Real Estate Glossary

Below is a comprehensive glossary explaining real estate terms to help both buyers and sellers navigate industry jargon:

A

1. Appraisal:
• An evaluation of a property's value conducted by a licensed appraiser.
2. Assessment:
• The official valuation of a property for tax purposes by local government authorities.

B

3. Buyer's Agent:
• A real estate agent representing the buyer's interests in a real estate transaction.
4. Balloon Mortgage:
• A mortgage with low monthly payments for a set period followed by a large, lump-sum payment.

C

5. Closing Costs:
• Fees and expenses associated with the purchase or sale of a property, paid at the closing.
6. Contingency:
• A condition that must be met for a real estate contract to be binding.

D

7. Down Payment:
• The initial payment made by a buyer as part of the purchase price, usually a percentage of the total.

E

8. Escrow:
• The holding of documents, funds, or assets by a neutral third party until certain conditions are met in a real estate transaction.
9. Equity:
• The difference between the current market value of a property and the outstanding mortgage balance.

F

10. Fixed-Rate Mortgage:
• A mortgage with a constant interest rate and monthly payments that do not change.
11. For Sale By Owner (FSBO):
• A property listed for sale by the owner without the assistance of a real estate agent.

G

12. Good Faith Estimate (GFE):
• An estimate of the total closing costs a borrower is likely to incur in a real estate transaction.

H

13. Home Inspection:
• A thorough examination of a property's condition, typically conducted before a sale.
14. Homeowners Association (HOA):
• An organization that establishes and enforces rules for a community or building and collects fees for common area maintenance.

I

15. Interest Rate:
• The percentage of a loan amount charged as interest over a specified period.
16. MLS (Multiple Listing Service):
• A database used by real estate agents to share information about properties available for sale.

L

17. Loan-to-Value (LTV):
• The ratio of the mortgage loan amount to the appraised value of the property.
18. Listing Agreement:
• A contract between a property owner and a real estate agent to sell the property.

M

19. Mortgage:
• A loan secured by real estate where the borrower pays back the loan amount plus interest over time.
20. Multiple Offers:
• Situations where multiple buyers make competing offers on a property.

N

21. Negotiation:
• The process of reaching an agreement on the terms of a real estate transaction.
22. Notary Public:
• A public officer who verifies and certifies documents, including real estate transactions.

O

23. Offer:
• A proposal to purchase a property, including specific terms and conditions.
24. Open House:
• A scheduled period when a property is available for viewing without an appointment.

P

25. Pre-approval:
• The process of obtaining a lender's commitment for a mortgage amount based on a buyer's financial profile.
26. Private Mortgage Insurance (PMI):
• Insurance paid by a borrower to protect the lender in case of default, typically required if the down payment is less than 20%.

Q

27. Qualifying Ratios:
• Calculations used by lenders to determine a borrower's eligibility for a mortgage.

R

28. Real Estate Agent:
• A licensed professional who assists in buying, selling, or renting real estate.
29. Reverse Mortgage:
• A financial product that allows seniors to convert home equity into cash.

S

30. Seller's Market:
• A market condition where there are more buyers than available properties, leading to increased property prices.
31. Short Sale:
• The sale of a property for less than the outstanding mortgage balance, with the lender's approval.

T

32. Title:
• The legal right to ownership of a property.
33. Title Insurance:
• Insurance that protects against financial loss due to defects in a property's title.

U

34. Underwriting:
• The process of evaluating a borrower's creditworthiness and the risk associated with providing a mortgage.

V

35. VA Loan:
• A mortgage loan guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans and active-duty military personnel.

W

36. Walkthrough:
• A final inspection of a property before closing to ensure it is in the agreed-upon condition.
37. Working with a Realtor:
• The partnership between a buyer or seller and a licensed real estate agent.

This real estate glossary is designed to provide clarity on common terms used in the real estate industry, aiding both buyers and sellers in understanding key concepts throughout the property transaction process.

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