18 Top Real Estate Terms You Need to Know In 2022
Most people believe that real estate seems a preserve of the rich, learned, or those with massive property. This as we shall get to find...
Victor Kiplagat
For most, real estate seems as a preserve of the rich, learned, or those with massive property. This as we shall get to find out is far from the truth.
Real estate is simply property consisting of land and buildings. Real estate cuts across diverse “economic patterns” as you either own a property; live in a rented property or have a desire to invest in property in the future. These terms will simplify the “real estate jargon” in general. They include:
Addendum
This document is added to a purchase agreement. The details in this document include things such as contingencies, financing details, and disclosure about the state of the home.
Amortization
This is the payment of debt over a fixed period of time.
Appreciation
This term refers to when a property’s value increases over time. The property’s value will increase when massive refurbishment has been done to the property.
Broker
A broker is an individual who represents a property buyer or seller. A broker can work independently or be chosen by a firm and therefore work as a real estate agent.
Closing
Closing is the final step in concluding a property purchase where ownership of the property is transferred from the seller to the buyer.
Commission
This is the percentage of money that the agent makes after the sale of the property is concluded.
Construction Loan
This is the short-term loan that the builder or home buyer takes to cover the cost of construction of property before obtaining long-term funding for the same project. A construction loan would apply in small details of the refurbishment of a property that is set to undergo sale imminently.
Deed
A deed is a legally binding document that transfers ownership of property from seller to buyer. For a deed to be legitimate, it must have these details: the buyer’s name, the seller’s name, details of the property being purchased, and the terms of the purchase.
Default
This term refers to when a homeowner fails to make the payment that is due on time as per the terms of either the loan contract or purchase agreement.
Down Payment
This is the amount of money that a prospective owner who intends to purchase a home pays as a percentage of the full amount within a specified period of time as stipulated in the contract.
Equity
Equity is the difference between the loan owed from your current property when you bought it and what your home is currently worth when intending to sell it.
Fair Market Value
This is how much a property would sell in a fairly competitive market that is free from bias. Here, the sellers or buyers have enormous knowledge of the property due for sale.
For sale by owner
This is when a property or home is up for sale without “interference” from a real estate agent or broker.
Home Inspection
A home inspection is the examination of the seller’s property in order to match the financial value of the buyer.
Mortgage
This is the amount acquired as a loan to purchase a home or property.
Title
This legal document states ownership of property and any prior association of the said property.
Transfer of Ownership
This refers to real estate property that is under new ownership. It is important to note that the transfer of ownership can be done in mortgage, sale, lease, gift, or exchange.
Transfer Tax
The new law imposes a 5% tax on net gains on the ‘transfer’ of property situated in Kenya.
These real estate terms and many more simplify real estate as a “jargon”. These terms will make real estate communication with agents easier. It is imperative to note that these real estate terms do not apply to sellers or buyers of the property alone, they apply to everyone.
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