Most people know that buying real estate is one way to build wealth, but before embarking on a real estate purchase, buyers need to understand the language associated with real estate. Confusing jargon, arcane terminology, and location-specific regulations could turn an exciting real estate adventure into a disappointing misadventure. And with real estate comprising often the single largest financial stake in Americans’ assets, we want our clients to gain the knowledge and locate the resources needed to make the best possible choices. 

Do you know what real estate actually is? Make sure you do. What kinds of physical property you may purchase, rent, or sell depends on your knowledge of them. Some property types include residential, commercial, industrial, and vacant land. Being aware of your options allows you to choose the right type of real estate transaction for your wants and needs.

I remember being a first time home buyer and knowing virtually nothing about how to buy a home. I was totally dependent on my Buyer Agent throughout the process. The next time I bought, I was much more savvy! Whether it’s your first or fourth real estate transaction, study up on the steps involved in buying or selling a property, including inspections, negotiations, the closing process, and associated costs. You’ll be more aware of deadlines, paperwork requirements, and this will help make your transaction run smoothly. 

Real estate literacy involves the big picture as well as the small steps. Liz & Ellie Local can help you stay informed about current and local real estate market trends, including supply and demand, interest rates, and economic factors. Seeing larger trends can help individuals make intelligent decisions about their investments.

As you can imagine, becoming literate in real estate takes time and work; ask lots of questions. Real estate agents, brokers, appraisers, inspectors, attorneys, and other professionals involved in the industry can help individuals navigate the real estate process effectively. Competent real estate advisors have a network of experts they can share with you; we at Liz & Ellie Local list our trusted colleagues on our website.

Financial literacy is an essential aspect of real estate literacy. One of the most common questions in real estate is How much is this property worth? Knowing how properties are appraised and how market value is determined is crucial for both buyers and sellers. This includes factors like comparable sales, location, condition, and demand. Liz and Ellie Local’s real estate advisors are experts on property valuation. 

Buying a property, or choosing a buyer to purchase your property, often involves financing (a fancy word for loan). Financing options vary; do your research first—and financial literacy will guide you. Understanding the different financing options available for real estate transactions, such as mortgages, loans, and down payments, is vital for buyers and investors. You must have a basis of financial literacy to truly understand the options available for purchasing real estate–it’s usually a combination of a loan, some savings, and perhaps the cashing-in of investments. And keep in mind: A home is a long-term financial investment, and won’t necessarily pay off right away.

Study your real estate vocabulary. Every language has its own terminology; real estate has them in droves. Understanding the various terms used in real estate, such as mortgage, Purchase and Sale, appraisal, escrow, title, and even Buyer Agent, is fundamental to navigating the real estate market. We’ve written many blogs breaking down these terms, and we are always ready to explain more. If you’re mystified by mortgages, for example, read this and contact us with any questions.

Be aware of local laws and loopholes. Real estate attorneys can educate buyers on regulations, disclosures, easements, liens, and lead laws, among others. Again, ask lots of questions. Lacking understanding of any of these regulations could cost you money, time, and stress.

No matter what kind of real estate you may own, prepare to maintain it. You’ll need to learn the ins and outs of the property’s needs; including heating and cooling systems, outdoor spaces, roofing, etc; but also, think about how you may add improvements to it down the road. A Home Equity Line Of Credit (HELOC), which is a line of credit that allows you to borrow against the equity of your home, could be an option–but you should understand how a HELOC affects your long-term cost and return on investment.

Real estate literacy can empower individuals to make informed decisions about their real estate transactions and investments, ultimately leading to better financial outcomes and reduced risks. It is especially important for first-time homebuyers, but it benefits anyone involved in real estate in any capacity.

Any questions? We hope so! Contact us; we’re here to help.