closed.

Contingencies

Clauses built into the offer from the buyer are called contingencies. For example, the buyer may make an offer contingent on the home inspection or on the sale of their existing home. These are also known as escape clauses.

If you’re getting ready to start shopping for a home, make sure you understand these terms. In addition, hire a great real estate agent so that you can ask questions when you don’t understand something during the process.