Real Estate Terms
Real Estate Terms
Click on a letter below to learn a real estate term.
Agent: A person authorized to conduct real estate transactions
Amortization: The gradual repayment of a mortgage in installments
Annuity: An amount that is paid on a yearly basis, oftentimes on a guaranteed dollar basis
Appraisal: The official property valuation carried out by a certified appraiser or valuer.
Broker: A person who brings parties together and helps in negotiating contracts between them, usually for a commission or a fee
Budget: A detailed financial plan that includes income and expenses over a certain amount of time
Cash-out Refinance: A type of refinance that involves receiving money from a new loan that exceeds the total of the money needed to repay the first existing mortgage
Clear Title: A title that is clear of liens or legal questions regarding the ownership of the property
Deed: A legal document conveying title to a property and is the document that is needed to transfer ownership from a seller to a buyer
Depreciation: A property that has declined in value
Down Payment: Where a portion of the total amount due is given upfront before finalizing a transaction between a buyer and a seller
Earnest Money: a deposit made to the seller and represents a buyer’s good faith to buy the seller’s home
Equity: The difference between the fair market value of the property and the amount that is still owed from the mortgage
Escrow: Money, documents, or an item of a value deposited with a 3rd party to be delivered upon the fulfillment of a condition.
Fair Market Value: the highest price a buyer would pay and the lowest a seller would be willing to accept
Foreclosure: this is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments back to the lender
Gated Community: a residential area is surrounded by gates to control traffic and people going in and out of the area
Guarantor: an individual who agrees to compensate the holder of a loan all or a portion of the unpaid principal balance in the possible event of a default made by the borrower
Hazard Insurance: Can also be referred to as Homeowner’s Insurance. It is a type of coverage that protects a property owner against damage caused by severe storms, fires, hail, or other natural events.
Home Inspection: an inspection that evaluates the structrural and mechanic conditions of a property
Income Property: Real estate developed or improved to generate income
Interest Rate: the rate of interest added to a monthly payment due
Investment Property: A property that the owner does not occupy
Joint Agent: One or more agents are jointly instructed by a principal to act on his behalf. In the case of real estate agents this is on the basis that if any one of the agents affect the sale, letting or other joint agent(s) will share the remuneration in agreed proportions.
Joint Tenancy: is a legal arrangement in which two or more people own a property together, each with equal rights and obligations. When one of the owners in a joint tenancy dies, that owner’s interest in the property passes to the survivors without the property having to go through the courts.
Khata: a revenue document, detailing the assessment of a property, recording details about the property such as size, location, built up area and so on for the purpose of payment of property tax. It is also a kind of identification of the person who is primarily liable for payment of property tax.
Landlord: The person who owns a land or house or real estate, which is rented or leased to an individual or a business organization.
Lease: A written agreement between a landlord and a tenant granting a period of tenancy of a property under specific terms and conditions
Lock-in : A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.
Manufactured Housing: A manufactured home is a house built with parts which have been made in a factory and then quickly put together at the place where the house was built.
Market Value: The price at which a seller is happy to sell and a buyer is willing to buy.
Mortgage: A mortgage is a loan from a bank or other financial institution that helps a borrower purchase a home.
Net Worth: The value of a persons assets minus liabilities.
Non-liquid Asset: An asset that cannot easily be converted into cash.
Notice of Default: A formal written notice to a borrower that a default has occurred and that legal action may be taken.
Offer: An offer to purchase real estate—also called a real estate purchase contract or a residential purchase agreement—is a legal agreement that identifies the seller(s) and the buyer(s).
Owner Financing: A property purchase transaction in which the property seller provides all or part of the financing.
Pre-Approval: an indication of how much money you will be eligible to borrow when you apply for a mortgage. This process occurs before you complete an application for a loan.
Pre-Qualification: The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan
Principal Balance: The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges.
Private Mortgage Insurance (PMI): Also known as Mortgage Insurance, PMI is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent
Qualified Covenant: A legal document which restricts the rights of a person on the interest in a land/property.
Real Estate Agent: A person licensed to negotiate and transact the sale of real estate on behalf of the property owner
Recording: The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.
Repayment Plan: An arrangement made to repay delinquent installments or advances. Lenders’ formal repayment plans are called “relief provisions.”
Second Mortgage: A mortgage that has a lien position subordinate to the first mortgage.
Servicer: An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.
Single-Family Properties: One- to four-unit properties including detached homes, townhomes, condominiums, and cooperatives.
Subdivision: A housing development that is created by dividing a tract of land into individual lots for sale or lease
Termite Inspection: A mortgage that has a lien position subordinate to the first mortgage.
Title: A legal document evidencing a person’s right to or ownership of a property.
Townhouse: A townhouse is similar to a condominium in that it’s a type of joint real estate where each housing unit is individually owned. However, it has two or more stories, rather than the typical one floor found in a condominium.
Under-Valuation: A value of the property that is lesser than the fair market value. The registration fee for a property is based on the value of the property in case of capital transaction or rent in case of rental transaction.
Utilities: The private or public service facilities such as gas, electricity, telephone, water, and sewer are provided by the government agencies as part of the development of the land.
Valuation: A written analysis of the estimated value of a property prepared by a qualified valuer.
Vested: Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.
Written Down Value: Making deductions for depreciation against capital cost or present value of an asset.
X: A notation made by an individual doesn’t know how to write or physically unable to write, to show intent to sign an instrument such as a deed or will. In regard to the conveyance of real property, such a person would be required to make such a mark or at least a thumbprint as intent to sign and have it witnessed.
Yield: The interest earned or return by an investor on an investment, stated as a percentage of the amount invested.
Zoning: The division of a city or town into zones and the application of regulations having to do with the structural, architectural design and intended use of buildings within such designated zone (i.e. a tenant needing manufacturing space would look for a building located within an area zoned for manufacturing).