Whether or not you use a realtor, it is important to know some basic real estate terminology. Having a general knowledge of some of these terms will save you the hassle of trying to filter through the language and guess at what is happening. Guessing what terms mean can lead to fatal flaws when it comes to buying or selling real estate. Some terms can be tricky and guessing wrong could cost you in the future.
Usable Square Footage vs. Rentable Square Footage
When buying a home or an apartment, you will want to know how much space you will be living in. Therefore, it is important to know the difference between terms associated with it. When you hear what the rentable square footage is, you are not only getting the area for your personal space, but also a portion of the shared space available. If you want to know how much room you are getting to yourself, pay attention to only the usable square footage.
Earnest Money & Escape Clause
Looking through contracts can be difficult and tiresome and its easy to skim through and skip over them because they are so lengthy and technical. A realtor or a lawyer can help you to understand it, but you should still have some idea of what to look for. A couple of terms involved in contracts that will be important include earnest money and escape clause. Earnest money is a deposit that is made so that all parties know that it will be a serious transaction. An escape or termination clause is a back out plan which renders the contract void if certain conditions are not met.
There will always be questions and worries that arise when looking at real estate. The big ‘what if’ factor will prod at your mind throughout the process. Contingencies are conditions that need to be met before a deal will go through.The term is defined as ‘provisions for unseen events or circumstances’. For example, if you have found a house that you would like to buy, you can have a loan contingency which will allow you to make sure that you can get a loan for the correct amount. To avoid any kinds of rip-offs, you can get an appraisal contingency which will assure you that the property you are buying is worth what you are paying. If conditions are not met, the buyer has the opportunity to walk away from the deal.
It is not often that a person would have the money to pay for a house in full. The most common way to get funding for a homes is via mortgage. Mortgage is a term that is dreaded by all. There are many different types of mortgages and you need to know which type it is that you are getting yourself into. The three most common types are fixed rate, adjustable rate, and assumable. A fixed rate mortgage provides you with an interest rate which will not change. An adjustable rate mortgage has an interest rate which can change over time. This kind of mortgage is really only better if you are not planning to stay in one place for very long. When taking on an assumable mortgage, you are taking over somebody else’s mortgage. This means that you have basically no control over interest or monthly amounts. The advantage is that the buyer can avoid some other costs.
As some of these terms can be tricky at first, it pays to know what they mean. There are many other terms that are important to both buyers and sellers. Know that it is important not be confused on any of them, the easiest way to be sure is to use real estate professional that will help you navigate through the jargon. Make sure that you know exactly what you are getting into when buying a home. Failure to do so will leave you with something that you may not want, and can cause legal or financial issues in the future.