Buying a home comes with a whole new vocabulary to learn. Real estate professionals often use industry shorthand and jargon that feel confusing for novice buyers. Learn what these real estate terms mean so you navigate the property search process like a pro. Comparable properties, or “comps”, are homes similar to the property for sale used to help determine fair market value. The square footage, bedrooms, location, and condition should mirror the subject home. Comps justify the listing price and help buyers negotiate. Days on the market refers to the period of time a home has been available for sale. DOM indicates demand. A low DOM signals a hot property, while a high DOM suggests overpricing. Sellers may lower the asking price for a home with a high DOM.
Turnkey and pocket listing
A turnkey home is move-in ready with no repairs, often newly renovated. Buyers pay a premium for the convenience of a turnkey property they can occupy immediately with no hassle. Ideal for investors, too. A pocket listing refers to a property unformally listed on the open real estate market yet is still available for sale. Brokers promote these listings discretely among their network of agents which limits broader exposure. Off-market properties are not listed on MLS or public Koh Samui real Estate sites, enhancing privacy. Those who want to limit showings often use off-market listings. Networking and contacts become crucial to finding these hidden deals.
FSBO (For Sale By Owner)
FSBO means a homeowner is selling sans agent representation. Buyers can often negotiate better deals with FSBO sellers. However, FSBO deals carry more risk without licensed agents guiding the transaction. A deliberately underpriced offer, usually below fair market value, intended to start negotiations. Lowball offers may insult sellers but sometimes motivate them to counter near the list price.
- All cash offer – Just as it sounds, an offer with the full purchase price is paid upfront in cash. Cash offers are attractive to sellers for quicker closes and greater certainty. Investors often make all-cash offers.
- Back-up offer – A contingency offer made in the second position, after the winning bid, should the first offer fall through. Sellers keep backup offers on hand if initial financing or inspections go south.
- Domino offer – A conditional offer to buy a house if the sellers first sell their existing home. Domino appeals to buyers worried about timing and financing overlaps between two home sales.
Hard money loan & PITI (Principal, Interest, Taxes, Insurance)
Investing in real estate to obtain a short-term, high-interest loan issued by private investors instead of banks. Hard money bridges financing gaps for real estate investors. The four major components that make up monthly housing costs. Lenders use PITI to calculate debt-to-income ratios for mortgage qualification. Taxes and insurance costs are estimated. The difference between the home’s contract purchase price and appraised value. If the appraisal is lower, buyers must pay the gap. If sellers refuse to lower the price, buyers pay the difference. It includes examining the home’s structure, systems, and components, such as the roof, plumbing, and electrical system. Buyers request repairs or walk away based on inspection findings.