🧠 Common Real Estate Terms Every Homebuyer Should Know

Learning these Common Real Estate Terms gives you the power to make smart moves, especially when buying in Metro Detroit. 🏘️
Once you understand the basics, you’ll feel more confident during contracts, negotiations, and big-money decisions. 💬A basic understanding of real estate concepts brings peace of mind—and could save you a fortune.

Here’s a friendly breakdown of key terms you’ll want to know:

📝 Appraisal

A professional report that estimates the home’s value. 📊
Lenders use it to make sure the loan matches the home’s worth.

⚠️ Contingencies

These are conditions written into your contract.
Example: A home inspection must happen before the sale moves forward.
⚠️ You can waive some, but it’s usually not a good idea.

💰 Closing Costs

These are the extra fees paid at the end of your purchase.
They can include title insurance, taxes, legal fees, and more.
💡 Always ask your lender for a complete breakdown!

💵 Down Payment

This is the cash you put down up front.
It’s usually 3.5% to 20%, but some loans go as low as 0%.
✅ Ask your lender what’s possible for your situation.

📈 Escalation Clause

This boosts your offer in bidding wars. 🥊
It tells the seller you’ll beat a competing offer by a set amount.
Used often in Metro Detroit when homes move fast.

🏦 Mortgage Rate

This is your loan’s interest rate—and it can change your monthly payment big time. 💸
📞 Talk to a lender to understand how rates affect your budget.

📄 Pre-Approval Letter

A must-have before house hunting.
It tells sellers (and your agent) how much a lender will loan you.
💡 This helps set your budget early and shows you’re a serious buyer.

🏠 Homeowners Insurance

This protects your home from things like fire, theft, or storm damage. 🌪️
Most lenders require it before closing.

🔧 Home Warranty

Not the same as insurance!
This covers repairs or replacements on appliances or systems (HVAC, plumbing).
It’s often offered by sellers or added by buyers for peace of mind.

🏘️ Homeowners Association (HOA)

If you buy in a community with shared spaces, you may have an HOA.
They manage upkeep and charge monthly or yearly fees.
📋 Always check the rules and costs before buying.

🏢 Title Company

The title company ensures the property you buy has a clear legal history. 🧾
They handle the title search, issue title insurance, and often help with closing paperwork.
📌 A trusted title company is a key part of the team, especially in Metro Detroit.

🎁 Seller Concessions

The seller agrees to cover these costs, like closing fees, repairs, or even buying down your interest rate.
Concessions can help make a deal work, especially if you’re tight on cash upfront. 💬
🚨 Be sure your loan type allows them, and have your agent help negotiate.

✨ Knowing these Common Real Estate Terms will help you buy smarter in Metro Detroit. You don’t have to be a pro, but you’ll feel like one with the right info. If you would like a PDF version, Click Here! 👍