Are you buying or selling a home and feeling unfamiliar with the real estate lingo being thrown around? Understanding real estate terminology can often seem complex and overwhelming, especially for those new to the process. That’s why we’re here to help! In this comprehensive glossary, we’ve simplified 50 important real estate terms that everyone entering the real estate market should know. By familiarizing yourself with these words and phrases, you can navigate the real estate space with confidence and make informed decisions.
Let’s start with essential general real estate terms that every buyer and seller should know. These concepts form the foundation of real estate transactions:
1. Appraisal
An assessment of a property’s value conducted by a licensed professional.
2. Broker
A licensed individual with advanced real estatetraining who serves as an intermediary between buyers and sellers in real estate transactions.
3. Buyer’s Market
A real estate market condition where there are more properties for sale than buyers, giving buyers an advantage in negotiations.
4. Cash Offer
A purchase offer made by a buyer without the need for financing.
5. Closing
The final stage of a real estate transaction where ownership is transferred, and funds are exchanged.
6. Closing Costs
Fees associated with finalizing a real estate transaction.
7. Commission
The fee paid to real estate agents or brokers for their services in facilitating a transaction.
8. Comparative Market Analysis (CMA)
An evaluation of recently sold properties similar to the one being appraised, used to determine market value.
9. Contingency
A condition that must be met before a real estate contract is binding such as getting a home inspection
10. Counteroffer
A response to an offer during negotiations, proposing different terms.
11. Earnest Money Deposit (EMD)
A deposit made by the buyer to demonstrate their seriousness and commitment to the transaction.
12. Equity
The difference between the market value of a property and the outstanding mortgage balance.
13. Escrow
The process of placing funds or important documents in the care of a neutral third party until the completion of a transaction.
14. Foreclosure
The legal process by which a lender takes possession of a property due to the homeowner’s failure to make mortgage payments.
15. Home Inspection
A thorough assessment of a property’s condition conducted by a professional inspector.
16. Home Sale Contingency
A clause in a real estate sales contract that allows the buyer to proceed with the purchase only if they can sell their current home within a specified timeframe.
17. Lien
A legal claim against a property due to an outstanding debt.
18. Mortgage
A loan taken out to finance the purchase of a property.
19. Offer
A proposal to purchase a property at a specified price and with specific terms.
20. Seller’s Disclosure
A document in which the seller discloses known issues or defects with the property.
21. Seller’s Market
A market condition favoring sellers due to low inventory and high demand from buyers.
22. Survey
The measurement and mapping of a property’s boundaries, including its features and any easements or encroachments.
23. Title
Legal ownership of a property.
Real Estate Terminology for Buyers
24. Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that can change over time.
25. Amortization
The process of gradually paying off a mortgage loan over time through regular payments.
26. Buyer’s Agent/Listing Agent
A real estate agent who represents either the buyer or the seller in a transaction.
27. Days on Market (DOM)
The number of days a property has been listed for sale.
28. Due Diligence
The process of completing inspections and investigations before purchasing a property.
29. FHA Loan
A mortgage insured by the Federal Housing Administration, often offering more flexible qualification requirements.
30. Homeowner’s Association (HOA)
A governing body that manages and enforces rules within a planned community or condominium complex.
31. Home Warranty
A service contract that covers the repair or replacement of certain home systems and appliances for a specified period.
32. iBuyer
A company that uses technology to make instant offers on homes.
33. Multiple Listing Service (MLS)
A database of properties available for sale in a particular area.
34. Pre-Approval
The process of obtaining a lender’s preliminary approval for a mortgage loan, based on the borrower’s creditworthiness.
35. Principal
The initial amount borrowed for a mortgage before interest.
36. Proof of Funds
Documentation that demonstrates the buyer has enough money to purchase the property.
37. Title Insurance
Insurance that protects the buyer or lender against any loss resulting from defects in the title or ownership of a property.
38. VA Loan
A mortgage loan guaranteed by the Department of Veterans Affairs, available to eligible veterans and service members.
Real Estate Terminology for Sellers
39. As-Is
Selling the property in its current condition, without making any repairs or improvements.
40. Covenants, Conditions & Restrictions (CC&Rs)
Rules and regulations that govern the use and appearance of a property in a specific neighborhood or community.
41. Listing
The act of putting a property up for sale.
42. Listing Agreement
A contract between a property owner and a real estate agent, authorizing the agent to market and sell the property.
43. Listing Price
The amount at which a property is listed for sale.
44. Realtor
A licensed real estate agent who is a member of the National Association of Realtors.
45. Rent Back
Allowing the buyer to rent the property back to the seller after the sale is completed, often for a specific period.
46. Short Sale
Selling a property for less than the total amount owed on the mortgage.
47. Staging
Preparing a property for sale by enhancing its appeal to potential buyers.
48. Title Search
An examination of public records to confirm the property’s ownership history and identify any potential issues.
49. Trust Sale
Selling a property held in a trust, often due to the owner’s passing.
50. Zoning
Regulations that dictate how a property can be used.