Knowing the most recent real estate jargon is crucial as an Ewa Beach rental property owner. The real estate market is changing significantly, and staying ahead of these changes can assist you in safeguarding your investments and expanding 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 examine each of them.
An iBuyer is a real estate company that makes instant offers on homes using technology. In recent years, these companies have grown in popularity as they offer a convenient and quick way to sell your home. iBuyers have greatly changed how people sell and buy residential properties in many ways since homeowners are provided with much more convenience.
DOM is the abbreviation for “days on market”. The length of time a property has been up for sale is indicated by this metric. A property’s DOM is calculated from the date it was listed on the MLS (multiple listing service) until the date the seller signed a contract to sell. 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). By checking the average DOM for a given region, you can determine whether the market is weak (high average DOM) or strong (low average DOM). In a weak market, buyers typically prevail.
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. 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
A government-backed loan known as an FHA 203k rehab loan enables buyers to fund the purchase of a fixer-upper. 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. This can also be used to retrofit older homes with energy-efficient features. It is not designed to include “luxury” additions, such as a swimming pool.
The “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. To determine your DTI, add your monthly housing payment to your total debt payments, divide that number by your gross monthly income, and multiply the result by 100. It is intended to determine the maximum mortgage payment you can make. 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. An ideal borrower for a lender is one who pays no more than 36% of their monthly income on debt and no more than 28% of their income on housing.
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. In most situations, the amount of EMD supplied is between 1 and 5%, although this amount can vary depending on the situation and the competitiveness of the market. The EMD is normally held in escrow and adapted to the purchase price of the home if the transaction closes.
Ewa Beach property managers must be conversant with a wide range of real estate terminology, as you can see. In a market that is competitive, knowledge is power.
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.
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