Is your head spinning at just the thought of figuring out real estate terms? If you’ve ever dreamed about buying or selling a home, you’ve probably run into words that you’ve never heard before, and don’t make sense. It truly can be like speaking a different language especially if you’re a first-time home buyer.
I’ve worked to put together a list of 10 of the most common Oklahoma real estate terms and what they mean in an understandable way. Hopefully this will help you form a foundation so you can carry on a conversation about real estate whether you are buying, selling, or just talking to your co-workers around the water cooler!
1. Appraisal – “Your house’s worth”
During the buying process, an appraiser will evaluate a home to determine how much it’s worth. This piece of paper is the appraisal. When purchasing a home, your lender will typically require an appraisal of the home to make sure that the loan they are giving you is for the right amount.
2. Closing – “The Last Step”
Closing is a meeting where everything is made official and the property is transferred from the seller to the buyer by signing lots of paperwork. This typically will take place at a local title company in town. (This is also a time to celebrate. Closing is my favorite day for my clients!)
3. Contingency – “Buyers and sellers to-do list”
A contingency is any condition that either the buyer or seller specifies must be met before the deal is completed. For example, a buyer may have an inspection contingency to make sure the inspection doesn’t reveal anything devastating, or seller may have a financing contingency to make sure the buyers can get the loan they need. Contingencies are designed to protect everyone involved.
4. Earnest Money – “I-Want-This-House Money”
This is money that a buyer typically gives when putting an offer on a house to show a seller they’re serious about purchasing the house. The earnest money goes towards the down payment and is typically returned if the buyer and seller find something that cannot be agreed upon during the inspection period on the contract.
5. Inspection - “When you discover wrong and right with your house”
After putting an offer on a house, and before closing, a buyer will need to schedule an inspector to do an inspection of the house. During this inspection, the inspector will walk through the house documenting the state of the house paying close attention to the foundation, electrical components, appliances, and more. A REALTOR can provide a list of inspectors that will be thorough and detailed.
6. Lender – “Person who lends you money to buy the house”
Simply put, a lender is the organization or person who is giving the loan out. This person will usually require proof of financial stability and credit before approving a loan.
7. Multiple Listing Service (MLS) – “Your house finder”
This is an organization that gathers information on homes for sale and then distributes it to members. Membership is not open to the public which is why it’s so important to work with a REALTOR. MLS data updates faster than other apps or sites like Zillow.
8. Pre-approval Letter - “Letter telling you your approved price range for house buying”
A pre-approval letter is a letter that you get from the bank estimating how much they will lend you. This letter will help you determine what you can afford before you even start looking for a home. Not only that, but this letter lets sellers know that you will be able to get the loan you need.
9. REALTOR – “Me!”
Not everyone is a REALTOR. Some are just real estate agents. A REALTOR is a member of the National Association of Realtors. The National Association requires that members follow a code of ethics. This means that when you work with a REALTOR, you can be assured that you are working a with a professional.
10. Time Reference Date – “How long you have to get things done!”
This is the date that the contract actually goes into effect and is one of the most important dates on the contract. This date is often referenced throughout the process so everyone knows how long parties have for inspections, reviews, and more.
While this list is nowhere near complete, hopefully it helps to give you some basic understanding of what you can expect when dealing with Oklahoma real estate. You should also know that I’m happy to help you understand any terms you may come across during the whole process! I also have lists of great lenders, inspectors, and whoever else you may need during your home buying or selling experience!
I’d love to talk to you about additional real estate terms, the home buying or selling process, or even just talk about your dreams for your family’s future! Contact me anytime at (405) 812-1204 or firstname.lastname@example.org