Real Estate Glossary

                                                                                                                      

Listing Agreement: A contract between seller and Real Estate Broker spelling out the terms of the listing. It should include a list date and a expiration date and compensation agreement. It will also include an Agency Agreement.

Comparative Market Analysis or CMA: An examination of the prices at which similar properties in the same area recently sold. Real estate agents may prepare a comparative market analysis for their clients to help them determine a price to list when selling a home or a price to offer when buying a home. Since no two properties are identical, agents make adjustments for the differences between the sold properties and the one that is about to be purchased or listed to determine a fair offer or sale price.     
                 
Absorption Rate: The rate at which available homes are sold in a specific real estate market during a given time period. It is calculated by dividing the total number of available homes by the average number of sales per month. The figure shows how many months it will take to exhaust the supply of homes on the market. A high absorption rate may indicate that the supply of available homes will shrink rapidly, increasing the odds that a homeowner will sell a piece of property in a shorter period of time.

Average Days on Market or DOM: The number of days a listing is active in a multiple listing service before it is entered into "pending" status. Pending status is when an offer has been accepted by the seller but the transaction is not yet closed. Many agents refer to "average days on market," which is derived by adding all the days on market of each listing and dividing by the number of listings. In a buyer's market, the DOM are generally higher because inventory takes longer to sell. In a seller's market, the DOM are fewer.

Realtor Commission: This is a percentage or an amount that you and the real estate agent/broker agree on when the property is listed and that you agree to pay when your property is sold. There is no set percentage. All commissions are negotiable. Your listing agent will then share a percentage of that to a cooperating agent should another agent bring a buyer.

Binding Agreement Date:  This refers to the date when an offer to buy is accepted and all parties (Buyers and Sellers) have signed and accepted the price and terms of an offer to buy.

Buyers Representation Agreement:  This is an agreement between a buyer and an agent/broker in which the buyer is agreeing to work exclusively with a particular agent/broker. In order to have a Buyers Representation Agreement the buyer and the agent must have a written agreement. Once a buyer enters into a Buyers Rep Agreement they are agreeing to let their agent schedule all showings for them and they are agreeing to pay the agent at closing whether through the cooperating commission paid by seller or out of pocket.  Depending on what is agreed to in the agreement the buyer may owe their agent additional commission should the cooperating commission be less than that agreed upon to pay. This agreement serves both the buyer and the agent in that it obligates both buyer and agent to certain due diligence behaviors and loyalty in the transaction. If the buyer goe to an open house or calls another agent about a property other than their agent they should let other agents they come in contact with know that they are in a Buyers Rep Agreement with another agent and provide their agents name. Should a buyer use another agent when they are under a Buyers Agreement they may wind up paying their agent at closing out of their pocket as well as the agent with whom they did not have the agreement . Buyers should always be aware of what they are signing and they should always get a copy of everything they sign.