Purchasing a new home is an exciting endeavor, but it often comes with a language of its own. The real estate world is filled with specific terms that can seem like a foreign language to those new to the market. To ensure that you’re making the best decisions when it comes to buying your dream home, it’s essential to understand the jargon. In this blog, we’ll demystify some of the most common real estate terms, providing you with a comprehensive understanding of the process.
1. Listing Price
This is the initial price at which a seller lists their property. It’s a starting point and is often open to negotiation.
An appraisal is a professional assessment of a property’s value. It’s conducted by an appraiser and is typically required by lenders to determine how much they’re willing to lend.
Before you start house-hunting, it’s advisable to get pre-approved for a mortgage. This process involves a lender reviewing your financial information and credit score to determine how much you can borrow.
4. Closing Costs
These are the various fees associated with closing a real estate transaction. They can include fees for inspections, title searches, insurance, and more.
In the context of buying a home, escrow refers to a neutral third party holding funds and important documents until the sale is complete.
A contingency is a condition in the purchase agreement that must be met for the sale to proceed. Common contingencies include home inspections and financing.
7. Title Insurance
This insurance protects you and the lender against disputes over ownership of the property. It provides peace of mind that the title is clear.
This refers to the process of paying off your mortgage over time. It involves both the principal amount and interest.
9. Homeowners Association (HOA)
If you’re buying a property in a managed community or building, you’ll likely be part of an HOA. This organization sets rules and manages common areas.
10. Fixed Rate Mortgage
With a fixed-rate mortgage, the interest rate remains constant over the life of the loan.
Understanding these essential real estate terms will help you navigate the home-buying process with confidence. At Housify, we’re committed to not only helping you find your dream home but also ensuring that you understand every step of the journey. Whether you’re a first-time homebuyer or a seasoned investor, knowledge is the key to making sound decisions in the real estate market. Reach out to us at housify.ph to learn more!