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Real Estate Terms to Familiarize with Before you Invest in Real Estate
November 14, 2022 by Arvie Midel
When people hear the word "REAL ESTATE" the first thing that automatically comes into their mind is a house and lot property. However, there are numerous real estate terms that must be recognized and acknowledged in order to have a smooth real estate transaction. Property owners might have already encountered the terms such as down payment, loan payments, interest rates, pre-selling, and ready for occupancy which is all part of the basics since these words are scattered all over the place as well as uttered many times over. Nevertheless, before investing in a real estate property, it is necessary to be well-informed about other real estate terms that will be discussed further.
Real Estate Terms
There are real estate jargons that every real estate agent and buyer should know. These words will definitely help to cut down a few questions in mind and save time for other crucial details and documents. Knowing these terms would also be useful when making an important decision as well as to effectively distinguish the property's value.
Here are some real estate words that are important to know according to Araj (2022):
A payment schedule indicating what goes toward principal and interest balances. The amount allocated toward principal increases steadily month by month as the debt amortizes, starting out small at first. To make it simple, amortization is the process of repaying a debt in a series of regular installments.
An appraisal is a professional's assessment of a house's market value. The condition, location, and recently sold comparable properties are all factors that appraisers look at. Legally, evaluations must be performed by unbiased, independent individuals that have no interests in the sale.
A mortgage is a contract between you and a mortgage lender that grants the lender the right to seize the borrower's property in the event that he/she is unable to repay the loan amount plus interest. Basically, mortgage payments consist of principal and interest payments.
Fixed Rate Mortgage
A Fixed Rate Mortgage is a house loan with a set rate of interest for the entire duration of the loan. This would mean that the interest rates remain the same (or fixed, as the term shows). This is an attractive option for customers.
Federal Housing Administration
Provides mortgage insurance on loans issued by lenders authorized by the FHA. The FHA loans frequently include lower credit qualifications, closing costs, and down payments.
A legal procedure called foreclosure may be used by a lender to seize ownership of a home when a borrower doesn't make the agreed-upon payments to the lender. The property can then be put up for sale by the lender to recover the unpaid loan.
Real Estate Agent
A person with a real estate agent license that is qualified to represent either a buyer or a seller in a real estate transaction.
Real Estate Broker
A real estate broker has the same responsibilities as an agent but is authorized to act alone and employ agents.
Earnest Money Deposit
A good faith deposit is another name for it. Earnest money is a portion of your down payment that you contribute before closing to demonstrate your commitment to purchasing a house.
Equal Credit Opportunity Act
This law prohibits lenders from treating applicants differently based on their age, race, religion, sex, marital status, receipt of public assistance, and Exercising rights under the Consumer Credit Protection Act.
The final step in the real estate transaction. Here, closing papers are signed, unpaid balances are settled, and the seller transfers ownership of the property to the buyer.
Real Estate Transaction
Every buyer and real estate agent always wishes to have a well-ordered and steady transaction. In order for it to happen, the person who will make an investment should look for a trusted agent who is well trained and knowledgeable enough with all the significant procedures since there are various steps involved when purchasing an investment property.
Prior to the purchase agreement, there are many factors to consider such as market value, legal process, legal document, property taxes, and other real estate terminology that will be encountered all throughout the transaction. Crown Asia has been offering house and lot for sale for years already and still continuously developing properties for individuals and families. The property owner should also be familiarized with the contracts, monthly payments, property management, and other relevant details in order to avoid any mishaps. Along with that, the property owner must look for a trusted real estate broker who will do almost all of the work and make multiple listing service. The real estate broker should assess the buyer's preference as well as oversee transactions between the buyer and seller by discussing down payment, drafting contracts, and negotiating the price. Furthermore, another real estate term to understand is the word "as-is" which is used when the seller will not make any changes to a home such as ceiling, roof, paints, etc. the home is being sold as-is. When there's a transaction, the buyer should be aware of the interest rate in order to adjust the budget and make sure that the interest payment is achievable to be settled on time. Not just that, it is also important to make sure that a property's monetary value is estimated for taxes purposes which is also known as assessed value.
Real estate market is dynamic as it changes depending on the economic situation. Cordero (2022) stated that during the last month of June, the report takes a look at the latest market activities in the Philippine commercial real estate sector and along with that, it revealed that the residential prices in Metro Manila, particularly for condominium properties, are slowly bouncing back amidst the sustained reopening of the economy that allowed increased business activities in the capital region. Crown Asia is renowned in the country for real estate business for making seamless real estate transactions and providing property ownership in the easiest way possible. The properties of Crown Asia are strategically located which makes it a great opportunity to offer a fair market value towards the interested buyer. There are house and lot for sale in Cavite that are located in the progressive municipalities of Bacoor, Imus, and Dasmariñas. However, prior to purchasing, make sure to research the real estate terms such as mortgage loan, mortgage lender, mortgage broker, monthly mortgage payments, and even title insurance. All the aforementioned terms will serve as a huge help to make the real estate transaction easier. All things considered, be knowledgeable enough when making huge transactions and only trust real estate professionals.
Related Blog: Filipino Real Estate Terms and Jargons People Should Know
Cordero, C. (2022, June 18). Philippine Property Market News. https://www.cushmanwakefield.com/en/philippines/insights/philippine-property-market-news-june-2022
Araj, V. (2021, November 25). 73 Real Estate Terms To Know In 2022. https://www.quickenloans.com/learn/real-estate-terms#x13