Basic Real Estate Terms You Need to Know
For first-time homebuyers, purchasing a property can be a little bit challenging or overwhelming. Before you begin the buying process, you should have a basic awareness of important real estate principles. This will not only save you money in the long run, but it will also offer you peace of mind. Here are some basic real estate terms you need to know.
Ready For Occupancy (RFO)
The property/unit you are purchasing is already livable. Thus, the buyer needs to pay spot cash downpayment (usually 10% – 20% of the total contract price) so he/she can move in, considering the bank loan has been approved and ready for a take-out loan.
The property is not yet built, or the construction has just been started. Thus, the buyer only needs to pay the monthly equity (downpayment which is divided into a number of months, mostly equivalent to the turnover date of the property). Preselling is much cheaper than RFO.
Assumed property, equity period
This means that the owner is still paying the monthly equity. The new buyer needs to pay spot cash called assumed price to the owner, then the new owner will continue paying the remaining equity as well as the loanable amount either through a bank or PAG-IBIG financing.
Assumed property, bank loan period
This means that the owner has paid the downpayment in full, and has started paying the monthly amortization. The new buyer needs to pay spot cash called assumed price to the owner, which is usually the sum of all payments the owner made + possible ROI. The new owner will then continue paying the remaining loanable amount either through a bank or PAG-IBIG financing.
This is the amount that represents the difference between the selling price and loanable amount.
This is the amount the buyer will need to pay for the processing of the condo or lot title before the turnover of his/her unit.
Condominium Certificate of Title
This is the title that provides evidence of ownership of a condominium. Verification and registration of title certificates is done through the local Land Registration Authority.
Transfer Certificate of Title
This is the title that provides evidence of ownership of a property. Verification and registration of title certificates is done through the local Land Registration Authority.