10 Real Estate Terms You Need to Know
A good real estate agent will guide a buyer through the purchase process from start to finish, but knowledge is power, and speaking the language will make you a savvier home shopper. And just as coffee ordered “light and sweet” means cream and sugar in New York City, the Big Apple has a dialect of real-estate speak with a few unique twists. Prime your vocabulary with these 10 essential terms.
1. Adjustable-rate mortgage (ARM):
Unlike a fixed-rate mortgage, for which the interest rate is set for the life of the loan, an ARM’s interest rate shifts up or down at pre-set intervals, following an index. The initial interest rate is usually fixed for a set time (usually lower than a typical fixed rate mortgage), after which it resets either monthly or annually.
2. Closing costs:
Fees paid at a real estate closing when the title of the property is transferred from the seller to the buyer. These costs are incurred by either party and may include attorney fees as well as fees for the appraisal, credit reports, and inspections.
3. Common charges (CC):
These charges are associated with condo ownership and are calculated by taking each condo unit’s percentage of common interest and multiplying by the building’s overall operating costs. CCs cover such items as building amenities, management fees, and operating expenses.
A building in which owners own their own apartments but the common space in/ around the building is jointly owned by everyone. Condo boards have the right of first refusal for each purchase. In addition, these apartments are considered real property because owners receive deeds for their homes as well as their own tax bill.
A co-op formed inside a condo building. While unusual—these make up less than 5 percent of the city’s real estate—condops function more like co-ops when it comes to the application and approval process.
6. Contract of sale:
A legally binding agreement between a buyer and seller that outlines the terms of purchase or transfer of an apartment.
A building in which buyers purchase shares in a cooperative that collectively owns the entire apartment building. Shareholders have exclusive use of an apartment within the co-op, and the bigger your apartment, the more shares you own. A co-op board is a group of residents elected to represent all shareholders. The board determines the rules of the building, addresses building issues, and reviews new buyer applications.
8. Final walk-through:
A few days before the closing, the buyer does a walk-through to make sure the apartment is in the condition specified in the contract.
9. In contract:
An offer has been made and accepted on a property. The buyer has paid a deposit, and both seller and buyer have signed the offer, meaning the listing is no longer available unless the deal falls through.
10. Maintenance fees:
The monthly fee that co-op owners pay to cover operating expenses of the building, including property taxes, insurance, repairs, staff salaries, etc. The amount is based on the number of shares owned in the co-op.