Confusing Real Estate Terms ExplainedBy Rob Gash, United Country Broker
February 22, 2021
To be more at ease and have a positive experience, it’s important for you to know and understand some of the most commonly used real estate terms.
If you’re a buyer or seller or real estate, it can be a
stressful process. It can also be confusing with all of the real estate jargon
used. To be more at ease and have a positive experience, it’s important for you
to know and understand some of the most commonly used real estate terms.
Below we bring clarity to some of the confusing terms
that you need to know.
What is Title Insurance in Real Estate?
Title insurance protects lenders and buyers from
financial loss if there are defects in the title. Title insurance protects
policyholders in cases of:
by another party
fraud or incorrect signatures
covenants or easements
judgments or liens against a property
A clean title is essential to a real estate transaction,
but title searches are not infallible, and sometimes, things fall through the
cracks. If you purchase a property and then find out after closing that the
previous owners defaulted on property taxes, that burden falls on you unless
you have title insurance.
Depending on the location, transaction price, and
insurance company, a title insurance policy costs anywhere from $500 to $3,500.
Typically, sellers pay for the owner’s policy, which protects the new buyers
What Does Pending Mean in a Property Listing?
Say you find your dream home online, but your query is
met with the word “pending” splashed across the cover photo. Pending in real
estate means that a buyer submitted an offer on the property and the seller
However, that does not mean that the transaction is
closed. Between the time that a pending label is assigned to a property and the
property sells, the home still has to undergo an inspection, the buyer still
may have to secure a mortgage and there’s still the possibility the buyer will
If a property is pending, not all hope is lost. Even
though the seller cannot accept any new offers while the property is pending,
if the original offer falls through, the property is open for new offers.
What Does Contingent Mean?
A contingent listing is very similar to a pending
listing, but contingent status happens before pending status. For an accepted
offer to be contingent, it means the buyer must sell another property in order
to purchase a new one. The offer is “contingent” on the sale of the buyer’s
A contingent listing is usually still considered an
active listing, which means the seller can accept new offers if the terms of
the contingency are not met. The MLS (multiple listing service, see more below)
classifies contingent listings as “UC Contingent/Call Listing Broker,” which
means that the seller has accepted an offer, but other buyers can continue showings
and submitting offers.
What is the MLS?
The MLS, or multiple listing service, is a tool that
helps real estate brokers cooperate to secure buyers for their listings and advertise
their listings to agents who might represent buyers looking for like properties.
Here’s an example of how the MLS facilitates connections.
Broker A posts his property listing on the MLS. Broker B finds the listing and
thinks it’s a great fit for her buyers. Broker A is willing to split part of
his commission with the buyer’s agent. Broker B sets up a showing and the
client decides to buy.
The MLS ensures that listings can be easily found by
brokers that might be working with buyers in the local area. Most systems feed
broker’s listings to 3rd party websites like Trulia, Zillow and Realtor.com.
What about the Acronyms PUD and HOA?
A PUD, or planned urban development, is a self-contained
development consisting of residential, commercial, or residential and
commercial units. PUDs are common in condominium buildings, single-family or townhouse
communities. PUDs include amenities or businesses to serve the residents, like stores,
restaurants and even landscaping services.
PUDs are less restrictive than HOAs, or communities with
a home owner’s association. In an HOA community, there may be rules imposed on
all residents to maintain conformity. However, in a PUD, you have the right to
do whatever you want to your individual property or lot and shared rights in a common
What is an REO Property?
REO, or real estate owned, properties (sometimes
described as “banked owned”) have fallen under the ownership of a lender or an
investor. If someone defaults on their loan payments, the lender can sell the
property at an auction. If the property doesn’t sell, it’s still in the
lender’s possession and deemed an REO property.
A foreclosure is an example of a REO, but it isn’t the
only example. For example, it can become a REO if the previous owner moves out
or passes away at the end of a reverse mortgage and the heirs refuse to pay off
the mortgage balance.
Buying an REO property often comes with an appealingly
low price point. However, you usually get what you pay for, which means the property
might need repairs.
United Country Real Estate has professionals
nationwide to help you get the most out of your property or find your next
dream home. Learn more at www.UnitedCountry.com.
Learn more about the author, Rob Gash, owner/broker of
United Country | Western Land and Lifestyle Properties in Colorado, at www.WeSelltheWest.com.