Sorry, commission not included
Is your escrow in retrograde? Is that even possible? Are you confusing comps with contingencies? Do you have zero ties to the real estate world, but for some reason all of these words are living rent-free in your head?
Clearly you’ve been binging the new season of Selling Sunset and have grown curious about real estate jargon. We’re here to help. Never again will you question what the agents are talking about when they’re not discussing, well, each other. Here’s an exhaustive guide to all the real estate terms you’ve heard on the show and maybe a few you haven’t. We even included the kitchen sink — just kidding.
Agent: This one’s pretty straightforward. An agent is licensed to represent property buyers and sellers in real estate transactions. Chrishell, Christine, Mary and all your other Selling Sunset favorites are agents at Oppenheim Group Real Estate. Sometimes they’re acting as a selling agent (looking for a home for their client to purchase), sometimes as a listing agent (looking for a buyer to purchase their client’s home), depending on which client they’re representing in the process.
Appraisal: After a property hits the market, it is inspected for marketability by a real estate appraiser. An appraisal considers everything — location, size and any special features or refurbishments made by the current owner — and makes an accurate valuation of the property’s price.
Backup offer: A backup offer can occur when a property is already in escrow (we’ll get to that later) but another potential buyer puts in a competitive offer. The offer comes from the potential buyer’s agent, and there are no guarantees that the seller will or can accept. Look out for Chrishell dealing with one of these in the Season 5 premiere.
Broker: A broker is a licensed agent who has passed their broker exam, enabling them to manage an agency or work on their own. They oversee compliance and negotiate contracts. Jason, the owner of the Oppenheim Group, is a broker.
Closing: After all the negotiations are done, the two sides meet to sign over the property. Everyone pays closing costs (escrow fees, title insurance fees, document recording fees, etc.), and the agent gets that coveted commission.
Co-list: When two agents from different brokerages agree to list a seller’s property and split the commission, they are co-listing that home.
Commission: Now we’re getting to the important stuff! The commission is the percentage of the property’s sale price that the agent earns for selling it. This is where agents can make big bucks. In Season 4, we see Mary earn $419,850 in commission by selling French Montana’s house. Not a bad day at the office.
Commission split: Here’s the catch. Even though there’s a set amount of commission earned on the sale of a property, the agent doesn’t get it all. Since the agent works for a broker, they have to split the commission. You might remember this being a moment of contention in the first season of Selling Sunset’s sister show, Selling Tampa.
Comps: When trying to determine at what price they should list a home, an agent will often run comps. This means they’ll compare the listing they have to recently sold homes with similar locations, sizes, conditions and features.
Contingency: Sometimes, even when an offer has been made and accepted on a property, there are still some criteria that have to be met before the deal is legally binding. These contingencies could include anything from the seller fixing a damaged roof to the buyer securing a mortgage.
Counteroffer: Buying a house can get pretty tense. As in all areas of life, everyone involved wants the most bang for their buck. Often a buyer will put together their best offer for a home, but rather than accept it, the seller will come back with a counteroffer that’s higher. This back-and-forth can go on for some time until someone concedes.
Disclosure: Honesty is as important between sellers and buyers as it is in all relationships. A house may look pretty on the outside, but does it have termite problems? Or mold? In some states, before a deal can be finalized, the agent and the seller must disclose any issues or defects that could cause the buyer not to proceed with the purchase. After all, nobody wants to be surprised by a crumbling staircase.
Double-ended deal (aka dual agency): A double-ended deal occurs when both the buyer and the seller are represented by the same real estate agent. This is tricky for all parties involved because the agent has to figure out how to get the best deal for both the seller and the buyer and, in doing so, themselves, too.
Equity: This one involves some math. Equity is the difference between what a homeowner still owes on a mortgage and what the home is currently worth. When an owner sells their home, they can keep whatever is left of their equity, once all closing and other costs have been paid.
Escrow: Ah, escrow! You hear this word more often in an episode of Selling Sunset than you do “drama.” Okay, maybe not more often, but certainly a lot. The deal is almost done when a house is in escrow. While both parties fulfill their contractual agreements, a third party — an attorney, broker or escrow company — holds the funds and then handles the property transaction and the eventual exchange of money.
Exclusive listing: In an exclusive listing, a contract is signed with just one agent to market and sell the property within a certain time. Pressure or power? You decide.
Fall out of escrow: Oops! Nobody likes falling out. In real estate, this is when a pending sale is canceled and the property goes back on the market. This can happen for many reasons, including a disagreement between buyer and seller, the seller changing their mind, or the appraisal value of a property turning out to be less than expected.
Full-price offer: If there’s one thing nearly every agent can agree on, it’s that a full-price offer is the dream. This means that a potential buyer has agreed to buy the property at the actual price the seller originally settled on with no negotiations. This typically allows the deal to come together quickly and for everyone to get what they want.
Hang your license: Once an agent gets their real estate license, they have to find a brokerage or online agency where they can hang their license. The agents of Selling Sunset have chosen to hang their licenses at the Oppenheim Group, with Brett and Jason as their supervising brokers. Before Christine introduces Chelsea to Jason in Season 5, Episode 2, she lets him know that her new BFF is looking for a place to hang her license. Guess where Chelsea ends up hanging?
Hot market: Some (agents) like it hot — and with good reason. A hot market means houses are selling almost as quickly as they’re becoming available. For an agent working for commission, fast sales above asking price are a win-win.
Leads (hot/warm/cold): Leads come in all different temperatures. In real estate, a lead is the name and contact information for someone who could be a future client. If a lead is hot, they may be someone you’ve worked with before and are ready to buy. A warm lead is less of a sure thing but better than a cold lead — someone who is probably unfamiliar with the brokerage and not yet ready to purchase property.
Listing: It all begins with a listing. Simply put, a listing is the details of a for-sale property that has been placed on the market by a real estate agent.
Market value: Market value is determined by buyers. It is the amount they are willing to pay for a home.
No contingency: This is the opposite of contingency and is probably a real estate agent’s ideal situation. It means there are no conditions that have to be met before the sale can go through, which, in turn, means a faster route to commission.