Real Estate Lingo 101
Like most industries, real estate is full of industry-specific terminology that can get confusing unless you are in the know. If you are getting prepared to buy a home, there are a few terms you should take some time to learn.
Comps: (comparable sales) Homes specific area sold within the past six months, used comparatively to determine a home's value.
Appraisal: A value analysis from a certified or licensed appraiser based on data about comparable homes in the area, as well as the appraiser's walkthrough.
Earnest money: A security deposit made by the buyer to assure the seller of his or her intent to purchase.
Conventional loan: A conventional home loan is not guaranteed by a government agency, such as the FHA or the VA.
Fixed-Rate Mortgage: A mortgage with a stable interest rate that remains unchanged for the entire mortgage term. If you need to count on your monthly payment remaining each month, this is your safe bet.
Adjustable-Rate Mortgage: A mortgage with a changing interest rate that fluctuates with the prime market rate.
Points: Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax-deductible, will lower the monthly mortgage payment.
Closing Costs: Closing costs are a necessary "evil". No one likes to pay them, but you can't close the deal without them. Closing costs generally range anywhere from 2-5% and include loan administration costs, inspection fees, appraisals, title insurance costs, and other fees that come with the mortgage.
Real estate has a whole language dedicated to the purpose of buying and selling property. We know it can be confusing, but don't worry - that's why Ramseier Group is here! If you are thinking of buying or selling, call 816.262.8077 today for your zero-pressure consultation.