There is a lot of real estate terminology used during the process of buying and selling property. Community Commerce Bank understands the importance of those terms, but we also want to make sure you are comfortable with them as well. We have created a glossary of commonly used real estate terms and their definitions in order to help you better understand terminology you may hear along your journey.
Select each range of letters below to display the respective terms and their definition.
Built-Up Area – It includes the carpet area plus thickness of the outer walls and the area of balcony/balconies.
Capitalization Rate – The rate of return on net operating income considered acceptable for an investor and used to determine the capitalized value. This rate should provide a return on, as well as a return of capital.
Cash On Cash Return – Percentage relationship of cash profit (GSI) versus cash down payment into the new transaction. Also called rate of return on investment.
Ceiling Rate – Maximum interest rate over the life of the loan.
Change Date – Date the interest rate has/will change.
Closing – When the sale is considered final, which typically includes all parties’ signatures on all required documents, all monies conveyed, and when a lender is involved, with full lender’s approval. From some markets across the nation, recording the deed with the county clerk’s office is the ultimate and final step of closing. One all these items are completed, then a buyer’s access to the property is then provided, and the buyer is considered the new homeowner.
Closing Costs – An assortment of fees, including fees charged by a lender, the title company, attorneys, insurance companies, taxing authorities, homeowner’s associations, real estate agents, an other closing settlement related companies. These closing costs are typically paid at the time of closing a real estate transaction.
Consumer Price Index (CPI) – An index of the variation in prices paid by typical consumers for retail goods and other items.
Covenants, Conditions, & Restrictions (CC&Rs) – Usually, these are the rules and regulations places on real property by a homeowner’s associations (HOA), a neighborhood association, a developer, or a builder that sets forth any requirements and limitations of what a homeowner is allowed to do with the property. It may also include monthly and/or annual fees or special assessments.
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