Whether new to the real estate industry or not, there are certain real estate jargon or terminologies that those interested should learn in order not to seem like they are looking at everyone like they have grown two heads.
Aside from bridging the gap between yourself and the people around you in the real estate industry, knowing their terminologies and jargon would help your understanding widen because you don’t need to look up the unfamiliar words, you already know what they stand for. This way, learning the industry would not be necessarily difficult.
Below is the A-Z list of real estate jargon and terminologies that will help you maneuver yourself through the business.
Abstract of Title
A document that holds the record of the title history of the property or the house. It includes the transfers and any legal actions that are connected to the property. It is highly important for buyers and investors as this proves the property’s validity and the property being free from any encumbrances.
Properties that are adjoined or literally next to one another with a small shared space in between.
This means there will be higher depreciation expenses in the early life of an asset and lower as it near the later life of an asset; unlike the straight-line method which spreads the cost of the depreciation evenly along the life of the asset.
The process of owning land with modifications and improvements, therefore gaining a little bit more of the price.
Simply the deprecation of the asset or the property’s value as time passes. Physical damages are mostly the cause of the decrease in value.
The process of acquiring land or property along with legal actions to ensure the validity of the real estate purchase.
A tenant is removed from the property that they are renting usually after being decided through a judicial ruling. There are a couple of grounds for eviction but usually not being able to pay the rent is the common cause.
Ad Valorem Tax
A tax that says the property’s amount depends on its value. (Read more about Ad Valorem Tax.)
A type of mortgage that has a changeable interest depending on the country’s monetary authority and economic condition.
A written statement strictly under oath and a court of law.
Agreement of Sale
An agreement between the buyer and seller, in which both parties agree to buy and sell the property respectively.
One’s right to have ownership over everything above their land, including the space above their properties if ever a company decided to build power wires or skywalks.
A strategy to stretch payments for a little bit more time.
The whole process of figuring out the cost and the worth of properties.
Assumption Of Mortgage
An agreement was made in transferring the seller’s loan balance to the buyer of the property.
Balloon Payment Mortgage
A type of mortgage that does not fully amortize within the agreed period and gains larger amounts of monthly payments or installments.
Imaginary lines from East to West at a given location and what surveyors utilize as guidelines in identifying land.
A contract of agreement between two parties where one agrees to do something and in turn, the other does one thing as well.
Bill Of Sale
A certificate is given once the property is already transferred.
A type of loan that shoulders multiple areas of real estate. This is used by developers to purchase land which they later sell in smaller portions.
Capital Gains Tax
This is a type of tax deducted from the total selling price or the market value of a property.
A certificate of validation for the owner’s rights to property issued by the city or municipality.
The expenses paid by the buyers and sellers upon the transfer of the land.
The amount an agent receives upon completing their responsibilities.
Republic Act 4726, or the Condominium Act of the Philippines, settles condominium owners’ rights and obligations, as well as condominium development regulations and conditions.
Assets that are owned by a couple right after their marriage.
Contract To Sell
A contract containing the terms and conditions upon selling the property and the agreement of the seller’s ownership being retained until the buyer has paid the property fully.
The appeal of a property when it is viewed from the street, also including the space around it.
Deed of Sale
A document that proves the agreement of sale between the buyer and seller and is legally binding for proof.
The lessening of a property’s value over time.
A monetary offer to show a buyer’s willingness and earnest proposition of purchasing the property.
In mortgage: A neutral third party that handles and protects the deposits and the papers used within the transaction.
In transactions: A party that holds the insurance money, taxes, or earnest money until the full payment. The escrow pays on behalf of the buyer.
A type of mortgage that ensures the stability of the interest rate in your loan until the expiry of the contract.
Properties are handed back to the possession of the government, the bank, or any of the lenders.
An effect of the inability to pay regularly, whether for the property’s payment or the tax included.
The actual value of the house from subtracting the property’s price upon buying minus the mortgage balance.
The contract between the tenant and the owner shows the right to use the property within the length of the lease.
Someone who leases land or property from the owner; See tenant.
Someone who rents out the land or property to a lessee/tenant.
Letter of Intent
A non-binding letter that shows the buyer’s intention to purchase.
Local Transfer Tax
A tax varies per area as it is imposed at the transfer of ownership.
Republic Act 6552 or the Maceda Law is also known as the Realty Installment Buyer Protection Act, which provides clear conditions and protection for buyers who prefer to pay by installment.
A type of loan for the purchase of real estate that usually lasts long-term.
Mortgage Redemption Insurance
This is a type of insurance applied once the insured dies or becomes disabled and a portion of their mortgage will be paid for.
Real Estate Broker
A registered and licensed individual takes a required professional fee, commission, or other acts in handling and managing the transaction of purchase or selling of properties. (Read more to see the types of real estate agents.)
Act No. 4122 or the Recto Law, was formerly known as the Installment Sales Law. This law provides clear conditions and protection for sellers in installment contracts.
The legal cancellation of a transaction contract for purchasing the property.
“Ready for Occupancy”; this term tells the buyer that they can move into the property that they bought right away.
The process of decorating and furnishing up a house in order to add to its appeal and property value.
The person renting the property; the lessee.
Total Contract Price
The overall contract price.
A voluntary surrendering or giving up of rights and claims over a property. While this is possible, however, not all waivers are permitted by law.
A method of urban planning which divides the land area into zones that will determine how private property is. This also gives way to the local government to decide how properties will be used.
Real estate jargon can be intimidating, especially for those who are new to the industry. However, by familiarizing yourself with the common terminologies and jargon used in real estate, you can better understand and communicate with other professionals in the field. This A-Z list of real estate jargon and terminologies can serve as a helpful reference guide to improve your knowledge and confidence in the industry.
For a list, it is understandable that all the A-Z list of real estate jargon and terminologies listed might be overwhelming. There could be more terms that lean into the technical side of the real estate business but listed above are the ones that are most used and will definitely help anyone in getting into the industry
Despite all these, however, it is important to remember not to be afraid to ask about the things you are unfamiliar with or those that sound very unclear to you. It is better to be known as someone who asks consistently and moves with knowledge than tremble to yourself with your lack of knowledge. The first one will always get you somewhere in life, not just real estate businesses and investments in general.
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