Ritika
Before
you begin the home-buying process, having a basic
understanding of important real estate concepts will give you peace of mind now
and could save you a fortune in the future.
In
this blog, you can learn about various Real Estate terms that will help you in
the home-buying process. “Now, let’s dive into the post to understand
these so-called complex industry terms simply and seamlessly”.
10
Important Terms of Real Estate
1.
Buyer’s Agent vs. Listing Agent
When
you buy a home, there are usually two agents involved: the "buyer's
agent," who represents you, and the "listing agent," who
represents the home seller. Dual agency occurs when only one agent represents
both sides of a transaction and is prohibited in several states.
When
purchasing a home, you do not pay your real estate agent; instead, they will
receive a commission from the home seller, just like Bricksnwall Advisors.
2.
Fixed-rate vs. Adjustable Rate Mortgages
Mortgages
with "fixed rates" and "adjustable rates" are examples of
conventional loans.
A
fixed-rate mortgage has an interest rate that is fixed for the duration of the
loan, which is typically 15 or 30 years.
An
adjustable-rate mortgage has a variable interest rate and is typically for
five, seven, or ten years.
3.
Pre-Approval Letter
Before
you apply for a mortgage or even begin looking for a home, you should obtain a
pre-approval letter from the bank, which is an estimate of how much money they
will lend you. This letter will assist you in determining what you can afford
and assure home sellers that you will be able to obtain a loan if one is
required.
4.
Listings
One
of the first real estate terms you're likely to come across is
"listings," which are homes for sale that are frequently referred to
by real estate agents.
On
a website, a "listing" displays information about the home, such as
the price and number of bedrooms.
Rather than real estate portals, use sites from real estate advisors like Bricksnwall for the most up-to-date listings.
5.
Home Inspection
After
making an offer on a home, you'll almost certainly need to schedule a home
inspection, which will cost between $200 and $500 depending on the market and
size of the home.
Experts
in Bricksnwall can help you buy a home. If we find something
wrong, you can ask the home sellers to fix it or lower the purchase price of
the home.
6.
Appraisal
When
you apply for a mortgage, your lender will request an appraisal of the home you
wish to purchase. A licensed appraiser will estimate the value of the home based
on comparable homes that have sold in the area and an examination of the
property.
Before
making an offer, you can ask our home-buying or real estate
agent to perform a comparative market analysis, which will tell you how
many comparable homes in the area have sold.
7.
Contingencies
When
you make an offer on a home, you can specify certain conditions that must be
met before the transaction can be completed – these real estate terms are known
as contingencies.
You
must ensure that you will be able to obtain the loan (a financing contingency),
that the inspection will reveal no issues (an inspection contingency), and that
the appraised value is close to what you are willing to pay (appraisal
contingency).
8.
Offers and Contracts
Once
you've found the perfect home, you'll make an offer on it with the assistance
of a real estate agent or attorney. If the seller counters
your initial offer, it is usually because they want more money or a faster
closing date.
Choosing
an experienced realtor is critical to negotiating successfully. Bricksnwall publishes
all of its agent's reviews, good and bad, so you can decide if you want to work
with them.
9.
Closing Costs
When
buying a home, be prepared to pay a lot of fees. Closing costs are typically
2-5 percent of the purchase price of the home, not including the down payment.
10.
Title Insurance
Title
insurance is typically required as part of the closing costs by most mortgage
lenders. Title insurers search public records to ensure that the home seller
owned the title and that there were no liens on the property.
The
Bottom Line
Being unfamiliar with real estate terminology can lead to a home buyer being duped by the builder. Instead of being the target, consult the experts, who will make the difficult process of purchasing a home easier.