Real Estate Terms
Real estate has terms and jargon that are used throughout the entire transaction process. Knowledge of these terms helps one follow the conversation when property matters are being discussed or transacted.
Chris Price Realty, a leading residential real estate company in Austin, breaks down a few real estate terms that all buyers and sellers should know.
Debt to Income Ratio
This financial metric is one that potential borrowers should be familiar with. It is used by financial institutions to contrast monthly debt repayments to the borrower’s gross income. The ratio will ascertain the borrower’s capability to meet the demands of the loan while meeting other financial obligations.
It is another financial measure that is expressed as a numerical figure. An individual’s credit score expresses their creditworthiness. It will determine whether you quality for a loan based on past credit files.
For a property to be sold, the seller or their agent will advertise the property on the MLS (multiple listing service) or any other possible platforms. An off-market property is sold/ is in the process without any form of advertisement or public knowledge.
To acquire a property, a homeowner or rental property owner may consider taking a loan. They will be required to pay monthly or quarterly repayments. If they fail to pay the repayments, the lender has the right to repossess the property. The property will be said to be in foreclosure.
A home can also be in foreclosure due to unpaid property taxes or homeowners association, HOA, fees.
The term refers to a property market where the demand for property is lower than the supply of new housing stock. Due to this, sellers are bound to lower their prices. A buyer’s market is the perfect market for any buyer.
In a seller’s market, the demand for property is significantly higher than the supply of new housing. The higher demand causes the prices to increase, making it an attractive market for sellers.
Appreciation refers to the increase in value of the property. Several factors can cause this increase in value: infrastructure development in the neighborhood, improvement in the macro-economic situation or increase in the demand for housing.
However, it should be noted that appreciation is not a given. House prices can depreciate. If there is a significant decline in demand or if location factors are a turn-off, you can expect home values to reduce.
Homeowners Association fees
The Homeowners Association is a body that governs the management of properties in a community, subdivision or condominium. The association charges monthly or yearly fees that are mandatory. HOA fees serve the purpose of maintaining amenities and repairs to common areas.
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Real estate makes use of unique terms and jargon. Knowledge of these terms will help you feel better prepared to make the right decision when it comes to buying and selling real estate. At times, you might require someone with the expertise and industry knowledge to help you break down and understand these terms.
Rely on the services of the experts at Chris Price Realty. Our professional and exceptional services are tailor-made to consider the needs and preferences of our clients. In addition, our reputable team is committed and dedicated to guaranteed 100% satisfaction.
Reach out to us today.