Terminologies You Should Know When Selling a Home in Pinellas County

Dated: April 29 2022

Views: 141

When you’re ready to sell your home in Pinellas County, there are many terms that you’ll need to understand before signing on the dotted line with your real estate agent. Selling your home isn’t always easy, but by knowing the terms listed below, you can learn how to successfully sell your home quickly and get the best possible price!


seller terminologies real estate

 

1031 exchange

A 1031 exchange is when an investor sells one property and reinvests that money into another property. This can be done repeatedly with more investment properties. The reason it’s called a 1031 exchange is because IRS Code Section 1031 allows for tax deferral on capital gains in many situations where properties are swapped for each other.

 

Appraisal

An appraisal is an estimate of how much your home is worth, and it’s typically ordered by your lender when you apply for a mortgage. Appraisals are not free, but they can be used toward your closing costs and can help to get you access to better loan options or rates. You’re also required to get an appraisal if you want to sell your home—but don’t let that dissuade you!

 

Appreciation

Gradually, over time, your house should gain in value due to more demand from the market and from inflation. The increased value of your home from when you bought it is what is called its appreciation in value. Generally, depreciation refers to the lessening of the value of something.

 

Asking price

An initial listing price of the seller. This is often set higher than what they expect to receive, and it’s negotiable with buyers. The asking price is also known as listing price or listing amount or asking amount or listing figure or listing sum.

 

Assessed Value

A tax assessor determines the value of a property in order to calculate a tax base. The assessed value is typically lower than what someone would be willing to pay for a home, so it’s best not to use it as an estimate of your home’s actual market value.

 

Assumption of Mortgage

The assumption of mortgage, or assumption agreement, refers to one borrower taking over another borrower’s existing loan. The new borrower must agree to follow all of the original loan’s terms and conditions, including payment amounts and scheduled payments. In some cases, if a property is underwater (where its value has declined below that of its mortgage), it may be possible for a buyer to assume an existing mortgage without agreeing to pay off any money owed on it.

 

Bidding war

Receiving bids for a piece of property from various buyers or competing agents also trying to list a house for sale.

 

Capital Gains Tax

In a nutshell, capital gains tax is a tax you pay when you sell an asset (like a home or investment) that you have owned for more than one year. To put it another way, if you own an asset and sell it at a profit within one year of buying it, that profit is considered ordinary income. If you hold onto your property for longer than a year before selling it, it’s considered a long-term capital gain and has lower taxes associated with it.

 

Closing Costs

The money you pay to third parties for their services, such as loan fees, title search, and inspection. Closing costs are usually paid with cash or through your lender’s financing. Typical closing costs range from 2% to 5% of the purchase price and are due at closing. The buyer pays most of these expenses; however, if necessary, many lenders will allow sellers to pay all or part of them.

 

CMA

CMA is short for Comparative Market Analysis. It helps determine your home's worth and how it stands in comparison to other homes on the market. If you're thinking about selling, be sure to do a CMA of your own before listing so you can better understand what it will take to sell.

 

Counteroffer

In real estate, a counteroffer is when you accept an offer from one buyer and then get another offer from someone else. Sometimes, as with any sales scenario, they’re used to drive up an asking price; other times they’re just out of courtesy (or on your end because you’ve been bartering with multiple buyers). Either way, watch out—it can sometimes be used as a tactic to find out how much you’d like for your house without officially submitting an offer.

 

Deed

A deed is a legal document that conveys title to real property from one person to another. It is also known as conveyance or title and legally transfers property from one party to another. The grantor (the seller) usually executes (signs) and records a deed for legal and monetary consideration.

 

Earnest Money Deposit  - EMD

When someone offers to buy your home, you'll usually have to make an EMD as a show of good faith. The amount varies by jurisdiction, but it is typically between $500 and $5,000. It is usually paid when you sign an agreement of sale for your home; it's called earnest because you're showing that you are committed to going through with selling or buying your house. If someone else outbids them at auction, they lose their earnest money deposit.

 

Equity 

The difference between what your home is worth and what you owe on it. This can be expressed as either a positive or negative number. For example, if your home is worth $100,000 and you have a mortgage of $80,000, then your equity is $20,000 ($100,000 - $80,000 = $20,000). A high equity ratio—positive equity—can help potential buyers see that you have plenty of wiggle room when negotiating selling prices with them.

 

Escrow 

A neutral third party conducts your home sale transaction and is responsible for handling all funds, paperwork, and disclosures between you and your buyer. In addition to managing escrow, escrow agents provide access to professional home inspection reports and government records (such as public documents related to property taxes). Your agent may also recommend an independent contractor for other aspects of your sale (like repairs or staging). Ultimately, you decide who will work with you during escrow.

 

Multiple Listing Service (MLS) 

An MLS, or Multiple Listing Service, is where all properties for sale are listed. Buyers are able to search through all homes on an MLS and each listing has a Realtor associated with it. Real estate agents use it as well when they want to find out what homes are available or if they need to show their home to potential buyers. Your real estate agent will add your home on an MLS whether you sell privately or through them.

 

Principal 

The amount of money you borrowed to buy your home. This includes interest that has accrued, but doesn’t include points or fees.

 

Seller's Agent

If you want to sell your home but do not want to manage all of the details, hiring a licensed real estate agent to represent you as an agent or Seller’s Agent may be best. This means that they will list your property for sale on MLS (Multiple Listing Service) and market it accordingly. They handle price negotiations, buyer inquiries, contracts, inspections and more on your behalf.

 

Real Estate Broker 

In order to legally sell real estate, you must have a license. A broker’s license is transferable, so if you obtain one in your state and move somewhere else, you can transfer it. This differs from an agent’s license. An agent cannot practice outside of his or her local region without obtaining that state’s license. The biggest difference between brokers and agents is that brokers work on commission while agents work on salary.

 

Sales Agreement 

A written agreement between you and an Agent or Broker that obligates one to sell a home and another to buy it. The Agreement may be prepared by either party, but if prepared by Agent/Broker, it will require your signature before it becomes binding. Before signing any Agreement for Sale of your home, you should review it carefully with an attorney or  with your agent.

 

Home Sale Tax Breaks

If you’re like most people, you want to claim as many tax breaks as possible when you sell your home. As it turns out, there are quite a few tax credits and deductions for homeowners. Here’s an overview of some important terms to know if you’re selling your home. These tax breaks will help you keep more money in your pocket when it comes time to sell your house.

 

Title 

The title refers to the proof of ownership that you can use to sell it.   In most cases, it is your deed, which should be kept in a safe place. In some states, like Florida, you’re required by law to keep your deed somewhere safe and accessible for future home buyers.

 

Need help in selling your home?

If you’re thinking about selling your home, now is a great time. Homes are selling quickly, and most recently sold at an average of 97% of their asking price. If you’re planning to sell your home soon, there are a few things that you should know. A professional REALTOR® can help walk you through every step of preparation, explaining what you need to do ahead of time and what it all means for your bottom line once you sell. To give yourself more control over your selling process, think about starting early by preparing for your listing appointment today. First impressions always matter so make sure yours is good! Please feel free to give us a call at ‪(727) 404-5530‬ or email us at troynowakrealty@gmail.com



Related Blogs:

Pinellas County Home Repair Cost Guide - 2022
Selling a Vacation Home vs. Primary Residence in Pinellas County
Selling For sale by owner (FSBO)




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Troy Nowak

Success in real estate stems from experience, integrity, knowledge, and most importantly, relationships. A successful real estate professional navigates many waters for their clients, and I am here to....

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