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18 Important Real Estate Terms Everyone Should Know - #Investment

October 08, 2018

Navigating the world of real estate, you’re going to end up coming across all kinds of real estate terminology that you may not be familiar with. Whether it’s your first time buying, or just don’t quite understand something, there is a lot of confusing terms used between real estate professionals.

Knowing what your real estate agent is talking about when they use common real estate terms will make the process smoother, and will also ensure communication is much easier.


Here are 18 fundamental real estate terms that will allow you to be better informed and involved in any real estate transaction.


Buyer’s Agent and Listing Agent:


Typically, there are two types of real estate agents that are involved in the home buying process. If you are buying a home, then you will want to be represented by a buyer’s specialist, while the listing agent will represent the seller of the home.

Acceptance


The acceptance is the agreement to the terms of an offer, which then creates a contract. As soon as the seller signs on the dotted line on the purchase agreement, you’re in a binding contract for the sale of the house. Once the contract is signed, neither parties can back out without facing consequences. In the buyer’s case, they will lose the earnest money deposit and in the seller’s case, it could end up in a potential lawsuit.

Closing: 


The closing date is the scheduled day on which the sale of the property is officially finalized and transferred thereafter. In order to meet the closing date, the buyer must sign all the mortgage documents and pay all closing costs and the seller completes the transaction with the buyer.

Closing Costs:


Closing costs are fees paid at the home closing, which is when the title of a residence is transferred from the seller to the buyer. These costs typically include real estate commissions, escrow fees, document recording fees, lawyer fees, title insurance fees, survey fees, and taxes. These costs can also include the expenses the home has incurred by buyers and sellers during any negotiations.

Comparative Market Analysis: 


The best method available to home sellers to learn their home’s current value so they can select the best sale price is a CMA, or Comparative Market Analysis. CMA is the term real estate agents use when they conduct an in-depth analysis of a home’s worth in today’s market.

Contingencies:


A contingency is the condition that must be met before the deal can be finalized between the buyer and the seller and becomes legally binding. If the home inspection reveals major problems, then the contingency allows the buyer to walk away from the contract without losing money. A common contingency is the home inspection. Other contingencies can include appraisal contingencies or financing contingency.

Down Payment:


The down payment is the amount of money you pay toward a home before your lender provides you with a loan to cover the rest of the purchase amount. Your down payment can vary depending on the type of mortgage you take out. It can be anywhere from 3 percent to 20 percent of the total cost.

Escrow


The escrow is a deposit of funds or documents, such as the earnest money deposit, that are held by an escrow agent, or other third party, until the sale goes through. The third party holds the property, cash, and the property title until all conditions of the property agreement have been met.

Appraisal


An appraisal is a third-party opinion of value. This is usually based on comparable sales within the area of the “subject property” (the house for sale).

Equity:


Your home’s equity is the difference between the home’s fair market value, and the unpaid balance of the mortgage. Equity increases over the life of the loan. For example, if your home is worth $100,000, and you owe $50,000 still, the other $50,000 is your equity.

HUD-1 statement


A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points and initial escrow amounts. A separate number within a standardized numbering system represents each item on the statement. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing.

Home Warranty  


Similar to any warranty, sellers and buyers can pay a fee to protect the home against future issues depending on how much their package covers, like plumbing, heating, or appliances.

Inspection


A home inspection is scheduled after you have made an offer on a home. Some municipalities require an inspection, whereas some do not. The inspector goes through every part of the home to check on the foundation, walls, heating, electricity, plumbing, and appliances to see if they are up to code or need repairs. If the inspector finds something wrong in the home during the inspection, the inspection will fail.

Lien


A lien is when a legal claim is put on a property in order to receive payment for debt. The holder of the lien can sell the property to recover the money owed.

Listings:


Real estate agents will often refer to homes for sale on the market as listings. These listings include basic information about the home for sale, such as the price, number of bedrooms and square footage.

