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Real Estate Terminology

What I've come to learn is everyone is in bed together let's say. In other words, agents, brokers, seller and buyers agents, they all want to sell property or help you buy property. They want to make money. But sometimes the terminology they use gets confusing...

I recently went to an open house where there were at least 50 business cards on the counter in the kitchen, cards for all types of agents who were willing to selling the property--connect people with the property and get a piece of the action if it's sold. Let's help each other make money they're saying to one another.

At times though it can get confusing, as the terms agents and brokers are used interchangeably. But brokers have a different license than agents. Brokers have to have more training and can create a private real estate company. Agents act more like the salesperson, marketing, searching, answering questions, and finding the person to buy or sell the property. Agents are licensed in a particular state to act as an agent.

Then there's the term realtor, which means an agent who's a member of the NAR (National Association of Realtors).

There are also specific types of agents, a 'seller's agent', whose sole purpose is to find a buyer for your property. And then a 'buyer's agent', an agent whose sole role is to find you a property to buy. In both cases, the agents are intermediaries so you can sell or buy the property.

Further along, to add to the confusion, there are mortgage brokers, who are part of NAMB (National Association of Mortgage Brokers), and connect the client or borrower with the lender or bank. A loan officer is someone who works directly for the bank or lending company exclusively.

A title company gives you insurance on the title of the property, to protect you from any liens against the property. Where there's a debt owed and the property has been put up in place of that debt or the sale of the property results in these debts coming do.

Escrow, is a way to put money in a safe place before the deal goes through, another intermediary comes into play, and then act as the means to transfers the money from a seller to a buyer.

The term underwriting is the due diligence that's done when you're going through the process of getting a mortgage. This is the double checking of your credit and financial standing in terms of debt versus earnings ratios.

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