Do you often get puzzled every time you encounter a seemingly peculiar term of real estate? There is no need to panic as most people experience the same thing more often than not. The myriad of real estate terms used commonly by professionals in the “biz” can certainly make anyone outside of the industry scratch their head. It is always a good option to get yourself in the “know” with real estate terms before you actually invest in a property.
Here are some common real estate terms you may not know:
Appraised Value: As soon as make up your mind to buy or sell your home, an appraiser will pay you a visit at your home and allocate a value depending upon certain factors that may include similar homes in the vicinity and based on the size, location and condition of your home.
As-Is: A home labeled under “as-is” is generally sold devoid of warranty and with no assurance of getting things repaired if the need arises. The homes in this category are mostly foreclosures.
Backup Offer: A back up offer is the one that is considered as the second offer for a home. This comes into effect in case the home does not make it to escrow due to some reason. In this case, a backup offer can come to the rescue.
Closing: Closing is known to occur when all of the escrow requirements are accomplished. Closing takes place when the buyer signs, Title/Deed is transferred, and funds are transferred to the original Owner.
Comparables: Comparable homes are the properties that compare to the one you are wanting to buy or sell. Comparables or “comps” are mainly utilized for the purpose of identification of a home’s sales price by comparing the home to others that fall under the same category in terms of factors like age, size, , condition and location.
Contingency: A contingency, in some scenarios related to an offer, making said offer dependent on other factors, such as the selling the present home of a likely buyer.
Earnest Money: Earnest money is generally paid when an offer is made on a property. If the deal is sealed, you enter into escrow and the amount paid as earnest money is considered a part of your down payment.
FSBO: It is a home that is being put up “For Sale By Owner” without a realtor. This term is pronounced as “Fizbo” as well.
HOA: New communities and masterplans are mainly known to possess a Homeowner’s Association. This association charges a timely fee from homeowners for amenities and landscaping. As far as acreage communities are concerned, there exists a Property Owner’s Association (POA).
P&I: It points to principal and interest only. As a buyer, one needs to take care of all other monthly charges that need to be paid by you like insurance, taxes and an HOA fee, if it needs to be paid.
PITI: It states principal, interest, taxes and insurance, which are referred to as monthly mortgage’s four vital elements.
PMI: it is a private mortgage insurance, and is basically required for homes where the purchaser is known to invest not more than 20 percent down.
Points: You could be paying points to your lender during the processing of your loan. A single point equals to one percent of the amount of loan, and it continues similarly.
Have a few more real estate terms you’re scratching your head about? Contact SCUDO today to help make sense of it all!