12 Important Real Estate Terms You Should Know
If you are planning to buy a property, you need to have some basic knowledge about the terms that are commonly used in such transactions. This will not only increase your knowledge but also, will help you negotiate and fetch a better deal. Understanding the entire process will make you look confident which also helps in getting the property at the price you are willing to pay.
In New York, the market bigwigs, Angus Reed and Lyons USA are betting big on sustainable development technologies in the real estate. It is also expected that by using the newer technologies in the construction, the projects might get completed 35-40% faster than what is usual. All this is going to make the real estate market in New York area very competitive and will increase its worth for the price. Here is a list of common terms that will help you understand things in the real estate better:
- Appraisal: It is the price of the property as determined by a qualified professional, called the appraiser. These appraisers are assigned by the lenders, such as the banks to evaluate the price of the property.
- Appreciation: Appreciation is the difference of the initial price of the property and the current price of the property.
- Buyer’s Agent vs. Listening Agent: These are the two agents that are involved from either side of the deal. These two agents help their clients settle on a price and close the deal.
- Closing: It is the day on which the deal of the property is scheduled. The buyer and the seller complete the transaction on this day by signing the agreement in return of the previously agreed upon money.
- Closing costs: This is the final money paid by the buyer that on or before the day of the transaction. This includes the agent fees, lawyers fee, survey fees, title insurance fees, and taxes.
- Contingency: A contingency is a condition that the buyer keeps which allows him to back out if the property has major repairs. This provides the seller the legal binding and keeps the buyer from losing money.
- Depreciation: It is the opposite of appreciation. It is the decrease in the value of the property over some specific time.
- Down Payment: The amount that is paid by the buyer from his/her pocket before the loan is provided by the lenders, such as a bank. It varies widely depending upon various factors which can have concerns with the buyer or with the type of the property.
- Escrow: It is a neutral third party that offers the service of handling the funds and the documents of the deal.
- Mortgage Pre-Approval Letter: You can get an approval for a home loan before you find a property. This thing is known as mortgage pre-approval letter which makes the mortgage process smooth. If you get this letter, you know how much you can borrow. The sellers get an assurance that they will get money easily because they have lender’s confidence on their back.
- Multiple Listing Service: It is a database that provides all the information about the properties on a single platform. Only the property agents have access to this database.
- Title Insurance: It is the insurance that helps the lenders and the buyers protect themselves against any future dispute in the name of the transfer of ownership.
It is important to know the relevant information and the procedures that buying and the selling parties have to follow to complete the transaction. Whether the real estate markets are on the upward trend or not, being well-aware will definitely help you.