Commonly used terms in the real estate industry
There are numerous terms, abbreviated or not, in the real estate industry that you might not understand.
Here are some basic terms of real estate language:
MLS—Multiple Listing Service
A Realtor organization where Realtors post properties listed for sale. Only Realtors have access to the MLS. You can research MLS listings thru Realtor.com.
Principle- interest- taxes-insurance (PITI) are the four components of a monthly mortgage payment. Principal meaning the monthly mortgage payment. Interest – the fee charged for borrowing the money. Taxes and insurance – are paid into an escrow account with your mortgage company each month and cover the property taxes and home insurance.
In real estate contracts some contingencies are necessary to protect the buyer’s interests. One example is a buyer’s right to perform a professional home and termite inspection to make sure the property passes the inspections.
The buyer’s closing costs will average between 2-4% of the selling price. They could include: points and origination fees a lender charges to make the loan, attorney fees, recording of deed, State, County or City Transfer Taxes, etc.
A title insurance policy protects a lender’s or owner’s interest in real property from unexpected or fraudulent claims of ownership. It’s customary for the buyer to pay for the lender’s title insurance policy.
A real estate transaction must include a detailed closing statement, or settlement statement. A closing statement must itemize all fees for every party involved in the transaction.