12 Scary Terms for Buyers and How to Make Them More Understandable

The home buying process can be overwhelming, especially with all the crazy industry jargon. With a few simple selling tips, however, you can calm frazzled buyers before they go AWOL.

Selling homes can be a battle when buyers don’t understand the plan…
When your buyer gets that deer-in-the-headlights look, ditch the fancy jargon and break down these common real estate terms:

  • Appraisal
    Estimated value of the property, which ensures sellers don’t get jipped, and buyers don’t overpay.
  • Closing costs
    Additional expenses beyond the cost of the home, including appraisals, surveys, title searches, inspections, escrow, loan and lawyer fees – usually about 6% of the sale price.
  • Contingency
    A get-out-of-jail-free card to renege on the deal if something doesn’t go as planned: financing, appraisal, inspection…
  • Due diligence
    The buyer’s obligation to do his homework before purchasing a property (as ending up with a “lemon” falls squarely on their shoulders).
  • Earnest money
    “I promise I’ll buy this property. If I walk away you can keep this moolah.”
  • Escrow account
    Holds funds for the closing and pre-payment of annual insurances and taxes.
  • Good faith estimate
    List of interest rate and fees from potential lenders so buyers can compare/shop for loans.
  • Loan-to-value ratio
    The amount of the mortgage divided by the appraisal value. High = pushing the limits of the home’s worth (a higher-risk loan).
  • Prequalification
    Buyer’s permission slip from the bank to purchase a home within a specific price range.
  • Principle, interest, taxes, and insurance
    Sums up the total monthly mortgage payment.
  • Private mortgage insurance
    PMI insurance protects the lender on high-risk loans in case the buyer walks away after the purchase.

 
Don’t let your buyers go MIA. Get the selling tips you need to sink the sale, only at Properties Online.

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