Real Estate Terms Everyone Should Know
Take a look at this glossary of Real Estate terms, everyone should know when selling or buying a home.
Affidavit of title: A written statement that sellers make under oath certifying that they are in possession of the property, and that since the examination of the title on the date of the contracts no defects have occurred in the title. Marital status is also stated.
Agent: The licensed real estate salesperson or broker who represents buyers or sellers.
Appraisal: The estimated current market value of a property, as determined by a professional appraiser — usually by comparing the property to recent sales of similar ones.
Assessed value: The value of real estate property as determined by an assessor, typically from the county.
“As-is”: A contract or listing clause stating that the seller will not repair or correct any problems with the property.
Back on market (BOM): When a property or listing is placed back on the market after being temporarily removed.
Back-up offer: When an offer is accepted contingent on the fall-through or voiding of an accepted first offer on a property.
Bidding war: When two or more buyers compete for a property by submitting higher offers than the first.
Brokerage: A firm engaged in buying and selling real estate for clients, using brokers and real estate agents to handle the deal.
Broker’s tour: A set time and day when real estate sales agents come to view listings by multiple brokerages in the market.
Buyers Agent: The agent who shows the buyers the property and negotiates the contract for the buyer through closing.
Buyer’s market: A market condition characterized by low prices and a supply of properties that exceed demand.
Capital gain: Profit earned from the sale which is above the original purchase price.
Chain of title: The document that shows the succession of conveyances, from some accepted starting point to the current holder of title.
Closing: The end of the transaction process, in which the deed is delivered, documents are signed and funds are dispersed.
Closing Costs: Expenses above and beyond the purchase price of a house and land (such as agent fees, taxes, etc.) that is paid by the buyer or seller at the completion of the sale.
Closing statement: A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made and all cash paid out in the transaction
Commission: The compensation paid to the listing brokerage by the seller for selling the property, a percentage of which is also paid to the buyer’s agent (although in some cases a buyer may be required to pay his or her own share of the commission).
Commission split: The percentage of commission which is split between the real estate sales brokerage and the real estate sales agent or broker.
Comparable: A property used in an appraisal or comparative market analysis (CMA) report that is equivalent to the seller’s property.
Competitive Market Analysis (CMA): A comparison of the prices of recently sold or listed homes that are similar to a seller’s property in terms of location, style and amenities. This is usually prepared by a listing agent for the property’s seller.
Contingency: A provision in a contract that requires certain actions before the contract is binding or the transaction can be finalized or “closed.”
Contract for deed: A sales contract in which the buyer takes possession of the property but the seller holds title until the loan is paid. Also known as an installment sale contract.
Cost approach: Determination of the estimated value of a property that comes from adding, to the estimated land value, the appraiser’s estimate of the replacement cost of the building, less any depreciation.
Counteroffer: An offer made in response to an offer received from the buyer (which, in effect, rejects the buyer’s offer).
Curb appeal: The visual impact that a property projects from the view from the street.
Days on market: The number of days that a property has been for sale on the market.
Depreciation: A loss of value in property due to physical or functional deterioration.
Disclosures: Federal, state, county and local requirements of disclosure that the seller provides and the buyer acknowledges.
Down payment: The amount of cash put toward a purchase by the borrower.
DOM: Days on market — the number of days that a property has been listed for sale.
Dual agent: A state-licensed individual who represents the seller and the buyer in a single transaction.
Earnest money: The money given as a good faith deposit to the seller at the time the offer is made. Once accepted by the seller, it is held in a trust account until closing.
Escrow account: The trust account established by a broker for the purpose of holding funds, such as the earnest money, on behalf of the seller or some other person until the closing.
Exclusive-right-to-sell listing: A listing contract whereby the owner appoints a real estate broker as his or her exclusive agent for a designated period of time, to sell the property on the owner’s stated terms, and agrees to pay the broker a commission when the property is sold.
Expired listing: A property listing that has expired per the terms of the listing agreement.
Fiduciary relationship: A relationship of trust and confidence between the real estate agent and client, as under the terms of a listing contract or buyer agency agreement.
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 property owner and not represented by a real estate agent.
Inclusions: Fixtures or personal property included in a contract or offer to purchase.
Installment sales contract: A sales contract in which the buyer takes possession of the property and pays the purchase price in periodic installments, even though the title is retained by the seller until the loan is paid off. The same as: contract for deed.
Lease option: When a lease gives the tenant the right to purchase the property during the lease term.
List date: Actual date the property was listed with the current broker.
List price: The price of a property through a listing agreement.
Listing agreement: A contract between an owner-seller and a real estate broker to have the broker find a buyer for the owner’s real estate in exchange for the owner paying a commission.
Listing appointment: The time when a real estate sales agent meets with potential clients (who are selling a property) to secure a listing agreement.
Lockbox: A device with a combination or keypad that hangs from the doorknob and stores the keys to the property for sale, so that agents can gain access for showings.
Market value: The estimated price that a property is likely to sell for under normal conditions on the open market.
Multiple-listing service (MLS): A group of member brokers who agree to share their listing information with one another in the hopes of procuring buyers for their properties more quickly than they could on their own.
National Association of REALTORS® (NAR): A national association of real estate sales agents.
Net listing: A listing contract between the seller and the seller’s broker which sets a baseline price for a property; the broker nets any funds above that price when it sells. This type of listing is illegal in some states.
Open listing: A listing contract under which the broker’s commission is contingent upon the broker bringing in a buyer before the property is sold by the seller or another broker.
Parcel identification number (PIN): A county or city tracking number for a property.
Pending: The status of real estate under an accepted contract that has not yet closed its transaction.
Preview appointment: When a buyer’s agent views a property alone to see if it meets his or her buyer’s needs.
Quit-claim deed: A document that releases the grantor/seller from whatever interest he or she has in the real estate.
Real estate agent: An individual who is licensed by the state and who acts on behalf of his or her client, the buyer or seller.
REALTOR®: A registered trademark of the National Association of REALTORS® that can be used only to refer to its members.
Re-list: Property listed by a broker that formerly was listed with another broker.
Severalty: Ownership of real property by one person only; also called sole ownership.
Staging: Preparing a home for sale through the neutral but appealing placement of furniture and accessories.
Survey: The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions and position of a house on a lot, including the determination of any existing encroachments or easements.
Temporarily off market (TOM): A listed property that is taken off the market for a short time.
Title search: The examination of public records relating to a real estate parcel which determines the current state of its ownership.
Transaction: The purchase process from offer to closing or escrow.
Under contract: A property that has an accepted real estate contract between a seller and a buyer.
Walk-through: A showing before closing that permits the buyers one final tour of the property that they are purchasing, typically so that they can check for any changes or defects.
