Residential Real Estate Term
|
Definition
|
| 1031 Exchange |
A tax-deferred exchange of qualifying investment properties under IRS rules. |
| Abstract of Title |
A summary of the recorded history of ownership and legal documents affecting a property. |
| Adjustable-Rate Mortgage (ARM) |
A mortgage whose interest rate can change after an initial fixed period. |
| Amortization |
Gradual repayment of a loan through scheduled payments. |
| Appraisal |
An opinion of a property’s market value by a licensed appraiser. |
| Appreciation |
An increase in a property’s value over time. |
| As-Is |
Property sold in its current condition. |
| Assessed Value |
Value assigned by the local government for property tax purposes. |
| Balloon Mortgage |
A loan requiring a large final payment at the end of the term. |
| Buydown |
Paying upfront to temporarily or permanently reduce the mortgage interest rate. |
| Buyer’s Agent |
A real estate professional who represents the buyer’s interests. |
| Capital Gains Tax |
A tax that may apply to profits from selling real estate. |
| Cash to Close |
The total funds a buyer must bring to closing. |
| Chain of Title |
The history of ownership transfers for a property. |
| Clear Title |
A title free of liens or ownership disputes. |
| Closing |
The final meeting where ownership transfers to the buyer. |
| Closing Costs |
Fees and expenses paid to complete a real estate transaction. |
| Closing Disclosure |
The final document detailing loan terms and closing costs. |
| Comparative Market Analysis (CMA) |
A report comparing similar properties to estimate market value. |
| Contingency |
A condition that must be met before the transaction proceeds. |
| Conventional Loan |
A mortgage not backed by a government agency. |
| Credit Score |
A number used by lenders to evaluate creditworthiness. |
| Days on Market (DOM) |
The number of days a property has been actively listed. |
| Deed |
The legal document transferring ownership. |
| Down Payment |
The buyer’s initial contribution toward the purchase price. |
| Dual Agency |
When one brokerage represents both buyer and seller, where permitted by law. |
| Due Diligence |
The buyer’s investigation of the property’s condition and value. |
| Earnest Money |
A deposit demonstrating a buyer’s good faith. |
| Easement |
A legal right to use another person’s property for a specific purpose. |
| Encroachment |
A structure that extends onto another person’s property. |
| Encumbrance |
A claim or restriction affecting title. |
| Equity |
The owner’s financial interest in a property. |
| Escrow |
A neutral third party holding money or documents until conditions are met. |
| Fair Market Value |
The price a willing buyer and seller would likely agree upon. |
| FHA Loan |
A mortgage insured by the Federal Housing Administration. |
| Fixed-Rate Mortgage |
A mortgage with an interest rate that remains the same for the loan term. |
| Fixture |
An item permanently attached to the property. |
| Foreclosure |
The legal process by which a lender takes ownership after default. |
| Home Inspection |
A professional evaluation of a property’s condition. |
| Home Warranty |
A service contract covering certain home systems and appliances. |
| Homeowners Association (HOA) |
An organization that manages a community and enforces rules. |
| Interest Rate |
The cost of borrowing money. |
| Lien |
A legal claim against a property for unpaid debt. |
| Listing Agreement |
A contract between a seller and a real estate brokerage. |
| Loan-to-Value (LTV) |
The loan amount divided by the property’s value. |
| Market Value |
The likely selling price in the current market. |
| MLS (Multiple Listing Service) |
The database used by real estate professionals to market properties. |
| Mortgage |
A loan secured by real estate. |
| Net Proceeds |
The seller’s amount remaining after expenses. |
| Offer |
A written proposal to purchase property. |
| Pending |
A property under contract awaiting closing. |
| PITI |
Principal, Interest, Taxes, and Insurance-the four components of many mortgage payments. |
| Pre-Approval |
A lender’s review indicating estimated borrowing power. |
| Principal |
The original amount borrowed. |
| Private Mortgage Insurance (PMI) |
Insurance usually required when the buyer puts down less than 20%. |
| Property Disclosure |
Information the seller provides about known property conditions. |
| Purchase Agreement |
The binding contract between buyer and seller. |
| REALTOR® |
A real estate professional who belongs to the National Association of REALTORS®. |
| Recording |
The process of officially filing legal documents with the local government. |
| Refinance |
Replacing an existing mortgage with a new one. |
| Right of Survivorship |
A form of joint ownership where a deceased owner’s interest passes automatically to the surviving owner. |
| Seller Concessions |
Closing costs or expenses the seller agrees to pay on behalf of the buyer. |
| Short Sale |
A sale in which the lender agrees to accept less than the mortgage balance. |
| Survey |
A drawing showing property boundaries and improvements. |
| Title |
Legal ownership of real property. |
| Title Insurance |
Insurance protecting against title defects. |
| Title Search |
A review of public records to verify ownership and identify title issues. |
| Transfer Tax |
A tax imposed by some jurisdictions when property ownership changes. |
| Under Contract |
An accepted offer with the sale still in progress. |
| Underwriting |
The lender’s review of the loan application. |
| USDA Loan |
A government-backed mortgage for eligible rural properties. |
| VA Loan |
A mortgage benefit for eligible veterans and service members. |
| Walk-Through |
The buyer’s final inspection before closing. |
| Warranty Deed |
A deed guaranteeing clear title. |
| Zoning |
Local regulations governing land use. |
