The seasoned real estate buyers and sellers are usually very comfortable with the real estate terminology. However, if you are not accustomed to the industry or are a first-time buyer, the real estate jargon can seem intimidating. Here are a few common terms you should know:
- Real Property: Also called real estate. Real property is land, buildings, and permanent fixtures or improvements to a property. For example, a central heating unit is real property. "Personal" property, on the other hand, is property such as a car or furniture.
- Real Estate Agent: A person licensed by a state to represent a buyer or a seller in a real estate transaction in exchange for a commission.
- Real Estate Broker: A person, corporation, or partnership licensed by a state to represent a buyer or seller in a real estate transaction in exchange for a commission. A broker can work independently, but an agent must either be a broker themselves or work for one.
- Down Payment: This is the amount of money a buyer puts into a transaction out-of-pocket. If a property costs $100,000 and the buyer has $20,000 saved, he/she will put down the $20,000 and finance $80,000.
- Equity: The difference between the value of a home and the amount of money the owner still owes to the lender. If the owner owes $150,000 and the property could be sold for $200,000, the equity is $50,000.
- Principle and Interest: Principle is the amount of money borrowed or still owed on the loan. Interest is the amount of money the lender charges for the use of borrowed money.
If you come across a term or "fine print" that you don't understand - contact us!