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