Real Estate Lingo First Time Homebuyers Must Know

It’s the time when you should start house-hunt because the rates of properties in Bangalore are within budget and soon things will start to change. But before you go ahead and decide on a property, here’s what you should learn about the terms used in the real estate market. Knowing so will not only educate you, it will also help you stay confident at the time of hiring an agent, meeting lenders, home inspection, and finalizing the deal.

Prequalified

This term is often mixed with pre-approval. If a lender tells you that you prequalify for buying a house, that’s good but you’re still away from being a homeowner. Being pre-qualified is like being eligible for a purchase but remember that it doesn’t necessarily mean that the lenders find you eligible for the property you’ve chosen. This is a very small process and lenders don’t pay much attention to your documents. This stage is good to get an idea of how much you can get from a lender so that you can expand or narrow down your search criteria accordingly.

Appraisal

An appraisal is an estimate to define the worth of your property. Banks usually do this and evaluate the value of the property according to different parameters. Lenders verify the property’s worth and accordingly they give you the loan. For example, if you are buying a property, the lender will only give you the money required for the purchase, if the property is overpriced, given the current market scenario, you will be getting what your property’s worth is.

Closing Fees

When you’re buying a house, the listing price is not always the final price of a house. There are several costs associated with the total price. The closing fee is a term used by lenders and they charge you a closing fee for various reasons. There are many costs involved in closing cost, so make sure you discuss this with your lender before signing any mortgage agreement

Escrow

With RERA, the term escrow is being widely used in the real estate market, but unfortunately, people have given it different meanings making it hard for buyers to understand. An escrow account is like a third party that takes care of the transactions taking place. This third party remains neutral and favors transparency between the buyer and seller. For example, the deposit you make a property purchase will go to an escrow account. Now the seller won’t be using the money for any other projects than the house you’ve chosen. In this way, both sellers and buyers can avoid misunderstandings and everyone can enjoy a better experience.

If you’re confused with some other things or want to know more about the real estate market, it is always good to have a professional with you. Hire a professional agent or meet a trustworthy real estate developer to make your experience meaningful.

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