Understanding real estate jargon and concepts can help guide people through the purchase cycle and might even help them save a lot of money at the same time. Since it is not every day that people purchase homes, they often do not have the knowledge required to complete the home buying process effectively. This is exactly why it is imperative that every individual looking for a new home should familiarize themselves with real estate jargon and concepts.
Real Estate Jargon You Should Know About
The following are the most common concepts that realtors and agents use in the real estate industry,
The buyer’s agent is the realtor that you hire and basically represents you.
The listing agent is the realtor who represents the home.
These are realtors who represent both parties at the same time.
A fixed rate mortgage is a predetermined rate that remains fixed throughout the life span of the loan.
An adjustable mortgage rate has a variable interest rate that changes every year.
Pre- Approval letter:
In order to obtain a mortgage from any bank a pre approval letter is required; this is an estimate on how much the bank is willing to borrow to you.
This is the most popular jargon used by realtors and is a term they use to define homes that are available for purchase.
Once you have made an offer for the house, you will then have to schedule an inspection upon your discretion. This inspection will allow you to conduct a survey of the entire home.
In order to obtain a mortgage from any bank you will have to submit an appraisal that estimates the home value based on the market value of the property.
As the name implies, these are certain clauses you can include in your offer letter. These clauses must be met for the deal to materialize.
An offer letter is basically a document that is crafted by the realtor or an attorney. It basically encompasses the amount you are willing to pay for the home. This offer is only legally binding if the other party accepts the proposal and some sort of consideration is given in exchange.
This is the most important concept that you should familiarize yourself with; these contracts will include every single detail of the transaction. The title of the deed will not be transferred until a contract is signed by both parties.
When all the dust settles and the negotiations are complete, the home owner will send you a title insurance. This is mostly included in the closing costs and will be the last formality before the deed is transferred.
By now you should have attained enough knowledge to complete you home buying process effectively and this hopefully will help you understand the intricacies of the real estate industry.