What Is IDX? 10 Real Estate Terms Every Agent Should Know

Every licensed real estate agent needs to know their industry vocabulary. Knowing the language communicates confidence and lets clients know they've made the right choice in choosing you. Here are 10 real estate terms every agent should know. Can you pass the test?

Condominium vs. cooperative

Only one of these terms applies to someone who owns real property. An owner of a condominium has an interest in the land as a tenant, which includes a share of the equity available. Someone who participates in a cooperative, however, is a shareholder in the corporation that owns the land. Partial ownership of the business grants the cooperative tenant access to a lease, but they don't own the home.

Net sheet

This financial document provides the seller with a breakdown of estimated closing costs and related fees. The 'net' portion of the worksheet shows how much money the seller stands to make when subtracting those costs from their current asking price for the property. Information from the net sheet can help the seller adjust the asking price to make the sale more profitable.

Cost sheet

Just like the net sheet, the cost sheet gives a detailed list of financials related to the sale of a home. As the name suggests, the cost sheet lists the closing costs, taxes and fees from the buyer's perspective. An agent uses the cost sheet to guide a prospective buyer through the price points — including how much cash they need to put down on the property — to arrive at the total amount paid. The document also includes due dates for all payments.

Escrow

An escrow is a type of third-party financial account used to hold all payments and monies related to the buying contract. Neither the agent, seller nor buyer has access to the account. The financial institution holding the funds only releases them when both parties have lived up to their respective ends of the agreement. This action keeps all parties (including the agent) honest leading up to closing the sale. Once complete, the escrow account closes and the property officially changes hands.

Earnest money deposit

The first cash deposit a home buyer gives to escrow is the earnest money. This commitment lets the seller, the bank and the agent know that the buyer has serious interest in the property. How much of an interest depends on the size of the original dollar commitment. This money is different from a down payment for a home loan. The buyer can get the earnest money deposit refunded in full if the deal falls apart during the contingency period, which varies by state.

Contract contingency

All parties have conditions they would like met before agreeing to a contact. A contingency is a formal clause within an agreement stating that if a party doesn't meet a certain condition, the other party can void the contract. In home buying, a seller might set a contingency that the buyer must secure a sufficient loan to buy the property. If the buyer can't get a loan, the seller is free to cancel the contract and look for another interested person. The bank lending the money to buy the property might also set a contingency, including verifying the property value and conducting a formal building inspection.

Carpet and built-up area

A big house on the outside may not have as much room on the inside. The carpet area of a home is the livable space within the property, including any steps. An agent showing a property for sale should be able to quote the square footage in terms of carpet area to give buyers an idea of how much real space is available inside.

Sometimes referred to as the plinth area, the built-up area of a home includes the carpet area along with balcony space, inside walls and outer wall thickness. Giving potential buyers the figures for the built-up area plus the carpet area paints an exact picture of the total structure.

Super built-up area

The super built-up area of a house includes the built-up areas plus any common spaces, such as walkways, corridors and lobbies. An agent or developer uses the total square footage of the super built-up area to calculate the home's property value. The per square foot rate used in this calculation can change depending on a property's previous sell price, housing market health and the home's location. In other words, a home in Manhattan can have a higher property value than a property with the same square footage in rural Pennsylvania.

Multiple listing service

A multiple listing service (MLS) is an array of services and software that offers brokers help in communication about contracts, organizing listing information and connecting buyers with sellers. An MLS is usually a regional entity and can span several states or just a single county. Large MLS networks in the United States contain tens of thousands of active members, including real estate brokers and agents. Membership in an MLS is necessary to use the service software and communicate with brokers about listings.

Internet Data Exchange

Listings from an MLS find their way to real estate websites through the Internet Data Exchange (IDX). The IDX encompasses the rules, software and provisions that allow the public to view property listings controlled by an MLS. Real estate agents who use IDX can add its search features to their websites so clients can look at MLS homes. Agents can also work with IDX vendors to add more advanced features, including mobile search functions and WordPress editing tools. These solutions help clients find the home they want to buy much faster.

Buying a home is a big decision for anyone regardless of price. Providing easy-to-understand definitions for the complicated terms clients are likely to encounter can help ease their anxiety. Calm clients make better decisions and often have a smoother buying experience, which is in the best interest of all involved.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.