Maintaining knowledge of the most recent real estate jargon is crucial for Hampden 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. In a competitive marketplace, it is essential to understand the following six terms. Let’s examine each one in more detail.
iBuyer
Real estate companies are called “iBuyers” when they utilize technology to make immediate offers on houses. In recent years, these companies have gained popularity as they provide a fast and accessible way to sell a home. iBuyers have greatly changed how people sell and buy residential properties in many ways since homeowners are provided with much more convenience.
D.O.M.
“Days on market” is referred to as DOM. This metric determines the length of time a property has been up for sale. DOM is computed from the date a property is registered on the MLS (multiple listing service) to the date a contract is signed by a seller to sell it. Although it could be a red flag, a high DOM could also be the result of seasonal changes in the housing market (in spring, homes generally sell faster than in the winter). Furthermore, by inspecting the average DOM for a specific location, you can establish whether the market is strong (low average DOM) or weak (high average DOM). Typically, buyers gain from a weak market.
R.E.O.
“Real estate owned” is known as REO. This phrase pertains to a home that has undergone foreclosure and has now been acquired by the lender, usually as a result that the home did not sell at the foreclosure auction. Due to the fact that many banks and lenders would rather sell a property than hold it, REO properties can present investors with the opportunity to buy below market value. It is vital to recognize that these sales are often “as-is,” which makes financing hard.
FHA 203k Rehab Loan
A government-backed loan known as an FHA 203k rehab loan enables buyers to fund the purchase of a fixer-upper. Investors looking to purchase properties in need of repair may find this type of loan to be a desirable option because it can be used to finance repairs and renovations. Updates to older homes’ energy efficiency can also be made using it. It is not intended to be used for “luxury” features upgrades like a swimming pool.
D.T.I.
DTI is the acronym for “debt-to-income” ratio. 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. It’s meant to determine how much mortgage you can manage. Keep in mind that a high DTI can make it challenging to be approved for a loan, so be sure to keep 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.
E.M.D.
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 demonstrate a buyer’s seriousness and eagerness, thereby encouraging a seller to accept an offer. The amount of EMD offered typically ranges between 1 and 5%, though it can change depending on the circumstance and the level of market competition. The EMD is normally held in escrow and adapted to the purchase price of the home if the transaction closes.
Hampden property managers need to be knowledgeable about a wide range of real estate terms, as you can see. Knowledge is power in a fiercely competitive market.
Expertise is your most valuable asset in a rental property market that is constantly shifting. Contact us online to learn how you can gain access to insider knowledge and the best asset management services available.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
