Real Estate Terms & Definitions You Must Know

Throughout our lives, most of us encounter real estate in some form, whether through buying, selling, or renting residential or commercial properties. In the course of these real estate activities, we often come across terms that help us understand the transactions better and ensure we get the best benefits.

Below are some essential real estate terms you should know:

Sale deed:

A legal document that records a real estate sale, validating the transaction between a buyer and seller.

Stamp duty:

A real estate tax collected by the government from sale deeds. Rates vary from 3% to 8% and are lower for female property owners.

Title deed:

A document that legally establishes ownership of a property. It’s essential to verify past title deeds from allotment onwards to avoid legal issues.

Carpet area:

The usable area of a property, excluding the walls, which helps determine the property price or rental amount.

Built-up area: The total area of the property, including the carpet area, walls, balconies, and other projections, crucial in determining the sale price or rental income.

Closing costs: Additional charges that the buyer must pay, such as taxes, agent fees, insurance, and housing society charges, referred to as closing costs as they are paid at the end of the property purchase.

Offer :  An offer made by a buyer to property sellers, recorded on a document for reference.

Blind offer: An offer made by buyers without inspecting the property, often due to high demand and competition in high-profile areas.

Due diligence: Refers to the thorough examination of a property before making an investment decision, often involving professional assistance.

Mortgage: A loan given to property buyers, which can be a fixed-rate or adjustable-rate mortgage, with the latter having fluctuating interest rates after an initial fixed-interest period.

Approval: The evaluation of an individual’s eligibility to obtain a home loan.

Down payment: A percentage of the property price that the buyer pays upfront after finalizing a deal.

Escrow: An agreement between a buyer and seller to ensure the fulfilment of certain conditions before full payment.

Homeowners Association: A governing body that aids in the maintenance of a community and ensures adherence to rules.

Occupancy certificate: A certification that a property is built as per the approved plan, ensuring that the buyer has essential facilities such as water supply, electricity, and other utilities.

These are some of the most important terms frequently used in real estate. If you have any doubts about any term, you can refer here.

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