Here at Hanu Reddy Realty, we that buying property can feel quite overwhelming.
Even the terminology can confuse, and may even sound like a foreign language.
For these reasons, we have provided a real estate agency and industry glossary to help our clients to start to better understand the overall process of buying a home.
The amount of land property proposed for sale.
The officially set value of the property. It can be above or below the asking and selling price and will serve as the basis for tax assessments where applicable.
This term refers to the practice of a property owner selling the home in its current condition and refusing to negotiate any repairs or changes.
Closing refers to the finalizing process where the buyer complaints the purchase of the property, usually in conjunction with a legal team.
The rating given to each individual determined by the health of their credit. Good credit scores reflect a historical track record of on-time bill payment. Poor credit records demonstrate that the applicant has had trouble paying bills in the past and may also do so in the future.
In essence, credit scores reflect the potential of risk in lending money to an individual client.
This is short for “days on the market,” which is the length of time that a property has been available. Sometimes sellers will remove a home from the market before putting it back up for sale to achieve a lower DOM. This is because, in most cases, a high DOM is seen as a sign of unappealing features in the property.
Equity represents the percentage value of the property actually owned by the buyer, after any payments made. If a homeowner purchases a home for less than the assessed value, he or she has amassed instant equity.
Those who own their home fully and outright enjoy 100 percent equity.
Equity is important because property owners can use it to leverage loans from a lender.
Homeowners Association (HOA)
Homeowners Associations serve as the collective governing body for a housing development. Some have minimal tasks, such as plowing the roads. Other have more invasive rules that some homeowners would find overwhelming.
When a home is not sold “as-is” the buyer has the right to pay for a home inspection. Inspectors look for problems such as water damage, mold, termites, structural issues, and more.
Interest rates represent the money charged by a lender for use of money loaned. In most cases, the interest rate is set at a specific mark above the Federal Reserve’s prime rate.
Fixed rate mortgages never change, but adjustable rates will rise and fall in conjunction with Federal Reserve decisions.
In most areas, mineral rights are potentially separate from surface rights. Whoever holds mineral rights has the right to profit from coal, natural gas, or other materials that might be found beneath the surface.
Mortgage brokers work with home buyers to shop among the best possible lenders for the buyer’s needs. They can also connect buyers with those who can quickly help to adjust credit scores so as to get better interest rates.
While many refer to all real estate agents as “realtors,” in reality this term refers to a member of the National Association of Realtors.