5 Commonly Searched Real Estate Terms (Part 1)
The real estate industry is well-established, with individuals engaging in buying and selling homes for an extended period. Various roles, such as brokers, realtors, lenders, escrow officers, and inspectors, contribute to the industry's dynamic nature. Despite this familiarity, not everyone is well-acquainted with real estate terms, including those commonly used. To assist people in navigating the real estate world, we've deciphered the meanings of five frequently searched words in the US.
MLS - Multiple Listing Service:
MLS is a database utilized by realtors to share information about properties for sale, facilitating cooperation and commission sharing. It encompasses essential details about properties listed for sale, including property specifics, listing price, agent information, features, descriptions, and high-quality photographs.
Down Payment:
The down payment, an initial upfront payment made by homebuyers, represents a percentage of the total home price. Separate from the mortgage loan amount, the down payment serves as a financial commitment, showcasing the buyer's ability to secure a mortgage and potentially leading to more favorable loan terms.
Closing Costs:
Closing costs encompass various fees and expenses incurred by both buyers and sellers during the final stages of a property transaction. Due at the closing, these costs may include loan origination fees, appraisal fees, title insurance, prepaid property taxes for buyers, and agent commissions, transfer taxes, and settlement fees for sellers. The total varies based on location, loan type, and other factors.
Escrow:
Escrow refers to a legal arrangement where a neutral third party, the escrow agent, holds funds and vital documents related to a property transaction. This intermediary ensures all sale conditions are met before releasing funds and transferring the property. The escrow process offers a secure and organized method for handling money and documents, safeguarding the interests of both buyers and sellers, with common elements including earnest money and purchase agreements.
Mortgage:
A mortgage signifies a legal agreement between a borrower and a lender, usually a financial institution, facilitating property purchase financing. The borrower receives a loan covering a portion of the property's purchase price, with the property acting as collateral. The mortgage outlines repayment terms, including interest rates, loan duration, and payment schedules.