Private Mortgage Insurance:


PMI allows buyers to put less than a 20 percent down payment on a home. A PMI is an insurance premium paid by the buyer to the lender to protect the lender if you are unable to pay your mortgage. Once you have 20% equity in the home, this insurance is discontinued.

Realtor®:


Don’t make the mistake of thinking a Realtor is the same thing as a real estate agent. Not all real estate agents are Realtors; only those that are members of the National Association of Realtors (NAR) can call themselves Realtors.

Title and Title Insurance:


Title is the legal term that identifies a piece of property that the owner is in lawful possession of that property. The title insurance protects real estate owners and lenders against any property loss or damage they might experience due to liens, encumbrances, or defects.

These therefore  are the fundamental  investment terms associated with real estate  transactions. Know it fully before  you go in to purchasing of real estate  properties.


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18 Important Real Estate Terms Everyone Should Know - #Investment 18 Important Real Estate Terms Everyone Should Know - #Investment Reviewed by worldforummedia on October 08, 2018 Rating: 5

Warren Buffet's Classic Value Investing Style - Investment

August 31, 2018

Berkshire Hathaway Chairman and CEO Warren Buffett, is an exceptional role model if one wants to imitate the classic value investing style. During the early years of his great investing career Buffet said "I'm 85% Benjamin Graham." Graham is deemed as the godfather of value investing who initiated the concept of intrinsic value – the underlying fair value of a stock based on its future earnings power.


Warren Buffet, American Greatest Investor

Nonetheless, Buffett’s investment approach is more qualitative and intensive as compared to Graham. He prefers potent businesses which have fair valuations and posses the potential for large growth whereas Graham favored undervalued, mediocre firms and would then expand his holdings among them.



Buffett's Investing Style


Buffett's formulas interestingly look fairly simple and cliché but can be difficult to execute. Buffett basically uses twelve investing tenets to make his decisions. These are grouped in the areas of business, management, financial measures and value. For example, one principle questions if management is candid with shareholders. Conversely, there is Economic Added Value ( EVA) [ EVA is a laundry list of adjustments ]which is a fascinating example of the reverse scenario; concepts that appear complicated but are easily executable.


"The Buffett Way" is a conventional method of investing that is also flexible; resulting in its its phenomenal success. Day traders may need firm discipline and adherence to a formula, but it can be argued that successful investors have to be willing to adapt their conceptual models to current environments.



Business Tenets


Buffett strongly believes that an inherent understanding of the operating business is essential to have a viable forecast of the future performance which is why he firmly limits himself to his “circle of competence” - businesses which he can comprehend and analyze. For example, when the tech bubble burst in the early 2000s, Buffet did not suffer great losses as he wasn't heavily invested in dot-com stocks. The main goal of his business tenets is to produce a robust projection. Primarily, analyze the business, not the market or the economy or investor sentiment. Next, search for a steady operating history. Finally, utilize that data to establish whether the business has beneficial long-term prospects.



Management Tenets


Evaluation of management quality is perhaps the most difficult analytical task but is extremely important. Here are his three management tenets:


- If the management is rational: It is important that the management of the company sagely reinvests the earnings and returns the profits to the shareholders as dividends; and doesn't focus on retaining profits to build their empire and seek scale.



- Management’s honesty with its shareholders.



- Lastly, if the management refrains from mindlessly duplicating the schemes and strategies of their peers/ competitors.It is key that you draw a fine line between parameters , like between imitation of competitor strategy and circumvent a company that is first to market.



Financial Tenets


“Buffettology” pivots on return on equity (ROE) instead of earnings per share. Many investors might argue that ROE is theoretically subservient to return on assets( ROA) or return on capital employed (ROCE) as ROE can be contorted by leverage ( a debt-to-equity ratio). [ ROA= earnings produced for all capital providers/ Equity contributed to the business ]. However, Buffett favours low-leverage firms and appraises leverage separately. He also seeks high profit margins.


