Can You Define These 7 Real Estate Terms?

Los Angeles and South Bay Real Estate Video Blog with Lenny LaRocca

Some real estate terms can be daunting to buyers. My goal is to help you understand them better, so you can navigate the process more comfortably.

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Searching for a home can be an intimidating process, especially with regards to the language that comes up during a real estate transaction. For today’s topic, I’ll be providing a short glossary of key real estate terms you should know as a homebuyer. My goal is to make you feel more comfortable with some of the basic terminology.

• Closing costs: The cost to complete the real estate transaction. These costs are in addition to the price of your home. Some examples could be your loan, the closing cost points on your loan, transaction fees, escrow costs, etc.
• Appraisal: A professional analysis used by your bank to estimate the value of your property. This includes examples of similar homes that sold in your immediate market.
• Credit score: A number ranging from 350 to 850 that is based on an analysis of your credit history. Your credit history plays a significant part in securing a home mortgage; it helps the lenders determine how much of a loan you would qualify for. Many buyers believe you need a score over 780 in order to get a good home loan, but in fact, over 55% of all the home loans are done with buyers with FICO scores less than 750.
• Down payment: A portion of the cost of the home paid up front to secure the purchase of the property. A down payment varies widely depending on where you are in the US, and how competitive you want to be in your presentation of your offer to buy a home. I’d love to elaborate more on that specifically with you, so give me a call.
• Escrow: The holding of money or documents by a neutral third party for closing.
• Mortgage interest rate: The interest rate you pay to borrow the money you need to buy your home.
• Pre-approval letter: A letter from a mortgage lender indicating you qualify for a loan for a specific amount and that your income and assets have been verified. This letter is a must-have in the highly competitive market we’re in.

We as real estate agents want to help you get through this sometimes confusing process. The negotiation of the transaction can also be overwhelming, but we’re here to help you. If we can assist you in any way regarding buying or selling a home, please reach out to me and I’d love to help you out.