Understanding Basic Real Estate Terms

 

Understanding Basic Real Estate Terms     

The real estate industry is just like other industries.  There are terms and acronyms unique to homes and home lending that are used frequently in advertisements, contracts and basic conversations.  Here is a list of the some of the most common terms to help you understand what is going on.

Appraisal – An assessment or estimate of what a home is worth in today’s market. This is an in-depth analysis that banks require in order to finance a home.

Assum Fin. - This means the home has financing that could be assumed by the new buyer.

CMA – Acronym for Comparative Marketing Analysis.  This is a report that a Realtor can produce to show the prices of different homes that sold in the area.  The report can also show homes that are currently for sale and even homes that formerly were listed up for sale but did not receive any successful bids.

3B/2B – This means the home has 3 bedrooms and 2 full bathrooms. The first number always refers to the number of bedrooms and the second number refers to the number of baths. Most of the time a bedroom indicates a room with a window, closet and place for a bed, however this can differ among areas. A full bathroom has a bathtub, toilet and sink.  Some people refer to a three quarter bath as a bathroom that has a shower stall along with a sink and toilet.  The half bath does not have a shower or bathtub at all, but only has the sink and toilet.

Contingency – This is a legal term that means the home purchase agreement will not be binding until a particular condition is fulfilled.  For instance, the buyer could request a satisfactory inspection of the home before completing the loan.

Closing Costs – These are the various fees associated with completing a mortgage loan.  There are fees charged by the lender, the closing attorney that conducts the title search, the local courthouse for recording the mortgage and several other items.

Fixture – This is a broad term that refers to things attached to the home.  Some examples are light fixtures, landscaping, carpeting and window adornment.

FDR – This is the dining area.  The F stands for “Formal.”

FP or frplc or fplc – All of these are acronyms for a fireplace

Gar – This is an acronym for a garage.  A garden is typically abbreviated as gard.

HWF or hdwd or hdw – These are various acronyms that refer to hard wood flooring.

In-law quarters – This usually refers to a section of the home that has a full bedroom, full bath, kitchen and sitting area.  It may even have a separate entrance.  It simply indicates a place where another person can live in the home and have some degree of privacy.

Listing – An agreement made between the home owner and a listing agent to market and actively look for buyers of the home.  Listing is often used to simply refer to a home that is available for sale.

LTV – The term ‘Loan to Value’ refers to how much of a home purchase is going to be financed. How much of the value of the home with your loan be for. A common LTV is 80% of the home’s price or value.

Move in Condition – This is typically a description of a home that does not need updates. The interior components of the home are in great condition.

Pvt – This is an abbreviation for “private.”  It can refer to the home’s location or a feature of the home.

      

If you are looking to purchase or sell a home in Rock, Dane or any of the surrounding counties in Wisconsin, please give me a call.  We are based in Janesville, but service Madison and many other surrounding Wisconsin cities.
Michael Collins - SFR - Short Sale & Foreclosure Resource(Broker, Realtor, Real Estate Agent)
c: 608.921.8536 f: 877.774.7625
Mike@RockRealtyWI.com
Rock Realty
Rock Solid Real Estate StrategiesPO Box 1361Janesville, WI 53547
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Tips on Buying Your First Evansville Wisconsin Home

Tips on Buying Your First Evansville WI Home


Getting that first home can be a really exciting time for anybody. However, it needs to be approached with realistic expectations. Going through a few of the following suggestions will make the whole process much easier.


Get Familiar with Real Estate Terms


Buying your first home will involve learning about the home market as well as loans. Therefore some terms may be unfamiliar to you. Here is a list of some common terms used in Wisconsin mortgage loans and real estate transactions.

• Closing Costs– These are fees associated with all mortgages. Amounts paid to a title company for the title search, recording the deed and mortgage at the court house, origination, credit report fees, appraisal fees and the fee from the attorney to close the loan are just some of the items involved.



• Warranty Deed – This document proves that the sellercan legally sell the home.



• FHA – This is a government organization known as the Federal Housing Authority. This organization authorizes lenders to offer FHA loans and enforces the guidelines for approving the loans.



• Bait Rate – Some mortgage companies will advertise an extremely low interest rate to entice borrowers to contact them and submit a loan application. However, it is later discovered that the advertised rate was for people with the absolute highest credit scores, along with a sizable down payment and a well established job history.



• GFE – This is an acronym for Good Faith Estimate. It provides an estimate of the costs associated with closing the mortgage loan.



• Underwriting – This is the process of approving a loan application. An underwriter will compare the borrower’s credit, income, savings and residence history to the guidelines of the particular loan program that has been matched with the borrower. The underwriter must make sure that the borrower meets the requirements of the loan in order to issue an approval.

Organize Your Finances


Before applying for a loan it is a good idea to ensure your credit rating is worthy of a mortgage loan. If you have some blemishes on your credit report then it is important to fix them before hand. Setting aside enough money for the down payment is also critical. You should plan on between 3% and 5% of the purchase price of the home. It is also a good idea to have another 3% to 5% for the closing costs.


Be Realistic About the Home


It is not a good idea to look at homes well beyond your affordable range. Talk to a mortgage company and get pre-approved for the loan. Then talk to your Realtor and ask to look at homes that fall within your price range. Looking at a home that may seem perfect, but is $10,000 more than you can afford, will make you unhappy with other homes and could lead you to make a bad decision towards an alternative mortgage.


Take some time to learn about the real estate market and get everything in order before house hunting. This will make it easier for your Realtor to find the right house for you and make the whole process less stressful.


At Rock Realty we want to make sure that your home buying experience is smooth and that you feel comfortable with your decision. It’s important that you buy the right home for you. Don’t forget about the great Wisconsin home buyer discounts that Rock Realty has to offer!


Home Buyer Discounts