When you go out to purchase any property there are a myriad of real estate terms being used between the professionals which you do not understand straight away. Whether you are buying a farm, blueberry plantation or house with acreage in Abbotsford and other nearby areas, there are some basic terms which you must be well versed with.
Having knowledge of these basic terms will help you in understanding the deals better and keep you informed about the whole process. Here are some of the basic terms used in real estate market that you must have an idea about:
- Assessed Value: It is a value assigned to you property by a tax assessing authority in terms of dollars. It is slightly different from the value assigned by private assessors.
- Amortization: It is a means of paying off the procured mortgage which collectively involved principal and interest for the loan amount. In a typical scenario people pay more tax initially rather than principal amount.
- Closing: It refers to the meeting where the deal is finalized and both parties sign the documents and money exchange takes place.
- Cash Reserves: The money left with the buyer after making the down payment and other added expenses.
- Closing Costs: These are the expenses incurred by buyer or seller on a closure, these include- commissions, insurance, mortgage fee etc.
- Earnest Deposit: The deposit given at the time of offer to display keen interest in the property. The deposit is later incorporated in the down payment and is refundable in case the deal doesn’t work out.
- Contingency: it is a clause added to an agreement to keep things from binding legally till certain conditions are ment. For example- home inspection or acceptable financing arrangements.
- Escrow: It is an account set up exclusively to receive payments from buyers in order to cover costs like taxes and insurance.
- Equity: Difference between the unpaid balance of your mortgage and fair market value of the home is known as equity.
- Interest: Cost incurred on the event of borrowing money is referred as rate of interest.
- Home Warranty: Buyers and Sellers can pay a small amount to add warranty to a house, issues like plumbing, heating etc are covered under it.
- MLS: A multiple listing service refers to an organization responsible for collection and distribution of information related to home sales. The data is used to add more listings on sites like http://fraservalleyfarm.ca/ and the membership isn’t available for public.
- Mortgage Brokers: They are individuals or organizations which bring the lenders and borrowers together. The broker is not responsible for funding, but takes care of processes involved whilst taking the client to a lender.
- Principal Amount: It is the amount of money borrowed during a purchase. For example if $100 is the amount borrowed at 10% then $90 is the principal amount and $10 is the interest that needs to be paid.
- PMI- Private Mortgage Insurance: It is a premium paid for an insurance by the homebuyer to keep the risk off the lender in case of a default. PMI is discontinued in case 20% of equity is paid off.
- Point: 1% of the mortgage value is known as point. Buyer can earn points by paying more money upfront in order to get low interest rate at the time of buying.
- Realtor: An estate agent who is a member of a national association is known as realtor. They are hold high standards and ethics during their dealings.
Get in touch with experts at http://fraservalleyfarm.ca/ to see the avaialble listings of farms, houses with acreage and more with complete assistance throughout the purchase. Visit the website today.