Rent, Buy or Sell - Avalon, Stone Harbor, North Wildwood, Wildwood, Wildwood Crest, Diamond Beach, Cape May & Sea Isle City!
Pinterest Facebook Instagram Twitter YouTube LinkedIn Google Plus
Phone

5 Often Misunderstood Real Estate Terms Sellers Need To Know

5 Often Misunderstood Real Estate Terms Sellers Need To Know


August 29th 2022

For the past two years the seller has been king, but that kingdom is starting to crumble.

Of course, we’re nowhere near an official shift from a seller’s market to a buyer’s market, but most sellers can’t bank on being bombarded by multiple offers over the asking price and buyers willing to waive every contingency.

To survive in the current market, sellers need to approach their home sale with a game plan, a strategy—and that includes mastering some critical real estate terms.

Quiz yourself on the following real estate jargon, then learn exactly how understanding these terms can help you.

1. Days on the market (DOM)

The number of days a home spends on the market is commonly referred to as days on the market, or DOM. Knowing your home’s DOM is important because it can affect the final closing price—or whether your home even sells at all.

If a property is priced right, it moves quickly.

However, if a home is overpriced or has a glaring issue that buyers are unwilling to overlook, it could languish on the market. A home with a high DOM can be used to a buyer’s advantage to negotiate a lower price.

2. Contingency

A contingency is a condition that must be met to finalize the sale of a home. The most common contingencies are a home inspection, appraisal, and financing.

In the red-hot seller’s market of the past couple of years, sellers have been used to buyers waiving contingencies to make their offer more competitive against other buyers. But as the market comes back down to earth, sellers shouldn’t be surprised to see contingencies in offers again.

One of the most common contingency from buyers in years past has been an offer depending on if the buyer could first sell their own property.  In this market, there are plenty of buyers without such a significant contingency, and making an offer like that will likely cost you a chance at the property.

3. Stale listing

Stale listing refers to properties with a high DOM, which means the house has been on the market for a long time. How long? It all depends on whom you ask and which market you’re referring to.

Some say a listing is considered stale after about 3-6 months.

So why are stale listings bad for sellers?

Even if the property is perfectly healthy, a stale listing can carry an unwarranted stigma that a brand-new listing does not have.

Buyers might believe they have more bargaining power and can get a steal on a house that’s been eating up time on the market.

Especially a buyer’s market, but even in a seller's market, sellers should be wary of letting that much time elapse before they adjust the price, because they will lose out to the new listing on the block.

4. Market value

A home’s market value is the price that a buyer is willing to pay and a seller is willing to accept on the open market. Market value is influenced by a number of factors, including location, supply and demand, comparables (aka comps), and a home’s physical characteristics.

A common tactic used a lot in the past two years has been sellers using the tactic of listing their house below market value to create a bidding war.

It can be great marketing strategy, but in a cooling market, buyers will pay what the market value is, and no more because they don’t have to.

Consult your real estate agent to come up with the most realistic and strategic listing price, and be sure to price it right from the beginning.

5. Earnest money deposit (EMD)

An earnest money deposit, or EMD, tells the seller that the buyer is serious. The buyer’s earnest money will go toward funding the down payment and closing costs.

The buyer gives the seller a deposit on the sale price.  This demonstrates good faith in the sale transaction.

The timing of EMDs can vary by state.  In New Jersey, a typical sales contract states that the EMD will be provided to the title company after 3-10 business days of the contract being signed.  Generally, a smaller portion is sent out immediately and the remainer of the deposit is sent immediately after that.  Specific dates are used, but if the check/transfer is a day or two late, the seller can simply agree that that's fine and the deal proceeds.

Dipeso Group - Jersey Shore Realtors
HOME  |  CONTACT  |  SITE MAP  |  ADMIN
SALES:  MLS SEARCH  |  LIST YOUR PROPERTY  |  RECENTLY SOLD  |  MARKET REPORT
ABOUT:  OUR TEAM  |  TESTIMONIALS  |  DIRECTIONS  |  BLOG  |  EVENTS  |  SIGN UP FOR EMAIL ALERTS
TOWNS:  AVALON  |  STONE HARBOR  |  NORTH WILDWOOD  |  WILDWOOD  |  WILDWOOD CREST  |  DIAMOND BEACH  |  CAPE MAY  |  SEA ISLE
Phone Number Instagram Twitter Facebook Linkedin YouTube Google Plus Pinterest Directions
© 2021 THE DIPESO GROUP IN AVALON NEW JERSEY.
WEB SITE DESIGNED BY: SQUARE 1 DESIGN | CAPE MAY