Ep. 46: Real Estate Terminology | 8 Words Everyone Should Understand

Ep. 46: Real Estate Terminology | 8 Words Everyone Should Understand

Hello everybody. Thank you for coming to this week’s video
blog. Great to see you. California Realty Training, Robert Rico
here, hoping to bring some great stuff for you so you can take it on to your real estate
career, and of course make it much more successful. Listen, today I want to talk to you about
some great key terms that I want you to be familiar with in the world of real estate. These terms will help you better understand
what’s going on out there in the real estate world. It’s an exciting real estate world, and doggone
it, you should know all about it. The first term I want to talk to you about
of course is very simple, a buyer’s agent versus a listing agent. Is there a difference? Absolutely. I don’t want you to think too hard on this
one, because it’s rather simple. A buyer’s agent of course represents who? That’s right, a buyer. A listing agent represents who? Let’s think about this. A listing agent represents a seller. Now, there’s a major difference there. Now, what if you represent both in the same
transaction? Can you represent both in the same transaction? Can you represent the buyer and the seller
on the same deal? You sure can. That’s called dual agency. You got that? Buyer’s agent represents the buyer, listing
agent represents the seller. Dual agency represents who? Both on the same deal. Good. Now, the next term I want you to understand
of course is a pre-approval letter. Now, pre-approval letter is completely different
than a pre-qualified letter. In fact, it is substantially different. Pre-approval letter, ready? Here it goes. Buyer’s sitting here with the lender. Lender says, “Hey, how are you doing, Mr.
Buyer? Would you like to borrow some money?” Buyer says, “Of course I’d like to borrow
some money.” The lender then says, “Well, I’d like for
you to fill out this application. I’d like to verify your income, I’d like to
verify your assets. I’d like to verify how long you’ve been at
your employment. I’d like to verify everything. I’d like to verify your FICA score. I want to verify everything there is to know
about you, Mr. Buyer.” Key word here is verify. We want to verify everything there is to know
about you, Mr. Buyer. Bring proof that you made a million dollars
last year. Bring proof that you’ve been at your job for
two years. Bring proof, bring proof, bring proof. That’s called verification. That’s good. Pre-qualified has none of that. Pre-qualified is completely verbal. Lender asks the buyer, “Hey buyer, how much
did you make last year?” The buyer says, “I made a million bucks.” He has yet to prove it. Lender asks the buyer, “How long have you
been at your job?” “Well, I’ve been at my job five years.” He has yet to prove it. There’s a huge difference there. Which one has more weight? Which one has more power? Which one has more validity? Of course, the pre-approval letter, because
the pre-approval letter, key term here, has been verified. All aspects have been verified. Another key term I want you to understand
of course is contingencies. That’s a huge one. Contingencies, contingencies, and contingencies. Contingencies work this way. Buyer makes an offer. Yay, I made an offer. When he made that offer, he made that offer
on an RPA, residential purchase agreement. He made that offer, and he signs and he fills
out an RPA, residential purchase agreement. That’s another term you might want to know,
RPA, residential purchase agreement. Sets out all the particulars of his offer
on this RPA, the purchase price, days of escrow. Everything there is to know that he wants
to offer, he’s going to put it on this RPA. However, there’s contingencies involved. Contingency, that’s a pretty darn nice word. Contingencies. The contingencies is a way of protecting the
buyer. It works like this. These are only ifs, what I call only ifs. I call these only ifs. This is the buyer saying this, “Hey, Mr. Seller. How you doing? I want to make you an offer of a million dollars
for your house. I’ll buy it only if I can get a loan.” That’s a loan contingency. “Hey Seller, how you doing? I want to make an offer on your house, Mr.
Seller. Only if the house appraises for what I offer.” That’s called an appraisal contingency. “Hey Seller, how are you doing? I want to make an offer on your house. I want to go through this transaction with
you only if I approve all the disclosures that you gave to me, and it passes my inspection.” Now these are inspection contingencies. These are all contingencies that protect who? Yeah, the buyer. These contingencies are very common, very
typical in the RPA. You don’t even have to worry about it. It’s already in the RPA. You don’t have to include it in there, it’s
already in there. It already exists. You don’t mess with it. It’ll exist to protect who? That’s right, the buyer. Next one that I want you to understand is
the key term appraisal. The word appraisal. The word appraisal is often used with the
lenders. This is what happens. The lender says, “Hey, Mr. Buyer, how are
you? We’d like to lend you the million dollars. You are pre-approved.” Remember that term? “You are pre-approved for one million dollars. Go find yourself a house for a million bucks.” Buyer says, “Hey, realtor, show me some houses
for a million dollars.” Realtor does his job, and finds him a house
for a million dollars. They make an offer on the RPA, remember that? They make an offer on the residential purchase
agreement. Make the offer, which has contingencies, remember
that one? It has contingencies. They make the offer, and the seller accepts
it for one million dollars. The lender, who was going to provide this
million dollars to buy this house, is slightly concerned. They want to make sure, they want to verify
that this house has got value of at least a million bucks. What does the lender do? They send out an appraiser. The appraiser visits this house, and runs
his comparable research to make sure that this house is worth a million bucks. He goes in the house, makes sure the house
has no major conditions that is wrong with the house. If the appraisal comes in at value, then the
transaction continues onward until it closes. Appraisal, bringing value to a home as to
what the offer was. Now listen, these are just a few of the terms
that you’re going to see often in a real estate career. You’ll see these daily. You’ll see these on offers, you’ll see these
on listing agreements, you’ll see these on RPAs, residential purchase agreements, you’ll
see these on everything. It’s always great to know this stuff. Always educate yourself when it comes to terminology,
because you’re always going to use it on a daily basis. Thank you so much for coming to our video
blog. If you have any questions or concerns, do
us a favor, better yet, do yourself a favor, leave a comment down below, or a question. Don’t forget to subscribe to our channel. Hope to see you next week. Have a great day.

8 thoughts on “Ep. 46: Real Estate Terminology | 8 Words Everyone Should Understand

  1. I like it. Very helpful, Thankyou

  2. Very helpful for my real estate exal

  3. Most helpful in completing my final course in real estate program!

  4. you are the best!!!

  5. You are a great teacher !!

  6. Thanks for the video!

    It was very helpful to see examples while getting a definition at the same time.

  7. Great stuff!

  8. Thank you, what is the style of teaching where as you repeat something to make it stick in the listeners mind?

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