Real Estate 101: Your Essential Glossary for Buying and Selling in Coastal NC
The real estate world, especially in a fast-moving market like Southeastern North Carolina, comes with its own language. Understanding these basic terms is the crucial first step for any buyer, seller, or investor looking to confidently navigate the process.
Here is a simple, 101-level guide to the core vocabulary you will hear from your lender, attorney, and Realtor.
Core Transaction Terms (The Process)
| Term | Simple Definition | Why It Matters |
|---|---|---|
| Listing | A property that is officially put up for sale on the Multiple Listing Service (MLS). | This is where your property is advertised to all local agents and on public websites. |
| Closing (or Settlement) | The final meeting where all parties sign the paperwork, funds are dispersed, and legal ownership (the deed) is transferred from the seller to the buyer. | This is the official end of the transaction and the day you get your keys or your check. |
| Closing Costs | All the fees and expenses (separate from the down payment) required to finalize the transaction, such as lender fees, appraisal fees, and title insurance. | Typically costs the buyer 2%–5% of the purchase price and the seller 6%–9% (mostly commission). |
| Escrow | A neutral third party (often an attorney or title company) that holds funds and documents until all conditions of the contract are met. | Protects both parties. Your Earnest Money goes into escrow and is held safely until closing. |
| Due Diligence | A specific period of time (typically 7–14 days in NC) granted to the buyer to conduct all inspections, appraisals, and investigations of the property. | This is the buyer's investigative period. If you back out for any reason during this period, you can lose your non-refundable Due Diligence Fee. |
| Contingency | A condition that must be met for the contract to close. If the condition isn't met, the contract may be terminated. | Common contingencies include a satisfactory home inspection or the buyer securing loan approval (financing contingency). |
Financial & Money Terms (The Funds)
| Term | Simple Definition | Why It Matters |
|---|---|---|
| Earnest Money | A cash deposit paid by the buyer when making an offer to show the seller they are serious ("good faith"). | Usually 1%–3% of the price. This money is applied toward your down payment or closing costs at closing. |
| Mortgage | A legal loan agreement that allows you to borrow money from a lender to buy a home, using the house itself as security (collateral). | The primary financing tool for nearly all buyers. If you don't pay, the lender can foreclose. |
| Principal | The original amount of money you borrowed for the mortgage, excluding interest. | Every time you make a payment, the part applied to the principal reduces your debt. |
| Interest | The fee charged by the lender for the use of their money, usually expressed as an annual percentage rate (APR). | In the early years of a mortgage, most of your payment goes toward paying off this interest. |
| Equity | The portion of the home that you truly own. It is calculated by taking the home's current market value minus what you still owe on the mortgage. | You build equity by paying down the loan or when your home's value appreciates. This is your personal wealth in the home. |
| Appraisal | A professional, unbiased estimate of a property's market value conducted by a licensed appraiser. | Required by the lender to ensure the home is worth the amount you are borrowing. If the appraisal is low, the sale price may need to be renegotiated. |
Property Terms (The Home & Neighborhood)
| Term | Simple Definition | Why It Matters |
|---|---|---|
| Title | The legal right of ownership to a property. The Deed is the physical document used to transfer that title. | Before closing, a title search is performed to ensure the title is Clear (no liens or legal claims against the property). |
| Lien | A legal claim filed against a property, usually due to unpaid debts like taxes, mortgages, or contractor work. | All liens must be paid off by the seller before the title can legally transfer to the buyer. |
| Amortization | The process of paying off a mortgage loan over time with regular, scheduled payments that gradually pay down both principal and interest. | The amortization schedule shows how much of each payment goes toward interest (high initially) and principal (low initially). |
| HOA (Homeowners Association) | A formal governing body within a planned community (condos, townhomes, or single-family) that enforces rules and maintains common areas. | Buyers must pay mandatory monthly/annual fees and abide by the HOA's Covenants, Conditions, and Restrictions (CC&Rs). |
Aspyre Realty Group: Your Knowledge-Based Partner
Don't let the jargon intimidate you. Your Realtor is there to translate these terms and guide you through every line of the contract and closing document.
At Aspyre Realty Group, we track every rezoning application, monitor new home inventory from national and local builders, and analyze infrastructure plans. We're experts in helping you navigate the real estate market because of this knowledge, ensuring you understand exactly what you are signing and why.
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