The Beginners Guide to Real Estate

January 20, 2017 | By Ron Molcho

The Beginners Guide to Real Estate - 7 Real Estate Terms to Know

 

Fixed Rate VS Adjustable Rate Mortgages A loan typically involves a “fixed rate" and "adjustable rate mortgage." A fixed rate mortgage has a predetermined interest rate throughout the existence of the loan. An adjustable rate mortgage has an adjustable interest rate and may change over time.

Buyer’s agent VS Listing Agent Two agents are involved in the process of buying a house. The buyer’s agent represents you and the listing agent represents the home seller. Dual agency occurs when one agent represents both sides of the transaction.

Pre-approval Letter A pre- approval letter is an estimate of how much the bank will lend you. You should obtain these documents before applying for a mortgage and beginning your search for a home. From there you will be able to determine what is affordable for you and sellers will know that you can get the appropriate loan.

Offers and Contracts After finding your perfect home, you will then make an offer with an agent and attorney at your side. Be prepared with a pre-approval from the bank and proof of funds to submit your offer. There is always a chance that the seller will counter your offer in order to get more money or close the deal faster. Don't be afraid to negotiate and speak with your agent. Make sure to have an experienced realtor by your side for an easy negotiation.

Listings Properties for sale are referred to as “listings.” Most real estate firms are incorprated with a "Multiple Listing Service" which displays listings depending on the city or board in which the firm belongs to. Within the real estate transaction, there's a Listing Broker, representing the seller, and the Buyer's Broker, represen the buyer.

Closing Costs In addition to a down payment, you will also have to pay closing costs fees. These include loan- processing fees, title insurance, excise tax, broker fees, and attorney fees. Be sure to budget closing costs when starting your search for a house. A good rule of measure is to set aside an additional 2-4% of the purchase price for closing costs.

Inspection After an offer has been made on a property, an engineer will perform an inspection on the home. Inspections typically determine the strengths and weaknesses of a structure. Inspections are a good indicator on whether or not a buyer wants to move forward into contract when buying a house. Costs may range anywhere from $500-$800, depending on the market.