10 Real Estate Terms You Must Know
Before dealing, have a look at basic terms of real estate that allows you to be well informed for any kind of real estate transaction.
When you plan on selling or buying a property for the first time, it becomes essential to have basic knowledge of a few particular terms of real estate. Often buyers or sellers find it confusing to understand the terminology of a real estate professional. In the first attempt, you might feel like struggling with the concepts of real estate market.
If you are thinking to purchase or sell something, Angus Reed - Commercial real estate expert can be a great help to make the right deal. But before dealing, have a look at basic terms of real estate that allows you to be well informed for any kind of real estate transaction.
Amortization: instead of just paying off the interest, this system allows you to pay off the mortgage with a combination of interest and principal payments. Usually, if you pay both separately, the interest rate is high in the beginning and principal is more at the end of the loan period.
Principal: It is the sum of money you borrow to purchase a home. For example, if you get a home worth $100,000 with a down payment of 10%, $90,000 is principal you need to pay in return with the addition of interest.
Assessed Value: A public assessor assigns a value in the dollar to your property to evaluate applicable taxes of the city. Typically assigned value is different if the appraiser is private and sometimes it differs and depends on the market.
Closing and Closing Costs: Closing is also known as a settlement in which a sale is completed by signing documents. It is the meeting of buyer and seller to complete the property sale. While closing cost includes all the different expenses and fees such as title insurance, commissions, recording fees, mortgage, and more.
Case Reserves: Case reserves is the money buyer yet to pay after the down payment. It comprises all the closing costs.
CMA: Often referred as ‘comps,' CMA means Comparative Market Analysis. It helps to detect an exact price of your property as it is a report of similar properties which are sold recently or are available for sale on the market.
Earnest Money Deposit: EMD is a payment, typically given to show your seriousness of buying property. It remains refundable if in case the offer isn’t accepted. You can find best of the deals with the help of Angus Reed - Commercial real estate expert if you are interested in a property purchase in New York City.
Equity and Escrow: Equity is a mortgage you are yet to pay. If you have paid 50% money out of the 100% payment, then remaining 50% is your equity. It augments the period of the loan. Escrow is an amount you pay to the lender every month in order to pay taxes or insurance.
PMI: Private Mortgage Insurance is an insurance you have to pay to the lender in order to protect the loaner if you are incapable of paying a mortgage. Once your 20% equity remains, the insurance discontinues. Beneficial part is, PMI allows you to access your property before 20% of down payment.
Title Insurance: Title insurance is a policy that provides protection to both, owner and lender from any kind of unexpected claims, loss, and ownership because of encumbrances in the title of the property. It is even more important if the deal is bigger than those typical ones. You can have one of the most trustworthy deals if you consult Angus Reed - Commercial real estate expert to make your dreams come true.