His final two financial principals share theoretical fundamentals with EVA. First, Buffett analyzes "owner's earnings," which is essentially cash flow accessible to shareholders. Buffett elucidates it as net income plus depreciation, depletion, amortization and other non-cash charges minus capital expenditures (CAPX) minus additional working capital (W/C) needs. This equation is similar to EVA before you subtract the shareholders equity charge. So, basically with owners' earnings, Buffett analyzes a company's ability to generate cash for shareholders.



Buffett also has a "one-dollar premise," which essentially means that every dollar of retained earnings must generate one dollar of market value.


Read also: Why should save money and invest


Value Tenets


Ben Graham once said “ price is what you pay, value is what you get”. Hence this principle of Buffet analyzes the intrinsic value of the company. Buffett strongly recommends to ignore the short-term market volatility and focus on long-term returns


A truly exceptional business ought to have an enduring "moat" that safeguards brilliant returns on invested capital .“Moat”is a buisness’ ability to retain competitive advantage in order to maintain its long term profits and market share from its competing firms. Any business "castle" which is earning high returns will be consistently punched by its competitors . Therefore an intimidating barrier such as a company's being the low cost producer (GEICO, Costco) or having a powerful world-wide brand (Coca-Cola, Gillette, American Express) is vital for prolonged success. Business history is filled with "Roman Candles," companies whose moats proved delusive and were soon crossed. A moat that needs to be consistently rebuilt will eventually be no moat at all.


Companies prone to swift and continuous change are ruled out from his “enduring” criteria.Though capitalism's "creative destruction" is extremely favorable for society, investment certainty is prevented .Buffett discounts the projected earnings at the risk-free rate, claiming that the "margin of safety" in carefully applying his other principles presupposes the minimization, if not the virtual elimination, of risk.



The Bottom Line


In essence, Buffett's principles, a foundation in value investing, is also adaptable to the changing times. But in recent times stable operating histories are difficult to find, and intangibles play a bigger role in the firm’s value thus making the analysis of a business quite challenging.


Buffett encourages small investors to buy a low-cost S&P 500 index fund instead of individual stocks. However, if one wants to buy individual stocks, follow “The Buffet way” and you will be on track to earn solid returns on your portfolio.
Warren Buffet's Classic Value Investing Style - Investment Warren Buffet's Classic Value Investing Style - Investment Reviewed by worldforummedia on August 31, 2018 Rating: 5

Why You Should Save Money and invest

May 28, 2018

Why should you save Money? if you make less money, paying your bills can be a major problem, especially in this current eonomy where people complain about low cash flow and the thought of saving money doesn’t even come to mind. When you have less than ₦5,000 left after spending from a salary of ₦50,000, why even think of saving? Because everyone has to start somewhere, and if you are focused at it, your financial situation is likely to improve going forward. Saving money is worth the effort. It gives you peace of mind, it gives you options, and the more you save, the easier it becomes to accumulate additional savings.

Peace of Mind


Who hasn’t stayed awake at 3:00 a.m. wondering how they were going to afford something they needed? If money is really tight, you might be wondering how you’re going to pay your bills.Later in life, the money thoughts that keep you up at night might center around paying for your kids to go to college or having enough money to retire.

As you accumulate savings, your financial worries should diminish, as long as you’re living within your means and not always looking for new things to worry about. if you have savings accounts for your children’s education and your own retirement that you’re regularly funding, you’ll sleep better at night. The reduced stress from having money in the bank frees up your energy for more enjoyable thoughts and activities.


READ: Cutting down expenses and saving more


Expanded Options


The more money you have saved, the more you control your own destiny. If you’re tired of living in an unsafe neighborhood, you can move to a safer area because you’ll have enough for a deposit on a better apartment on.

If you get sick and need expensive healthcare that your insurance doesn’t cover, you’ll have a way to pay for it even though you can’t work while you’re getting treatment. And knowing that you have options because of the money you’ve saved away can give you even more peace of mind.

