You’ve finally put your house on the market but every word that comes out of the real estate agent and potential buyers (or their real estate agents) seems like a foreign language to you. You just nod and try to stay in the loop reading the emotions from your real estate agent. If you took the For sale By Owner route… yikes! Even worse. You’re living one of those nightmares where everyone speaks in weird sounds and your head explodes in the end.
But fear not! There’s still time to make it right because you came to the right place: the article about the real estate terms every home seller HAS to know. Or at least, the most searched weird real estate terms. If you are a home buyer, we will soon have you covered as well, with an article about the real estate terms every home buyer has to know.
Net Listing is one of the real estate terms that appear the earliest, even before the property is on the market. We hope that when the real estate agent asked you if you’re interested in a Net Listing you didn’t think he was asking if you think the listing should be posted on the (inter)net and said: “Of course I want to!”.
Net Listing is one of the many listing agreement options available for a property. In this one, the home seller and agent agree to set a minimum price for the home to be sold. The arrangement is that no offer below is to be accepted by the agent, while if any offer above that number is made, the agent gets to keep every penny above the number set.
However, beware: net listings tend to lead to lawsuits due to perceived financial losses. In many states, in fact, a net listing is not even allowed. So think through it if a real estate agent advocates for a net listing. Since the final decision of the price is to be yours, chances are you will lose either way: if you under evaluate you will “lose” money when the offer comes higher and if you over-evaluate you will not sell the house, losing time (and time is money).
Another type of listing agreement is the option listing. This is not as controversial as the last one. It’s actually kind of nice for everyone involved.
Option listing is when the home seller gives someone (either the home buyer, the agent or the broker) the option to purchase the property within a certain period of time at a predetermined price. It’s nice for the home seller because if at the end of the period the home buyer doesn’t exercise his option – it’s not an obligation – at least he got a little bit of money out of it; sometimes, depending on market conditions, it can take months or even years to close the sale of a property.
But if just out of curiosity, you’re wondering what an option listing is good for when it comes to home buyers, if you’re wondering what is in it for them: it’s nice for the home buyer because while he/she sorts everything with their cash flow, credit score etc. the property is off the market and the home seller cannot make any deals. Plus – and this applies to the real estate agent that buys the option acting as an investor - say there’s a huge appreciation in the area in the meantime… since the price was set when the option listing agreement was signed, you might be paying $200,000 for a house that is effectively $400,000 worth. An awesome investment that paid for itself before you even got the keys to it!
But enough with listing agreements. If you need to learn more about it, check our Listings 101 article!
Corner influence definition is pretty much what it says. It’s the influence in the price that a property located on a corner of a lot bounded by intersecting street suffers. It can be both good or bad. For a commercial property, it’s always good. The fact that your store is viewed by the incoming traffic of two different streets means the property is more valuable than one that’s only exposed to one singular street.
For residential real estate, it’s a bit more debatable. Although the natural lighting is better and the access to the house gets diversified – which is cool; you can enter the house without passing through the living room when there are annoying visitors - that exposure to pedestrian and automobile traffic can be somewhat of a nuisance. Especially regarding privacy and noise pollution. So if a home buyer tries to low ball you over corner influence, know what it means and try to use some of the positive corner influence arguments we gave here to stand your ground.
“To revoke” is a verb used outside of real estate, and it means to take something back. So it can be used in a number of ways within real estate. If you’re searching for revocation on the internet because the home buyer is asking for one… we have bad news, buddy. What revocation means is that the home buyer is retracting (revoking) from his offer. But revocation can also mean the act of revoking from the real estate agent the clearance or authority to act on one's behalf.
Now, beware: revocation rules and guidelines change from state to state, so not everything is lost if the case is the home buyer asking for a revocation of his offer. If you don’t have a real estate agent contact one to help you out figuring if you can force him to abide by the offer he made or not.
On-site improvements are the improvements that were directly made to the property. Those include not only renovations to the dwelling and its structure, but also if you did a new driveway or even some landscaping renovations to give the home some curb appeal. This is important for you to know when a potential home buyer says it’s interested in buying the home if he sees some home improvements. Because you have to make the differentiation between on-site improvements and offsite improvements – like sidewalks, access roads, power lines etc. Although it also adds value to your home, no one can expect a home seller to make offsite improvements because they are only allowed to work on their own lot. Do not agree in taking charge – even if by asking local municipalities to do something about whatever that guy is complaining about. Chances are he’s just stalling you or seeing if you lower the price in the name of those “on-site improvements” that are really out of your jurisdiction.
Do you feel more confident now that you know all those terms? If you don’t; head to our real estate glossary terms and search for more. Or even write here in the comments and we’ll get back to you with the correct definition for them!