Comprehension is key in any conversation for effective communication to take place. To understand what the other person is saying, you have to know the meaning of the words they speak.
Likewise, it is easier to hold conversation with your real estate consultant when you can understand the basic terms being used. Also, you would feel more assured about whatever is being communicated to you.
In this blog post, you will learn about basic real estate terms.
LISTING: This is a comprehensive list of landed properties available for sale or lease by a real estate company. A particular listing is under the jurisdiction of a real estate company or agent for sale. The different types of listing are:
- Open listing.
- Exclusive listing
- Exclusive right-to-sell listing.
OFFER: This is an act of negotiation by the buyer or buyer’s agent. The buyer or his agent would write an offer of the amount they are willing to pay for the property based on the market value.
This proposed offer is then forwarded to the seller or seller’s agent. If the offer is accepted by the seller, it becomes a purchase contract through the agreement. If the buyer’s offer is not accepted by the seller, then a counter offer for negotiation is prepared.
INSPECTION: Property inspection refers to a physical evaluation on a property to identify any defect that can lead to avoidable future cost.
Inspections allow you to see for yourself what you will be investing in. You get to visit the property site with the appointed agent from the agency and ask necessary questions about the property.
EARNEST MONEY DEPOSIT: This is the money paid or deposited by the buyer in acquiring the property. Once both parties (buyer and seller) have agreed on the proposed offer, the buyer makes a deposit to confirm the purchase agreement. This is a form of assurance to the seller that the buyer is willing to purchase the property.
ESCROW HOLDER: This refers to a third party who holds temporary authority over the money or other instrument to be used to acquire a property. The individual has the right to keep all these until a purchase agreement is reached by both the buyer and seller of the transaction.
DAYS ON MARKET (DOM): This refers to the estimated period a property was on listing before it got sold. It helps real estate companies determine the market demand for such property. The longer it takes for a property to get sold, the higher the days on market and vice versa.
EQUITY: This is associated with mortgaged property transactions. It refers to how much of the current value of the property is owned by the buyers after mortgage cos is deducted.
APPRAISAL: This is the process of determining a property’s worth based on market value and other circumstances. Each party in the transaction process is entitled to give an appraisal of what they think the property is worth. A property worth can be appraised based on the following approach;
- Sales comparison approach
- Cost approach
- Income approach
COST/PRICE: Price is the amount being demanded by the seller in exchange for the property ownership. While, cost is the actual amount paid to acquire the property by the buyer at the end of the transaction.
PRELIMINARY TITLE: This is a summary or a detailed report from the seller about the property you want to acquire. It includes all necessary information, past and present about the property. It states clearly the property title, previous owner name, existing tax and proper description of the property.
With an original preliminary title report from the seller, you can be assured of the property status and ownership.
CONCLUSION
Real estate terms are limitless, however it is important that you understand and be familiar with the basic ones. If you ever get to invest in real estate properties, then you will come to know more about them.
You can also get yourself trusted real estate consultants during your transaction process. They will do the talk, legwork and paper work on your behalf and provide you with a detailed report.
Start out by checking out our properties at Sterling Homes Limited And get in contact with our trusted and reliable agents.