Basic Real Estate Terms Home Sellers Should Know

When I first started investing in real estate and realized that I might need to sell my own home someday because I might want to keep all the profit for myself, I had a rude awakening. I realized that there is more to selling a home than just finding a buyer. I had a lot to learn, and a great deal of my education was simply learning real estate terminology.

I'm going to share three basic terms that you will need to know when you are making your decision and working with your buyer. There are a lot of real estate websites that offer huge listings of terminology, but it's easy to get overwhelmed when all you really need to know is what's important to you and to your transaction.

I'm assuming that you feel like I did when I first decided to sell my own home. You know there's a lot to learn, but you know that keeping the profit on the sale of your home means you're going to be paid well to get some education in advance. Is that right? To me, the time it takes to learn some real estate terms is not a big investment in such an important lifetime skill for future wealth-building. Even if you only buy and sell the homes in which you personally live, these terms will come in very handy for you.

1. Agent - a real estate agent is actually working for a real estate broker, the person who has the legal responsibility to represent you , the client. Agency law is a very deep subject, but for now, just remember that it's actually the office broker who has a fiduciary duty to you (a responsibility to protect your financial interests) and that an agent is representing the broker in providing services to you.

2. Exclusive Right To Sell Listing Agreement - when you list your home with an agent who is working for a broker you will sign one of these agreements, unless you specifically ask for an alternative. This agreement gives the broker the right to earn commission on the sale of a home regardless of who brings a buyer into the transaction. The broker splits his or her commission with in-house or outside agents but doesn't split a commission with you, the seller, even if you bring the buyer yourself.

3. Purchase Agreement, or Sales Agreement, or Sales Contract - there are many different names for it, but they all describe the form on which a buyer makes an offer to purchase a certain property from its legal owner, the seller. There are many components required on the purchase agreement, but what you need to remember right now is that this is a form you will need to have prepared in advance. It is the first thing I studied and developed when I decided to sell my own home years ago. I've been refining my sales agreement over many years now, and each time it becomes simpler. At the present time it's one page in length. Typical purchase agreements have several pages.

This list of three is just a basic beginning of real estate terms you need to know to sell your own home. Spend some time with a good real estate dictionary online in order to learn more.

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