What does that mean? The Language of Real Estate
Have you ever taken on a major project and felt you’re the only one who doesn’t know what’s going on? Real Estate seems to have a language all its own, and most of us don’t have a grasp on the thousands of terms being tossed around as we’re in the process of buying our home. To help you make sense of some of this terminology, here is a very BASIC list of the many terms you may hear. This list is probably 10% of the terms that are out there on real estate vocabulary lists – there are plenty more. Information is good – too much information can make your head explode. As you enter your home buying or selling process, take a few minutes to acquaint yourself with the language of real estate.
Real Estate Dictionary
Amend/Extend A form used to amend a contract or extend dates once a home is under contract. Signed by both buyer and seller.
Assessed Value The value of a property according to jurisdictional (usually county) tax assessment
Assessor's Page The website run through a county which provides public information regarding property ownership, sales, and taxes
Back-up Offer A secondary bid for a property that the seller will accept if the first offer fails.
Buyer's Agent> A real estate broker who represents a prospective purchaser in a real estate transaction
Buyer's Market The condition which exists when a buyer is in a better position as to price and terms because the real property for sale is in greater supply in relation to demand.
Cash Offer An offer on a home being paid for completely in cash.
CIC Common Interest Community - often a townhome or condominium community
Closing The final transfer of the ownership of a house moves from the seller to the buyer after all parties have met all the terms of the contract and the deed has been recorded
Closing Costs "The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. This is a typical list:
Buyer's Expenses Documentary Stamps on Notes, Recording Deed and Mortgage, Escrow Fees, Attorney's Fee, Title Insurance, Appraisal and Inspection, Survey Charge
Seller's Expenses Cost of Abstract, Documentary Stamps on Deed, Real Estate Commission, Recording Mortgage, Survey Charge, Escrow Fees, Attorney's Fees"
Commission The compensation or fee for services that a licensee receives for performing the agreed-upon terms under a brokerage contract which in the practice of real estate this is usually a percentage of the selling price of a property
Comparables Property similar in age, size, condition and location that help determine another property's value.
Deed A means by which conveyed real estate can be identified in a deed so that it will legally hold up in court.
Default When referring to a contract to buy and sell, when a buyer or seller do not perform, or terminate a contract outside of the legal reasons and must relinquish or return earnest money
Disclosure The making known of all material facts regarding a property.
Earnest Money A sum of money or other consideration tendered by a prospective purchaser as evidence of good faith in conjunction with an offer to purchase rights in real property.
Easement A right-of-way granted to a person or company authorizing access to or over the owner's land. An electric company obtaining a right-of-way across private property is a common example.
Equity The market value of real property, less the amount of existing liens.
Escrow Funds paid by one party to another (the escrow agent) to hold until the occurrence of a specified event, after which the funds are released to a designated individual.
Exclusions When referring to a contract to buy and sell, items that do not transfer with the sale of the property and noted in the listing information. Example: family chandelier
Deductible The amount of an insurance claim that the insured person agrees to pay. This amount is deducted from the claim payout.
Fair Housing Act A federal law that prohibits discrimination against any person due to race color religion sex handicap familial status or national origin in the sale rental leasing financing and advertising of housing. The Fair Housing Act was passed in 1968 and amended in 1974 and again in 1988.
Final Walk Through A final inspection of a home before Closing to document that all inspection items have been resolved.
Flood Insurance Additional insurance often required by lenders for homes located in FEMA-designated flood zones.
Foreclosure Foreclosure is the legal process whereby a lender (bank or secured creditor) terminates the owner
HOA Home Owner's Association - the governing body of a Common Interest Community (townhomes, condominiums, etc)
HOA Dues The amount a homeowner must pay monthly/quartly/yearly into the Homeowner's Association for specific services (example: trash and snow removal, street maintenance)
Home Inspection A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
Homeowner's Insurance Insurance required by lender to protect home in case of damage from fire, wind, etc.
HUD-1 Statement Federally mandated document required by Dept of Housing and Urban Development (HUD) of all anticipated closing costs connected with a particular property purchase.
Inclusions As a part of a real estate contract, items to be left with the home, ex: refrigerator, washer/dryer, other major appliances
Joint Tenants An undivided interest in property, taken by two or more joint tenants. The interests must be equal, accruing under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.
Lead Based Paint Disclosure A disclosure sellers living in a dwelling built before 1978 must complete giving any known information about the presence of lead based paint on a property.
Lien on Property A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials or labor.
Listing Agent The real estate agent representing the seller and marketing the property to be sold.
Lot Generally, any portion or parcel of real property. Usually refers to a portion of a subdivision.
Market Value The price that a home will likely fetch on the market, based on comparisons to similar homes that have sold recently.
Megan's Law An informal name for laws in the United States requiring law enforcement authorities to make information available to the public regarding registered sex offenders.
MLS Multiple Listing Service - a service of area or regional real estate associations.
Negotiation The process that buyers and sellers undertake to determine price and conditions to mutual satisfaction.
Out of Contract When, after a property is under contract, deadlines or stipulations are not met.
Permits County or regional requirements for notifying authorities of certain types of property improvements
Plat Map A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land and easements.
Power-of-Attorney A document by which one person (called the "principal") authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in designated transactions.
Price per Square Foot A formula to determine cost: Cost divided by square footage = cost per square foot.
Property Disclosure A document provided by sellers offering known information about a property.
Property Taxes City and state taxes on property based on size, value and improvements.
Proration To allocate between seller and buyer their proportionate share of an obligation paid or due.
Purchase Contract A state-approved form outlining the details and legalities of a property sale. An offer is written on this, and it is contractual once signed by both buyer and seller.
Quitclaim A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land. A quitclaim deed is often given to clear the title when the grantor's interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has.
Radon/Radon Mitigation An odorless, tasteless gas that comes from the natural (radioactive) breakdown of uranium in soil, rock and water and get into the air.
Seller's Market is any process used to reduce radon concentrations in the breathing zones of occupied buildings.
Short Sale a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.
Tenants in Common An estate or interest in land held by two or more persons, each having equal rights of possession and enjoyment, but without any right of succession by survivorship between the owners.
Title Insurance is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens.
Title Search is a process that is performed primarily to determine seller's saleable interest, restrictions pertaining to use of the land, and existance of liens on property.
Transaction Broker A realtor having no agency nor fiduciary relationship between brokers and sellers or buyers, but instead acting as a facilitator in a transaction.
Under Contract Upon mutual execution of contract (both buyer and seller's signatures), property is considererd under contract and proceed to close.
Zoning Laws Passed by local governments regulating the size, type, structure, nature and use of land or buildings.