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Real Estate Glossary (100 Terms)

  1. Appraisal - An estimate of a property's market value by a licensed appraiser.
  2. Assessment - The process of determining a property's value for taxation.
  3. Buyer's Agent - A real estate agent who represents the buyer's interests in a transaction.
  4. Closing Costs - Fees paid at the closing of a real estate transaction, such as attorney fees and title insurance.
  5. Closing Date - The day the sale is finalized, and the property ownership is transferred.
  6. Commission - The fee paid to real estate agents for their services, usually a percentage of the sale price.
  7. Comparative Market Analysis (CMA) - An evaluation of similar, recently sold homes in the area to determine a property's value.
  8. Contingency - A condition that must be met for a real estate contract to be binding.
  9. Deed - A legal document that transfers ownership of property.
  10. Down Payment - An upfront payment made by the buyer, typically a percentage of the purchase price.
  11. Earnest Money - A deposit made by a buyer to show they are serious about purchasing a property.
  12. Equity - The difference between the market value of a property and the amount owed on the mortgage.
  13. Escrow - A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.
  14. FHA Loan - A mortgage insured by the Federal Housing Administration, often with lower down payments and easier credit requirements.
  15. Fixed-Rate Mortgage - A mortgage with a fixed interest rate for the entire term of the loan.
  16. Foreclosure - The process by which a lender takes control of a property due to the borrower's failure to make mortgage payments.
  17. Home Inspection - An examination of a property's condition by a professional before completing the purchase.
  18. Homeowner's Association (HOA) - An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties.
  19. Interest Rate - The proportion of a loan charged as interest to the borrower.
  20. Listing Agent - A real estate agent who represents the seller's interests in a transaction.
  21. Loan-to-Value Ratio (LTV) - A ratio used by lenders to assess risk, calculated by dividing the loan amount by the property's appraised value.
  22. Market Value - The price at which a property would sell under normal market conditions.
  23. Mortgage - A loan used to purchase a property, with the property itself serving as collateral.
  24. Multiple Listing Service (MLS) - A database used by real estate agents to list and find properties for sale.
  25. Offer - A proposal to buy a property at a specified price and terms.
  26. Open House - A scheduled period when a property for sale is available for public viewing.
  27. Pending Sale - A property that has an accepted offer but has not yet closed.
  28. Pre-Approval - A preliminary evaluation by a lender indicating that a borrower qualifies for a mortgage of a certain amount.
  29. Principal - The amount of money borrowed on a mortgage, excluding interest and fees.
  30. Private Mortgage Insurance (PMI) - Insurance that lenders require from borrowers who make a down payment of less than 20%.
  31. Property Tax - A tax assessed on real estate by the local government, based on the property's value.
  32. Real Estate Broker - A licensed professional who oversees real estate transactions and manages real estate agents.
  33. Refinancing - The process of obtaining a new mortgage to replace the original one, often to get a better interest rate.
  34. Short Sale - The sale of a property for less than the balance owed on the mortgage, with the lender's approval.
  35. Title - A legal document establishing the right to ownership of a property.
  36. Title Insurance - Insurance that protects the lender or buyer against any claims or disputes over the property ownership.
  37. Underwriting - The process by which a lender evaluates the risk of issuing a mortgage to a borrower.
  38. VA Loan - A mortgage loan available to veterans, service members, and their families, guaranteed by the Department of Veterans Affairs.
  39. Walk-Through - A final inspection of the property by the buyer before closing to ensure the condition is as agreed.
  40. Zoning - Regulations governing the use of land and buildings within specific areas.
  41. Adjustable-Rate Mortgage (ARM) - A mortgage with an interest rate that can change periodically based on the performance of a specific benchmark.
  42. Balloon Mortgage - A mortgage with a large payment due at the end of the loan term.
  43. Bridge Loan - A short-term loan used to bridge the gap between buying a new home and selling the old one.
  44. Cash-Out Refinance - Refinancing a mortgage for more than the amount owed to convert home equity into cash.
  45. Caveat Emptor - "Let the buyer beware," a principle that buyers are responsible for checking the quality of goods before purchase.
  46. Debt-to-Income Ratio (DTI) - A measure of a borrower's monthly debt payments compared to their monthly gross income.
  47. Dual Agency - When a real estate agent represents both the buyer and the seller in the same transaction.
  48. Easement - A legal right to use another's land for a specific limited purpose.
  49. Encumbrance - A claim or lien on a property that affects its transferability or use.
  50. Fixtures - Items that are attached to the property and are included in the sale unless otherwise specified.
  51. Home Equity Line of Credit (HELOC) - A loan in which the lender agrees to lend a maximum amount within an agreed period, where the collateral is the borrower’s equity in their house.
  52. Amortization - The process of gradually repaying a loan through regular payments that cover both principal and interest.
