Buying or selling a house isn’t rocket science but it does come with its own lingo that can be sometimes confusing especially to first time buyers and sellers.
If you are looking to buy or sell your property here are some real estate lingoes that you should know.
Mortgage – This is a loan that a bank or a financial institution would draw up for you in order to help you buy the property. It contains information on when the loan commenced, the amount that you have to pay monthly and the duration of the loan among other things.
There are 2 most common mortgages called fixed rate and adjustable rate mortgage. The fixed rate mortgage means that your mortgage has a predetermined interest rate all throughout the duration of the loan. An adjustable rate mortgage on the other hand has a variable interest rate.
Pre-approval letter – Ask your bank for a pre-approval letter so that you can have an estimate of the amount that they are willing to lend you. It helps you determine what you can and cannot afford early on. A pre-approval letter can also provide assurance to the home seller that you can get a loan when needed.
Buyer’s and listing agent – The buyer’s agent is the person who is representing the buyer whereas the listing agent is the person or real estate firm representing the seller. If your agent is the same agent for the listing or the seller then you can be assured of a smoother transaction than when the buyer and listing agent comes from different real estate agencies.
Listing – a house that is put up for sale is called a listing by most real estate agents. Listings are usually posted online nowadays so that people looking to buy properties can easily click on it and view the information about the property.
A listing usually contains the price, number of rooms and bathrooms, size of the property and other special information about the property. In most real estate sites, they let you customize or filter your search so that you don’t have to go through listings that you are not interested in. You can filter for location, price and type of house easily. A photo or photos of the listing is also available. In some cases you can even go on a virtual tour of the property. This can save you time and money and help you decide early on if it is the property that you seek.
“As Is” Condition – a property with an “as is” condition label are usually properties that require some or a lot of work. They are usually priced lower than usual market value but can become more expensive as you go about doing the repairs. If you are unsure about the extent of the repairs that you need to do on a house bring an expert contractor with you on your next viewing of the house. He can provide you with at least an estimate of how much it will cost to fix the house and you can decide whether it is worth the trouble or if it is better to just find another house.
Closing Date – The closing date is the official date when the new owner takes ownership of the property. This means that the new owner’s name is on the title of the property.
Appraisal – An appraisal is the estimated value of the property that you are looking to buy. It is conducted by a licensed appraiser. The appraiser uses information on the prices of the homes that were sold in the surrounding areas and the inspection of the actual property itself as basis for the estimated price. The appraisal is one of the things that the banks use in determining the amount of loan they will grant you.
Inspection – Inspection of the property by a licensed inspector will cost around $500-$850. The inspector will look at things like the property’s foundation, plumbing, heating and electrical information. It is essential that you get an inspector to look at the property after an offer has been made so that you will know what you are getting yourself into. He may be able to see some things that you did not see like growing molds or a termite infestation.
Some of the real estate lingoes are easy to understand and some are not. Educating yourself with these terms can ease the transactions you will have when selling or buying a property.