There’s a tremendous amount of information to learn and process when you’re starting out as a new real estate agent. Some of this information relates to the real estate industry, some of it relates to the specifics of your local market or the niche you choose to specialize in, and some of it relates to how to build and run a business. At Colorado Real Estate School, we’re committed to helping you build the foundation for a successful real estate career. We make good on this promise by providing the most comprehensive online real estate courses available, ensuring you’ll be armed with all the information you need to pass the Colorado real estate exam and get your license.
Whether you’re brand new to the industry or a seasoned real estate agent, it’s critical to have a strong command of the terminology used in the industry. Understanding basic real estate terms will play an important role in your ability to negotiate with other agents, construct proper contracts and build successful client relationships.
Below is a list of the most important real estate terms to master. Having them organized in one place will help as you study for the Colorado real estate exam, and it will provide an easy reference once you begin your new career as a real estate agent.
As-Is
This term indicates that a seller is putting their property on the market in its current condition, and a buyer must purchase the property without asking the seller to make any repairs or improvements prior to closing.
Listing Agent
The real estate agent representing the seller in a transaction is called the listing agent. This person is responsible for marketing the property to the public and negotiating on behalf of the seller to secure the best possible deal.
Commission
Real estate agents don’t earn a salary. Instead, they get paid by taking a commission on the deals they broker. The amount of the commission fee is typically a percentage of the property’s sale price that is agreed upon by the seller and the seller’s agent at the start of the process.
Earnest Money Deposit
When a seller accepts an offer, the buyer makes a payment called an earnest money deposit which serves as a commitment to complete the transaction. In most instances, this deposit will be nonrefundable in the event that the sale falls through.
Pending
When an offer on a property has been accepted by the seller, the property is considered to be pending until the sale has been finalized.
A mortgage is a loan used to purchase real estate. The property will serve as collateral for the loan.
Debt-to-Income Ratio
When lenders are considering a borrower’s application for a loan, one of the factors used to determine whether to approve the candidate is their debt-to-income ratio. This figure compares the borrower’s total monthly debt obligations to their monthly gross income. It is one of the primary ways a lender evaluates a loan candidate’s ability to make their monthly mortgage payments if they’re approved for a loan.
Preapproval
Before making an offer on a house, it’s helpful for buyers to get preapproved for a loan. This represents a lender’s conditional agreement to grant a mortgage up to a specific amount based on an initial review of the buyer’s application and credit information.
Prequalification
During the preapproval process, a lender assesses the borrower’s financial situation to determine how much money they will be eligible to borrow.
Buyer’s Agent
The buyer’s agent represents the party purchasing the property in a real estate deal. The buyer’s agent provides advice, handles all negotiations with the seller’s agent, advocates for the buyer’s best interests, and guides the buyer through the entire process.
Comparables (Comps)
When a seller’s agent is trying to determine the value of a property in order to set the proper sale price, they look at similar property listings and recently completed sales. These are called comps.
The title is a legal document providing proof of an individual’s right to own and use the property.
Deed
The deed is a document that is transferred from the seller to the buyer during the closing of a real estate transaction. This document represents ownership of the property.
Lien
When a creditor is owed money by the property owner, they may be able to obtain a lien. This is a legal claim against the property that will be held until the owner pays off the debt to this creditor.
Foreclosure
If a borrower stops making their monthly mortgage payments, the lender may attempt to recover the balance of the loan by forcing the sale of the property. The proceeds of the foreclosure sale would be used to pay off the loan.
Escrow
A neutral third party or account that holds funds, property or documents until certain specified contractual conditions are met.
Closing
The last step in a real estate deal is the closing. During this process, all documents are signed and notarized, the deed is transferred from the seller to the buyer, and the buyer officially takes ownership of the property.
A real estate professional can call themselves a realtor when they are a member of the National Association of Realtors® (NAR). The NAR has a strict code of ethics that all members must adhere to.
Broker
A real estate broker has more training and state licensing than a real estate agent. Brokers can either work independently or have a team of agents working for them.
Appraisal
An appraisal is a critical component of the mortgage process and involves a neutral third-party professional providing an assessment of the property’s value. The appraisal protects the lender’s interests by ensuring they don’t grant a mortgage for more money than the property is worth.
If you’re considering a career in real estate, Colorado Real Estate school can help you build the foundation necessary to establish a thriving business. Our online real estate courses are packed with all the essential information you need to pass the Colorado real estate exam and become a successful real estate agent.
All of our online real estate courses are developed and taught by local, licensed real estate professionals, giving you access to the most up-to-date information regarding the latest trends and issues impacting real estate professionals in Colorado. In addition, our online format allows you to complete your coursework at your own pace, making it easier to fit your learning into a busy schedule.
You’ll also benefit from our VideoConnect Success Learning System™ containing the largest library of video content available. These highly engaging video lessons enhance your learning experience and create an authentic classroom atmosphere in the comfort of your own home.
When you take our real estate courses, you’ll have a dedicated partner who is truly committed to your ongoing success. We take this commitment seriously, and we back it up with our TruSupport Pass Guarantee™. If you don’t pass your real estate exam on the first try, you’ll have extended access to all course materials. One of our instructors will also analyze your test results and work with you to create a customized study plan focused on reinforcing the concepts you struggled with on the exam, giving you the greatest chance for a successful outcome next time.
Contact us today to learn more about our online real estate courses.
