Real Estate Terms - From Appraisals To Comps
By Raynor James, Fri Dec 9th
When you're selling your home or other real property on yourown, you don't have to know everything about the process. Itdoes help to have a practical knowledge of the terms that comeup during the process.
Keep in mind, these aren't intended as "be all, end all,penultimate" definitions. They're working definitions forpragmatic folks. Let's go...
1) Acceptance - A legal term referring to the acceptance of abuyer's offer by the seller. Acceptance is often preceded by anumber of counter offers between the parties.
2) Appraisal - a professional opinion of
the value of realproperty. Most jurisdictions have careful rules defining who maycall themselves an appraiser, and most lenders have a "stable"of approved appraisers whom they use regularly. Typically, thelender making the new mortgage loan will require that theproperty appraise for at least as much as the purchase price.Occasionally, a buyer will require the same thing in an all cashtransaction.
3) Bridge Loan - Short term loans used to "bridge" any time gapbetween the sale of a home and purchase of the next one. Theseloans can be valuable when escrow is delayed on the sale of ahome and the seller has committed to the purchase of anotherhome. Bridge loans are also known as "panic loans", but can be alife saver.
4) Coinciding Settlements - when a buyer needs the funds fromthe sale of his prior home (which is under contract to be sold)in order to purchase his next home, he may well make settlementunder his sale a contingency for settling on the home he ispurchasing. In reality, the sales don't usually coincide. Theyusually take place back to back. Funds from the first are oftenwire transferred to the second.
5) Closing - Depending upon the state you live in, Closing canhave different meanings. Generally, the closing of a real estatetransaction refers to the exchange of necessary documents,execution of the same and transfer of money.
6) Comps - This term refers to the sales prices of similarproperties in the area of a house in question. Comps are used tohelp determine the fair market value of a property.
7) Conditions - any conditions which must be met before the salecan be consummated. Some typical conditions include things likethe property's appraising for the purchase price or more, theproperty's being in good condition when a home inspection isdone, the buyer's loan being approved.
As you can image, there are many real estate terms for which youhave a general understanding. In our next article, we continuewith the terms starting with "Condominium."
About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.
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