9 Terms You’re Bound to Hear Your Realtor® Use

Like any other industry, real estate has a language all its own. As you embark on the buying/selling process, you’re bound to hear a million new terms and phrases. Certainly, one of the best parts of having a Realtor® is having a translator at the ready to help explain any term or step in the process that you don’t understand. To kick the language lessons off, here’s a mini-primer of 9 terms you’re likely to hear as you go about buying and selling a home with your Realtor®.

Buyer’s Agent/Listing Agent

‍A buyer’s agent is a licensed real estate professional whose job is to locate a buyer’s next property. They are legally bound to help the buyer. Listing or seller’s agents, on the other hand, are real estate agents representing the home listing—they have a fiduciary duty to the home seller.

As-is

‍This term is often used in a property listing when talking about the state of a property and how it will be sold. For example, “This property is listed as-is.” This means whatever state the house is in when listed is the state in which the buyer will receive the property. Any issues or problems the property has will not be addressed or fixed by the seller. The upside to “as is” is that these properties are often sold at a lower price.

Days on the Market (DOM)

‍This term is exactly what it sounds like: the number of days a property has been listed on the market through local multiple listing services.

When browsing home listings, it’s always a good idea to look at the DOM to gather insight on how other buyers are reacting to the property. Your Realtor® will be able to advise you on how you can use the DOM to your advantage — a high DOM can indicate sellers are refusing to budge on their asking price, but it can also identify sellers who haven’t received offers and who may be open to dramatically lower offers.

Option Period

‍Once an offer is accepted, the buyer and seller enter a process called the option period. The length of time varies, but an option period is usually 7-10 days. During this time, the buyer is allowed to do their due diligence. This means that the buyer is invited to fully investigate the property for potential problems and make sure they’re getting what they’re paying for. It’s a process worth taking seriously and may include a home inspection, an appraisal, and an investigation of condo or HOA rules.

If all goes well, the buyer and seller continue forward with the transaction. If it doesn’t, the buyer can terminate the contract without the risk of losing their earnest money.

Title Company

‍As the title company is responsible for the escrow, they are a third party that acts as the neutral agent for the buyer and seller. They collect and hold the money, documents, personal property, etc. until the transaction’s conditions have been fully met and both parties finalize the sale. They can also provide a title search and title insurance. Once the deal is final, the title company disburses the funds and records of the documents conveying the change in title.

Homeowner’s Association (HOA)

‍A homeowner’s association or property owner’s association is a private association that manages a planned community or condominium. When you purchase a property that is managed by an HOA, you agree to abide by the HOA’s rules and pay its monthly or annual dues. Failing to pay and/or comply gives the HOA the ability to file a lien (legal right) against the property and/or foreclose on the property.

Multiple Listing Service (MLS)

‍MLSs are independent broker marketplaces that focus exclusively on residential real estate in local real estate markets. The cooperative MLS system exposes home listings to the largest number of potential buyers with an offer of compensation to any successful buyers’ agent, and therefore contains the largest, most accessible and most accurate source of housing information available to consumers. Online home listing sites receive the vast majority of their inventory from these local broker marketplaces.

Closing

‍Closing is the moment everyone in the buying/selling process looks forward to because it’s when a sale is considered final. The process typically includes all parties signing a number of required documents, all money transferring from buyer to seller, and when a lender is involved, the lender giving full approval. Once all these items are completed, ownership officially transfers from seller to buyer, the buyer gains access to the property and the buyer is considered the new owner.

Closing Costs

Closing costs are additional out-of-pocket expenses paid when getting a mortgage to buy a home. These fees, paid to third parties to help facilitate the sale, typically total anywhere from 2% to 7% of the home’s purchase price. They can include loan application and origination fees, appraisal fee, survey fee, escrow fees, and more. Both buyers and sellers pay closing costs in Texas, and they can negotiate how much each party pays at closing. Your Realtor® may have some advice on how to minimize these costs and can assist with negotiations.

We’re Here to Be Your Translator

As you might guess, these nine terms are only the beginning of real estate lingo. The beauty of having a Realtor®, though, is having a trustworthy guide and friend to explain every step (and piece of jargon) of the buying/selling process. We’re here to be your translator.

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