Therefore, with more money in the bank to deal with issues like these, you give yourself better odds of coming out on top.

Emergency fund


In your life, you never know what may come across and at what time. You never know which accident or difficulty you may face throughout the life. For this, you need to save a particular portion every month from your regular income. And then, you invest this savings to a good plan that earns you proper interest on the same.
Why You Should Save Money and invest Why You Should Save Money and invest Reviewed by worldforummedia on May 28, 2018 Rating: 5

a guide on how to invest in the Nigerian Stock Exchange.

April 26, 2018
Stock Market

This article provides a step by step guide on how to invest in the Nigerian Stock Exchange. We will also highlight a number of factors peculiar with the Nigerian stock exchange that we think you should know before investing
.


Who is this article for?


If this is your first time of investing in stocks, then this is also for you

If you just read a book about investing in equities and feel this is the best time for you to test the waters, then this is for you.
If you have been inspired by some of the things you read online about stocks and wish to invest in Nigeria’s stock market, then this is for you.
If you are interested in investing in the Nigerian stock exchange and wish to get a fair and balanced insight into what to expect, then this article is also for you.
If you are a complete novice with stocks then read this first

What is the official market for trading stocks in Nigeria?


In Nigeria, you can only buy and sell shares of publicly quoted companies solely from the Nigerian Stock Exchange which is based in Lagos. However, if you want to trade in equities of private companies, then the National Association of Security Dealers Over- The-Counter (NASD OTC) is the market for you.


How do I start?


Before you start trading equities in Nigeria, you will need to open a brokerage account with any of the approved stock broking firms in Nigeria. Upon application, you will be required to provide a means of identification, bank account details including BVN, passport photographs, signatures of account holders, next of kin details (if it is a personal account) etc. It takes less than 48 hours to open an account provided you have a bank account. Some stockbroking firms also have online trading platforms, meaning you do not need to visit the stockbroking firm physically. Just visit their portals and upload all the information that they need.


What else do I need to have?


We recommend that you open a Central Securities Clearing System (CSCS) account. CSCS is a market aggregator that warehouses all the accounts created and maintained by all stockbrokers in Nigeria. By owning a CSCS account, you can also view your portfolio independent of your stockbrokers and see what stocks you own. This is important as it helps you mitigate fraudulent activities. It cost between N2k and N5k per annum.


RELATED: 7 tips To Know about real estate investment


How do I start trading?


To start trading in equities, you are expected to have opened a stockbroking account. You will be given a Clearing House Number (CHN), which is unique to your portfolio. To trade, simply deposit money with your stockbroker and instruct them to purchase shares for you on your behalf. The means of communications is typically with your registered email. However, it is easier using their online trading platform, which allows you to buy and sell stocks on your own. Through online trading portals, you can place bids or offers which usually terminates within seconds of being received. You should also get emails from your broker once you place bids and offers, and when the transaction goes through.


Transaction fees


Transaction fees are charged any time your bid or offer goes through. There are statutory fees that you pay to regulators and those you pay to your broker. Statutory fees are fixed while broker fees vary between the range of 1.5% and 1.8% per transaction.


Taxes


There are no capital gains taxes on buying and selling of equities in Nigeria.


Clearing of funds


When you buy or sell stocks, it usually takes about 4 days before the entire transaction is concluded. In the NSE, clearing and settlement is T+3.


Withdrawals


After you sell equities, your cash remains in the account of the broker till you request for a withdrawal which takes within 24 hours to be completed. To withdraw using an online brokerage account, just visit the portal and click withdrawal. Some brokers also require emails for your withdrawals to be paid into your accounts. Remember, the account where your cash will be credited is the bank account you provided when you registered.


Trading time


The Nigerian Stock Market usually opens for trading at 9.30am for pre-markets. During pre-markets, you can place bids or offers and catch a glimpse of how the prices of stocks and the market as a whole might open officially. Pre-markets close by 10.05am, paving the way for Pre-open adjustments which last for about 10 minutes. The pre-market then officially closes at 10.15am and the official market closes at 2.30pm.


