Real Estate Terms

Everyone has a dream to purchase their dream home, some people have a dream of opening their retail shop, or some want to invest in office spaces; everyone wants to invest in real estate at some point in their life because it is the only asset that gives you unimaginable returns and also provides shelter from inflation.

But before investing in real estate, it is essential to be aware of real estate terminology India or at least have some basic real estate knowledge. As we all know, real estate involves high-value transactions, and if one is unaware of real estate terms, it might open gates for fraud to manipulate you while purchasing a home, office, or shop. 

Today, in this article, we will provide you with basic real estate knowledge so that you will be aware of everything involved in real estate transactions. It will save you from fraud and other manipulations by agents or dealers. 
But with Commercial Noida, you are safe from fraud and can carry your real estate investment journey smoothly and without obstacles. We are a RERA-authorised real estate agency that deals in real estate throughout Noida; our expert team has helped thousands of people in real estate investment and seamless document processes. Contact us now and get free from all the worries.

Top 10 Complex Real Estate Terms

These real estate terms will help you in understanding complex real estate terminology with ease. 

Carpet Area 

Carpet area means the actual usable space within a property, excluding the thickness of walls. It is a space where the carpet can be spread. In most cases, the carpet area would be around 70 percent of its build-up Area (the actual Area of a property or flat.) 

For example, if your build-up Area is 1000 sq feet, it means the total Area of your flat, so you can only use 700 sq ft. 
Carpet area = Area of bedroom + living room + balconies + toilets – the thickness of the inner walls. 

Built-Up Area

The total Area occupied in the flat apartments includes carpet, walls, balconies, corridors, and lobbies. It also consists of the thickness of the walls, usually 30% more than that of the carpet area. 

Sale deed

You might have heard this term often in real estate. A sale deed is a document that includes the record of ownership transfer from seller to buyer, including the details related to the property, buyer and seller, rights of the buyer, etc. The sale deed establishes the ownership of the buyer over the property. The buyer mentioned in the sale deed is the legal owner of the property. Real estate transactions are not considered valid if you have not finalized your sale deed.

Title deed

Don’t be confused between a sale deed and a title deed because it becomes the title deed as soon as it gets registered legally. The title deed shows the legal owner of the property, and you should always thoroughly check the title deed, as it is the most important document and has all the records and clauses of the property. Always consult a legal expert before executing a title deed.

Stamp Duty

The tax collected by the government after every property you sell varies from 4 percent to 9 percent. It is calculated at the circle rate or the value of the property (whichever is higher).

Adjustable-Rate Mortgage

According to the market, if you take a loan on your flat under an adjustable mortgage rate, your interest rate can fluctuate over time. So sometimes it goes up if you have to pay more interest, or sometimes it goes down so you will pay less. It will depend on the market and inflation. Generally, such mortgage rates have lower interest rates in initial phases and gradually change over time. It is typically a complicated concept, so always check all the documents and payment plans before opting in. 

Fixed Mortgage Rate

In a fixed mortgage rate, the interest rate remains constant throughout the loan tenure, regardless of any changes in the market.

Due Diligence

Due diligence is the time given to the property buyer to thoroughly examine the property before purchasing it and revolves around any issues.

Occupancy Certificate (OC) 

An occupancy certificate (OC) is a legal document that verifies that a building has been constructed according to the approved plans and is ready to be occupied. It is issued by local government agencies, such as the municipal corporation after the building is finished. The OC also indicates the building has civic needs like water, sanitation, and electricity.

Closing Costs

Closing costs in the real estate market refer to the extra charges buyers must bear. This includes fees charged by lenders, insurance companies, attorneys, real estate agents, title companies, taxing authorities, homeowners associations, and other related expenses. The investor usually pays these charges at the end of the investment when they close all the real estate transactions. Hence, it is called closing costs.

Conclusion

There are various other real estate terms, but these are the essential terms you should know before purchasing a property and ensuring everything is legalised. Always consult a legal expert before executing a real estate deal for transparency.