The common name of commercial areas such as house, land, field, building, garden or office, workplace, store is real estate.
There are many real estate terms for the purchase, sale, rental and legal transactions of real estate. By learning the meanings of the most curious real estate terms, you can perform transactions related to your real estate without any question marks in your mind.
Interest, in brief, means the rent of money. For example, when you give your money to someone else for a while, as you demand when you rent out your house, you demand rent, which is interest. The interest rate plays an important role in determining the course of the economy.
In public banks, loan interest rates for brand-new houses have been decreased to 1.20% for houses whose prices are less than 1 million TRY / 78,988 USD. Furthermore, the interest rate for houses over 1 million TL was reduced to 1.29%.
2. Title deed
Turkish title deed is an official document issued by the land registry directorate showing the owner of a certain part of the land or an independent section built on it, valid until proven otherwise. Besides, the process of issuing a title deed document from the land registry office, which is attached to the name of a newly built real estate, is called a deed.
3. Title search
A property title search examines public records on the property to confirm the property’s rightful legal owner. The title search should also reveal if there are any claims or liens on the property that could affect your purchase.
It is the assurance of the building or residence against any disaster or adverse event. Insurance is not compulsory, however, TCIP is mandatory.
TCIP is Compulsory Earthquake Insurance aims to secure houses against natural disasters. House purchase and sale transactions, that is, title deed transfer, cannot be carried out without TCIP.
Amortization, which means the share of depreciation, expresses the sales price of a rented real estate in the real estate sector in how many years.
When calculating the amortization period, the value of the real estate at the time of purchase and the estimated rental value are taken into account. To calculate the real estate amortization period, the current value of the investment is divided by the monthly rental price. The return year of the real estate value can be calculated by dividing the result by 12. For instance, the real estate value of a house with a sale price of 700.000 TRY / 42.633 USD and a rental value of 3500 TRY / 214 USD is calculated as follows:
700.000/3500 = 200 months
200/12 =17 years amortization period
By acting as an intermediary between the parties, the person who carries out commercial transactions on real estate agreements is called a broker.
Unlike a real estate agent, a real estate broker is responsible for controlling the operation of real estate. If the owner of the real estate agency works as a professional, it is called a “broker owner”.
These two professions working in the field of real estate are clearly different from each other. The broker can take the franchising and create its own dealer or own workplace. In this case, real estate consultants work within the body and continue to operate. While the consultants receive premiums thanks to their sales transactions, the broker has the responsibility to meet all the needs of the real estate office and to bear the cost.
7. Buying Agent
Buying agent is the person who deals with the buying, selling and leasing of real estate and other types of real estate. An agent provides information for the customer, takes the task of guiding, promotes the projects of large companies and explains the projects. In companies such as Realty Group, buying agents work to provide real estate consultancy for the buyers.
Closing means completing a real estate transaction. For instance, you completed the required official papers during your home purchase and handed them over to the relevant units. After covering your agent and home expenses, you have successfully completed the entire process. This means that you successfully closed the home sales.
9. Closing Costs
When a person or business buys real estate, there are many fees or costs involved in addition to the purchase price of the property. These are called closing costs. Closing costs must be paid before “closing” a real estate transaction and are usually the responsibility of the buyer. In some cases, the seller will pay a certain closing cost to make the deal more attractive or to get the sale moving more quickly. Besides, closing costs usually range from 2% to 5% of the purchase price of a property.
10. Listing Agent
A listing agent is a real estate professional who represents a home seller in a real estate transaction. As the name suggests, the listing agent lists the home for sale and works on the seller’s behalf to sell the home at a price and under terms that are best for their client.
Moreover, the listing agents help sellers price, set and sell their properties, show them off to potential buyers and bargain offers.
11. Short Sale
The term short sale in real estate refers to a sale that takes place when a financially distressed homeowner sells their property for less than the amount due on the mortgage.
12. Title Insurance
Title insurance is a form of insurance that secures property risks. It protects the property owner’s rights within the legal system and pays the insured property owner’s insurance coverage losses in a failed defense.
