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These are some of the common terms used in real estate.
Addendum: An addition to a document.
Adjustable rate mortgage (ARM): A type of mortgage loan in which the interest rate that can change with the market.
Agent: A real estate salesperson or broker who represents buyers or sellers.
Annual percentage rate (APR): The costs (interest rate, closing costs, fees, and so on) that are Associated with a loan, known as percentage rate of interest. The costs are amortized over the term of the loan.
Application fees: Fees that mortgage companies charge buyers when they apply for a loan.
Appraisal: The opinion of property value at a certain time.
“As-is”: The seller will not fix any problems with the property.
Balloon mortgage: A mortgage that is paid over a short period of time, but is amortized over a longer period of time. In a specified period of time, the entire unpaid balance must be repaid.
Back-up offer: An offer that is made contingent on a first offer on a property falling through.
Board of REALTORS® : An association of REALTORS® in a specific local geographic area.
Broker: A licensed individual who acts as the agent for the seller or buyer.
Broker’s price opinion: A real estate broker’s opinion of the expected sale price of a property.
Buyer: The purchaser of a property.
Buyer agency: A real estate broker hired by the buyer and works in the buyers best interest buyer.
Buyer agent: The agent who shows the buyer’s property, negotiates the offer for the buyer, and works with the buyer to close the transaction.
Closing: The end of a transaction process when the deed is delivered, documents are signed, and funds are dispersed.
Commission: The amount paid to the listing brokerage by the seller for selling the property. The commission may be split between the listing broker and the selling broker as agreed to at the time of the listing.
Commission split: The percentage of the commission divided between the real estate sales brokerage and the real estate sales agent or broker.
Comparative market analysis CMA: A study done by real estate sales agents and brokers using active, pending, and sold comparable properties to estimate a listing price for a property.
Contingency: A requirement that must take place before a contract can be binding.
Continue to show: When a property has an accepted offer with contingencies, but the seller wants the property to be shown to prospective buyers until contingencies are released.
Contract: The legally binding document in which the buyer agrees to buy and the seller agrees to sell a property.
Conventional mortgage: A type of mortgage that has certain limitations placed on it to meet secondary market guidelines.
Counteroffer: The response to an offer or a bid by the seller or buyer after the original offer.
Credit report: The history for a borrower’s credit accounts, outstanding debts, and payment timelines on past or current debts.
Credit score: A score assigned to a borrower’s credit report based on information gathered.
Curb appeal: The visual impact a property from the street.
Days on market DOM: The number of days a property has been listed for sale.
Disclosures: Federal, state, county, and local requirements of disclosure that one party provides and another acknowledges.
Divorce: The legal separation of a husband and wife that totally dissolves the marriage relationship.
Docusign Transaction Room: A secure cloud based storage for all documents of a transaction in which invited members can share, sign and store documents related to the transaction.
Down payment: The amount of cash put toward a purchase.
Drive-by: When a party drives by a property listing or potential listing.
Dual agent: A state-licensed real estate agent who represents the seller and the buyer in a single transaction.
Earnest money deposit: The money given to the seller at the time the offer is made as a sign of the buyer’s good faith.
Escrow account: An account in which borrowers pay monthly toward real estate taxes and property insurance.
Esignatures: Electronic signature, documents are sent and signed electronically on computer or mobile devices.
Exclusions: Fixtures or personal property that are not included in the contract or offer to purchase.
Expired (listing): A property listing that has passed the timeframe of the listing agreement.
Feedback: The real estate sales agent or their client’s reaction to a property.
Fee simple: A form of property ownership where the owner has the right to use or sell the property as he chooses.
FHA: Federal Housing Administration.
Fixture: Personal property that has become part of the property through permanent attachment.
Flat fee: A predetermined amount of compensation received or paid for a specific service in a real estate transaction.
For sale by owner (FSBO): A property that is for sale by the owner of the property.
Foreclosure: A bank repossesses a property after a borrower defaults on the mortgage. Often, after the repossession the property is referred to as a foreclosure.
Gift letter: A letter to a lender stating that a gift of cash has been made to the buyer and that the person gifting the cash to the buyer is not expecting the gift to be repaid.
Good faith estimate: Under the Real Estate Settlement Procedures Act, within three days of an application submission, lenders are required to provide in writing to potential borrowers an estimate of closing costs.
Homeowner’s insurance: Coverage that includes personal liability and theft insurance in addition to hazard insurance.
HUD: U.S. Department of Housing and Urban Development.
IDX: (Internet Data Exchange) Allows real estate brokers to advertise each other’s listings posted to the multiple listing service.
Inclusions: Fixtures or personal property that are included in the sale.
Independent contractor: A real estate sales agent who conducts real estate business through a broker. This agent does not receive salary or benefits from the broker.
Inspection: A NYS Licensed home inspector is hired by the buyer or the seller to evaluated the major components of a property.
