REAL ESTATE GLOSSARY

If you’re new to the real estate market, here is a list of definitions you might find helpful.

A B C D E F H I L M P R S T

 

A

Adjustable-Rate Mortgage (ARM) A mortgage with an interest rate that varies throughout the life of the loan based on credit market conditions, usually after an initial fixed rate period - also called a variable-rate mortgage

Amenities The features of a property or neighborhood which increase a property's value or desirability, such as included appliances or being near good schools

Appraisal A estimate of a property's market value based on the review of a licensed appraiser

Appraiser A licensed professional who can perform appraisals and give an estimate of a property's value

After Repair Value (ARV) An estimate of a property's value after repairs, renovations or rehabs have been done

Assessed Value The value of a property used to determine taxes

B

Broker A licensed real estate agent who has additional education and certifications for owning a real estate business and supervising other agents

Broker Price Opinion An estimate of a property's value made by a licensed real estate agent

C

Closing The final step in the buying/selling of a property when ownership is officially transferred to the buyer - also called settlement or escrow

Closing Agent A third party who oversees the transferring of a property from seller to buyer and the closing of a real estate transaction

Closing Cost Fees paid during the closing of a real estate transaction by both the seller and the buyer

Competitive Market Analysis An analysis of the selling prices of recently sold properties to determine the selling price of a similar property

D

Demographic A section of the population that shares similar characteristics or traits such as age, sex, income or employment

Depreciation The decrease in a property's value over time

Down Payment The portion of a property's purchase price paid at the time of buying and not included in the mortgage

Duplex (Multi-Family) A residential building that has two separate living units

E

Equity The difference between the market value of a property and the amount left of the mortgage

Escrow An account where money and/or documents are held by a third party during closing to ensure that all requirements are met before they are transferred

Exit Strategy A method a real estate investor uses to sell an investment property

F

Fixed Rate Mortgage A mortgage with an interest rate that remains the same throughout the life of the loan

Fixer-Upper A property that needs repair work or renovations but can otherwise be lived in as usual

Foreclosure The legal process where a property is sold to pay for a loan that has been defaulted on

H

Home Inspection An examination of a property's structural and mechanical elements by a licensed inspector to assess its condition

Home Staging The decorating of a home so that it will appeal to buyers

Home Warranty Short-term plan that covers repairs or replacements on home systems and appliances

Homeowners Association (HOA) An organization in a subdivision, development or condo that defines and enforces rules for properties and shared spaces within its purview

Homeowners Insurance An insurance policy for your property that covers losses and damages to the property, assets within the property and provides liability for accidents

I

Interest A fee paid to a lender for money borrowed

Interest Rate The amount of interest charged on a loan, usually in a percentage

Investment Portfolio A group of investments belonging to a particular investor

Investment Property A property owned for the purchase of real estate investing

L

Listing Agent A real estate agent who works on behalf of the seller to sell and market a property - also called a seller's agent

Listing Agreement A contract between seller and real estate agent that grants the agent the right to handle the sale of a property during a given period of time and receive a commission or fee for their services

Loan Period The length of time a borrower has to pay off a loan

M

Mortgage A loan agreement in which the property is used as collateral to repayment

Move-In Ready A property that meets all governmental requirements and is ready to be lived in immediately without any repairs - also called turnkey

Multiple Listing Service (MLS) A database used by real estate agents for sharing information about properties for sale and for marketing properties to real estate websites

P

Pre-Approval The commitment by a lender to provide a borrower with a loan of a certain amount - often involves a credit check

Pre-Qualification The determination by a lender that a borrower meets requirements for a loan of a certain amount - usually does not require a credit check

Principal The amount owed on a loan, not including interest and fees

Private Mortgage Insurance (PMI) An insurance policy that protects lenders from loan non-payment and is often required for loans with down payments less than 20% of price

Property Management The day to day administration and maintenance of real estate property by a person or company other than the owner

Property Tax A tax based on the assessed value of the property and paid to the local government where the property is located

Property Value An estimate of a property's worth

R

Real Estate Agent A licensed professional is who can perform real estate transactions under a broker

Real Estate Attorney A lawyer who specializes in the laws of real estate transactions

Realtor A real estate agent who is also a member of the National Association of Realtors

Refinancing  The process of obtaining a new loan for a previously mortgaged property

Rehabilitation (Rehab) The restoring of a distressed or poor condition property by completing major repairs and updates, usually so that it can be sold for a profit

Remodel The renovation of a property that includes making structural changes such as removing or adding walls

Renovation The updating of a property, or area of a property, with new or improved features, such replacing fixtures or restoring hardwood floors

S

Short Sale A sale of a property for less than is due on the mortgage, usually occurs when a owner is in financial distress

T

Tenant A person who rents or leases a property that is owned by someone else

Title The legal documentation of ownership for a property

Title Company A company that checks and ensures the legal owner of a property for real estate transactions