Real Estate Jargon-What Does it Mean?
Average Days on Market
This is the average time a property has been on the market (for sale). Residential Property Data measures this as the time from date of listing to date of sold contract.
Buyers can use these data to negotiate the price down on a home sale if the number is high. Sellers, on the other hand, may try to use the data to stay firm on their price if properties in the area are selling quickly.
Average Vendor Discount
A price a home sales at verses the price it was originally listed and advertised for is expressed as a percentage. The smaller the percentage, the better advantage for the seller to negotiate a firm price. A higher percentage may mean they will loose that negotiating power and may have to consider lowering their price in order to sell.
Comparative Market Analysis (CMA)
A CMA compares the prices of homes sold, homes currently on the market and homes pending to a subject property. A CMA may be prepared for a buyer or a seller to determine market value. The CMA accounts for style, size, location and other factors that make the homes comparable.
Earnest Money Deposit
The earnest money deposit is a deposit made by the potential home buyer to show that he or she is serious about buying the house. This is typically made at the time of the offer to purchase.
A short sale is when the seller arranges with their mortgage lender to accept a price that is less than the amount they owe on the property. The lender typically agrees to forgive the rest of the loan. A short sale arrangement is made between the seller and the mortgage lender.
A contingency is a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. Common contingencies are a buyer’s contractual right to obtain a professional home inspection before purchasing the home or obtain mortgage financing.