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Essay On Real Estate

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Real Estate Terms Every First Time Buyer Needs to Know

So, you’re ready to buy your first house. Little did you know, there’s a whole new language you need to learn during the process! Real estate has many different terms, phrases, and acronyms that every first-time buyer needs to familiarize themselves with before they jump into the market.

Don’t worry, the experts here at The Degnan Group are here to explain the most common real estate terms that every first time-buyer needs to know.

Escrow - Even though this word may sound more like a fancy French dish than a real estate term, escrow is actually very simple. Basically, it’s a third party (like a bank or law firm) that holds the agreed upon money for the sale.

Example: If you’re in
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There are many steps to take between finding one you like and moving into it, and paying the closing costs are one of them. Simply put, closing a home is when you finalize the sale, and the closing costs are all the extra fees associated with it.

Example: These usually include the down payment, fees for attorneys, commission for the real estate agent, and any other small costs like title insurance, appraisal fees, homeowners insurance costs, and more. Make sure you keep these in mind throughout the sale, so you don’t get blindsided by extra costs at the end!

Down payment - All your friends are saving for one, and your parents are hassling you about what they think is enough for one. But, what exactly is a down payment on a home? It’s the amount of money you pay upfront for the purchase. Then, the rest of the cost is covered by a loan.

Example: Down payments are calculated by percentages, and it’s best to be able to pay at least 20% of the total home cost as a down payment when you purchase. That means, if you want a $200,000 home, you need to have a $40,000 down payment saved. 20% is just a starting point though. A larger down payment means a smaller loan, which can lower mortgage costs, decrease the amount of interest paid, and save you money in the long run.

Equity - This word is thrown around constantly in the real estate world, so it’s important that you understand what it means. The equity of
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