Real Estate Glossary

A

• Amortization: The process of gradually paying off a loan over time through regular payments.
• Appraisal: A professional assessment of a property's value.
• ARM (Adjustable-Rate Mortgage): A mortgage with an interest rate that can fluctuate over time.
• APR (Annual Percentage Rate): The total cost of borrowing, including interest and fees, expressed as a yearly rate.
• Assessed Value: The value of a property as determined by the local government for tax purposes.

B

• Balloon Payment: A large lump-sum payment due at the end of a loan term.
• Buyer's Agent: A real estate agent who represents the buyer in a transaction.
• Broker: A licensed professional who facilitates real estate transactions.

C

• Closing: The final stage of a real estate transaction when ownership is transferred.
• Closing Costs: Fees and expenses associated with the closing process.
• CMA (Comparative Market Analysis): A report comparing a property to similar recently sold properties to estimate its market value.
• Contingency: A condition that must be met for a real estate contract to be valid.
• Conventional Loan: A mortgage not insured or guaranteed by the government.

D

• Deed: A legal document transferring ownership of a property.
• Down Payment: The upfront cash payment made by the buyer when purchasing a property.
• Dual Agency: When a real estate agent represents both the buyer and seller in the same transaction.

E

• Earnest Money: A deposit made by the buyer to show their serious intent to purchase the property.
• Escrow: A neutral third party that holds funds and documents during a real estate transaction.
• Equity: The difference between the property's market value and the outstanding mortgage balance.

F

• FHA Loan: A mortgage insured by the Federal Housing Administration.
• Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant throughout the loan term.
• Foreclosure: The legal process by which a lender takes possession of a property when the borrower defaults on the mortgage.

G

• Grantee: The person or entity receiving ownership of a property.
• Grantor: The person or entity transferring ownership of a property.

H

• HOA (Homeowners Association): An organization that manages a community and enforces rules and regulations.
• Home Inspection: A professional examination of the condition of a property.
• Home Warranty: An agreement that covers the cost of repairs or replacements for certain systems and appliances in a home.

I

• Interest: The cost of borrowing money, expressed as a percentage of the loan amount.
• Inspection Contingency: A clause in a contract allowing the buyer to cancel if the home inspection reveals significant problems.

L

• Lease: A contract outlining the terms under which a tenant can occupy a property.
• Lien: A legal claim against a property as security for a debt.
• Listing: A property being offered for sale by a real estate agent.
• Listing Agent: The real estate agent who represents the seller in a transaction.
• Loan-to-Value Ratio (LTV): The ratio of the loan amount to the appraised value of the property.

M

• Mortgage: A loan used to purchase a property.
• Mortgage Broker: An intermediary who helps borrowers find and apply for mortgages.
• Multiple Listing Service (MLS): A database where real estate agents list properties for sale.

O

• Offer: A formal proposal to purchase a property.
• Origination Fee: A fee charged by the lender for processing a loan application.

P

• PMI (Private Mortgage Insurance): Insurance that protects the lender in case the borrower defaults on a mortgage with a low down payment.
• Pre-Approval: A lender's preliminary assessment of a borrower's ability to qualify for a mortgage.
• Principal: The original amount of a loan, not including interest or fees.
• Property Taxes: Taxes levied on real estate by local governments.

R

• Realtor: A real estate agent who is a member of the National Association of Realtors.
• Refinancing: Replacing an existing mortgage with a new one, often with better terms.

S

• Seller's Agent: A real estate agent who represents the seller in a transaction.
• Short Sale: A sale of a property for less than the outstanding mortgage balance, with the lender's approval.
• Title: Legal ownership of a property.
• Title Insurance: Insurance that protects the lender and buyer against defects in the title.

V

• VA Loan: A mortgage guaranteed by the Department of Veterans Affairs.

Z

• Zoning: Local regulations that dictate how land can be used.