  53. Lien - A legal claim or hold on a property, either as security for a debt or due to unpaid taxes or bills.
  54. Lot - A parcel of land owned or meant to be owned.
  55. Escalation Clause - A clause in a purchase offer that allows the buyer to automatically increase their offer if another higher bid is received.
  56. Depreciation - A decrease in a property's value due to age, wear and tear, or market conditions.
  57. Equity Loan - A loan based on the equity homeowners have in their property.
  58. Seller's Market - A market condition characterized by high demand and low supply of properties, favoring sellers.
  59. Buyer's Market - A market condition characterized by high supply and low demand of properties, favoring buyers.
  60. Title Search - A process to ensure the property being sold legally belongs to the seller and is free of any liens or claims.
  61. Loan Origination Fee - A charge by a lender for processing a new loan application.
  62. Assumption of Mortgage - An arrangement where the buyer takes over the seller’s existing mortgage.
  63. Covenants, Conditions, and Restrictions (CC&Rs) - Rules established by a homeowners' association that govern properties in a subdivision or community.
  64. Pre-Qualification - An informal estimate by a lender of how much a borrower may be able to borrow.
  65. Real Property - Land and anything permanently affixed to it, such as buildings.
  66. Transfer Tax - A tax imposed by the state or local government on the transfer of property ownership.
  67. Yield Spread Premium (YSP) - A rebate paid by a lender to a mortgage broker for selling a loan with a higher interest rate than the borrower qualifies for.
  68. Assessed Value - The value assigned to a property by a public tax assessor for the purpose of determining property taxes.
  69. Certificate of Occupancy - A document issued by a local government agency certifying that a building is in compliance with building codes and is safe for occupancy.
  70. Common Areas - Areas within a property that are shared by all residents, such as lobbies, hallways, and recreational facilities.
  71. Duplex - A residential building divided into two separate units, each with its own entrance.
  72. Exclusive Right to Sell Listing - A listing agreement giving a real estate agent exclusive rights to earn a commission by representing the owner and bringing in a buyer.
  73. For Sale By Owner (FSBO) - A property that is being sold by the owner without the assistance of a real estate agent.
  74. Lease Option - A lease agreement that gives the tenant an option to purchase the property at the end of the lease term.
  75. Open Listing - A property listing that gives multiple real estate agents the right to sell the property and earn a commission.
  76. Planned Unit Development (PUD) - A type of development and zoning designation that allows for a mix of residential, commercial, and industrial uses.
  77. Principal, Interest, Taxes, and Insurance (PITI) - The components of a monthly mortgage payment, consisting of principal, interest, property taxes, and homeowner's insurance.
  78. Promissory Note - A written promise to pay a specified amount of money at a certain time.
  79. Reserve Fund - A savings account for future expenses or repairs for a property, often used in condominium associations.
  80. Subdivision - A tract of land divided into individual lots for residential development.
  81. Townhouse - A multi-story home that shares one or more walls with adjacent properties but has its own entrance and often a small yard.
  82. Underwater Mortgage - A mortgage where the balance owed is higher than the property’s current market value.
  83. Unsecured Loan - A loan that is not backed by collateral.
  84. Adjustable-Rate Mortgage (ARM) - A type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan.
  85. Balloon Payment - A large payment due at the end of a balloon loan's term after a series of smaller, regular payments.
  86. Conforming Loan - A mortgage that meets the guidelines and limits set by government-sponsored entities like Fannie Mae and Freddie Mac.
  87. Credit Score - A numerical rating that represents the creditworthiness of a borrower.
  88. Debt Consolidation - Combining multiple loans into one loan with a lower interest rate.
  89. Escrow Account - A financial account where a third party holds funds or assets until the transaction is completed.
  90. Federal Housing Administration (FHA) - A government agency that insures mortgage loans made by approved lenders.
  91. Interest-Only Loan - A loan in which the borrower pays only the interest for a set period, followed by payments of both principal and interest.
  92. Lock-In Rate - An agreement between borrower and lender guaranteeing a specific interest rate for a certain period.
  93. Mortgage Insurance - Insurance that protects a lender against losses due to default by the borrower.
  94. Origination Fee - A fee charged by a lender for processing a loan application.
  95. Points - Fees paid directly to the lender at closing in exchange for a reduced interest rate.
  96. Private Mortgage Insurance (PMI) - Insurance that protects the lender in case the borrower defaults and is typically required when the down payment is less than 20%.
  97. Refinance - The process of replacing an existing mortgage with a new loan with different terms.
  98. Reverse Mortgage - A loan available to homeowners aged 62 or older, allowing them to convert part of their home equity into cash.
  99. Title Insurance - Insurance that protects lenders and homeowners against legal issues that may arise from the property's title.
  100. Walk-Through Inspection - A final inspection of a property before the closing to ensure that it is in the agreed-upon condition.