real-estate-glossary

The world of real estate can be overwhelming if this is your first time buying or selling a home (or if you just aren’t a REALTOR®). The amount of terms and phrases that are used within the industry all add up to feel somewhat mind boggling. Well, we are here to tell you that it’s okay to not know and honestly, this is what REALTORS® are for! But, we want to help you feel more confident in getting started nonetheless. That’s why we have put together a glossary of common words and phrases that will you give you a great foundation to dive into your real estate dealings!

American Land Title Association (ALTA)

a trade association representing the title insurance industry. They record the title history for individual pieces of real estate.

Active

a status of the listed property indicating that it is available.

Active Contingent

a status of the listed property indicating an offer has been made but is contingent on a set of specific stipulations.

Appraisal

an estimate of the value of a piece of property based on recent sales of similar properties and required for any home that needs a mortgage.

Arbitration

a technique used to resolve disputes outside of court.

Broker

a real estate agent who has completed additional training and has additional licensure

Brokerage

an organization where a real estate salespersons holds their license. The brokerage oversees all transactions to ensure they are compliant, ensures that agents are acting by the code of conduct and acting in the best interest of their clients.

Buyer’s/Selling Agent

assists the buyer in finding a home, writing the offer and negotiating the price.

Coming Soon

a status of an upcoming property indicating that it will be available at a set date.

Comparative Market Analysis (CMA)

report showcasing comparable homes in the area & used to derive an accurate value for the home in question.

Contingencies

conditions that have to be met in order for the purchase of a home to be finalized.

Closing

the finalization of the transfer of homeownership.

Closing Costs

ensures that the purchase price and loan details meet the fair market value of the property.

Days On Market (DOM)

the count of days the property has been active under it’s current MLS number.

Debt-to-income ratio

divide your monthly debt by your gross monthly income.

Disclosure Statements

legal document in which the seller presents any necessary information about the property such as any issues the future buyer needs to know about.

Down Payment

a small percentage of your total loan amount that influences monthly repayment and interest rate.

Earnest Money

a payment of a small portion of the total purchase price by the buyer to show that they are serious about the complete purchase of property.

Equal Opportunity Housing

set terms involving anti-discriminatory policies that ensure all Americans have equal opportunity to the housing of their choosing.

Equity

the difference between the market value of your home and the amount you owe your mortgage lender.

Escrow

an arrangement in which money and documents is placed in the care of a third party to be held safely until the finalization of the transaction.

Foreclosure

a legal process in which a lender uses the sale of the real estate to use as collateral for the loan that the payee has stopped making payments on.

Homeowner Association (HOA)

an organization that makes and enforces rules upon the properties that they oversee, typically for the purpose of managing and selling homes within their jurisdiction.

Inspection

a check and test of the home’s overall health, safety, and condition.

Listing

a collection of photos, documents, and data that are necessary to market and sell the specific property.

Mortgage Loan

a loan given to you by a creditor so that you can claim title of a property.

Conventional Loan

a loan that’s not guaranteed or insured by the federal government. Most common & typically best interest rates.

FHA Loan

Loans backed by the Federal Housing Administration, typically less down payment & easier credit requirements.

VA Loan

loans for active-duty members and veterans of the Armed Forces and are insured by the Department of Veterans Affairs.

USDA Loan

government backed loan that helps people in rural and suburban areas buy homes.

Multiple Listing Service (MLS)

a tool used in the real estate industry to conduct business related to establishing offers, marketing listings, collecting industry information, and provide necessary information to conduct appraisals.

Pending

the time period and status within in the buying and selling process where the offer has been made and accepted but the transaction is still waiting on the transfer of the deed and title in order to be finalized.

Purchase Agreement

when signed by both the buying and selling parties, this legally binding document details all of the agreed-upon terms for the transaction such as the final sale price, closing date, and other details.

Radon

a naturally-occurring gas that can be linked to health problems. It is recommended that a radon test is done prior to the purchase of a home.

REALTOR®

a federally registered membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and acts in accordance to their Code of Ethics.

Seller’s/Listing Agent

assists the seller in the sale of the home and helps in negotiations.

Short Sale

when the mortgage lender is willing to accept less than the amount owed to them for the sale of the real estate property.

Title

a right or claim to the ownership of the property.

Townhome

a house with a shared wall or walls, typically in a row of houses.

Turn-Key

a way of saying the home in question is “move in ready”. This is typically determined by the completion of necessary renovations and updates.