Markets segments


The Nigerian Stock Exchange also has a number of market segments that represents different liquidity levels. They are the Premium Board, Main Board, and the Alernative Stock Exchange Market ( ASEM). The Premium Board includes the most capitalized stocks on the exchange: Zenith Bank, FBNH and Dangote Cement. The main board includes about 190 stocks and is as liquid as the Premium Board. The ASEM is a market for smaller stocks and is highly illiquid. This means you might not see the stocks to buy and even if you buy, there are very few buyers available.


Indexes


Just like most stock exchanges in other parts of the world, the Nigerian Stock Exchange also has indexes. The first is the All Share Index, which is a broader representation of all stocks. It includes all the stocks on the exchange and tracks their performance daily. We also have sub-indexes for sectors such as banking, insurance, consumer goods, oil and gas etc. We also have the NSE 30, which is Nigeria’s own equivalent of the Dow. It tracks the performance of the 30 most capitalized stocks on the exchange.


RELATED: Cutting down expenses and saving more


Data and information


To have a robust stock, you will also need to have data you can use. The Nigerian Stock Exchange is not the best with data, however, there are a few you can get to start with. Companies publish their results and other corporate information on the website of the NSE. Results are published quarterly by companies and those who do not comply are fined accordingly. You can also get closing day prices on the website of the NSE or from your broker websites. In fact, you are better off subscribing to newsletters from your broker for more detailed market information.


What about dividends?


Apart from capital gains, investing in companies quoted on the Nigerian Stock Exchange also allows you to earn some returns in the form of dividends. Dividends can either be paid in cash, stocks (script dividends) or a hybrid of cash and stocks. Cash dividends are now paid electronically into your bank account. To ensure that you receive your dividends, you are expected to visit the registrars for the stocks you own and provide them with your bank details. They will also ask you for means of identification as well as other documentation. Once you are done, you get your dividends as soon as it is paid by the company. Script dividends are also credited to your CSCS accounts by the registrars.
a guide on how to invest in the Nigerian Stock Exchange. a guide on how to invest in the Nigerian Stock Exchange. Reviewed by worldforummedia on April 26, 2018 Rating: 5

7 KEY THINGS YOU NEED TO KNOW ABOUT REAL ESTATE INVESTMENT

April 26, 2018
Investment

1. You don’t need all the money in your pocket to invest in real estate
.


There is usually initial deposit where you get to pay in the course of a period as you have flexible payment plans.


2.  Instead of thinking affordability, think collaboration.


You can collaborate with your siblings, friends and so on to purchase a 600sqm land for instance, after a while sell it off or divide into two 300sqm each.


3.  Before investing in real estate, do a lot of research!


Know your location and ask a lot of questions like accessibility, go for site inspections, check online (search engines, social media, bureau of land and properties and so on)


4.  An unsuccessful venture doesn’t mean failure.


Because you have been exploited or defrauded doesn’t mean there are no credible real estate development company.


5.  When Buying into real estate, control is key


For property investments, once you’re done paying for the property and settling legal requirements, you directly own the asset and have virtually complete control over it. You can directly influence the asset worth (by adding value to it) and cash flow (increase rent)


RELATED: Cutting down expenses and saving more


6. When investing in property, title is key.


The land title is very key when acquiring land/properties. Land title can either be CofO, Governors Consent, Gazette or Excision


7.  Buy Land, keep acquiring more


Real estate investment is a form of investment that when done right (i.e. buying from a valid real estate company/realtor) its return on investment is enormous
.


7 KEY THINGS YOU NEED TO KNOW ABOUT REAL ESTATE INVESTMENT 7 KEY THINGS YOU NEED TO KNOW ABOUT REAL ESTATE INVESTMENT Reviewed by worldforummedia on April 26, 2018 Rating: 5

Cutting Down Expenses And Saving More

October 24, 2017
Expenses sometimes is hard to control as needs arises and we spend everyday in buying things we require.

