Basic Terminologies In Real Estate

Just like every other industry, the real estate industry has its own terminologies. While they are so numerous, I have selected out a few for you. So sit back and learn new stuffs about the real estate industry.

Amenities

This refers to the features that comes with a building such as a garage, common lounge, children’s playroom, parking space etc.

Amortization

Land or buildings are non-depreciable assets. Amortization is the payment of principal and interest on a liability (including mortgage), or the write-off of a non-depreciable asset over a scheduled term. Payment is usually spread over a period of time.

Appraisal

This is evaluation of property, usually carried out by a licensed appraiser based on previous sales of similar properties. The bank makes use of the appraised value to determine the lending limit on a given property.

Assignment

This refers to the process of transferring a right or a contract being transferred from one party to another. Examples of contracts are mortgages, leases, deeds of trust etc.

Caveat Emptor

This simply means “Let the buyer beware”, in Latin.

Closing

When the transfer of ownership of a property from the seller to the buyer has occurred according to the sales contract, it’s referred to as closing

Closing Costs

This is the expenses incurred during the purchase and sale of a real property at the time of closing. Some examples are title insurance, attorney fees, taxes etc.

Commission

This is an agreed percentage of the total purchase price of a real property that is made to the broker for his /her marketing efforts of bringing a buyer.

The commission is the payment to the broker for his or her efforts on marketing and selling the property, and is usually a percentage of the total purchase price.

Consideration

This is anything that has value which is offered as an inducement to contract.

Contract for Deed

This is also called installment land contract or installment plan. It is a contract of sale and financing instrument where the seller agrees to convey title when the buyer completes the payment for the purchase of the property.

Counter-offer

Sometimes one of the partners in an agreement may reject a previous offer by proposing a new one.

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