realtor

Understanding Frequently Used Terminology in Your Transactions

By Amy Leonhardt
February 2, 2024

New real estate agents may find themselves confronted with terms and acronyms that are unfamiliar. Understanding these terms is crucial for success. Here is a brief guide to some of the most-used terms and acronyms used in real estate and escrow to help newer agents: 

Real estate agent showing paperwork to clients
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APN

APN (Assessor’s Parcel Number) is a unique number assigned to a parcel of real estate. It is used to identify property for legal and tax purposes. It is included in the legal description, and will be referenced on the Grant Deed and the preliminary title report.

CMA

CMA (Comparative Market Analysis) helps determine a property’s market value by comparing it to similar properties in the area, and it is an important tool for pricing strategies.

Closing Costs

Closing Costs are the expenses, beyond the property price, that both buyers and sellers incur to complete the transaction in escrow. Some examples of these costs include title insurance, processing fees, appraisal fees, messenger fees, and taxes. Note that buyer and seller closing costs are not equal, so keep in mind that if “Both” is checked on the RPA, closing costs will be split 50/50, instead of each paying their own fees, and buyers typically have more closing costs.

COE

COE (close of escrow) is the date when buyer and seller complete the sale, and ownership officially transfers to the new owner.  This date is determined by what is agreed upon in the contract. Funds have been transferred, principals have fulfilled their contractual obligations, documents have been recorded, and the transaction is complete. 

EMD

EMD (Earnest Money Deposit) is the buyer’s deposit to escrow that shows the seller the offer was made in good faith. The agreed-on contract will determine the amount of the EMD, the form it can come in (check or wire), and the deadline for depositing into escrow. Once escrow is opened, the escrow company will contact the buyers to provide them with wire instructions. Due to increasingly rampant wire fraud, always have your buyer confirm wire instructions directly with a known verified number for your escrow company, and never take instructions via email or from an unsolicited call. This will help protect your client’s funds.

EOI

EOI (Evidence of Insurance) is a document confirming the details of an insurance policy, and will be required by a buyer’s lender. It is typically requested by escrow on behalf of the buyer, and the insurance company provides the proof of insurance.

FHA

FHA (Federal Housing Administration) is a federal agency that insures mortgages with low down-payments. These loans typically have more stringent requirements than conventional loans, and the process may take a bit longer than a conventional loan, though they are a great option for buyers with limited down-payment funds.

NHD

NHD (Natural Hazard Disclosure) Report is a statutory document that discloses potential risks such as earthquakes or floods on a particular piece of property. Buyer and seller will sign to indicate they have received and reviewed the report.

Familiarizing yourself with these terms and dedicating yourself to continuous learning and training will benefit your career in this ever-changing real estate market.

About the author: Amy Leonhardt is an escrow assistant for Equity Escrow Group, Ltd. in Fullerton, California. For more information on the services provided by Equity Escrow Group please contact them at 714.626.2095 or visit their website www.equityescrowgroup.com

Questions To Ask at the Listing Appointment

By Joe Lins
January 21, 2024

Selling a home is a big decision that involves various factors. For some sellers, this may be the first time they’ve sold a home. As the professional, you will need to ask questions and guide them through this often emotional and stressful process. When meeting with a potential seller make sure to ask them these questions before they decide to put their home on the market:

Real estate agent talking to clients at her desk

Why do you want to move?

Ask them what is triggering the move. Are they downsizing, upsizing, relocating for work? Understanding their “Why” will help in your communications with them.

How much equity do you have in your home?

You will need to ask your Seller some questions that may be considered a bit personal. To find out how much equity they have in their home you need to prepare a net sheet for them. To do this, you will need to ask if they have a mortgage or any other liens on the home. 

Are you prepared to get your home ready to sell?

An important part of selling a home is getting it ready to be put on the market. You as well as the seller want the home to look it’s best to potential buyers in order to get top dollar. A simple question asking if they are prepared to make updates to the home to get it ready to sell is an important part of the listing appointment. If necessary, ask if they will be able to make any home improvements or repairs needed. Remember to ask about home staging and if they want the home staged, as well as how much they are willing to pay for that service. It’s a good idea to have tiered levels of home staging pricing to meet every budget and situation. 

Are there any Legal or Regulatory considerations?

Ask them if there are any legal obligations or disclosures that will need to addressed when selling the  home. Make sure to ask if they have all the necessary paperwork and documents in order. You may need to refer them to their attorney or accountant for some of the information.

What is your timeline?

You will need to know their timeline for selling and moving out. This will dictate how flexible they are with closing dates and potential contingencies. Also, make sure to ask if they have made plans for their new housing situation after the sale. Offer to assist them in finding a new place if they are not already working with another agent.

Having these questions ready to go in a Word or Google Doc to print out, will make your job easier as you go off to a listing appointment. Taking the time to ask these questions at the beginning will set the stage for a smooth transaction and more successful home-selling experience for everyone.

Joe Lins

About the author: Joe Lins is President, CEO and Co-owner of CENTURY 21 Discovery. If you are interested in becoming part of the CENTURY 21 Discovery team or would like more information about our services, training and coaching we provide, contact Joe at 714.626.2069.