10 Real Estate Terms You Should know
Basic understanding of real estate concept is important before entering into home buying process because it will give you a mature knowledge and pre-defined solutions. Having a knowledge of real estate terms will also help you to save a fortune in the future. Thus, here are ten real estate terms that you should at least know before looking for a home.
Buyer’s Agent vs. Listing Agent
For any real estate dealing, there are usually two agents involved; “buyer’s agent” the one who represents you for the dealing and the “listing agent” the one represents the home seller. There is also the dual agency which means every transaction for both the buyer and seller are handled by the single agent , and it is something that you want to avoid in your business process at all costs.
Fixed Rate vs. Adjustable Rate Mortgages
With a fixed-rate mortgage, the interest rate is predetermined when you take the loan and remains same throughout the life of the loan; most common are for 25-30 years. With an adjustable rate mortgage (ARM), the interest rate may differ (up and down); the most common are for 5-10 years. ARM can make financial sensibility while planning to resell or refinance your property before the estimated period ends, but if you planning to go on more than 5 years then fixed rate would seem less risky and sound one.
A pre-approval letter from the bank is very much important before you apply for the mortgage or even start looking for a property. Pre-approval is a written statement from a money lender stating the lender’ preliminary determination that a borrower would qualify for a particular loan amount under the lender’s guidelines. With the help of this letter, you will be able to determine the amount you can afford and ensures seller’s that you will be able to get the loan when needed.
Listings are terms referred to the properties for sale by the real estate agents. Usually “listing” on a website carries detail about the property like price, facilities, the number of bedrooms etc. With the reference of listings available, you can choose the appropriate home property and make the deal. Therefore it is necessary to browse the sites with complete and updated information about the property rather than visiting real estate portals. You will miss the opportunities for the property if the sites you use do not show the all available property details.
Buying property without having inspection check is not considered wise at all. Thus, after making an offer on a home, you need to schedule an inspection check, which may costs around $400-$800, depending on the market structure. Inspection helps you to analyze each and every nooks and cranny, and review things like plumbing, electrical, base foundations, walls, heatings appliances and much more. Therefore it is important for you to get a good inspector and check the property before making any kind of rash decisions.
When you apply for a home loan, your bank will require an examination of the home you need to purchase. An authorized appraiser will evaluate the home’s estimation in view of practically identical homes that have sold in the territory and an examination of the property.
When you put in an offer on a home, you can determine certain conditions that must be met before the arrangement will experience – these are called possibilities. You need to ensure you can really get the credit (a financing possibility), that the investigation doesn’t demonstrate anything excessively insane (assessment possibility), and that the evaluated esteem is near what you’re putting forth to pay (examination possibility). Those are only a couple of regular cases; there are a few different sorts of possibilities, which you ought to examine with your operator.
Offers and contracts
Offers and contracts take place once you make the right home choice. With the help of your attorney and agent, you can also make the right offer for the home and prices and be negotiable. Many important things need to be focused while making an offer because the seller will obviously try to counter your original offer. So, it would be better if you submit your offer with good ideas like personal touch by including the cover letter explaining reasons for buying the home in a convenient way.
Closing costs are the extra fees you have to pay after purchasing a home. Usually, the closing cost ranges from 2-5% of the purchase price of the home, and the cost does not include the down payment. Some of the common fees include excise tax, loan processing costs, title insurance and much more. Hence, it necessary for you to ask your lender about every fee involved in estimation detail and you may also be able to negotiate on that amount.
After every one of the arrangements is done and the merchant has acknowledged your offer, you ought to get a home title report inside a week. Most home loan moneylenders oblige you to pay title protection as a major aspect of the end costs; title guarantors look general society records to ensure the home dealer really had rights to the title and that there are no liens on the home (like an unpaid temporary worker or unpaid duties).
Above points are essential for entering the real estate business and gives you mature knowledge and information while making the right home choice decisions and if you have any confusion you can always contact us.