The entire process of searching for and buying a new home can be quite exhilarating as well as tantalizing. A notable issue is the words used by realtors and real estate companies. How would you stay on top of a conversation when you don’t know half of the words spoken?
Oftentimes, the words you normally use in a regular context might have a different meaning in the real estate world. Here are several such words in the real estate lingo that you need to know about before venturing into home ownership.
Clean Offer
This means the home has no contingencies, which are some required conditions before the completion of the sale. Such conditions, including financing, inspections, appraisal, etc., allow a buyer to back out of a transaction. The transaction on the property is dependent on these conditions, and in the case of a clean offer, the buyer of the property has no obligations as such and is completely okay to proceed with the buying.
Fully Underwritten
Your request for a mortgage is inspected by an underwriter, who checks the risks and identifies whether you are creditworthy enough to avail a loan to buy the property. The fully underwritten mortgage signifies a borrower who has filed all the paperwork required for the loan approval and the final approval is underway. Credit, capacity, and collateral are regarded as the three C’s of underwriting.
Carpet area
Carpet area is a key measure you need to check while buying a new home. It does not include wall thickness, outer areas, etc. However, it includes the thickness of the inner walls. Essentially, it is the actual area of the home that you can use for your furniture.
Built-up area/super built-up area
Built-up area is the sum of the carpet area, the wall thickness of all outer walls, and the balcony area. The super built-up area takes this further. It also includes common areas such as lift lobby and stairs.
Credit score
You should worry about your credit score if you are applying for a home loan. It’s a statistical score ranging from 300 to 900 that gives a good picture of your creditworthiness. It’s used by the banks to find out whether you can repay the loans on time. It’s dependent on several factors, such as your credit history, credit card payments, past loans, etc.
Freehold property
A freehold property is one which is “free from hold,” which means you, as the owner, are free to enjoy its ownership perpetually as well to transfer it at your will to anybody.
Per square foot rate
Usually, when the real estate developers price a property, they do it on the basis of the square footage. The rate per square foot multiplied by the total square footage is the total value of the property excluding the taxes and other charges. The entire value of the property is the product of the square foot rate and the super built-up area. But when developers sell individual flats, they have to use the carpet area according to the RERA regulation.
Floor space index (FSI)
This is an important measure that talks about how much of living space you have in a property in relation to its gross built-up area. It’s the ratio of the whole area of all floors to the total area of the property. Look for a property that provides a higher FSI.
Conveyance
The word “conveyance” has nothing to do with transportation. It’s the process of transferring the ownership, title, etc., to a property from the owner to another person. This is an agreement that the buyer makes with the seller of a property.
Before you embark on a journey to find the ideal home, try to learn some of these terms that will make life a lot easier for you. It’s not difficult to do your research on real estate. There are multiple blogs, real estate company websites and real estate sections in newspapers that can help you with familiarizing with the industry terms.
