Working in real estate involves having excellent communication skills. A big part of learning about real estate comes from having a deep understanding of real estate basics and terms.
As a real estate investor, you will likely spend most of your time addressing real estate-related questions from home buyers and sellers. After all, the job is to guide customers through a complex process that revolves around what is probably the biggest purchase of their lives.
Even if he is already familiar with most of the real estate terminology, brushing up on some of the basics is helpful from time to time and is a great way to improve his skills and knowledge. To help you, we’ve put together this glossary of real estate terms you need to know about.
A seller’s real estate agent is a professional who exclusively represents the seller of a property during a real estate transaction.
They assist the seller by performing specific tasks, such as collecting data and comparable home sales prices, marketing the property, and advising clients on choosing the best offer received for the property.
As the name implies, a buyer’s agent is a real estate agent who is legally licensed to assist buyers during the home buying process. They represent the interests of the buyer exclusively during a real estate transaction.
Some of your responsibilities include negotiating the best possible price for a home, providing information about the neighborhood and its surroundings, ensuring the home is inspected and conducting due diligence.
A real estate appraisal is a process designed to develop an accurate opinion of the real estate value. In a real estate transaction, a lender often requires an appraisal by a third party to ensure that the amount requested for the loan reflects the property’s fair market value.
When the appraised value of a home is less than that offered by the buyer, the lender may ask the buyer to cover the difference in cost.
Lessee and Lessor
Commonly known as a lessor, the lessor is the owner and operator of an investment property. They rent their unit (s) to tenants or tenants. If you want to start your career as a real estate agent, you can work with tenants looking for a lease.
Landlords who operate large-scale properties, such as apartment buildings with a dozen or more units often work with leasing agents to fill their units throughout the year. Some represent their listings themselves, but these owners usually hire agents (or teams of agents) to fill available vacancies.
Appendix and amendment
⁇During a transaction, a home buyer or seller may want to make a request to each other in the form of a supplement or amendment. Sometimes this is a change to an existing contract (an amendment).
An amendment to a living agreement is often made when there is a mistake. An addendum could occur, for example, if a buyer wanted to keep a seller’s washer and dryer, thus requiring new contract language. Other times, they want to add to the contract (an appendix).
Amortisation is the term used for the schedule of mortgage installment payments over some time. A typical buyer’s repayment schedule is one payment per month for 15 or 30 years in real estate.
A homeowners association or HOA is a private organization within a planned community, subdivision, or condominium tasked with creating and enforcing rules for the houses in the community and its residents. Those who purchase property within the jurisdiction of an HOA are automatically included as members and must pay HOA fees or dues.
A pre-approved home buyer means that a lender has verified their information, verified their credit, and approved for a specific loan amount for up to 90 days. The process requires buyers to fill out an application to allow a lender to examine their current financial situation, including creditworthiness, debt-to-income ratio, and ability to pay.
The part of the property officially owned by an individual is known as real estate. Although a person owns a property that he has purchased, the mortgage lender has an interest in it until it is paid in full.
Closing is the final step in the home buying and selling process, and it’s one of the most important real estate terms you should know. The buyer and seller agree on the closing date during the negotiation phase and is generally set weeks after the offer is accepted.
At closing, ownership of the property is officially transferred from the seller to the buyer, and all necessary payments are made, after which the buyer can move in or begin renovating the property.
Homebuyers and sellers incur expenses to finalize a real estate transaction are known as closing costs. These can include appraisal fees, taxes, loan origination fees, credit reporting fees, title insurance, etc. In most situations, the buyer generally pays 2% to 5% of the home’s purchase price, although closing costs can be paid by either the buyer or the seller.
A seller’s disclosure is a document issued by the seller of a home to a buyer. It describes any existing problems with the property and other important details that buyers should know regarding the house. It typically includes home repairs, details about faulty systems or appliances, and history of leaks and other environmental issues.
Title deed and property title
Deed and title are two terms that are often used interchangeably. But although they are closely related, there is a difference between them. The title is a concept and not a physical document. It represents legal ownership of the home and all rights transferred from the seller to the buyer. On the other hand, the deed is a physical and legal document that conveys the title to the new owner after a home is sold. It includes a property description and identifies the dealer (buyer) and grantor (seller) of a specific transaction.
Trust is a step in the home buying or selling process when a neutral third party has something of value (often the buyer’s surety check) during a real estate transaction. Once the transaction is completed during the closing period, the third party will release the funds held during the escrow.
A fixed-rate mortgage comes with an interest rate that remains the same for the life of the loan, giving the borrower more predictability and stability for the life of their loan. It is one of the most common types of loans available and is preferred by many consumers due to its long-term reliability.
Adjustable-rate mortgages have interest rates that change periodically. A home buyer with an adjustable-rate mortgage may start with lower monthly payments than a fixed-rate mortgage, but varying interest rates mean that monthly payments can increase later.
A home inspection is a non-invasive examination of the condition of a home and is often performed in connection with the sale of that home. These are typically performed by a professional home inspector who has the proper training and certifications to handle the inspection.
After the inspection, the inspector provides the client with a written report of the findings, which the client can use to make informed decisions regarding the pending purchase of the property.
A listing is a written agreement, contract, or arrangement for the marketing and sale of real estate through a real estate broker or agent for a specified period. It gives an agent the exclusive authority to handle the sale of the property in exchange for a fee or commission for the services of the property.
In the real estate business, home buyers must offer Houses For Rent In Karachi
Houses For Rent in Bath Island is the property they want to buy. An offer can be for the total list price of the home or what the buyer and agent consider fair market value for the home. Buyer’s agents are responsible for submitting the formal offer in writing before sending it to the seller’s agent. If the seller chooses not to make a counteroffer, he can immediately approve the request, making it a purchase contract.
Homeowner’s title insurance
Due to various possible “defects” in the title, title insurance is insured by both home buyers and their lenders. This insurance covers them if another party claims a residence, there are problems related to counterfeiting or fraud against a landlord or difficulties related to deeds arise. As described in an Inman News article, it is pretty rare for a title insurance claim to be made, but it can happen. That makes this insurance protection essential, as it can provide new homeowners with peace of mind. You can read the following article with detailed information about Homeowner’s Title Insurance.
So, these are some of the terms you need to know. These terms will not only help you with your dealings but also broaden the horizons of your knowledge. Give these terms a read and give your feedback in the comments section below.
Meanwhile, if you want to read more such exciting lifestyle guides and informative property updates, stay tuned to Feeta Blog — Pakistan’s best real estate blog.