17 Common Real Estate Terms Everyone Should Know
July 20, 2021
If you’re interested in buying or selling a home, you’ll need to learn a little about the real estate market. The more knowledge you have about the industry, the better off you’ll be in the process. The real estate market is known for having some unique lingo that doesn’t normally apply to other industries. Thus, if you want to be more comfortable in your real estate ambitions, learn the following 17 common real estate terms.
An assessment of the market value of the property in question. An appraisal is typically done so the buyer can apply for a mortgage.
A type of mortgage that comes with an interest rate that changes throughout the mortgage payment. The rate can lower and increase depending on the market. The interval at which the rate is reassessed is predetermined.
A professional real estate agent that assists home buyers throughout the process. They may assist with negotiations, setting up inspections, and general functions that represent and aid the buyer’s interest.
A one-time payment related to the change in title on a property that’s a part of a homeowner’s association or a condo. The payment is typically placed into capital reserves to contribute to future maintenance and similar expenses.
Conditions that need to be met before closing a real estate sale. For example, some home buyers may decide to place a contingency that they must sell their current home before they purchase a property.
All fees involved in a real estate transaction. These can include credit reports, attorney fees, title insurance, or others.
A ratio used by lenders to determine your ability to pay your loan. The ratio, expressed as a percentage, is found by dividing your monthly debt payments by your monthly gross income.
A financial deposit placed by the buyer and held by the selling party’s agent to show the buyer has serious interest in purchasing the property.
The deposit of funds into a federally insured account that will then be transferred to the seller once the deal has been finalized.
A type of mortgage that comes with an interest rate that will never change, regardless of the state of the market, throughout the mortgage payment.
Homeowners Association (HOA)
An organization usually in a planned community, condominium, or subdivision that establishes and enforces various rules for homeowners and residents. Those who live and own property in such an area are required to pay dues and follow the rules.
A professional real estate agent who represents the interests of the seller. The agent can assess and help determine a price, market the property, and advise on selling terms.
The point in the process where the seller accepts the offer and all terms presented by the buyer.
The process where a buyer applies to a mortgage broker with a complete financial report of the purchase. The mortgage broker will then provide a written letter stating preliminary approval of the buyer’s loan.
A document provided by the seller to the home buyer that covers any issues with the property. These can be needed reforms, defective systems, and a description of past issues.
A type of insurance that protects the buyer from unknown debts or liens placed against the property. Before obtaining the insurance, research is performed in public databases to ensure the seller has legal rights to the property and can sell it and that there are no liens against the property.
A background check performed on the property to discover any outstanding debts or claims against the property.
The Bottom Line
Purchasing property is a cumbersome task that requires experience and knowledge in addition to care and commitment. If you’re looking for realtors in Chester County, PA to help your home buying ambitions, contact Anne Townes Team today!