The real estate world is full of words that would confuse any outsider. If you are planning to get involved with it, whether by buying or selling property, it is best you know about the vocabulary before you do, otherwise you will feel confused and unprepared. And everyone knows that buying and selling property in this day and age is hard enough, without having unknown words thrown your way.
So here are eleven words you should familiarize yourself with before getting into real estate:
1.Adjustable-rate Mortgage
Adjustable-rate Mortgage, otherwise known as ARM, are loans which are when your interest can be changed after the first fixed rate time frame. The change that arises is due to the interest rate index that is linked to the ARM.
2. Appraisal
Appraisals are basically professional opinions on the value of a property. Mortgage lenders tend to have this done to see if it worth giving the amount of loan a buyer is requesting for.
3. Appraisal Contingency
It is a part of a contract that states the buyer’s ability to dissolve a purchase agreement. This term is only in effect if the appraised value of the house is less than the sale value.
4. As-in
As-in is a term given to a real estate property where the owner is not going to be willing to do any or all repairs. The pricing of a as is property is considerably lower due to this reason.
5. Back-up Offer
If there are two buyers that are interested in one property, the second one can send a ‘backup offer’ to secure a place in case the first buyer does not want to property later.
6. Blind Offer
Is any offer made by a buyer who hasn’t seen the property at all in person. Buyers usually do this in areas that are highly competitive, but have good reputations.
7. Buyers agent/listing agents
Buyer’s agent are professionals who find properties for their clients and negotiate a deal for them.
A seller, or listing agent is someone who represents a property that is to be sold, and find potential buyers.
8. Covenants, conditions and restrictions
These are rules set by an association, builder or developer than restrict homeowners from doing certain things with the property. Sometimes it can include a fee.
9. Conventional Sale
Conventional sales are those properties that have no mortgage remaining on them. These offer easier sales as the transactions do not require so much paper work.
10. Closing
It is when a house sale is finalized, and both the seller and buyer has signed all documents and the money has been transferred. The property is at this time considered the buyers.
11. Closing Cost
These are all the fees paid at the end of the transaction, including lenders fee, title company fee, fee to the attorney, insurance company, real estate agent, homeowner association, and other associations involved.
So here you have it, 11 must know terms before you enter into the real estate world!
