Real Estate 101
Every industry has it own terminology and real estate is no different. Though we may not be an expert in real estate dealings it is good to be familiar with the common terminology used in the industry.
AMORTIZATION
A process of gradually paying off a debt by making equal periodic payments of principal and interest on a loan at equal intervals of time. Eg. ($xx,xxx.00 per month for X years.)
APPRAISAL
An estimate of a property’s valuation by an appraiser.
ASSESSED VALUE
A value placed on a property by a public officer (assessor) or a board as a basis for property taxes.
ASSUMABLE MORTGAGE
A mortgage that is transferred to the buyer who then becomes personally liable for the terms and conditions including payments.
CLOSING
The actual transfer of title for money or other consideration. This is the day that parties actually consummate a deal.
CONVENTIONAL LOAN
A loan not insured or guaranteed by a government.
DEED
A written instrument that, when executed and delivered, conveys title to or an interest in real estate.
DOWN PAYMENT
The amount of cash that a purchaser puts down to buy property.
EQUITY
The value of a property over and above any mortgage indebtedness.
LIEN
A right given by law to certain creditors to have their debt paid out of the property of a defaulting debtor.
LOAN PROCESSING FEE
A flat fee charged by lenders for administration of the loan process. Some banks waive this fee.
MARKET VALUE
The actual value of property at a specific time. Eg. (What your house would sell for today if you were to decide to sell.)
MORTGAGE
A pledge of real estate as security for the payment of a debt. A mortgage is a recorded document that tells the lender that the borrower pledged their real estate as collateral for a loan.
PRINCIPAL
The amount of money that a borrower owes on a loan at a given time.
TITLE
Evidence of ownership.
(image source : activerain.com)
In selling a real estate, there are different ways in advertising it. First, through the modern way, the Internet. There are hundred sites where we can post pictures, details and even an online virtual tour of the estate. Second, through Flyers & Newspaper, where a seller post one picture and rough details of the estate. This is usually done locally or within a state and last for about 2 weeks. Third, through TV or Radio announcement, this is usually time limited and sometimes costly on the part of the seller. And last and considered an old way, is through Word of Mouth. This done by the seller telling his neighbors/friends to look for buyers of the estate and usually do an open house.