Last week, we introduced you all to a few real estate terms that we think everyone should know—just a handful of commonly used words and phrases that, while uttered daily at Homeworks, might not be in your vernacular. Our hope in sharing them? To familiarize you with (and thereby demystify) the often-confusing process of listing your home or purchasing a new one.
Next up…some of the industry lexicon that’s a bit more specific to the buyers! While ALL of these terms are useful for both buyers and sellers (after all, it affects everyone involved somehow), we think the following is particularly useful for those on the hunt for home. Whether you hope to buy a bungalow in Bonneville Hills, something modern in Marmalade, a Canyon Rim condo, or a farmhouse in Federal Heights, below are a few handy phrases to keep in your pocket.
REAL ESTATE GLOSSARY, PART II (for the buyers):
Comps (Comparables): This is an abbreviation for “comparable properties,” which are used as a comparison in determining the current market value of the property as it is being appraised.
Open House: A useful event held after putting a property on the market wherein it is shown to potential buyers without requiring individual appointments.
Disclosure Statement: A document that the seller must provide to buyers outlining any known issues or defects with the property at the time of sale.
Capital Gains Tax: A tax on the profit made from selling a property, applicable if the home has appreciated in value.
Pre-List Agenda: Those important items that sellers should address—such as minor repairs, removing any liens, cleaning, landscaping, etc.—prior to taking their home to market. Your HW agent is happy to assist with this!
1031 Exchange: This real estate investing tool allows investors to exchange an investment property or business property for another of equal or higher value, thereby deferring paying capital gains tax on profit made from the sale.
Equity: The value of a home above the total amount of the liens against said home. Example: If you owe $100,000 on your house but it is worth $140,000, you have $40,000 in equity.
Listing Agreement: A contract between the property owner and a real estate agent that outlines the terms of the sale.
Fair Market Value: The price at which property would be transferred between a willing buyer and seller, each of whom has a reasonable knowledge of all pertinent facts and is not under any compulsion to buy or sell.
Exclusive Right to Sell: A traditional listing agreement under which the property owner appoints a real estate broker (AKA the “listing broker”) as exclusive agent to sell the property on the owner’s stated terms, and agrees to pay a commission when the property is sold.
Right of First Refusal: A provision in an agreement that requires the property owner to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
As always, the Homeworks team is here to answer any questions you may have about this process. Feel free to contact us anytime for all things real estate. We've got the experts on hand and the experience to help!
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