Title insurance makes purchasing, selling and refinancing processes faster, easier and more affordable.
The term differs from other insurance products such as home, workplace or fire insurance with a significant difference. While these products protect the value of the real estate against possible future losses against different risks, title insurance provides protection against defects and risks arising from past transactions.
13. Reverse Mortgage
A reverse mortgage is a term used to describe cash access to the equity in your home. It is a financial instrument available for seniors in the USA, Canada and Europe. These types of mortgage qualification rules are based on the home owner’s age and assume full ownership of the property.
A realtor is a person who manages the sale and lease of real estate and acts as an intermediary between the owner and the buyer and the tenant.
15. Home Appraisal
A home appraisal is the determination of the value of an immovable property.
Experts select the most appropriate home appraisal method for the houses that belong to legal or real persons or public institutions. Appraisers make an independent and impartial valuation at a specific date.
The annotation made for the solution of the problem arising from the conflicting works is called foreclosure. It is the situation in which the debtor’s money, pension or property is seized by the enforcement office for the payment of a debt.
Equity is the difference between the market value of your house and the amount you owe the lender who holds the mortgage. Briefly, it’s the amount of money you’d receive after paying off the mortgage if you sell the house.
For instance; the market value of your home is $300,000 and you owe $150,000 on the mortgage. Your equity is, therefore, $150,000.
18. Debt-to-income Ratio
The debt-to-income (DTI) ratio is the total of your monthly debt payments divided by your gross monthly income. Thus, the lower the DTI, the better the balance of payment and debt.
A contract is an agreement between two or more persons, in which they agree to do or not to do something which has legal consequences. A contract is very important to protect the rights of the parties.
There are also types of contracts in real estate exchange such as lease contract, sales contract, title exchange agreement.
20. Comparative Market Analysis
A comparative market analysis is a tool in real estate sales and purchases to determine the selling and buying price of the properties. A comparative market analysis evaluates sales and listings of similar homes to residential property that are on the market. Most importantly, comparative market analysis supports the determination of their approximate value of them.
21. Down payment
A down payment is a portion of money given at the beginning of a loan to show commitment to a real estate purchase. It is usually cash, but in some cases, it can be credit. This money is usually only used for sales involving large sums of money. When buying houses and land, the payment, for example, 35% can be taken as a down payment.
A principal is a responsible party involved in a real estate contract. A broker, realtor, buyer or a seller can be a principal.
The type of real estate corresponds to what we call an apartment in Turkey. However, there is a significant difference between condominiums and apartments. While you can own a condominium, you are able to rent an apartment. It means that you need to register your condo in the official departments. You can also make any changes you want for your condo.
24. Floor Easement
The process of showing the property right of persons on a real estate that is under construction and not ready is floor easement. The floor easement shows that the real estate to be built is registered in the title deed. After the occupancy of the building is received, the title deed can be obtained by applying to the Land Registry and Cadastre Directorates.
25. Joint Property
Joint property is the ownership of more than one person on the immovable property. The right of joint property usually arises after inheritance.
Shareholders may participate in the management style or income expenses related to the immovable property, which is the subject of joint ownership, in proportion to their shares. However, joint ownership may come to an end if the property is or sold. In addition, stakeholders in joint ownership; may also have rights such as pledges or transfer their shares.
26. Concurrent Ownership
Concurrent ownership is the joint ownership of property by two or more people. There are different types of concurrent ownership in Turkey like joint tenancy, tenancy in entirety, tenancy in common, public property. Moreover, the most common is the joint tenancy. In joint tenancy, there are two or more people and have exact rights on the property.
27. Real Estate Easement
A real estate easement is the right to access or cross another person’s property. Besides, it is a real estate concept that might include that one person takes advantage of another person’s property under the condition of payment. There are 3 main real estate easements; utility easement, private easement, easement by necessity.
28. Floor Ownership
It is a term stating that the independent parts of a building such as a warehouse, office, flat or floor have the right of ownership. In order to obtain the floor ownership, the building construction must be ready.