Investing in real estates can be really exciting, or overwhelming especially when you do not seem to be familiar with the real estate vocabulary.
We want you to have a seamless investment experience, so we have compiled a list of real estate terminologies we use here at Hall7 Real Estate and their meanings for you in this post.
Let’s dive in!
A mortgage is a type of loan that is used to finance the acquisition of a property. Mortgages in Nigeria are made available to qualified applicants by the Federal Mortgage bank, or through commercial banks and primary mortgage institutions
#2 Off-Plan investment
Off-plan investment refers to the art of investing in a property while it is still in the planning or development phase. Investors who subscribe to off-plan investments make their decisions based on the property plan and location, amidst a number of other factors. This may also attract an early bird offer,
#3 C of O
C of O simply means Certificate of Occupancy. It refers to a document issued by the constituted authority in your location to land owners and property buyers as a legitimate proof of ownership. This document also spells out the land use, i.e. residential, commercial or mixed development.
#4 R of O
R of O means Right of Occupancy. It is the right of a person or corporate entity lawfully using or occupying a property in accordance with customary laws.
Equity refers to the difference in the value of your property and the amount owed in mortgage. For instance, if your property is worth 50Million Naira and you owe 10Million Naira in mortgage, your equity is 40Million Naira.
#6 Site Inspection/Viewing
An inspection is the physical or virtual examination of a property before acquisition. The purpose of an inspection is to determine the suitability of a property for the purpose for which you intend to acquire it.
#7 Investment Document
An investment document, also known as a Sales agreement, is a legally binding contract between an investor and a developer/Owner of a real estate property. It contains all the terms of the transaction.
An addendum is an addition or modification to an existing contract. It could serve as an update or a means of clarifying concerns not included in the initial contract.
#9 Initial Investment
An initial investment, also known as initial amount, refers to the first monetary sum credited to the developer or seller of a property. An initial investment comes to play when an investor has decided to make payments for a property in installments.
#10 Investment Plan
An investment plan refers to a method of investment that has been agreed upon between the seller and buyer of a property. It clarifies how an investor intends to make payment for a property. Investment plans could either be outright or in installments.
The abbreviation ROI stands for Return on Investment. It is a performance measure used to evaluate the profitability and efficiency of an investment. A quick and easy way of calculating ROI is by subtracting the initial value of the investment from the final value of the investment which equals the net return.
#12 Closing Date
The closing date is an agreed date between the developer and an investor, when the documents that transfer ownership of a property to the investor is endorsed. This is often when you will receive the keys to your new home and you will become responsible for the property.
#13 Deed of Restriction
A deed of restriction is a legal document that imposes a limitation, condition or other restrictions on how a real estate property may be used. It usually applies to all future owners of the property, not just the party who owns it when the restriction is adopted.
#14 Deed of Lease
A deed of lease is a contract that outlines the conditions under which a property owner has agreed to lease a property to a tenant (lessee).
#15 Offer Letter
An offer letter is a physical representation of an individual/corporate entity’s interest in acquiring a real estate property. It usually contains the details of the property to be acquired, alongside some other relevant information. The investor is required to accept the offer as an official marker of the commencement of the transaction.
This post has succeeded in explaining 15 real estate terminologies used in Hall7 real Estate.
Now it’s your turn.
What other real estate terms would you like us to explain?
Tell us in the comment section below.