A List of Real Estate Terms Definitions for Potential Home Buyers!
Being aware of real estate terms definitions will be an asset for anyone – whether they are in the market for property. Increased demand and a growing economy are two of the primary factors that fuel the growth of real estate in the Philippines.
Browse social media, newspapers, and TV, and you’ll come across dozens of ads to prove it. These ads, though, can contain words that are unfamiliar or difficult to understand.
For those planning to buy or invest in a property, jargon can delay decision-making. They can also increase the risk of buyer’s remorse. If you want to avoid these scenarios, this post compiles four real estate terms definitions that buyers need to know:
1. Pre-selling
A pre-selling house and lot, such as a property in Lancaster New City Cavite, can refer to a home that falls in the following
categories:
- It doesn’t exist yet.
- It might be in the planning stages.
- The dwelling is still under construction.
It can take a few months to years before the buyer can move in or lease it. It all depends on what stage of the construction or planning the company offered the price.
Buying a pre-selling property provides enormous discounts. They can range from 30% to 50%. The increase in market value can also be significant.
2. Tax Declaration & Land Title
This list combines both terms since many people confuse one over the other. Real estate agents and brokers with not enough experience can also use them interchangeably.
A tax declaration is a property record held by the assessor’s office of the municipality or a city. It reflects the assessed value of real property to calculate the holder’s property tax.
After the buyer fulfills all obligations, the property owner then signs the deed of sale. The buyer then becomes the new owner, who now works on transferring the land title under their name.
According to the law, the tax declaration is not conclusive proof of ownership. It only implies that the bearer can have a claim over the property. The best evidence remains a certificate of title.
Why does this information matter?
Some properties for sale might still be under a tax declaration. It can be difficult for the buyer to transfer the ownership to their name later.
3. Transfer Charges
Also known as transfer fees, these refer to the cost to pay after the buyer paid all the initial dues, and they’re ready to transfer the title. The costs can vary. Usually, the documentary stamp tax will be 1.50% of the price, while the local transfer tax can be as high as 5%. The buyer also needs to settle the notary fee.
Since many residential properties now cost a million and above, total transfer fees can balloon to thousands. Buyers might have two options to settle it:
- Use the waiting period before turnover to save up.
- Request the real estate company to include it in the total purchase price. This way, the buyer can pay it ininstallments.
4. Home Equity
Home equity is part of the total property value the buyer needs to pay before they take up a mortgage. It is different from the reservation fee, which is the amount to pay to secure a chosen property. It implies an interest in buying it, so the real estate company should not sell it to somebody else.
Both amounts, though, can form the down payment. One of the worst things that can happen to a property buyer is to get a home they can’t afford or struggle to claim later.
Understanding these real estate terms definitions can save many from the heartache when you decide to actively research property – either for personal use or investment opportunities.
Images courtesy of Pixabay, UnSplash and Pexels.
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