1. Listing – A listing refers to a property that is for sale. This could be a house, apartment, land, or commercial property. When a property is listed, it is available for purchase by potential buyers. It is important to know the difference between a listing and a sale, as not all listed properties are sold.
2. Closing – Closing, also known as settlement, is the final step in the real estate transaction process. This is where all necessary paperwork is signed, and the property officially changes ownership. Closing costs, which include fees for various services, are typically paid by the buyer.
3. Appraisal – An appraisal is an estimate of the value of a property conducted by a professional appraiser. Lenders require appraisals to ensure that the property is worth the amount of the loan being requested. The appraisal helps determine the market value of the property.
4. Mortgage – A mortgage is a loan that is used to purchase a property. The borrower agrees to repay the loan with interest over a set period of time. The property serves as collateral for the loan, meaning that if the borrower fails to make payments, the lender can take possession of the property.
5. Equity – Equity is the difference between the market value of a property and the amount still owed on the mortgage. As the property value increases or the mortgage balance decreases, the homeowner’s equity grows. Equity can be used as collateral for loans or can be accessed through a home equity loan or line of credit.