A real estate is a property consisting of lands which again includes buildings, fixtures, roads, utility systems, etc. Just like every sector, even the real estate industry follows a particular set of real estate terms. There are four types of real estate; residential real estate, commercial real estate, industrial real estate, and investing in land.
Before buying a property, every person would want to be 100% sure about their choices. At Saroj Groups, we cater to our clients with the right property in desirable locations and at reasonable prices. We believe in delivering exceptionally unique homes with live neighborhoods.
When you are into the real estate industry or are planning to explore real estate in India, then being familiar with specific terms used widely in it is a must. There are hundreds of such words that are used, and knowing them all is not an easy task. Therefore, in this blog, we have picked 25 real estate terms for you and their descriptions to help you better understand how the real estate industry functions.
Here’s a list of those real estate terms in alphabetical order
APR
APR stands for Annual Percentage Rate, meaning the cost one pays yearly to borrow money that includes the fees expressed in a percentage format. Since the APR reflects both the interest rate and the prices you must pay to obtain the loan, it can give you a better idea of what it will cost you to borrow money.
Appraisals
Estimates the value of land/house based on factors such as similar properties in the neighborhood. Because real estate transactions are infrequent, they require inspections compared to corporate stocks, which are traded daily.
Assessed Value
To tax property, its monetary value is assessed. The assessed value is the price that has been determined. Property values and market conditions in the surrounding areas are considered part of this annual assessment.
Broker
A broker is a person or a company/firm that buys and sells houses, lands, and the buildings of the owner. In the securities market, brokers are intermediaries between investors and exchanges.
Closing
This is the final step while executing a buy flat in Bangalore and the last step while purchasing and financing a property.
Closing Cost
Closing cost is the fee charged to a purchaser by a lawyer or a bank for the services provided relating to sale as a title of search or appraisals. This can also be any expense over the purchase of land or a house paid to the seller at the end of the sale.
Commission
Real estate agents earn between 5 and 6% of closing sales.
Construction Loan
This loan is granted to build offices, homes, or other real estate property. These loans are usually presented to builders to fund a significant project like the development of houses, offices building, or shopping malls.
Conventional Mortgage
A conventional mortgage, also known as a traditional loan, refers to any home buyer’s loan that is not secured nor offered by the government entity. Conventional mortgages are available through private lenders like banks, credit unions, or any mortgage company.
Deed
It is a form of proof that you are the owner of the property or the house.
Default
This is a form of monetary penalty or a jail term. For example, your bank will charge liability for this default if you fail to pay the EMI for two months. The bank can also take legal action in case of willful default.
Down Payment
This word can be changed to deposit, which refers to a percentage of the total price paid to finalize the sale. So, it can be said that a down payment acts as a guarantee.
Equity
An equity is a difference between what you owe on the mortgage and what your home is worth.
Exclusive Listing
A complete listing is a real estate listing agreement in which a property seller proceeds to appoint one real estate broker to act as the seller’s only agent.
Fair Market Value
The value of a property is at which it would change hands between a willing and informed buyer and a seller. This term is used throughout the Internal Revenue Code, bankruptcy laws, state laws, and many other regulatory bodies.
FHA Mortgage
FHA stands for Federal Housing Administration; this type of mortgage is a loan backed by the government and is reserved for buyers with a low credit score or a significant amount of debt.
Fixed Rate Mortgage
This loan is secured for a real estate property where the interest rate is determined ahead of the loan disbursement. The rate does not change the loan term.
Lender
This is a financial institution, private, public, or a group of individuals who provide funds to a business or an individual with the expectation that the funds will be repaid. The payment happens in monthly EMIs, increments, or lump sums.
Mortgage
This process offers something as a guarantee or collateral against a loan. This term may appear when one looks up a secured loan. The borrower must submit their property as security to the lender.
Original Principal Balance
The total amount the consumer must repay on the loan as part of the original principal balance.
Prime Interest Rate
The term refers to the interest rate that the large commercial banks charge on loans and the products held by their customers with the highest rating.
Real Estate Agent
A person who arranges the selling and renting of houses, offices, land, or buildings of their owners.
Transferable Ownership
Ownership is when a person has all the rights on the property and owns it. Owners will have rights to possession, use, right of way, transfer, and the right to earn rent from their property. Property can be gifted or sold by its owner.
Transfer Tax
Defined as a charge imposed on the transferor of a particular asset that includes real estate or any other revenue-generating holdings at the time of transferring these assets.
Under Contract
If a house has to move under contract, the buyer must make an offer, and the seller shall accept it. This then states that both parties agree to complete the transaction on an agreed purchase price and other significant real estate terms.
The mentioned above are some general real estate terms that one would come across while dealing in the real estate industry.
For any queries regarding buying property, one can get in touch with the Saroj Groups.