Personal finance has been one of the numerous problems that young entrepreneurs face in their early life and trying to cut down expenses is not excluded.




It is pertinent to address this issue of how to minimize expenses and maximize the amount you save for the future of your business or if you have a project you are to handle.

Keeping a threshold on how much you spend every month is one of the best options that many successful entrepreneurs will tell you if you ever seek for advice on how to cut down your expenses and maximize savings.

HERE ARE SOME TIPS TO HELP YOU CUT DOWN YOUR EXPENSES AND SAVE MORE.

GO FOR BASIC NEEDS/ REQUIREMENTS

Needs are the relevant things you must have in other to live a good life without having to stress yourself. Basic needs like provisions for upkeep like cereals and other foods that will not get spoilt quickly, soaps, creams, perfumes, clothing etc should be first on your budget list before thinking of getting a new gadget you just saw on Jumia or other internet means.

This is because those pieces of stuff are not what you really need at the moment and should come into your mind maybe after you have made plans for it and have saved money that you can now afford it.

DO WELL TO AVOID GETTING ADDICTED TO A DRUG/ALCOHOL

Drug addiction has been one of the major causes of broke young entrepreneurs who can’t handle their expenses well. And to be on the safer side, it is advised that one should steer clear from hard drugs like cocaine, heroin, and marijuana.

These drugs have potential bad effects on your expenses as you don’t include them in your budget because the urge to take them just comes unannounced and you may be tempted to even squander your whole earnings and business capital on them.

AVOID SPENDING MONEY ON SPORTS BETTING

Sports betting is a good way to make some money and is also a good way to lose lots of money.
When the urge to double the little you have is there, probably that same urge will be there when you have more money say your monthly profits.

Sports betting companies like Bet9ja does not force you to bet, and you should on your own side have that self control to resist it and believe that your business will grow someday.

SAVE THE PROFITS THAT COME FROM YOUR BUSINESS

If you have profited from your business, that means you are progressing, and such money should not be used on any kind of thing. Profits should be saved and should not be touched except you want to use it to expand your business to the next level. Which means that the profit margin will probably increase too by the time the business is being expanded.

RELATED: 7 tips about real estate investment

I want to use Aliko Dangote as a case study on how you can minimize expenses and maximize profit in your line of business. His business did not just move to where it is now in a day, he started step by step and it was due to his ideas of venturing into diverse industries that made him who he is today.

GET A WIFE OR HUSBAND IF YOU ARE OF AGE

Marriage is a critical issue many people fail to consider when considering how to manage and save money. Why getting married is a guarantee to saving more money is that as a married person, eating from home saves you the stress of having to buy from eateries and fast foods as their dishes seem to be expensive and may turn to be insatiable or not what you would have eaten if it was prepared at home.

Another reason why getting married increases savings is that as a single man, for example, you neglect to buy things and to keep them for future use simply because you feel it’s just you and you can get anything anytime you are in need despite the fact that buying a particular thing in bulk reduces cost and the money can be used for other things.

ACQUIRE A SKILL TODAY

The world is full of opportunities to learn different skills and develop them, skills acquired are never lost especially if you have the passion for it. So in this article, it is advised to learn how to do different things so you don’t have to pay for every little thing like fixing a loose button, polishing your own shoes, washing your clothes, operating a computer system, typing a letter, or even washing your car. Youngsters should try and cut down their expenses by doing some minor things by themselves rather than paying others to do them.

Consider having to employ a typist in an enterprise that is not large enough for many employees because of the output. Learning how to type your own documents will make it possible for fewer expenses as you won’t need to employ a typist or a computer operator.

I hope these tips will guide you on how to save more and live a better life.
Cutting Down Expenses And Saving More Cutting Down Expenses And Saving More Reviewed by worldforummedia on October 24, 2017 Rating: 5

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