Found 760 blog entries tagged as Real estate.

Real Estate Word of the Day: Co-Op

If you’re in the market for a new home, you might have come across the term "co-op." But what exactly is a co-op, and how does it fit into the real estate landscape?


A co-op, short for cooperative, is a type of housing that differs from the more traditional condo or single-family home. When you buy into a co-op, you’re not buying a piece of real estate in the traditional sense. Instead, you’re purchasing shares in a corporation that owns the entire building or complex. These shares entitle you to live in a specific unit.

Essentially, when you live in a co-op, you’re a shareholder, not an owner in the usual sense. The cooperative corporation holds the title to the building, and you, as a shareholder, have the…

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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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Real Estate Word of the Day: Earnest Money

Earnest money is a deposit made by a potential homebuyer to show that they are serious about purchasing a property. It's a gesture of good faith, indicating that the buyer is committed to following through with the purchase. This deposit is typically held in an escrow account and is applied towards the down payment or closing costs upon finalizing the sale.

Earnest money shows the seller that the buyer is serious about the purchase, which can make the buyer's offer more attractive, especially in competitive markets. Once the earnest money is deposited, the property is taken off the market, and the seller is less likely to entertain other offers. This gives the buyer time to conduct inspections, secure…

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Real Estate Word of the Day: Encumbrance

An encumbrance is a claim, lien, charge, or liability attached to and binding real property. It is any right or interest in land that may exist in someone other than the owner, but which will not prevent the transfer of title. Encumbrances can affect the property's value and limit its use.

Types of Encumbrances
Liens

Liens are legal claims against a property, typically used as security for a debt. Common types of liens include:

  • Mortgage Liens: These are claims by a lender against a property until the mortgage is paid in full.
  • Mechanic’s Liens: Filed by contractors or subcontractors who have performed work on the property but have not been paid.
  • Tax Liens: Imposed by the government for unpaid…

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Real Estate Word of the Day: Contingent Offer

A contingent offer is an offer on a property that is dependent on certain conditions being met before the sale can be finalized. These conditions, known as contingencies, are outlined in the purchase agreement and must be satisfied for the transaction to proceed. If the contingencies are not met, the buyer can withdraw the offer without penalty, and the seller can continue to market the property to other potential buyers.

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Real Estate Word of the Day: 1031 Exchange

Named after Section 1031 of the Internal Revenue Code, a 1031 Exchange allows investors to defer paying capital gains taxes when they sell an investment property and reinvest the proceeds into a new qualifying property. By doing so, investors can leverage their profits to acquire more valuable properties, thus enhancing their investment portfolio without the immediate tax burden.

The primary advantage is the ability to defer capital gains taxes, potentially until the sale of the replacement property. This can lead to significant tax savings, allowing more capital to be reinvested. By reinvesting the entire sale proceeds into new properties, investors can enhance and diversify their portfolios, thus…

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