Real Estate Terms First Time Home Buyers Should Know Pt. 2

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In the real estate world, there’s lots of terms and phrases that might leave your head spinning. Here’s a list to help get you started at becoming fluent in real estate!

Earnest Money 

A deposit, given by the buyer to the seller after they have an accepted an offer. This deposit is typically between one to three percent of the contract price and is held by an escrow company until closing. That money can later be applied to the down payment and closing costs.

Escrow

Whether or not you are required to have an escrow account or how long you’re required to have one will vary depending on your loan and lender. An escrow account allows the mortgage holder to collect not only your interest and principal payments each month, but also 1/12 of the estimated total of your taxes and insurance for the year. When the bills are due, the lending bank uses the money in your escrow account to pay your tax and insurance bills on your behalf. refers to impartial third party holds onto funds during the transaction of your home sale.

Multiple Listing Service (or MLS)

MLS is a database that allows real estate agents and brokers to access information about properties for sale. As soon as a home is listed, it will be logged into the MLS database. The benefit from working with a real estate professional is they have access to the MLS and are able to see what’s on the market in the areas you’re looking to buy.   

Pre-Approval

Pre-approval, for a mortgage, follows a credit check and thorough verification of your finances, employment and credit history. A pre-approval letter states that, barring appraisal issues, that you are approved for a loan. Pre-approval is essential in today’s ultra-competitive market because it shows the seller you are a legitimate buyer.

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Categories: Real Estate Tips

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