Real estate is a big field as it is. Moreover, the terms used in the real estate universe are also very different. Firstly, the terms used related to real estate are full of jargon. So, for a newbie in the world of real estate it becomes very difficult to understand everything easily. I’ve listed 7 common real estate words that people use when investing. This should help you understand the real estate world better. Now, let’s cut the introduction short and see what those words are:
- DOM (Days On Market):
In general, DOM or Days On Market means how many days a property has been listed in the real estate market. But, you might wonder now that how does it actually matter? The days on market element is important since it influences the price of the property. Basically, the more days a property has been listed in the market, the lesser the price as it appears less desirable to prospective buyers! In the same way, the fewer the days a property has been listed in the market, the more the price of the property!
This becomes one of the most important reasons why realtors are trying to sell a property as fast as they can because the longer the property is on the real estate market, the more difficult it gets to sell it.
- PSA (Purchase and Sell Agreement):
PSA as its name suggests is an agreement between a buyer and seller. It’s like a sacred bond that entails all the minute legal details that you could think of, to ensure that both the buyer and the seller are satisfied with the transaction. PSA is also known as SPA (Sell and Purchase Agreement). PSA or SPA is a very crucial agreement when it comes to purchase of property.
I know you guys might have heard the term ‘realtor’ many times. If you’re familiar with the TV show ‘Modern Family‘, you’ll know that Phil is a character who works as a real estate agent. Now you may not have the most extensive knowledge on the topic, but you might have some basic understanding. But, if you are someone who has no idea what a realtor means, then I’ll explain it to you in short.
Realtor is someone who is a licensed real estate agent. Basically, a realtor’s job is to act as an agent for the sale and purchase of buildings. More specifically, a realtor is a real estate agent who is a part of the National Association of Realtors.
- Down Payment:
The down payment, dear friend, is the very first contribution made by the buyer to seal the deal and make the property their own. It is a portion of the total purchase price that the buyer pays out-of-pocket, while the remaining balance is typically financed through a loan or mortgage. Making a down payment can help to minimize the total amount of the loan. Remember, when making a significant purchase, down payment is a crucial element to consider.
- Blind Offer
Ah, the infamous “blind offer”. I know you guys might have definitely heard about this term before. And now, I think the time has finally come to understand the term. A blind offer is when a brave buyer boldly offers to purchase a property without ever laying their precious eyes on it. This usually happens when a particular real estate property is located in an upmarket and lush area.
- Capitalization Rate
What is capitalization rate? Capitalization rate is the metric that is used to know the potential returns on a particular property. An understanding of the capitalization rate arms you with the knowledge needed to determine whether the property is a worthy contender, tailored to your unique investment needs.
- Extra Income Homes
The concept of extra income homes has existed since the real estate market has been existing. This term explains the concept of earning from the properties you have or are about to buy. Here are some methods for achieving that:
Convert your property into a rental property: One common method is to purchase a property specifically for rental purposes. This could involve owning a multi-unit building, such as an apartment complex, where each unit is rented out to tenants. This helps you get in some extra cash. And who doesn’t like some extra money?
Running a home-based business: This can also be a source of extra income. Basically, a lot of people run businesses from their homes. And guess what? This brings in quite some cash. As a result, this also becomes a good source of income.
Co-Living Spaces: The concept of renting out your homes and rentals out as a co-living space is always helpful. This brings in more cash than the normal rental yield. The returns can go up to 6%-7%. But for that to happen you need the perfect company to provide you the best services and when it comes to there’s only one company you need to rely on which is ‘Xtra Income Homes’. The properties offered by them are handpicked only after careful consideration of a lot of factors. So, go ahead and check their site out!
At last, we have reached the end of this blog. I really hope this blog helped you understand some of the terms related to real estate a little better. It can be overwhelming to navigate the jargon and technical language often used in this field, but by breaking down some of these terms, I hope to have provided some clarity. So, now get into the world of real estate and choose your dream home today!