Just when you think that you might have a deal on a real estate transaction your deal might go belly up. When this happens there is usually only one cause and that cause is usually miscommunication. This miscommunication often happens because your clients do not really understand the lingo of the real estate world and even though you are telling them exactly what is happening they just do not understand and that will more than likely end up with a dead deal. This article will give you a heads up as to what the real estate terms are that many clients do not understand.
Good Faith Estimate
If we were living in a perfect world there would be absolutely no surprises when you were getting ready to close on a new home. However we do not live in a perfect world and surprises do happen. This is where the clients will often not understand the term of the Good Faith Estimate. It happens time and time again where a client will see the amount of the good faith estimate as the exact amount they will need when it comes time to close on the home. However what they soon realize is that the estimate can drastically change when it comes to closing time. Many times they will not have the extra amount when the deal is put on the table and the deal will then fail. The good faith estimate is something that you will want to be sure that your client understands is only an estimate and the number may change.
It is also important for your clients to know that a preapproval is only a preapproval. Many times the clients will obtain a preapproval and think that it is all wrapped up and the loan is a for sure thing only to be disappointed later on. The preapproval will give the clients the idea of how much they will be able to shop around to spend but if the market or even their financial habits change it can affect the chances of them closing on the new home. As a real estate agent you need to be sure that you will keep them in tune with the fact that the loan is not theirs until they sign the last sheet of paper at closing.
One of the catchphrases that a real estate agent will often use when speaking with their clients is the word “comp”. This is a term that helps with the pricing of a home and will typically be used when you are speaking to sellers and not buyers. The sellers will usually look at sites such as Trulia or Zillow to try and find the current selling price of their home. However if you do not take the proper amount of time to explain the process to your sellers you will lose them because of another miscommunication.
The MSL is where all properties that are for sale get listed therefore all real estate agents can see them and be sure that their clients can view them if the home meets their criteria. Having the home listed on MLS does not mean that the house will sell. All agents know that there is much more work that will go into the selling of a home.
Many people will hire a real estate agent but not know exactly what the agent does for them. You will need to be sure that you explain to your clients exactly what you are doing so they do not in turn think that you are not doing your job and will ruin your reputation.
There are many terms that are used in the world of a real estate transaction. The ones listed above are the terms that are most commonly misunderstood because they are not explained clearly. As a real estate professional it is your duty to explain everything in detail to your client as to not have a misunderstanding and upset customers.
Image credits to : Philip Taylor