Talk Like A Real Estate Pro
Buying, selling or renting out a property already has its challenges. Not understanding basic RE lingo will only add to the challenge of getting everything finalized. Side note: RE stands for real estate. But have no fear, we’ll have you talking like a pro in no time. Below are the most commonly used RE terms and their meanings.
APR: APR stands for annual percentage rate. This percentage rate helps indicate the cost of a mortgage loan while also factoring in closing costs.
Appraisals: Appraisals are an asset to both the buyer and the seller, but are particularly necessary for the buyer. These are written estimates done by qualified appraisers. An appraiser’s job is to estimate property values and report back with their findings. An appraisal is done before closing on a home to insure that the home’s value is in the same ball-park as the selling price.
Assessment: An assessment is the same things as an appraisal, but is done by the city or county. It determines the taxes on a property.
ARM: An adjustable-rate mortgage (also known as an ARM) is an interest rate that changes based on the economy. ARMs can be partially to blame for the recent housing crisis because as times got tough for people their interest rates increased and their mortgages became more and more difficult to pay.
Capital Gain: Capital gain is the increased value of a property when it sells compared to when it was last purchased. The capital gains taxes only have to be paid by the seller if he or she has lived in the home for less than two years.
Contingency: Contingencies are asks requested by the buyer. They are listed on the contract when a buyer makes an offer. An example of a contingency would be that the buyer agrees on their offered price, but only if the seller replaces the roof before the sale is finalized.
Inspections: Inspections are done to ensure that a property is in good shape and does not have any large problems such as termites. Inspections are done by professionals certified by the American Society of Home Inspectors before a purchase is finalized.