Common Real Estate Terminology

Listed below are common real estate terms and definitions for your information.

Agent: The professional who represents the buyer, the seller or both during the real estate transaction.

Appraisal: The value of real estate property as determined by a professional appraiser.

Assessment: to determine the amount of property taxes the property owner is due to pay.

Buyer's Agent: The real estate agent who represents the buyer.

Closing: This is the final step of transferring the property deed to the buyer.

Closing Costs: These are the funds due at the time of closing which may include everything from mortgage fees and deed preparation to attorney’s fees. This cost is generally 2 to 5% of the home’s purchase price.

Comparable Market Analysis: Also abbreviated as CMA- is the comparison of two or more properties with a subject home for pricing.

Contingency: Conditional term that may be included in real estate contracts.

Deed: Document that proves ownership and is recorded at government office.

Earnest Money: A buyer puts money down on an offer in good faith to secure a binding contract. This amount of money goes towards the property’s purchase price.

Escrow: The earnest money and deposit on a property is held by a third party as a reserve until closing.

Inspection: A property examination for defects in homes that are being considered for purchase.

Listing: The real estate brokerages and agent’s properties for sale are called listings.

MLS (Multiple Listing Service): This is a cooperative of real estate brokers who pool their listings in one area to advertise to a mass of buyers.

Principal: The amount owed on a loan minus interest.

Pre qualification: The first step in mortgage processing that determines the mortgage amount the lender is willing to lend based on basic credit reports and debt to income ratio.

Property Tax: The amount owed on a property to the government based assessment value.

Real Estate Attorney: A lawyer specializing in real estate transactions.

Real Estate Broker: A licensed state broker represents buyers and sellers in real estate transactions. A real estate broker gets paid a commission.

Realtor: A state certified associate or broker holding active membership in a real estate board that is associated with the National Association.

Recording: Recording deed or mortgage into public information.

Title: A legal document that shows ownership.

Title Company: Title insurance provider to clear title property.

Title Insurance: Insurance to protect your ownership title against claims. This is paid at closing.

Title Search: Title company search to determine legal property ownership.

Warranty: A home option, a warranty can vary in price and terms, but is primarily used to cover house items.

Zoning: A zoned area is regulation on how the land can be used.

Zoning Variance: A modification to a zoning law.