Boise Real Estate: 101 ~ Terminology
I get a lot of questions about real estate terminology, so here are a few simple explanations of the jargon commonly heard in real estate:
MLS Status Codes
- “Available” obviously means the property remains unsold and is available (I told you it was “:101″!)
- “Pending” means there is a pending sale (the property is “in escrow”, pending closing).
- “Sold Contingent” means that there is an accepted offer that is contingent upon another event, such as selling another property, closing another property, getting the down payment from grandma, etc.)
- “Closed” means that the property has been sold and escrow has closed.
Spec Home
A spec home is one that has been built by a builder who’s speculating that someone will buy it (very risky business these days).
In other words, the home was not pre-sold before starting construction.
Build Job/Build To Suit
A build job is a home sold prior to starting construction that is being built-to-suit for the buyer.
Prequalification Letter
Mortgage lenders issue pre-qualification letters to provide general assurances that a borrower will be able to obtain mortgage financing. It is not a firm loan commitment because the lender has not thoroughly investigated the borrower’s ability to obtain financing.
Loan Commitment
A loan commitment is issued by a mortgage lender after the lender has completed a thorough review of a borrower’s credit, employment, debt to income ratio, etc. Generally speaking, a loan commitment is more reliable and more thorough than a pre-qualification letter.
REO
The term “REO” means “real estate owned” and refers to foreclosed real estate that is owned by a mortgage lender.
Short Sale
The term “short sale” means that the net proceeds from the sale of a property are “short” (less) than the amount owed on the mortgage(s) for the property. It definitely does NOT mean that the sale will be short or easy!
Title Search
The term “title search” refers to the process of searching the title of a property to determine ownership, legal issues, liens, etc. In Idaho, this process is completed by the title/escrow company prior to closing and issuance of title insurance.
July 11th, 2010 Posted in Inside Real Estate
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