As a North Logan rental property owner, it is essential to remain current on the latest real estate terminology. As the real estate market undergoes significant changes, maintaining awareness of these changes can help you secure your investments and expand your portfolio. When negotiating with prospective buyers or renters, it may also help you to be well-informed. It’s essential to understand the following six terms in a market that is competitive. Let’s observe each of them more closely.
iBuyer
Real estate companies are called “iBuyers” when they use technology to submit immediate offers on properties. In recent years, these companies have grown in popularity as they offer a convenient and quick way to sell your home. In many ways, iBuyers have drastically altered how people buy and sell residential properties, as they provide homeowners with significantly more convenience.
D.O.M.
DOM is the abbreviation for “days on market”. The length of time a property has been up for sale is indicated by this metric. 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. While a high DOM may be cause for concern, it can also be a sign of seasonal changes in the housing market (homes tend to sell faster in the spring than in 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 what REO stands for. This term refers to a property that has undergone foreclosure and has come under the ownership of the lender, usually as a result of it not selling at the foreclosure auction. REO properties can be an opportunity for investors to purchase below market value, as many banks and lenders would often sell a property than keep it. It is significant to note that these sales are frequently made “as-is,” which makes financing challenging.
FHA 203k Rehab Loan
The purchase of a fixer-upper can be financed with an FHA 203k rehab loan, which is a government-backed loan. This type of loan can be used to finance modifications and repairs, making it a great option for investors seeking to acquire properties requiring repair. It can also be used to improve the energy efficiency of older homes. It is not intended for “luxury” extras such as a swimming pool.
D.T.I.
DTI refers to “debt-to-income” ratio. This metric is used by lenders to determine how much of a borrower’s income goes toward debt repayment. DTI is determined by adding your monthly housing payment and total debt expenses, dividing that number by your monthly gross 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. Typically, a lender favors borrowers who spend 28% or less on housing and 36% or less on monthly debt payments.
E.M.D.
The acronym EMD stands for “earnest money deposit.” This is a deposit that buyers must make when submitting an offer on a house; it is also referred to as a “good faith deposit.” An EMD can convince a seller to accept an offer by demonstrating the buyer’s seriousness and eagerness. The percentage of EMD offered varies depending on the circumstance and the level of market competition, but it typically ranges between 1 and 5%. In most cases, the EMD is kept in escrow and, if the deal closes, applied to the cost of buying the house.
As is evident, North Logan property managers must be knowledgeable about a variety of real estate terms. In a market that is competitive, knowledge is power.
Your greatest asset in an ever-changing market for rental properties are the professionals at your disposal. 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.
