If you're thinking about becoming a real estate agent, congratulations! Signing up for your first real estate licensing course is a big, exciting step on the way to an amazing career.
If you haven't been back to school for a while, you might be wondering if you're ready for the classroom. Fortunately, online real estate courses are much more convenient and comfortable than those old desks in your high school, and you'll feel much more in control of your time and learning.
But if you're nervous, that's okay. The best way to conquer your jitters is to go into the class with some pre-game knowledge under your belt. So here's a look at some of the terminology you'll come across in your coursework. Review these common real estate terms, and you'll start your courses with a leg up.
10 Real Estate Terms to Know
Naturally, there are a lot of real estate terms you'll need to know as an agent. But the following ten are some of the most important and will ease you into your coursework.
Brokerage: The real estate brokerage is the firm, or company, that real estate agents work for. Depending on the state, you may need to be sponsored by a brokerage to get your license. Most agents work for a brokerage to gain experience before they consider going solo.
Chain of Title: A title isn't a thing so much as a legal concept. Title is the legal right to own a home or property — that is, no one else can claim it's theirs due to a lien or mortgage. A chain of title is the record of ownership that stretches from the current owner back to the day the home was built.
Deed: A deed, on the other hand, is a thing. This is the official paper that declares you own the home, and the transfer of the deed from seller to buyer is the major action that occurs at the closing of a real estate deal.
Earnest Money: Earnest money is cash that a buyer is willing to offer a seller to show they are serious about completing the purchase. The amount is typically up to 3% of the purchase price, and having it set aside allows the seller to stop advertising the home and focus on completing the sale.
Fair Market Value: This is the amount a home could be expected to sell for on the open market. Real estate agents make their best guess at this value by evaluating the market and selling prices of comparable homes in the area — an important skill when it comes to pricing a home to sell.
Home Equity: Home equity is the amount of a home that a borrower has paid off. It's calculated by subtracting the remainder of the mortgage from the home's fair market value. Home equity can be used to secure a mortgage for a new home while waiting for the old one to sell.
Homeowners Association: An HOA is a group of neighborhood or condo owners who pool their resources to maintain shared grounds and buildings and enforce private community standards. They often require an annual or monthly fee for property upkeep.
Pre-Approval: Many mortgage lenders will run a credit check to determine a ballpark amount they will lend to a buyer. This provides a budget and streamlines the mortgage approval process later.
Private Mortgage Insurance: PMI is a fee mortgage lenders charge to borrowers with a down payment of less than 20%. It's generally a percentage of the purchase price and remains in place until the borrower reaches 20% equity or refinances.
Transfer Tax: One of many possible closing costs, a transfer tax is an additional fee charged by municipalities when property changes hands.
Feeling inspired to get your real estate license? Take the next step by signing up for online real estate license courses with Aceable! You'll have the power to work at your own pace while learning everything you need to know to ace the licensure test in your state.