Interest rate lock: When the borrower and lender agree to lock a rate on loan.
Inventory: The available properties that are for sale at a given time.
List date: The date a property was offered for sale.
List price: The price of a property in the a listing agreement.
Listing: A property represented by a broker.
Listing agent: The real estate sales agent that is representing the sellers and their property, through a listing agreement.
Listing agreement: A document that establishes the real estate agent’s agreement with the sellers to represent their property in the market.
Listing appointment: The time when a real estate sales agent meets with potential sellers of a property to secure a listing agreement.
Loan: An amount of money that is lent to a borrower who agrees to repay the amount plus interest.
Loan application: A document that buyers who are requesting a loan fill out and submit to their lender.
Loan closing costs: The costs a lender charges to close a borrower’s loan. These costs vary by lender.
Loan commitment: A written document telling the borrowers that the mortgage company has agreed to lend them a specific amount of money at a specific interest rate for a specific period of time. The loan commitment may also contain conditions to the commitment.
Loan processor: An administrative individual who is assigned to check, verify, and assemble all of the documents and the buyer’s funds and the borrower’s loan for closing.
Lockbox: A tool that allows secure storage of property for agent use.
Mortgage banker: One who lends the bank’s funds to borrowers and brings lenders and borrowers together.
Mortgage broker:A business or individual who unites lenders and borrowers and processes mortgage applications.
Mortgage loan servicing company:A company that collects monthly mortgage payments from borrowers.
Multiple listing service (MLS): A service that compiles available properties for sale by member brokers.
Multiple Offers: More than one buyers broker present an offer on one property where the offers are negotiated at the same time.
NATIONAL ASSOCIATION OF REALTORS® (NAR): A national association comprised of real estate professionals.
Off market: A property listing that is no longer for sale. A property can be temporarily or permanently off market.
Offer to purchase: When a buyer proposes certain terms and presents these terms to the seller.
Office tour/caravan: A tour by a real estate sales office of listings represented by agents in the office or other local brokerage’s.
Open house: When a listing is available to the public or brokers for viewings and showings.
Parcel identification number (PIN): A taxing authority’s tracking number for a property.
Payoff letter: A written document from a seller’s mortgage company stating the amount of money needed to pay the loan in full.
Pending: A real estate contract that has been accepted on a property but the transaction has not closed.
Planned unit development (PUD): Mixed-use development that sets aside areas for residential use, commercial use, and public areas such as schools, parks.
Preapproval: A high level of buyer/borrower pre qualification required by a mortgage lender.
Prepaid interest: Funds paid by the borrower at closing based on the number of days left in the month of closing.
Prepayment penalty: A fine imposed on the borrower by the lender when the loan is paid off before it comes due.
Prequalification: The mortgage company tells a buyer in advance of the formal mortgage application, how much money the borrower can afford to borrow. Some pre-qualifications have conditions that the borrower must meet.
Principal:The amount of money a buyer borrows.
Principal, interest, taxes, and insurance (PITI): The four parts that make up a borrower’s monthly mortgage payment.
Private mortgage insurance (PMI):A special insurance paid by a borrower in monthly installments, typically of loans of more than 80 percent of the value of the property.
Real estate agent: An individual who is licensed by the state and who acts on behalf of his or her client. The real estate agent who does not have a broker’s license must work for a licensed broker
Real estate contract: A binding agreement between buyer and seller. It consists of an offer and an acceptance as well as consideration.
REALTOR®: A registered trademark of the NATIONAL ASSOCIATION OF REALTORS that can be used only by its members.
Release deed: A written document stating that a seller or buyer has satisfied his or her obligation on a debt. This document is usually recorded to the county.
Real estate owned REO: Property that has been foreclosed and is now third party (bank) owned.
Rider: A separate document that is attached to a document. This is done so that an entire document does not need to be rewritten.
Sale price: The price paid for a listing or property.
Secondary market: An institutional investment market that purchases mortgages from mortgage lenders.
Seller (owner): The owner of a property who has signed a listing agreement or a potential listing agreement.
Short Sale: When an owner owes more on a mortgage then they can sell the property for the bank may agree to accepting less through a sale of the property then is currently owed. The sale is contingent on third party (bank) approval.
Showing: When a listing is shown to prospective buyers or the buyer’s agent.
Special assessment: A special and additional charge to a unit in a condominium or cooperative.
State Association of REALTORS®: An association of Realtors® in a specific state.
Temporarily off market (TOM): A listed property that is taken off the market for a short period of time.
Third-party company: A relocation company hired by an employee’s employer to coordinate the employee’s move to a new location.
Transaction: The real estate process from offer to closing.
Transaction sides: There are two sides of a transaction, sellers or list side and buyers.
Under contract: A property that has an accepted real estate contract between seller and buyer.
VA: U.S. Department of Veterans Affairs.
Walk-through: A showing before closing that permits the buyers one final tour of the property they are purchasing.