The process of buying or selling a home can seem daunting. We can help that process feel less overwhelming with three free and helpful resources we offer on our website for buying or selling a home. Find out more about these awesome resources and how they can help you in your home buying or selling process.
When looking at purchasing a home, our mortgage calculator will help you quickly estimate your monthly mortgage payment based on factors such as the home's price, your downpayment amount, interest rate, and mortgage term. Our mortgage calculator can be found here.
Completing a home valuation is a great starting point for determining your home's value. While it's not an official appraisal, having an estimate of how much your home is worth can help you in formulating a competitive listing price at which to sell your home. Our home valuation tool can be found here.
House hunting can be a stressful process, especially if you're touring a lot of homes. Having a tool to organize and analyze each home you're considering buying will help you sort out your options and find your dream home. That's why we created a free printable house hunting worksheet! Find and print the worksheet here.
The terms and words used in the real estate industry can seem foreign and confusing to someone who isn't familiar with it. We're here to clear things up by explaining 15 commonly used real estate terms.
1. Adjustable-Rate Mortgage
An adjustable-rate mortgage is a mortgage loan that can be adjusted periodically throughout the life of the loan, usually at five, seven, or ten year intervals.
A real estate appraisal is the process of developing a value for a property. This is done by an appraiser and is generally used to create a sale price for a property and is utilized by banks to be sure they are lending the right amount of money to buyers. Appraisals consider the value of a property based on its physical characteristics along with prices of comparable properties in the surrounding area.
A real estate closing is the meeting that happens when the sale of a property is finalized. The buyers and sellers meet to sign the final documents and the title for the property is transferred from the seller to the buyer. This is also when a downpayment is made and closing costs are paid. The closing is the final step in a real estate transaction and usually occurs weeks after an offer is accepted.
4. Closing Costs
Closing costs are fees paid at the end of a real estate transaction, and are usually set at 2-5% of the purchase price of a property. Closing costs can be made up of fees from title insurance, excise taxes, loan processing, and more.
Contingencies are conditions or actions that must be met in order for the purchase of a property to become binding. A common contingency when buying a home is a home inspection contingency. A home inspection contingency would allow the potential buyer to back out of the purchase of the home if the inspection agency found major problems with the home. The sale of the home would be contingent on whether or not the buyer accepted the results of the inspection of the home.
A real estate contract is a legally binding contract between two parties for the sale of a property. The goal of a contract is to establish the responsibilities of both parties involved in the sale of the property.
7. Fixed-Rate Mortgage
A fixed-rate mortgage is a mortgage loan with an interest rate that remains the same throughout the life of a loan.
8. Home Warranty
A home warranty is a warranty paid for by the buyers of a property that covers the cost of repairing problems such as plumbing, appliances, heating and cooling and more.
A home inspection is an exam of a home and its condition, often performed by a home inspector, that is used in the sale of a home. It is performed once a buyer makes an offer. Inspections usually cost a few hundred dollars and the purpose is to ensure the home is up to code. The inspection can also help with the negotiation of the price of a home.
A listing is a home that is for sale. It is usually "listed" in a publication or on a website such as Zillow, the Multiple Listing Service, or a real estate agency's website.
An offer is the price of a home offered to the seller by the buyer. The seller chooses to accept, reject, or propose a counter offer.
Principal is the balance on a loan. Interest and principal are what make up a monthly mortgage payment.
13. Real Estate Agent
A real estate agent is someone with a real estate license that assists buyers and sellers in the home-buying process.
14. Real Estate Broker
A real estate broker is a real estate agent who has passed their state's broker exam and has met a required level of learning, experience, and transactions to do so. A broker may work on their own or hire agents who work under them.
The title of a property is a document that states the rights and ownership of a property.
We hope this post cleared up any questions of confusion regarding common real estate terms. If you have questions about the above terms or something else related to real estate, please don't hesitate to get in touch with us. We are happy to answer your questions and meet all of your real estate needs!
When investing in real estate, the main goal for the investor is to make their money work for them so they earn a return on their investment. While investing in real estate can be a complex process with many factors involved, there are five simple ways investors can make money.
In real estate, appreciation is when a property increases in value. This could be due to a change in the market, such as land or properties becoming less available or busier. With appreciation, value can increase even if there isn't a change in the physical property. When there is a limited supply of property, a raise in price will reflect the demand. For example, a two bedroom apartment in Los Angeles may cost more than a two bedroom apartment in Omaha, Nebraska simply because the demand for housing in Los Angeles is higher than in Omaha.
2. Cash Flow
Real estate investors earn income from cash flow when tenants pay rent. This type of investing simply focuses on the investor buying a property such as an apartment building, rental house, office building, or storage unit, and operating it in order to collect cash from tenants who pay to use the property for a set amount of time.
Property development produces income for real estate investors through the process of building or renovating physical property. As an example, an investor might buy a plot of land and build an office building on the land. The investor can then sell the land for more than it was purchased for because land with a building on it is generally more desirable than the land on its own.
4. Ancillary Income
Income from ancillary sources provide profit within a bigger real estate investment. Examples of ancillary sources of profit within a real estate investment can include laundry facilities in apartment buildings, vending machines in offices, application fees, furniture rental, short term lease agreements, storage, parking passes, late fees, and pet fees. This form of income is non-rent income and can even increase the value of an investor's property.
Real estate investors that are specialists generate income in their industry by having a service or specialty. Real estate brokers can make money through direct commissions on a sale they make, and can also make commissions if they have a staff of agents working under them. Another specialty within the real estate industry is property management. Property management companies earn money through running daily operations of a property..
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