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Real Estate Jargons on your Fingertips: Effective Rent / Equity Linked Mortgage / Escalation Clause

When you are looking for an ideal home to live and you go to a real estate agent or a broker or even a builder, they might use jargons which you might not know.

But we give you a solution!!

Read this space every Tuesday & Wednesday for Real Estate Jargons.

Effective Rent

  • Effective Rent is defined as the remaining cash the landlord receives after paying all expenses for operating the property, and any costs for tenant work to get the space ready for occupancy.
  • Effective rent is also often referred to as Net Effective Rent.

Equity Linked Mortgage

  • A mortgage whereby the interest on the principal in part or in whole is calculated, usually yearly, by reference on the security.
  • It may reflect annual increase or possible decreases, in the annual return on, or the value of, the property in which the mortgage is secured.

Escalation Clause

  • An escalation clause is a real estate contract, sometimes called an escalator, that lets a home buyer say, “I will pay x price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer to y price.”
  • In theory, an escalation clause is fairly simple. In practice, there are a lot of details involved.

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