10 Real Estate Misunderstood Terms – Before you begin your home buying process, it is imperative to have a basic understanding of major real estate concepts. This will not only help you in your home buying process but can actually save you a good amount of money.
To assist you with that and as Dr. Phillips realtors suggest, here are the top ten real estate terms that you must understand and know before you get into a real estate transaction.
Understanding the 10 Real Estates Misunderstood Terms
According to Winter Garden realtors, following are some real estate most misunderstood terms.
Amortization
It is a system to pay off the mortgage which is a combination of both principal and interest for your payments. Instead, people take it as just the interest which must be paid off first. Typically, we pay interest first and principal at the end.
Cash Reserves
This is the amount which is left by the buyer after making the down payment. This also includes all other closing costs.
Listing
Many realtors refer to homes as listings. As per the Dr. Phillips realtors, a listing is actually on a website that shows information about the house. This information may include a number of bedrooms and price. Browse listing here.
Inspection
Inspection is not about finding the negatives in a property but it’s an offer to thoroughly inspect a house. According to winter garden realtor, inspection is a scheduled activity and may cost around $500. This is indeed, a variable factor and may depend on the market. The inspector checks every nook and cranny and reviews things to be sure of their functionality such as foundations, plumbing or electrical items, appliances etc.
CMA
CMA stands for Comparative Market Analysis. You may also see many Winter Garden realtors, referring it as ‘comps’. This is actually the report of all these houses which are either recently sold or are on the market. Knowing this is important to set a realistic and accurate price for your house.
Contingency
This is a term or a clause in real estate agreement which allows things to work without being legally binding. But this is only applicable unless a particular condition is met. For instance, the common contingencies in a real estate contract are to perform a home inspection before closing the deal.
Earnest money deposit
This is an amount which is usually given with the offer. This payment is made to show interest to the seller and to show seriousness about purchasing the home. This amount is refundable if the offer is denied.
Escrow
It an account set up by your lender to receive monthly payments and to pay off payables like taxes or insurance.
Home warranty
According to Winter Garden realtors, a home warranty is similar to other warranties. Buyers and sellers pay this fee to prevent the home from any future issues like heating or plumbing.
Equity
It is the difference between the unpaid balance of the mortgage and the fair market value of the home. Also, equity continues to increase over the period of the loan.
If you need more information about real estate matters, head over to Megan Dowdy Realty right away!
