Interesting real estate terms that you should know!
At some point, you may consider investing in real estate, but the complexity of the property terms and many facets of the sector may overwhelm you. In particular, the numerous real estate terms may be unfamiliar and confusing, which could lead to misunderstandings and problems when finalizing a contract with a seller. Unfortunately, some agents or sellers may take advantage of your lack of knowledge, so it is critical to make informed decisions throughout the investment process.
To make the best decisions, it is essential to have a solid understanding of key real estate terms. And you have come to the right place! Here is a list of important real estate terms and their meanings you may not have previously encountered. By familiarizing yourself with these property terms, you can confidently navigate the real estate market and make informed investment choices. Read on to learn about some of the most important property terms you must know to make profitable real estate investment in India.
15 Must-Know Real Estate Terms:
It might be difficult for first-time investors to invest in this real estate market without properly understanding all the terms. Here you will find 15 important property terms used by real estate people, which will help you to be confident the next time they mention something related to it.1.
When searching for real estate, you may come across the term "carpet area" quite often. It is a real estate term that refers to the actual usable area of a property that a carpet can cover. Essentially, it represents the area that can be utilized within the property, excluding the thickness of the walls. Understanding the carpet area of a property is important as it can give you a better idea of the space available for your needs. It is also a crucial factor in determining the property's value and is often used to calculate the property's rental or sale price.2.
After understanding carpet area, it is important also to be familiar with the term "built-up area", as it is another crucial factor when evaluating a property. Although these real estate terms are sometimes confused, they have distinct meanings. The built-up area of the property includes the carpet area and the area that is taken up by walls, including the thickness of the walls. This means that the built-up area represents the entire space occupied by the property, including walls, balconies, and other projections. Understanding the built-up area is essential for determining the actual usable space within a property and calculating its value and potential ROI.3.
During your investment process, you will hear this real estate term often. A sale deed is a term used to describe a recorded document of all your sale events. It is a legal document that both the buyer and the seller sign to keep a record of the sale. No real estate transaction can be considered valid without executing the sale deed.4.
Another frequently used term is stamp duty which in real estate is a tax that the government collects. You will find that this tax differs from state to state. In some places, it is 3%, and in some, it might go up to 8%. It is important to understand this concept as it is one of the important real estate terms. For instance, stamp duty for female owners is much lower than for male owners. Hence, if you register a property in the name of a female family member, you can save considerably on stamp duty.5.
This real estate term is one of the most important property terms you must know. A title deed is a legal document that proves the property's ownership. You must check the document thoroughly and ensure that the owner's name matches the name on the original title deed document. To be on the safe side, you must investigate the entire chain of title deeds, right from the allotment stage till the last owner.6.
There are two types of agents in the real estate market. One is the buyer's agent, and the other is the listing agent.
A buyer's agent in real estate is a licensed professional agent who helps buyers find suitable real estate. They may also help you negotiate the real estate price and are actively involved throughout the buying process.
On the other hand, a listing agent works with the sellers to find the best deals and prospective buyers for the seller's property. They are also actively involved and take part in negotiations.7.
An adjustable-rate mortgage is a kind of loan where, after a period of initial fixed rate, the interest keeps changing. Hence, according to the market, your interest rate may increase or decrease. It is one of the relatively well-known and often used terms in the real estate sector, and we recommend that you understand the terms and conditions carefully if you opt for this.8.
Fixed Rate Mortgage
Along with adjustable-rate mortgages, fixed-rate mortgages are another type of loan available to borrowers. The main difference between the two is that with a fixed-rate mortgage, the interest rate remains constant throughout the life of the loan, regardless of any changes in the market. This provides borrowers with stability and predictability in their mortgage payments, as they will always know their monthly payments.
This makes fixed-rate mortgages popular for those who prioritize budgeting and financial planning. Conversely, with an adjustable-rate mortgage, the interest rate can fluctuate with the market, leading to uncertainty and potentially higher payments over time. Understanding these property terms is crucial for everyone in the real estate sector.9.
Closing costs in the real estate market refer to the extra charges buyers must bear. This includes fees charged by lenders, insurance companies, attorneys, real estate agents, title companies, taxing authorities, homeowners associations, and many other related expenses. The investor usually pays these charges at the end of the investment when they close all the real estate transactions. Hence, it is called closing costs.10.
Days on Market (DOM)
This term refers to the period from when the property was launched in the market to the day when the buyer and the seller signed the contract to complete its sale. A strong market favouring sellers usually has a low average DOM compared to a weak market favouring buyers with high average DOM.11.
This term refers to the time given to the buyer to examine the property thoroughly with the help of professionals so that they can decide whether to proceed with the investment. You can also renegotiate, considering how you find the property. One of the simpler real estate terms is an opportunity given to the buyer to look at the property before buying it.12.
This term means the lenders can thoroughly check the financial background of the buyers before granting loans. The buyers are given a form they must fill out, and based on that, the lenders make decisions.13.
It is one of the most crucial real estate terms in present times. In real estate, the buyers make an offer to the sellers with the help of agents. These offers can be rejected, accepted, or countered. It is a type of negotiation done on paperwork to keep it as a record.14.
In this kind of offer, the buyers don't check the property but make the offer immediately because of the competition with the other buyers. Usually, properties located in areas that have high competition for buying are the ones that are offered with a blind offer.15.
This term means that the buyers can own the house or the property, but they will have to pay rent for the land on which the property is built to the landowners. It is one of the complex real estate terms which must be thoroughly understood by all individuals active in the property sector.
Investing in real estate is a big decision; hence, it is essential to note all the terminologies used during the investment process to save yourself from trouble and misunderstandings. This is where Adani Realty provides expert guidance and ensures a hassle-free buying experience. Trust Adani Realty to help you make informed investment decisions and find your dream property in Mumbai, Pune, Ahmedabad & Gurgaon.
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