Real estate is any land or building that has value. The value is determined by a number of factors, including the land itself, location, zoning, development potential, and more. The same property could sell for two different prices depending on those factors, which is why it’s so important that you know what these terms mean.
Here are the Important Terms You Should Know About Real Estate:
Contract and Contract Clauses
The contract is the legal document that the seller and buyer sign when they agree to the terms. Contract clauses include specifics about things that the buyer and the seller want, like who will pay closing costs and when the buyer can take possession of the property.
These are similar properties in the neighborhood you’re considering. You can look at the number of bedrooms, bathrooms, square footage, etc., to get an idea of what properties in the neighborhood are listed for.
Pre-approval is one of the first things you need to do. When you speak with a lender, the lender will find out how much you qualify for and tell you what interest rate and loan terms the lender will offer you. By getting pre-approved, you will know how much you can afford to spend on a purchase.
In the walkthrough, your real estate agent will check for any obvious defects in the home, like leaky faucets, missing or damaged windows, or a faulty appliance or furnace. If you discover any defects you didn’t notice during the inspection, your realtor will report them to the seller and ask that they make the appropriate repairs before signing the contract.
Curb appeal refers to the external aspects of a property that make it appealing to potential buyers. Curb appeal is the first impression a home gives potential homebuyers, so it’s important to get this aspect of your home in shape. Sprucing up your curb appeal can improve the curb appeal of your entire neighborhood.
A turnkey real estate investment is exactly what it sounds like. It is a property that has already been developed, and all you have to do is move in and start enjoying the profits. What makes this an attractive option for investors is that you don’t have to worry about finding the money to finance the startup costs.
Escrow is a key term used in real estate transactions. It refers to the holding period of funds or assets that one party pays to another. The purpose of escrow is to ensure that neither party takes advantage of the other.
A Closing Cost is primarily a type of cost which is commonly associated with buying a home. It is an estimate or estimation of various charges that may be incurred as a part of closing a real estate transaction.
A disclosure is a written report issued by lenders, sellers, or agents informing you about defects or problems with the property you buy.
For Sale by Owner
When you plan to buy a new home, it’s natural to wonder what a “For Sale by Owner” home means. A home sold by an owner, as opposed to an agent, is one where you will own the property yourself, rather than having a real estate agent represent you during the sale.
A home inspection is a thorough examination of a home’s mechanical and operational systems to ensure everything is in good working order.
Any person who acts on behalf of another in a legal or business matter, especially one who accepts fees or gets a commission for these services, is called an agent.
A real estate addendum is a written document that adds or modifies the terms of the contract of sale between the buyer and the seller. An addendum changes or modifies the original contract’s terms, and it is possible that they can be made before or after the contract is signed.
Although any real estate transaction is unique, a basic understanding of common real estate terms will help simplify the process.