Whether you are preparing to sell your existing property or looking for Belleville homes for sale, studying up on real estate terms will help the process go smoothly.
When entering the real estate market, preparation is vital to successful transactions. If you cannot remember all the different definitions, do not worry. Our real estate agents are available to answer any of your questions. Here is a list of some basic real estate terms to get you started.
- Buyer's Agent: In a real estate transaction, the buyer's agent represents the person purchasing the property.
- Listing Agent: The listing agent represents the person selling the property. The agent generally has multiple listings for you to browse.
- Pre-Approval Letter: When purchasing a home, you can obtain a pre-approval letter from your financial institution. The letter simply states the estimated amount of money allowed for your home purchase.
- Assessed Value: The public tax assessor for the area determines the value of the home. The process allows for collecting state or city tax fees.
- Appraisal: Before receiving your loan, your bank will request an assessment of the home. The process of appraising the home or other real estate determines the value of the property.
- Adjustable-Rate Mortgage: The first type of conventional loan is an adjustable-rate mortgage. A changing interest rate may cost more money throughout the life of your loan. When you use an adjustable-rate mortgage, you risk a rising interest rate.
- Fixed-Rate Mortgage: The second type of conventional loans. The fixed-rate mortgage has the same interest rate throughout the life of the loan. There are no surprises on the amount of interest collected each payment.
- Principal: Your monthly mortgage payment consists of the principal and interest. The principal is the amount borrowed to buy your home.
- Interest: When you borrow money from a lending institution, you must pay an interest rate. Rates will vary. The interest is the price for borrowing money.
- Inspection: When you make an offer, an inspection of the home occurs. The process allows for any potential issues in the house. The inspection process checks the home's plumbing, septic system, foundation, electrical unit, and any other features that may negatively affect the home's cost. The process protects the buyer from any misrepresentations.
- Offer: The seller has the right to decline, accept, or counter any offer made on the home. Many sellers will reject and counter the first offer.
- Closing: The closing is the finalization of your home's purchase or sale. The process includes closing costs, down payment, and signing of the legal documents.
- Closing Costs: The closing costs consist of the bank's processing costs of the loan, title insurance, and any taxes.
- Title Insurance: Before sale, there is a research process to check the home's title. The home must not have any type of lien before moving forward with the closing.
- Escrow: An escrow account is set up by the lending institution that will receive monthly payments from the purchaser.
If you need help with any terms, purchasing or selling a home, please contact us.