There is a lot that is involved in the home selling process than just staging and setting a reasonable price. If you have never sold a property before, you might encounter some real estate concepts and terminology that may seem foreign.
Here are some of the common real estate terms and definitions
- Acceleration covenant/clause
This is a provision that compels the borrower to repay outstanding loan to the lender if the requirements outlined in the contract are not met.
- Active Contingent
It means that the seller has accepted the buyer’s offer and an agreement exists. However, the buyer must meet certain conditions (contingencies) before the sale is finalized.
- Addendum
This is a specific part added to a contract that the seller or the buyer may want to adjust. The rest of the elements of the contract remain the same, regardless of the addendum.
- Adjustable-rate mortgage (ARM)
Unlike a fixed rate mortgage, an ARM is a type of mortgage where the interest rate may change periodically. You may start with lower monthly rates which might increase in the future due to interest rate fluctuations.
- Bridge loan
A bridge loan is a short-term loan that an individual take to meet a current obligation. For instance, if you own a property, you can take a bridge loan against your property to buy another property.
- Buydown
This is a mortgage-financing technique where the buyer tries to obtain a lower interest rate of their mortgage from a few years to the lifetime of the loan. Normally, the developer or seller pays the mortgage lender which lowers the buyer’s monthly interest rate and monthly payment.
- Cash-out refinancing
Cash-out refinancing is a refinancing option where the homeowner pays larger amount than the existing loan and withdraws the difference in cash.
- Escrow
It is an arrangement where a third-party holds payment of funds for two or more parties involved in a transaction. The funds are only released to the seller when the transaction is complete.
- Under contract
This is where the seller has accepted the buyers offer but the transaction is still active.
In the recent past, the off plan property market in Dubai has been growing at a rapid pace. If you are looking to buy off plan property in Dubai, you should consult Dubai real estate agencies. There are numerous new projects which are expected to be completed by 2020 such as District One Residences in MBR City. But before you hop onto buying your next property, make sure you know the lingo.
