Since the COVID-19 pandemic started, many people have begun returning to their hometowns and settling down there. Both Indians and NRIs alike are looking for good homes to buy and settle down or invest in. So if you are one of the many who are looking for the perfect home, you must know some of the terms used in the real estate industry before investing in property.
Here are 10 real estate terms you must know before investing-
- EMI
You may or may not be familiar with the term EMI. It stands for Equated Monthly Installment. When you decide to opt for EMI as a payment option, the total amount to be paid is divided into parts that have to be paid every month until the total amount (plus interest) to be paid is covered over a fixed period. Because you are allowed to pay in parts over some time, there will be a fixed amount of interest you have to pay to avail EMI option.
- Appreciation
Price appreciation refers to the increase in the resale value of a particular real estate property over some time. Some people invest in real estate expecting the price to get appreciated over some time so that they can sell it at a higher price than they bought it and make a high return on their investment. The appreciation of a property depends on a variety of factors such as location, amenities, good condition, furniture and future developments in and around the property’s location.
- RERA
The Real Estate Regulatory Authority or RERA was introduced in 2016. The main goal of RERA is to ensure that everything related to real estate is done properly and to ensure there is no overlap of information between what is written on paper and what is communicated verbally. RERA has revolutionised the real estate industry since it was introduced in 2016. It helped in boosting real estate investments and reduced the number of frauds happening in the real estate industry.
- Carpet Area
The definition of carpet area as per RERA is “the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment”.
- Salable Area
There is a common misconception that the salable area or built-up area and the carpet area are the same thing. It is not true. While the carpet area excludes the external walls, balcony, verandah, etc. the salable area is the whole area including all the things that are excluded from the carpet area.
- Credit score
It is a number with the help of which a seller can get a picture of the consumer’s creditworthiness. It is a number between 300-850. A credit score is calculated using the credit history of the consumer’s repayment of loans, timely payment of bills, total debt, number of open accounts, etc. A good credit score means that the consumer pays their bills on time and can be trusted. The higher one’s credit score is the better the return on investment.
- Corpus Fund
A Corpus fund is related to the project or the organisation you are looking into. A Corpus Fund is the collective of capital and funds generated and collected when the buyers are booking an apartment with a builder. It is the fund that is required for the basic expenditures needed for the administration or organisation to function. The funds are used to develop the property and the amenities that were initially offered by the builder.
- Occupancy Certificate
An occupancy certificate (OC) certifies if a building is ready to occupy following the national building codes. An occupancy certificate is compulsory to buy an apartment. The local government bodies have the authority to issue an occupancy certificate. It is proof that a building is fit for occupancy.
- Social Infrastructure
If a community has a social infrastructure, it means that the community provides social services that can be accessed by all like hospitals, playgrounds, schools, colleges, water and wastewater treatment plants, etc. Bus stops and parks can also come under social infrastructure. Social infrastructure ensures that everyone residing in the community has an opportunity to use these facilities without facing any discrimination.
- Possession certificate
A possession certificate is given to indicate the ownership of said property. The possession certificate is transferred from the seller to the buyer at the time of registration. The completion certificate should be submitted to get the possession certificate.
Now that you know some important terms of real estate, we, at Ark Real Estate & Infra, can help you make an informed decision on buying your dream house.