Must-Know Real Estate Terms and Definitions
The real estate industry is actually simple.
However, some find it difficult to understand.
The truth is that the terms used are quite intimidating.
If you don’t know what a certain term means, you’ll think twice about your real estate property investment.
Might as well familiarize yourself with it. Search through the net. Talk to corresponding contacts. Understand the must-know real estate terms and definitions.
But first, do you know what real estate is?
What does Real Estate Term Means?
Any physical property, land, and buildings fall under the real estate.
But that’s not all. It also includes air rights and underground rights.
What does it mean? The above and below the ground are included in the property. It comprises natural resources like water, vegetation, and animals.
If you are planning to buy a home, look for the surrounding areas as well. Know the rights inclusive on your real estate property. Convert it to a generating profit.
Be Familiar with the Real Estate Terms and Definitions
Every time you purchase a house, you need to talk to an agent or contractor.
For sure, they’ll use terms you might not be familiar with.
Don’t hesitate to ask them. Trusted contract people explain professionally.
Much better if you equip yourself with the right knowledge.
Study everything about your real estate investment. The real estate terms and definitions included.
Real Estate Agents
Basically, there are two types of agents when you buy a house. The buyer’s agent and the listing agent.
As a homebuyer, the buyer’s agent represents you.
Meanwhile, the listing agent represents a home seller, brokerage firm or property developer.
What you need to find is a real estate agent. These people are already established with real estate developments and a member of a brokerage firm.
Approach real estate agents and inquire about current property listings.
Remember, paying the real estate agents is not necessary. These agents earn through real estate development or commission from the seller.
In addition, look for a trusted real estate agent. Read through feedback. Always do a background check.
The properties for sale are also called as Listings.
You can actually search it through the internet.
According to PropertyOnline Philippines, an official website shows all the properties up for sale, for rent or foreclosed. Details about the properties like price, developers like Alveo Land, land/floor area, number of rooms and additional facility are included.
Browse the most up-to-date listings from real estate portals. Filipino Homes has updated and accurate listings and real estate services.
The appraisal is one of the commonly used real estate terms. It is the home’s current market value based on comparable homes sold in the area.
An appraisal is needed when you apply for a mortgage. Look for a licensed professional real estate appraiser. They help you decide if you should buy a property or not.
Take note that if an appraised value is less than it is being offered or sold for, your loan might be denied. Of course, who would want to invest in an overpriced house?
Always ask for a comparative market analysis from the professional real estate appraiser. They buy a house that will increase your home appraisal value.
Amortization (Term & Schedule)
The real estate term Amortization is usually heard by homebuyers. It is your ability to repay a mortgage with regular payments. The principal value of the property and its interest is included.
There are two real estate terms under amortization: Amortization Term and Amortization Schedule.
Amortization Term is the amount of time required to amortize the mortgage. It is basically expressed in a number of months. A 10-year fixed-rate mortgage is 120 months in amortization term.
On the other hand, the Amortization Schedule is the amount of each payment applied to the principal amount and interest. The remaining balance is also shown after each payment.
Ask for an amortization term and schedule. Have an estimated timeline of repaying your mortgage. This way you can imagine how long you plan to pay off the mortgage.
A mortgage is a real estate term used by a homebuyer to raise funds.
Typically, you can get it through banks and housing loan insurance companies.
This is a secured type of loan. It means any default or failure in abiding the terms means foreclosure or repossession of property.
Secure your real estate property by an on-time mortgage payment.
There are two types of mortgage: fixed-rate mortgage and adjustable mortgage.
A fixed-rate mortgage means the loan interest rate will remain the same until the contract matures. You can know exactly how much to shell out of your monthly payments.
On the other hand, the adjustable-rate mortgage has a variable interest rate. It depends on the prevailing rate set by the Bangko Sentral ng Pilipinas. This means the rate can either go low or high depending on the current economic status.
The title insurance is an essential document. It protects both the seller and the buyer in case there is an illegal defect in the property’s title.
Ideally, the title insurance covers both parties. However, it commonly insures either the lender (lender’s title insurance) or the owner of the property (owner’s title insurance.
If a buyer is committed in the real estate purchase, the earnest money is given to the seller. This money signifies their intent and good faith in the transaction.
Usually, the earnest money is kept in the escrow account.
Understanding the real estate concept is helpful. If you know the basic real estate terms and definitions, you’ll secure a safe transaction.
Buy the house you’ve dreamt of. Start fulfilling your dreams. Own a home now. Back up yourself with must-know real estate terms and definitions.