The real estate industry is full of terminologies and jargons that, if you don’t do your research, could leave you empty handed when a client one ups you on real estate terminology.
So, to help you get ready for the battle, here are 10 real estate terminologies you should master, which may also help you increase your sales.
Amortization and Amortization Schedule – By far, these terminologies are the first thing that you will encounter during any real estate sales pitch. The process of clients paying for their homes at a certain period of time while adjusting the stretch of their interest is called amortization of the loan. At first, the amortization amount will be high, and the client’s principal payment will be low. However, at the end of the loan, the principal payment will be high, and the interest payment will be low. This is how the amortization schedule will be depending on the years the client is willing to pay, which will eventually pay off their debt.
Bridge Loan – Clients who have existing property but wish to purchase another can use bridge loans to pay off the new one while waiting for their previous property to be sold.
Capital Expenditures – These are expenses capitalized in improving a home or building, which will extend the property’s life and increase its value.
Closing – It is the completion of the transaction or negotiation between the seller, the buyer, and the real estate agent.
Collateral – This is known as the borrower’s pledge to secure payment and as a protection for a borrower’s default through a certain property. In case of a mortgage loan through the bank, the property itself is the collateral.
Commission – This is known as the agent’s fee that varies and is negotiable. Commission is the percentage sale price of the value of the home when sold. Usually, the seller pays a six percent commission to the real estate agent.
Contract for Deed – This is a contract between the buyer and the seller whereby the buyer makes a regular payment until such time the full amount owed is paid to the buyer.
Fixed Rate Mortgage – This is the fixed interest rate as well as payment terms over the period of the mortgage, usually within 15 to 30 years.
Injunction – This is a court order to prevent somebody from doing something, especially when monetary restitution is not anymore sufficient to remedy the harm caused by the person.
Market Value – is the estimated price of the property within a reasonable period. It is formulated by an appraiser, based on the property’s current value, current condition, and other amenities and perks that come with the property.
Use of real estate terms is important in any sales pitch, as it is important to show your understanding of the industry to keep the client at ease.
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