The process of buying or selling a house can be fascinating. It can also be technical if you are not familiar with the real estate world. It would be helpful to educate yourself on some home buying terminology for the process. Terminologies are essential knowledge to have before putting your house on the market.
These simple home buying definitions could make all the difference in making the right decisions in the process of acquiring a property. Knowing these terminologies could help you make your dreams come true in getting the perfect home if you are buying a house. On the other hand, if you intend to sell your home, they come in handy too. It is crucial to think like a salesperson and not necessarily the homeowner, in other to achieve your goals. If you are very new to this process, make sure you read to the end. Who knows, maybe you’ll leave here feeling like a professional realtor.
Appraisal
This is a process that determines the total assessment of a property for sale. It should be a commonly known term to people who intend to buy or sell a home, but the result of the finished process is commonly referred to as the cost of a property. Oftentimes when you hear how much a house costs, then the appraisal process has been completed.
It is vital to know that the appraisal process provides an estimate that has a direct influence on the cost of a property. Understanding the appraisal process as a home buyer or seller is essential.
Actual Cash Value
This is a method in which wear and tear are taken into consideration in the estimation of the cash worth. It is done by insurance companies to evaluate your property, and it is a report of what your house is worth considering the number of years it has been in use to date.
It is also equivalent to the payment you get from an insurance company if your property is stolen or damaged.
Annual Income
This is as simple as it sounds. As the name implies, it is the total calculation of what you earn in a year. It is important in calculating taxes. It is the amount you earn in a year before taxes are deducted.
This is a significant factor when you are considering taking a loan to buy a house. The annual income helps to determine how you will owe in loan interest yearly.
Balance
This is the amount left in payment for anything. It is the payment left for you to complete the purchase of your home. If you are selling your house, it is also the payment you expect to receive to complete the sale of your house. It is also known as the principal.
Balance is the amount of money due on your loans excluding the interest.
Closing
This is the last step of successfully selling a home or buying one. When the exchange of money and keys has taken place for the sale of a property, then the deal has been closed.
