Three real estate industry terms that are important in today’s market.

The real estate industry is constantly evolving, and with that comes new terms to learn. Today, we'll be discussing three of the most common terms you may come across in today's market: buydowns, assumable loans, and days on market (DOM).

First, let's talk about buydowns. Simply put, a buydown is a way for a buyer to lower their interest rate by having a seller buy down the interest. One specific example is the 2-1 buydown, which is ideal for those who don't plan to live in the home for the entire loan term. In some cases, the seller may even contribute to the buydown as an incentive to get their home sold.

Next, we have assumable loans. If the current homeowner's loan has a better interest rate or terms than the current market, you may have the opportunity to assume that loan. For instance, if the homeowner owes $300,000 on their mortgage and the value of the home is $400,000, and you qualify to assume the loan, you could take over the mortgage and pay the difference to the seller through cash or a second mortgage. However, not all loans can be assumed and not all buyers will qualify. VA loans are always assumable, and many FHA loans are as well. If you’re thinking about selling your home, we recommend that you contact the loan servicer and ask if the mortgage is assumable.

“It's important to stay up-to-date on the latest real estate terms and trends.”


Finally, let's talk about DOM, which stands for days on market. In contrast to the real estate market in 2020 and 2021, homes are not selling as quickly and buyers are becoming more selective. This results in homes staying on the market for longer periods, typically 30 to 60 days. As a result, initial pricing conditions and effective marketing strategies are crucial.

It's important to stay up-to-date on the latest real estate terms and trends. If you're thinking about buying or selling, it's wise to seek the help of a knowledgeable real estate agent who can guide you through the changing market and negotiate the best terms for you. Contact us by phone or email to learn more about these terms.