Figuring out real estate can feel like trying to assemble IKEA furniture without an instruction manual. Just when you think you’ve got it, you’re left holding an extra piece (or term) you don’t understand.
Since April is Financial Literacy Month, there’s no better time to simplify the homebuying or selling process by decoding common real estate jargon. With a clear understanding of the lingo, you’ll be well-equipped to achieve your real estate goals with confidence. For a deeper dive, check out the FTC’s real estate glossary.
Key Terms to Know Before You Buy or Sell
- Pre-Approval
Pre-approval is like getting your ticket before the show. It’s highly recommended, as it tells you how much home you can afford and shows sellers you’re a serious buyer. Plus, it speeds up the process when you’re ready to make an offer. - Earnest Money
Earnest money is like a down payment’s eager first step. By offering it early in the process, you’re showing the seller you’re serious about the deal. It’s held in escrow and typically goes toward your down payment or closing costs. - Appraisal
An appraisal is the home’s official report card. It tells you and your lender how much the property is worth based on current market conditions, ensuring you’re not overpaying for a home that doesn’t make the grade. - Escrow
Picture escrow as a digital safety deposit box. It’s where the important stuff, like money and documents, is securely held until both the buyer and seller fulfill their parts of the agreement. - Title Insurance
Title insurance is your property’s invisible shield, warding off most surprise enemies like unknown claims or unpaid debts attached to the home. You pay for it once, and it continues to protect you for as long as you own the property. - Closing Costs
Think of closing costs like the essential finishing touches at checkout. They cover fees for services like loan processing, title work and property taxes. Being prepared for these costs helps avoid any surprises as you finalize the deal. - Outstanding Mortgage Balances & Tax Obligations
Before the seller hands over the keys, they need to handle any remaining mortgage balance or unpaid property taxes on the home. It means tying up loose ends before moving on. - Deed
The deed is the MVP of paperwork, the ultimate proof that the home is officially yours. This legal document should be kept safe, just like your birth certificate. Consider it your key to ownership, in writing.
Simplifying the Process with a Trusted Team
Navigating real estate can feel confusing, but that’s where your team comes in. While your REALTOR® guides you through the major decisions, Continental Title Company ensures every title-related detail is managed with precision and care. Our goal is to help turn the process from a puzzle into a smooth transaction, so you can focus on the exciting next steps—like choosing paint colors and where to put the couch. Have questions? Reach out to Continental Title Company today. With our team in your corner, you can turn the complex world of real estate into a smooth, confident ride.