Real Estate Terms

Contingent, Show for Backups, Pending, Appraisal, Effective date! There are a lot of terms in Real Estate. Here is a list of the most common ones, so you know what’s going on!

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Active- An Active listing means it's currently availalable for purchase/sale.

Pending- This means an offer has been accepted and they no longer allow showings. Also known as "in escrow" or "under contract".

Contingent- An offer has been accepted, however the offer is "subject to" a certain circumstance. (For example the buyers also need to sell their home in order to buy their new home).

Show for Backups- An offer has been accepted, however they are still allowing showings and backup offers if first offer falls through.

Backup Offer- A backup offer is an offer made aknowleaging that there is already another offer and ensures if the first one falls through the backup offer would be next in line to get accepted.

Earnest Money- Earnest money is typically 1% of purchase price and acts as a "down payment". It also gets applied to your down payment at closing.

Appraisal- An appraisal is the process of developing an opinion of value for real property. It is ordered by the buyers lender (at cost to buyer) to ensure the property is being purchased at or under market value.

Inspection- Inspection is when the buyer hires licensed professionals to come out and examine the property.

Pre-Approval- The Mortgage Lender has checked credit score, viewed tax statements, pay check stubs, bank account, and approved buyer for loan.

Pre-Qualified- Not as strong as a pre-approval. The Mortgage Lender writes this letter based on what buyer claims they make and how much money they have. However Lender has not verified these numbers.

Buyers Agent- Real estate agent that has a contract with buyers and acts solely as helping clients buy a home.

Listing Agent- Real estate agent that has a listing contract with a seller, and acts solely for that seller.

Equity- Home equity is the Market value of the home minus the current loan amount.

Counter Offer- An offer made in response to another.

Down Payment- The amount of money you put down on a home. Typical 3%-5% depending on loan type. But can sometimes be 0% up to 20% or more.

Closing Costs- Closings costs are LenderFees + Home Insurance + Taxes.

Money to Close- (Down Payment + Closing Costs ) - Earnest money.

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