As a newly created real estate agent, learning certain terms quickly will ensure that you are well equipped to guide and guide clients through the complexities of today’s market. Here are a few to get you started.
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As a newly created real estate agent, learning certain terms quickly will ensure that you are well equipped to guide and guide clients through the complexities of today’s market.
Here are the top 10 real estate terms new agents should learn as quickly as possible in this fast-paced market.
1. Escalation clauses
An escalation clause, often referred to as escalation, is a clause in a real estate contract that allows buyers to increase their offer by a predetermined amount over other offers in the event that the seller receives another offer at a price. higher price.
Escalation clauses are usually reserved when a buyer is convinced that there will be more than one offer or if the buyer expects to pay a higher price for the property.
2. Purchase agreements
Concessions are perks or offers given by the buyer to help sell a home and close a deal. Usually specified in negotiations, concessions can include covering the cost of new appliances in a home, moving expenses, and necessary repairs.
Concessions can affect the selling price of a home. Therefore, appraisers often take concessions into consideration when appraising the home and comparable properties in the area.
In today’s buzzing housing market, many buyers are bidding very competitively for all cash payments and quick closings. However, while the agent, bank, and everyone involved in a transaction may be able to move quickly, it takes a lot to physically move from house to house.
Additionally, sellers may need to have cash in the bank to submit their offer on their new home. Each transaction has its own set of circumstances, but these are the most common reasons that sellers may want to include a period in which they rent out their home after the sale is finalized for a set period of time.
Agents need to make sure everything is agreed upfront and included in the contract that both buyer and seller have to sign.
4. Disclosure of the seller
One of the most important documents for homeowners looking to sell their home, disclosure documents detail the condition of a property and anything that can negatively affect its value and price.
These documents are especially important for those looking to change homes, as these types of buyers often look for properties in poor condition to upgrade and then sell.
5. “As is” or “where is it”
When a property is sold “as is” or “where is”, it means that sellers do not want to make repairs on the house until it closes.
There is no guarantee from the seller that everything is in good working order, and therefore, a buyer who purchases a home “as is” is responsible for resolving any problems the home may have or have. repairs that might be needed.
6. Blind offer
Although not recommended, some home buyers will buy a property without seeing them. Known as the blind offer, these types of offers are very popular among buyers looking to turn their home into a commercial venture.
7. Multiple Listing Service (or MLS)
Developed by the National Association of Realtors, the Multiple Listing Service (also known as MLS) is a private database maintained by real estate professionals to help their clients buy and sell properties.
This tool is incredibly useful not only for fostering collaboration between markets, but also for helping brokers find their clients the perfect property.
8. Seller’s concession
Seller’s concessions are closing costs accepted by the seller. Sometimes you can ask the seller to contribute some closing costs, and other times the sellers may only pay a percentage of the total.
Examples of closing costs that are typically covered by the seller include prorated property taxes, title insurance, city and county transfer taxes, and any HOA fees.
9. Variable Rate Mortgage (ARM)
A variable rate mortgage is a mortgage that does not have a fixed interest rate. The rate changes throughout the life of a loan according to the evolution of an index rate. This type of mortgage usually offers a lower initial interest rate than fixed rate loans.
10. Comparative market analysis
A Comparative Market Analysis (CMA) is used by real estate agents to estimate the value of a property by comparing and evaluating the property to similar recently sold properties in the same area. The CMA is one of the cornerstones of a good property price assessment.
As a new agent, there is a lot to learn. From effectively pitching a property to managing clients and complex transactions, training a new agent is never complete.
Of the many things agents will learn in their first year of practice, real estate terminology is one of the most useful and critical. From adjustable rate mortgages to blind offers and concessions to buyers, understanding some key real estate terms will help make your first year of practice a success.
David Parnes is a director at The Agency in Los Angeles. Connect with him on Instagram. James Harris is a director at The Agency in Los Angeles. Connect with him on Instagram.