Real Estate Glossary

Dream Renew Real Estate Glossary

Real Estate Glossary

A

  • Adjustable-Rate Mortgage (ARM) – A mortgage with an interest rate that changes periodically based on market conditions.
  • Amortization – The process of gradually paying off a loan through scheduled payments.
  • Appraisal – A professional assessment of a property’s market value.
  • As-Is Condition – Selling a property in its current state, with no repairs or improvements.
  • Assessed Value – The dollar value assigned to a property by a tax assessor for tax purposes.
  • Assignment – The transfer of rights or interests in a contract to another party.
  • Asset – Any valuable property or resource owned by an individual or entity.

B

  • Balloon Mortgage – A loan with small payments initially but a large lump sum due at the end.
  • Broker – A licensed professional who negotiates real estate transactions.
  • Buyer’s Agent – A real estate agent representing the buyer’s interests in a transaction.
  • Bridge Loan – A short-term loan used until permanent financing is secured.
  • Building Code – Regulations that dictate the construction and safety standards for buildings.

C

  • Capital Gains – Profit earned from selling a property for more than its purchase price.
  • Closing Costs – Fees associated with finalizing a real estate transaction, including taxes, lender fees, and title insurance.
  • Comparative Market Analysis (CMA) – A report that estimates a home’s value based on similar properties recently sold in the area.
  • Contingency – A condition that must be met before a contract is legally binding, such as financing approval.
  • Cash Flow – The net income generated by an investment property after expenses.
  • Covenants, Conditions & Restrictions (CC&Rs) – Rules set by a homeowner’s association or community to maintain property standards.

D

  • Deed – A legal document that transfers property ownership.
  • Down Payment – The initial amount paid upfront when purchasing a property.
  • Depreciation – A reduction in a property’s value over time due to wear and tear.
  • Dual Agency – When one agent represents both the buyer and the seller in a real estate transaction.

E

  • Equity – The difference between a property’s market value and the outstanding mortgage balance.
  • Escrow – A neutral third party that holds funds or documents until specific conditions are met.
  • Earnest Money – A deposit made by the buyer to show serious intent to purchase the property.

F

  • Fair Market Value – The price a willing buyer and seller would agree upon for a property.
  • Foreclosure – The legal process where a lender takes ownership of a property due to the borrower’s failure to make payments.
  • Fixed-Rate Mortgage – A mortgage with a constant interest rate and monthly payment.

G

  • Gross Rent Multiplier (GRM) – A formula used to assess rental property investment potential.
  • Grant Deed – A legal document transferring property ownership with a guarantee of clear title.

H

  • Home Inspection – A professional evaluation of a property’s condition before purchase.
  • Homeowner’s Association (HOA) – An organization that enforces rules and maintains common areas in a community.
  • House Flipping – Buying a property, renovating it, and selling it for profit.

I

  • Interest Rate – The cost of borrowing money, expressed as a percentage.
  • Investment Property – A property purchased primarily for generating rental income or appreciation.
  • Income Property – Real estate purchased specifically to generate rental income.

J

  • Joint Tenancy – A form of ownership where two or more people share equal rights to a property.
  • Judgment Lien – A court-ordered claim against a property to satisfy a debt.

L

  • Listing – A property for sale, represented by an agent or broker.
  • Loan-to-Value (LTV) Ratio – The percentage of a property’s value financed through a loan.
  • Landlord – The owner of a rental property.

M

  • Mortgage – A loan used to purchase a home, secured by the property itself.
  • Multiple Listing Service (MLS) – A database of available real estate listings shared among agents.
  • Market Value – The estimated price a property would sell for under current market conditions.

N

  • Net Operating Income (NOI) – A measure of a property’s profitability, calculated as income minus operating expenses.
  • Notary Public – An official authorized to verify signatures on legal documents.

O

  • Offer – A proposal made by a buyer to purchase a property at a specified price.
  • Open House – A scheduled period when a home is available for public viewing.

P

  • Pre-Approval – A lender’s confirmation that a buyer qualifies for a loan up to a certain amount.
  • Principal – The original loan amount borrowed before interest is applied.
  • Property Tax – A tax levied on real estate by local governments.

Q

  • Quitclaim Deed – A deed transferring ownership without guaranteeing a clear title.

R

  • Real Estate Agent – A licensed professional who assists in buying or selling properties.
  • Refinancing – Replacing an existing mortgage with a new loan, often to secure a better rate.
  • Return on Investment (ROI) – A measure of the profitability of a real estate investment.

S

  • Short Sale – Selling a home for less than the remaining mortgage balance, typically with lender approval.
  • Survey – A detailed map or report showing property boundaries.

T

  • Title – A legal document proving property ownership.
  • Title Insurance – A policy that protects buyers and lenders from potential ownership disputes.

U

  • Underwriting – The lender’s process of evaluating a borrower’s risk before approving a loan.

V

  • Vacancy Rate – The percentage of unoccupied rental properties in a market.

W

  • Walkthrough – A final inspection of a property before closing to ensure everything is in order.
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Last modified: February 6, 2025

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