Real estate 101

If you are like the rest of us that own or rent office space, property costs are one of the largest business overhead expenses. It is very important that we comprehend the terms used in Real Estate. It is important that you understand the ramifications of taking over the title to a property or entering into a lease agreement with someone. Always consult with an attorney who specializes in real estate law. This will keep you out of a lot of problems which you do not need in business.

Real Estate Terms List:

1. Appraisal: This is a written report by a state-licensed appraiser that includes an unbiased analysis of the properties value and what led to that opinion. This is always required on all commercial property sales. If you are borrowing money, you will need an appraisal.

2. Broker: This is the person that brings together a buyer and a seller, or a landlord and a tenant, in a real estate transaction. All brokers must be licensed by the state where they work. Some work on a salary but most work on commission. They either represent the seller or the buyer; the lessor or the lessee.

3. Concessions: Benefits or discounts given by either the seller or landlord. This helps to close a sale or lease. Common concessions may include moving expenses, remodeling of office space or upgrades. This can also be used as an inducement of reduced rent for the initial term of the lease.

4. HVAC. An acronym for "heating-ventilation-air-conditioning" system in the unit. In a commercial building, the landlord generally is responsible for maintaining the HVAC. Often, they tenant can be responsible also, it depends on the terms of the concessions or lease.

5. Lien. This is a legal claim filed against a property for payment of a debt or money owed. If a property owner fails to pay, for example, the creditor can place a lien on his or her property. A lien will halt the sale of a property. It is important to know if there is a lien on a piece of property you are considering buying.

In conclusion, this is just a few terms that are important in a real estate transaction. Understanding what you are getting into is important. Always consult with a Real Estate Attorney before entering into a real estate traction. Remember, investigate the property you are considering investing in. This is called "Due Diligence" on your part before signing on the dotted line.