Whether you’re buying, selling, or both, navigating the real estate market can be as stressful as it is exciting. There is a lot of information to process, which can sometimes feel overwhelming, so here’s a handy cheat sheet of terms to help you plot your course to a smooth and enjoyable transaction.
Absorption Rate: the rate at which the existing housing inventory is being absorbed by the existing buyer pool (aka supply and demand).
Active Contingent: an offer that is contingent on the sale of another property. (Also see Contingent Offer.)
APR: annual percentage rate. This is in reference to a home loan.
Appraised Value: the amount the market deems the property is worth.
ARM: adjustable rate mortgage.
Arms Length Transaction: a condition that there is no relationship between the buyer and the seller.
Assessed Value: the value set for property tax purposes.
Assumable Mortgage: a mortgage that can be taken on by a new buyer.
Back Up Offer: an offer that would automatically be accepted in the event of the cancellation of the escrow of an accepted offer.
COC: cash on cash (the return on your out-of-pocket expenses) (See the Staging blog entry for more information on this!) and the (Cash in Cash Out blog entry).
COE: close of escrow. That’s the day that the title to the property transfers to the new owner. Woo Hoo!
Community Property: you have to be married to own a home as Community Property. It has an automatic right of survivorship.
Comps: comparative market analysis of other similar sized, similar condition, similar location homes sold within a recent period of time.
Contingent Offer: an offer that is contingent on the sale of another property. (Also see Active Contingent).
DOM: days on market. How long a property has been actively exposed to the market or on the MLS.
First Right of Refusal: the right to buy the property before it can be sold to somebody else.
Joint Tenancy: each owner has a 50% share of the home and each owner can deed his or her share to whomever they wish.
Joint Tenancy with Right of Survivorship: Each owner has a 50% share of the home and it automatically goes to the surviving partner when one or the other dies.
Level In: entering a home when there’s no step to get to the front door.
Loan Docs: the documents that require signature in order to complete the loan on a home.
MLS: Multiple Listing Service (a database of all the available homes on the market).
Notice to Preform: a notice to the other party in the transaction about an action they have agreed to do but haven’t yet done. (If they do not do it, they lose the contract.)
PITI: principle, interest, taxes and insurance (AKA the combined property payment). It’s basically, the monthly nut.
ROI: return on investment. It’s how much you will earn on the investment you’ve made.
Tenancy in Common: when an owner has an undivided interest in the property as a whole.
Of course, we are always here to answer any questions that arise during the process, so don’t hesitate to ask us for clarification about any term you encounter during the buying or selling of your home! That’s what we’re here for!
