The main real estate conditions that every owner should know

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From Good Housekeeping

Like any industry, the real estate industry revolves around a multitude of terms that are often misunderstood. If you’ve ever found yourself on Google when it comes to depreciation, right of refusal, or transfer tax, you’re not alone. Some words and phrases associated with the process of applying for a mortgage, finding a property, and buying a home are not known to some people.

But if you have a basic understanding of real estate terms like these, you can proudly show off what you know when communicating with industry professionals, including agentsand bond with friends who are also owners.

Ready to advance your real estate expertise? Take a look below at some of the top real estate terms that are worth knowing, especially if you’re a first-time buyer. Feel free to bookmark this page to use a reminder whenever you need to brush up on your skills.

  • Evaluated value
    When a county, town, town or city hires an appraiser to determine the value of a property for tax purposes.

  • Home inspection
    A home inspection involves assessing the condition of a property, including electrical, sewer and plumbing work before closing.

  • Owners Association
    When a group of homeowners in a community, like a condo, join in paying a fee that covers the upkeep of the entire property.

  • Pre-approval
    The pre-approval process involves a potential lender or bank examining an individual’s finances, including income, assets, and credit history, to determine the amount likely to be borrowed.

  • Prime interest rate
    Banks offer customers who have proven to be creditworthy their best interest rate, or prime rate.

  • Second mortgage
    Also known as a junior lien, a second mortgage is an additional loan taken on the same property. It usually has a higher interest rate than the primary mortgage and can be used for repairs, among other reasons.

  • Transfer tax
    Tax charged by a state, county or city on the transfer of ownership of a property.

  • Under contract
    It refers to a potential buyer and seller who come to an agreement on a property. At this early stage, both parties are in compliance with the terms of the transaction, including the price of the property and the closing date.

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