Becoming Familiar With Real Estate Lingo
Real estate can seem like a very profitable investment until you pick up your first text book to learn the rules of how to properly sell real estate
. The list of new vocabulary dealing with real estate investment is tremendous.
It can be very daunting to learn all this vocabulary at first. However, by learning one word at a time, you will find that the task is not as daunting as you first imagined.
Overtime, you will begin to use the new real estate lingo with ease. No matter what job you select and want to pursue, there will be a new list of vocabulary you will need to learn and understand before you perform the job efficiently.
One of the terms involved with real estate that you will need to know is the 1031 exchange. The 1031 exchange is also known as the Starker exchange.
The Starker exchange is the exchange of properties that is delayed and qualifies for tax-deferment. Saavy real estate investors use these exchanges strategically to legally avoid paying extra taxes.
Another term you will need to know is the 1099. The 1099 is a document that states the income of an independent contractor that is given to the IRS.
The A/I is another term you will need to know. The A/I is a contract that is being reviewed with attorney and inspection agencies.
The showings in which an agent and his or her clients must attend with the listing agent is known as accompanied showings. This is another term you will become very familiar with very quickly.
You may have heard the work addendum before. An addendum refers to an addition, usually an addition to a document.
Another term you should become familiar with is adjustable rate mortgage (ARM). An adjustable rate mortgage is a special kind of mortgage loan.
In this mortgage loan, the interest rate is dependent on the economic index. The interest rate will fluctuate with the index, or with the market.
In general, an adjustable rate mortgage has a period of one, three, five, or seven years. This term will be used a lot while you are working in the real estate agency.
Another term that you have most likely heard before is the term agent. An agent is the real estate salesperson or broker who works with the buyers and sellers and it is who you will be when you learn the necessary vocabulary and laws.
The annual percentage rate, or APR, is the total costs that are part of a loan. The APR is a percentage of the rate of interest.
The total costs amortize over the lifetime of the loan. These costs include the interest rate, closing costs, other fees, and so forth.
Another terms you may recognize, but not really know what it applies to is the term application fees. The application fees are the fees that buyers are charged with by mortgage companies when the application of a loan is signed.
These fees may be included to cover the costs of running credit reports on the buyers, property appraisals, and so forth. Application fees are quite common and you will become very familiar with them over time.
Another term you should already be familiar with is the term appointments. An appointment is when the client meets with the agent, you, to view a property.
An appraisal is another word that you have most likely heard before, whether you were selling or buying your own piece of property. This word refers to a piece of paper that details the value of your property at a specific time.
Occasionally a potential buyer will offer what is called an appraised price for a property. The appraised price is usually the average of two or more appraisals.
Another term you will need to become familiar with is "as-is." "As-is" refers to a contract or offer that states the seller is not responsible for making any repairs on the property.
The buyer is buying the property "as-is" and will have to fix any problems themselves. This term can also be used in other situations within the real estate industry.
An assumable mortgage is a mortgage agreement where the buyer states that he or she is willing to fulfill the obligations of an existing loan agreement. The existing loan agreement was usually made with the same lender.
When a person assumes a mortgage, that person is responsible for paying off the principal and the interest. The person who originally took out the mortgage will no longer be held responsible for the payment of the mortgage.
by: Ignacio Lopez
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