Maintaining knowledge of the most recent real estate jargon is crucial for Goose Creek rental property owners. Maintaining awareness of the significant changes in the real estate market can help you safeguard your investments and expand your portfolio. Additionally, it can assist you in making knowledgeable choices when haggling with prospective tenants or buyers. The following six terms are crucial to understanding a market where there is fierce competition. Examine each one in great detail.
Real estate companies are called “iBuyers” when they use technology to submit immediate offers on properties. In recent years, these companies have gained popularity as they provide a fast and accessible way to sell a home. Given how much more convenience iBuyers provide to homeowners, they have in many ways fundamentally altered how people buy and sell residential properties.
DOM stands for the phrase: “days on market.” This metric indicates how long a home has been on the market. The DOM of a property is calculated from the day it is put on the MLS (multiple listing service) to the day someone who wants to sell signs a contract. A high DOM may be a red flag, but it may also be caused by seasonal fluctuations in the housing market (homes are usually bought faster in the spring than in the winter). Moreover, by observing the average DOM for a given area, you can identify whether the market is weak (high average DOM) or strong (low average DOM). Normally, a weak market favors purchasers.
REO stands for “real estate owned.” This term refers to a property that has been foreclosed and is now in the lender’s possession, typically because it did not sell at the auction. Given the fact that many banks and lenders would prefer to sell a property than hold it, REO properties can offer investors the option to purchase below market value. It is critical to mention that financing can be challenging because these sales are frequently made “as-is.”
FHA 203k Rehab Loan
The FHA 203k rehab loan is a government-backed loan that enables buyers to finance the acquisition of a home in need of repair. This kind of loan is an appealing choice for investors looking to buy properties that need repairs because it can be used to pay for repairs and renovations. Additionally, it can be applied to update older homes’ energy systems. However, the addition of a swimming pool or other “luxury” upgrades are not intended for this loan.
“Debt-to-income” ratio is referred to as DTI. The percentage of your income that is used to pay off debt is calculated by lenders using this metric. Your DTI is calculated by adding your monthly housing payment to your total debt payments, dividing that amount by your gross monthly income, and multiplying that by 100. Its purpose is to calculate your ability to pay for a mortgage. It can be hard to qualify for a loan if your DTI is high, so it’s vital to have this number low. Lenders typically favor borrowers who pay no more than 36% of their monthly income on debt and no more than 28% of their income on housing.
Earnest Money Deposit is referred to as EMD. It’s also known as a “good faith deposit,” this is a down payment required of buyers when submitting an offer to purchase a home. An EMD can convince a seller to accept an offer by showing how serious and eager a buyer is. In most instances, the amount of EMD given is between 1 and 5%, but this can vary based on the situation and market competition. The EMD is typically kept in escrow and used, if the deal closes, to reduce the cost of the house.
As is evident, Goose Creek property managers must be knowledgeable about a variety of real estate terms. Knowledge is power in a fiercely competitive market.
Your greatest asset in a dynamic rental property market are the professionals by your side. Contact us online to learn how you can gain access to insider knowledge and the best asset management services available.
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