Glossary – C

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Capital Expenditure (CapEx)

Capital Expenditure is the funds the company requires to upgrade the business. CapEx represents the sum of physical property and amortization. The expenditure is considered CapEx if it lengthens the life of the property.

Cash Flow

Cash flow represents the expected profit from renting a property. Cash flow calculation is done subtracting expenses from the total gross income.

Closing Costs

Closing costs are fees and expenses associated with the property trading. Possession transaction requires payments from buyer and seller during the property trade. Both parties pay the closing costs after signing the ownership documents. The final sum of the closing costs is two to five percent of the sale price.

Comparative Market Analysis

Comparative market analysis (CMA) is a property pricing or evaluating process. Real estate agents determine the enlisting value of the subject property using CMA. The deciding factor is the assessment of similar properties sold in the vicinity. The main determinant of CMA is the square footage, age, special features, and location.

Contingencies

Contingencies in a real estate contract are the clause in the formal documents. Any contracting party has the right to state their needs in the document. The transaction of the property ends when the clause in the contract is satisfied.

Conventional Loan

Conventional loans are the home buyer loans that are not granted by any public entity. Meaning, that a private lender or government-supported enterprises provide loans. Conventional loans have interest rates that defer from the institutions providing them.

Credit Score

A credit score is a number depicting borrower’s creditworthiness. Credit score plays a vital role in the lender’s decision to offer credit. Credit scores range from 350 to 850. Higher scores represent less risk for the lender, making it more likely to approve the loan. Lenders check previous types of loans, repayment history, total debt, and credit history.

Credit Report

The credit report is a document authorized by three credit bureaus’. The report’s summary states the information about the borrower’s credit account. It contains details on the debtor’s credit history and legal record.

Closing

The real estate closing process is the final stage of a property sale. Legal ownership of the property implies signing the final documents, placing a down payment, and paying the closing costs.