Real Estate Word of the Day: Condominium

A condominium, commonly referred to as a "condo," is a type of real estate property where individual units are owned by different people while common areas, such as hallways, swimming pools, and recreational facilities, are collectively owned by all unit owners within the complex. This setup combines private ownership with shared responsibility, offering a unique blend of community living and personal autonomy.

Condos differ from apartments in that apartments are typically rented, and the entire building is owned by a single entity, often a corporation. In contrast, a condominium allows you to own your specific unit outright, similar to owning a house, while still sharing ownership of the property’s common…

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Real Estate Word of the Day: Condemnation

Condemnation is a legal process through which a government or a government-authorized entity takes private property for public use. This process is often associated with the power of "eminent domain," where the government has the right to expropriate private property for a project deemed to benefit the public, such as highways, schools, or utilities.

For property owners, the prospect of condemnation can be unsettling. It essentially means that, even if you own your property outright, the government can compel you to sell it. However, there are protections in place. Under the Fifth Amendment of the U.S. Constitution, property can only be taken for public use, and the owner must receive "just compensation"—a…

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Real Estate Word of the Day: Closing Disclosure

The Closing Disclosure (CD) is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs). This document is critical because it ensures transparency, allowing you to review all the terms and costs associated with your loan before you sign on the dotted line.

The CD is designed to give you a clear and accurate picture of your loan details. It ensures that there are no surprises at the closing table. By law, you must receive your Closing Disclosure at least three business days before your closing. This gives you time to review the…

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Real Estate Word of the Day: Cash Flow

Cash flow refers to the net amount of cash being transferred into and out of a business. In simpler terms, it’s the money you make from your investments after all expenses are paid. Positive cash flow means you’re earning more than you’re spending, while negative cash flow indicates that expenses are outpacing income.

To calculate cash flow, you subtract the total expenses from the total income. Cash Flow = Total Income − Total Expenses

In real estate, cash flow is the difference between the income generated from a property and the expenses associated with owning and managing that property. This includes all the money you receive from your property, primarily rental income. If you own a multi-family…

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Real Estate Word of the Day: Amortization

Amortization is the process of spreading out a loan into a series of fixed payments over time. Each payment covers both interest and a portion of the principal (the amount borrowed). Over the life of the loan, you gradually pay off the debt in regular installments until it's completely paid off.

When you take out a mortgage to buy a home, the lender provides a schedule known as an amortization schedule. This schedule details each payment you'll make over the life of the loan, showing how much of each payment goes towards interest and how much goes towards reducing the principal. In the early stages of your mortgage, a larger portion of your monthly payments goes toward interest. As time goes on, more of each…

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