Terms Every Seller Should Know
COMPETITIVE
MARKET ANALYSIS (CMA)
- A comparison of active listings, pending sales, sold properties
and expired listings of similar properties in the same area or neighborhood.
For a seller, active listings will show what the competition is asking,
pending sales will show the asking prices that were low enough to
generate an offer, sold listings will show what properties actually
sold for, and expired listings will show asking prices that were too
high. Appraisers will generally use properties that sold over the
last 6 months. A CMA is not an appraisal.
HUD
- The Department of Housing and Urban Development, a cabinet-level
department in the federal government. HUD provides a variety of housing-related
services, including insuring FHA loans, providing assistance to distressed
homeowners and administering fair housing laws.
LEAD
DISCLOSURE
- A form included in residential sales contracts, where the seller
discloses any actual knowledge of lead-paint hazards in their house.
The form is mandatory for the sale of all residential housing built
before 1978 (even in For Sale By Owner properties), and advisable
on all residential sales. Additionally, the buyer must be given the
HUD/EPA pamphlet, Protect Your Family From Lead In The Home.
MULTIPLE
LISTING SERVICE (MLS)
- A computer database that includes most of the properties for sale
in the region. Any licensee that belongs has access to the information,
and a property can be sold by any agent from any company.
OFFER
- A contract offer from a buyer that the seller has not accepted yet.
The seller has no obligation to the buyer until they accept the offer.
PRE-APPROVAL
LETTER
- A letter from a buyer's lender stating that they have checked the
buyer's credit and given the buyer a preliminary approval for a loan.
The quality of the pre-approval letter can vary greatly. The seller's
agent should assist the seller in determining the likelihood that
the buyer will get final loan approval.
PROPERTY
DISCLOSURE/DISCLAIMER
- A form that is mandatory on most residential sales in Maryland (most
ohter states have a similar form). The seller can choose to fill out
either the Disclosure or Disclaimer part of the form. If the seller
fills out the Disclaimer, they must still disclose in writing any
defect they know about, that could directly affect the health or safety
of a buyer or legal occupant. The form is still required if the property
is sold by the owner without the aid of a real estate agent.
SELLER'S
NET -
The amount the seller receives at settlement after everything has
been paid. This is the number the seller should use to determine if
an offer is acceptable to them, and to compare to other offers.
SHORT
SALE -
A sale of real estate, where the value of the property is lower than
the balance of the loan. The lender agrees to accept less than the
full amount owed. Lenders will require that the sale be handled by
a licensed real estate agent. The property can not be sold to a family
member or rented back to the borrower.
©Copyright
2011 Douglas R. Barry.
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