Real Estate Terms Made Easy!

Real Estate Terms made easy:

Home buying and selling can be an overwhelming process. It helps to understand the jargon, especially for first time home buyers. Let’s look at some words that your Realtor, Lender, Closing agent, or others involved might throw around that will help you follow.

“EMD” short for “Earnest Money Deposit” - When a seller accepts a buyer’s offer and the contract is executed, the buyer then has 3 days to turn in their deposit to the designated Escrow Agent

Escrow agent - The title company, attorney, or broker, who is designated on the first page of the contract to hold the deposit. There are more ways that "escrow" can be used but we'll keep it simple for now.

Appraisal: The lender hires an “Appraiser” to go out to the home, take measurements and photos and then draw up a report that compares the subject property to similar homes that have sold recently in order to most accurately price the property. The appraisal ensures that you and the bank do not end up spending more money purchasing the home than what it is worth. BEWARE: Sometimes appraisals will refer to their service as an “inspection” when calling to schedule. This is not the same as a home inspection.

Home inspection: Once a buyer is under contract, they have a designated amount of time to get their inspections done. A Home Inspector is someone who has taken the class, passed their exam, and is a member of the American Society of Home Inspectors who will perform a thorough exam of the property and create a report full of notes and photos and will suggest to the buyer any places that may need attention on the property. Sometimes home inspectors will even tell buyers that they wouldn’t recommend going through with the sale if they find too many issues. Home Inspectors can also find things to help you save on your homeowners insurance such as if your trusses are secured with straps vs clips or perform a wind mitigation.

WDO/ WDO inspection: WDO stands for Wood Destroying Organism: This inspection is performed by a home inspector within a pest control company. In Florida, this is a super common thing we deal with because of our climate. Homes that have T1-11 exterior or Cedar which is less commonly seen but still out there, are going to be the main culprits but even Cinder block homes with wood around the garage or doorways and roof decking associated with shingle roofs can acquire wood decaying fungi. If a buyer is using an FHA or VA loan, the lender requires this type of inspection and if any spots are flagged, they must be repaired and be reinspected and cleared before the loan can be approved.  

Contingencies: Anything that the sale of the property is contingent upon. Often times, sales of homes are contingent upon the appraisal. Now that you know exactly what an appraisal is, this means a buyer will not pay the difference to purchase the house in the event that the appraisal comes back LESS than the purchase price.  If the sale is contingent upon the sale of the buyers property, that means a buyer cannot close on the home they are putting the offer in on until they close on the house they currently own.

Survey: Lenders require a survey of the property in order to approve the loan. Many times, a seller has a copy of the survey available and as long as there have been no structural changes to the property, the same survey can be used. If there is no survey available, buyer will need to order a survey, usually via their Realtor. A land surveyor will come out and use all kinds of scopes and tools to survey the boundaries and measurements of the property, specifically the land.

Home Warranty: Some buyers will ask the seller for a home warranty. Buyers can also purchase these themselves. A home warranty is like insurance on mostly appliances: A/C, fridge, dishwasher, etc. They are typically around $500 and last for one year.

So we’ve covered some of our most common words where people most often ask “what is that?”
Of course if you have any other questions or inquiries, we encourage you to ask your Realtor or give us a call. We’re here to help!  


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