Be in the Know on Real Estate Terminology
As you shop for a new home, your agent may tell you that a house you are interested in just went “pending” or is “under contract accepting backup offers.” These are terms common to the real estate process and the Multiple Listing Service (MLS) the industry uses. Here’s a quick primer on typical MLS and real estate terminology.
Comparative Market Analysis (CMA)
When a seller is trying to set a sales price for her home, her agent will research sales prices and closing prices of comparable homes nearby to set an appropriate price. These figures also help buyers determine whether a home is fairly priced.
Days on Market
This real estate terminology tells you how long a house has been listed. When you are considering a house, you should check its Days on Market figure against a market-wide measurement called Average Days on Market. If a home has been on the market longer than the market average, its seller may be eager to make a deal, or the property may have an issue that caused other buyers to pass. Average Days on Market can also be a gauge of how strong or weak the overall market is.
Cost per square foot
The cost-per-square-foot metric helps buyers make an apples-to-apples comparison of a home’s listing price to other houses on the market. This real estate terminology is a general gauge. You must also take other factors into account, such as a property’s location and its upgrades and features.
An active listing is simply a house listed with an agent for sale. It is wide open for an offer.
A contingent offer is real estate terminology referring to a situation where a buyer and seller have signed a contract, but its fulfillment is contingent on certain conditions. Possible contingencies include an inspection satisfactory to the buyer, an appraisal that satisfies the buyer’s lender, the buyer’s securing a mortgage commitment, or the buyer’s selling another property within a specified time. While an offer is contingent, the seller may accept backup offers in case the contingent offer falls through. These backup offers are not signed by the seller while the initial offer remains contingent. Instead, the backup offer is held in reserve until the first sale either progresses to closing or falls through.
The house is under contract and there are no contingencies to be met. The sale is working through the escrow process toward closing. A pending listing could also be referred to as “in escrow.”
This real estate terminology means the sale has closed, ownership has legally changed hands and the house is off the market.
A seller may withdraw their listing from the market if they decide not to sell their home. The listing real estate agent will remove the property from the MLS so that is no longer listed as active. Be aware that even if the home is no longer actively for sale, it still may appear in database searches.
The listing agreement between the seller and the real estate agent reached its end date and was not renewed.