The Technical Terms You Should Know for Real Estate

For a career in real estate, it's important to understand the terms used regularly and the subtle differences between certain phrases. At Kentuckiana Real Estate Academy, we offer pre-licensure classes for Kentucky and Indiana residents that cover everything you need to know as a real estate agent, including tricky terminology. Continue reading to learn some of the technical terms you should know.

What is Adverse Possession?

Adverse possession is when someone occupies and uses land that isn't legally theirs, eventually acquiring a valid title to it. Uses could include putting up a fence along the property line, building a shed, or farming part of it. For adverse possession to take effect, possession must be hostile, open, and notorious. In Kentucky, it needs to be ongoing for at least 15 years.

What is a Settlement Statement?

A settlement statement is a document, usually several pages long, that itemizes all of the costs, credits, and funds exchanged between the buyer and seller at closing.

This could include:

• Purchase price and loan details: Expenses directly related to the mortgage, like the loan amount, interest rate, loan terms, purchase price, and any down payment already paid.
• Property-related costs: Things associated with the property's value, like an appraisal fee, title search, title insurance, and home inspection fee.
• Government-related fees: Local or state government fees, like property taxes, municipal fees, transfer taxes, and recording fees.
• Broker and escrow fees: The cost of real estate services, like the agent or broker's commission.
• Insurance and protection: Financial protections like the mortgage and homeowners' insurance.

What Are Contingencies in Real Estate?

In real estate, before a sale can proceed, certain agreed-upon conditions must be met. These are usually designed to protect the buyer, so they can get out of the purchase without penalty. These can include things like:

• The buyer couldn't find a purchaser for their current home before closing day.
• Problems arose during the home inspection that the buyer isn't comfortable with.
• The buyer couldn't secure a loan in time.
• The home's value is less than the offered price.

What is the Difference Between "Pending" and "Under Contract" in Real Estate?

When a house sale is pending, it means the house is off the market and nearing closing. If it's under contract, it means a buyer's offer has been accepted, but not all the contingencies have been met. If a house is under contract, it's still on the market, and backup offers could still be considered. In both circumstances, it's still possible the sale won't go through, which is why many real estate agents don't change a house to pending until just before the closing contract is signed.

Contact Us to Prepare for a Career in Real Estate

If you're interested in pursuing a career in real estate, Kentuckiana Real Estate Academy can help. We provide pre-licensure classes taught by people who have served in real estate and who want to make sure you're prepared not only for the real estate licensure exam, but for the career to follow. We also offer continuing education classes and broker classes.

Get started by calling, filling out our contact form, or signing up for a class. We proudly serve the areas surrounding Louisville and Lexington, KY.