Selling Terms You Should Know

When you’re thinking about selling, there are some things you should really know, and it helps to learn them by learning a few key terms. We’ll make sure you know what both agents and cash buyers, like SILT Real Estate and Investments, LLC, use.

Terms

After Repair Value (ARV): After repair value (usually shortened to ARV) refers to a property’s estimated market value after it undergoes specific repairs and renovations. It is frequently used by investors to identify how much money they should invest in renovations and if the property is worth their investment

Agent: An agent has statutory responsibility and represents you in all negotiations and transactions regarding the sale or purchase of a home.

Closing: When you’re in the “closing,” that means the transaction is almost complete. The deed is delivered, documents are signed, and payment has been sent. It’s the final step in selling your house

Closing costs: They are expenses beyond the actual price of the home. They can include agent fees, taxes, and other expenditures, and both the buyer and seller can contribute to those costs to ensure the completion of the sale. The reputable cash buyers will pay for these when purchasing your home.

Commission: This is what is paid to a broker or agent for their work upon the sale of the house. The commission may be negotiable. This is included in closing costs when selling on the open market.

Comparable: Also known as a comp, is used when evaluating the value of your property, looking at other similar homes, and seeing the price they have been sold on the market. This would determine how you’re going to price yours. The similar homes out there are considered “comparables.”

Contingency: A part of a contract that allows for a party to follow through on the contract “depending on certain circumstances” being fulfilled. An example of this is an inspection or financing contingency.

Disclosures: Federal, state, county, and local requirements of sellers to inform the buyer of any known bad conditions of the house or improvements on a home, or anything else of relevance to the property.

Due diligence: It is a period of time made available in the purchase agreement, which allows a buyer to fully examine a property, often by hiring experts to inspect the property, perform tests, etc., so that a buyer may decide on how to proceed. A buyer might also be afforded an opportunity to renegotiate the contract based on their findings or possibly even to terminate within a specified time period, in order to not be considered in default of the contract. Due diligence allows a buyer to fully understand what they are buying.

Earnest money: Like a down payment towards the house that shows good faith by the buyer. Generally, the more earnest money they are willing to put down, the more serious the buyer is as they can lose that money.

Escrow account: It’s like a “trust account” held by a third party, generally the title company, and used for the sale of your house.

“For Sale By Owner”: When the owner of the property attempts to sell their house on the open market without the help of an agent.

Lease option: This is also known as a “rent-to-own” option. If you’re renting out your property to a tenant, you may give the buyer the option to purchase the property, transferring title, deed, and mortgage over.

Market value: The “assessed” value, which is a determination by the local authority, and the “appraised” value, which is a determination based on comparables in the market, are different from the market value, as this value applies to what the property would cost under “normal market conditions.” Some may consider it the ‘fair value.’

Multiple-Listing Service (MLS): A listing service where participating agents and brokers share information on homes listed for sale on the open market. This generally includes a cooperating commission to the selling broker.

Real Estate agent: The hired person representing the buyer or seller in the purchase or sale of a property.

Realtor: A real estate agent who is a member of the National Association of Realtors. These agents abide by a code of ethics set by the NAR and are often top-performing agents, like the ones we partner with and can find out more about here.

Title company: It is a neutral third party hired by you to research and ensure the title of the home you’re buying. They also usually manage the closing of the sale of your home.

Title: Your title shows who’s owned the property in the past, contains a description of the property, and shows if there are any liens on it. Having a “clean title” means that you have no liens on your property other than the mortgage holder.

These are not all-inclusive of the terms you should know, but they will help you decide what’s the best decision for you when you talk to an agent or a cash buyer.

Remember, you can work with one of our agents we work with or give us a call anytime (708) 415-3801 or fill out the form over here today if you’re looking to sell a Chicago house fast!

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