5 Real Estate Terms You Should Know

Buying or selling a home can feel overwhelming, especially with all the industry-specific terms and processes involved. To help you navigate the real estate journey with confidence, here’s a quick guide to some essential terms every buyer and seller should know.

Home Inspection
A visual examination performed by a licensed home inspector to identify potential defects or noteworthy issues related to the property, its structures, and systems. The inspection typically occurs when the home is under contract or in escrow.

Homeowners Insurance
A policy that provides financial protection for the structure of the home, its contents, liability for injuries to others, and additional living expenses if the home becomes uninhabitable due to covered damages.

Title Insurance
Insurance that protects the buyer and lender against potential claims or disputes over ownership rights to the property. This includes claims that may arise from liens, encumbrances, or defects in the title that existed before the seller transferred legal ownership of the property to the buyer.

Escalation Clause
A clause or addendum in a real estate offer stating that the buyer is willing to increase their offer price to a specified maximum if the seller receives a higher competing offer.

Contingencies
Provisions written into a home purchase contract that allow the buyer to cancel or renegotiate the agreement if certain conditions are not met, such as securing financing, passing a home inspection, or resolving appraisal issues.

Please reach out if you have any questions about real estate - Linda.Nelson@Compass.com or 425-785-3724

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