Real Estate Glossary
Understanding real estate terminology can be challenging, especially if you’re new to the market. At CrystalOrbit Realty, we want to make the process as clear and straightforward as possible. Here’s a glossary of common real estate terms to help you navigate your journey:
A
- Appraisal: An evaluation of a property’s value conducted by a licensed appraiser, often required by lenders before approving a mortgage.
- As-Is: A term indicating that a property is being sold in its current condition without any repairs or improvements.
B
- Broker: A licensed real estate professional who can manage their own business and employ other agents.
- Buyer’s Agent: A real estate agent who represents the buyer in a transaction, helping them find and purchase a property.
C
- Closing: The final step in a real estate transaction where the title is transferred from the seller to the buyer, and all financial obligations are settled.
- Comparative Market Analysis (CMA): A report that compares a property to similar properties in the area to determine its market value.
D
- Down Payment: The initial payment made by a buyer towards the purchase price of a property, typically a percentage of the total price.
- Dual Agency: When a single real estate agent or brokerage represents both the buyer and the seller in a transaction.
E
- Escrow: A neutral third party that holds funds or documents until certain conditions are met during a real estate transaction.
- Equity: The difference between the market value of a property and the amount owed on the mortgage.
F
- Foreclosure: The legal process by which a lender takes possession of a property due to the borrower’s failure to make mortgage payments.
- Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant throughout the term of the loan.
G
- Gross Income: The total income received before any expenses or taxes are deducted, often used in rental property evaluations.
H
- Home Inspection: An examination of a property’s condition by a professional inspector, typically conducted before the sale is finalized.
- Homeowner’s Association (HOA): An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties within its jurisdiction.
I
- Interest Rate: The percentage charged by a lender for borrowing money, expressed as an annual percentage of the loan amount.
J
- Joint Tenancy: A form of property ownership where two or more people own a property together with equal rights and obligations.
L
- Listing Agent: A real estate agent who represents the seller in a transaction, helping them market and sell their property.
- Loan-to-Value Ratio (LTV): A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
M
- Multiple Listing Service (MLS): A database used by real estate agents to list and find properties for sale.
- Mortgage: A loan used to purchase a property, where the property itself serves as collateral.
O
- Offer: A formal proposal to buy a property at a specified price and terms.
P
- Pre-Approval: A preliminary evaluation by a lender indicating the amount a buyer can borrow based on their financial situation.
- Principal: The amount of money borrowed on a mortgage, excluding interest.
R
- Real Estate Agent: A licensed professional who assists buyers and sellers in real estate transactions.
- Refinance: The process of replacing an existing mortgage with a new one, typically to obtain better terms.
S
- Seller’s Market: A market condition where demand for homes exceeds supply, often leading to higher prices and quicker sales.
- Short Sale: A sale of a property where the proceeds are less than the amount owed on the mortgage, often requiring lender approval.
T
- Title: A legal document proving ownership of a property.
- Title Insurance: Insurance that protects against losses due to defects in the title.
U
- Underwriting: The process by which a lender evaluates the risk of a loan and determines whether to approve it.
V
- Variable Rate Mortgage: A mortgage with an interest rate that can change periodically based on market conditions.
W
- Walk-Through: A final inspection of a property by the buyer before closing to ensure it is in the agreed-upon condition.
Z
- Zoning: Regulations that determine how a property can be used, such as residential, commercial, or industrial.