As Realtors, we know how confusing and complicated our field can be sometimes. More often than not, the terms that we throw around on a daily basis seem like a foreign language to those who are just entering the market, or those who have been out of practice for quite a while. So, we’re here to go over and explain 3 real estate terms that everyone should know, regardless of where you happen to be in the market!
Escrow is a term that we guarantee you will hear during the real estate process, and you may also hear it in another line of work. Essentially, all of this term breaks down to is someone who acts as a third party, and will collect and disperse all facets of the agreement once the conditions have been met. So, if you hear someone say that “the money is in escrow,” it means that the money is being held by an escrow agent—the third party—until the other conditions of the agreement is met, when it will be dispersed. Escrow is important in the real estate field because it keeps everything fair, as it assures that all parties will get their benefit of the agreement before it is terminated.
2. Title Insurance
When you buy something like a car or a boat, you are issued a piece of paper called a “title” which proves that you are the rightful owner of that thing. A title is also issued when a home is bought. However, there are some cases when a lien or a debt made against the previous owners is carried over to the new owner due to a misfiling of paperwork—it is still attached to the title of the home, even though the previous owner has been absolved of the title. Title insurance guarantees that you are the rightful owner of the property that you have purchased, and protects you against any loss or damages that may occur due to a previous lien. Without it, you could be liable for any liens on the house, even if you did not cause them.
In real estate, “equity” is one of those buzzwords that you hear quite often, especially when it comes to investment and retirement accounts. All that “equity” boils down to is the amount of ownership that you have in the home—the difference between the market value of the house and the amount still left on the mortgage. Equity is extremely important in financial planning, as it represents an asset that you have. The more equity you have, the richer you are, as you owe less than what the property is worth (all other debts aside).
Sure, real estate can seem a little arcane at times, but we strive to cut through that fog so you know exactly what is going on. And when you have professional and time-tested agents on your side, explanations about complicated terms come with ease.
Stop into our office today and see what we can do for you!