Real Estate Basics: Everything You Need to Know

The world of real estate may seem confusing and complicated, but in order to purchase ahome, you'll have to be aware of the basics. You need to understand the real estate marketto help you make an informed decision and buy a beautiful home within your budget.Here are answers to some frequently asked real estate questions:

What is real estate?

The dictionary definition of real estate is "land and all things permanently attached." Thatincludes buildings, plumbing, light fixtures and other improvements. As far as we areconcerned, it means your house and the land surrounding it.

What is a real estate agent?

A real estate agent is a licensed professional that represents either the buyer or the seller of a property. They are typically paid by commission, which is calculated from the valueof the home.

What is a realtor?

A realtor is an agent who is a member of the National Association of Realtors.

What is a real estate broker?

Becoming a real estate broker requires more training and a different type of license thanthat of a real estate agent. For our purposes, a real estate agent, realtor or real estate broker is sufficient.

What is a mortgage loan?

A mortgage loan is a fixed amount of moneygiven to a borrower from a bank or other lending institution in order to purchase realestate. The real estate itself serves as collateralfor the loan.

What is a fixed rate mortgage?

A fixed rate mortgage locks in the interest rateat the time the loan is given and stays the samefor the length of the mortgage.

What is an adjustable rate mortgage(ARM)?

ARMs initially have a low interest rate for the first few years but can be adjusted up or down depending on the index to which it is tied.

What is a mortgage broker?

A mortgage broker helps you secure financing for a home, though they are not the lender themselves. Rather, they serve as an intermediary and, ideally, will help you find the bestdeal.