Real Estate Terms Made Simple

Every industry has its own jargons and real estate is no exception. Real Estate Professionals are used to using these terms that sometimes, they forget that common consumers know nothing about. So, if you are dealing or planning to deal some transactions in real estate, it is better to have some understanding on the most common terms used.

In line with that, here are the most common terms you’ll encounter when buying or selling a property in Alaska.

Addendum - a form used to make changes to the purchase agreement after it's been accepted by both the buyer and the seller. 

Appraisal - a report of the estimated value of the property from a qualified 3rd party to ensure it is worth its price.

Closing - the official recording by the County's Recorder's Office of the property's transfer to the new owner.

Counteroffer - a response submitted when the seller doesnt agree with the terms of the purchase agreement.

Disclosures - forms used to tell anything that may affect the homes' comfort, enjoyment and safety. In Alaska, the most important disclosure is the Residential Real Property Transfer Disclosure Statement.

Earnest Money Deposit - the deposit of money submitted after the offer has been accepted to let the seller know you are earnest to purchase the home. This will generally be applied to the down payment or closing costs in closing.

Escrow - the disinterested party that holds and distributes purchase funds in accordance with the demands of the agreement. It can also be referred as the period from contract writing and acceptance.

Equity - difference between the market value and what is owed on the home.

MLS – means Multiple Listing Service where real estate properties available are listed for sale.

PITI – it’s just the short for the components of mortgage payment - principle, interest, taxes and insurance.

Preapproval - the initial evaluation from the preliminary financial information of how much a buyer may be qualified to borrow. This is not a guarantee of loan approval but can give seller more confidence with the buyer.

RESPA – the Real Estate Settlement Procedures Act of 1974 that requires lenders to provide borrowers a disclosure of the loan costs in a timely manner.

Title - legal document highlighting the current and proper ownership of the property including its ownership and transfers. It can also be referred as a Title Deed.

Underwriting - evaluation of the buyer's financial ability to obtain an repay the loan which normally includes credit check and property appraisal.

Understanding these terms will help you grasp on what exactly is going on with each real estate transaction. Knowing is always better. And most importantly, getting a real estate professional that is not only knowledgeable in Alaska Real Estate Market but also cares to guide and help you in every step of the way is essential to a stress-free and smooth transaction.

If you need help in dealing with your real estate transactions, we’d love to help. Call (907) 570-6757 or 907-720-4663.