30 Common Real Estate Terms
1) ADDENDUM
Supplemental document used to add in any additional language or provisions in the original Buy-Sell that do not fit.
2) AMENDMENT
Additional document used to make any amendments on the original Buy-Sell contract
3) APPRAISAL
A real estate evaluation completed by an appraiser to determine market value. Can take 2-4+ weeks. Determines the loan amount.
4) AS-IS
The buyer is willing to take the property in its current condition. That means that the seller will not make any repairs.
5) BUY-SELL
A legal binding agreement between parties to transfer real property, sometimes called the purchase agreement or contract.
6) CLOSING COSTS
All the fees involved in completing the transaction that are typically paid at time of closing. Includes those charged by the lender, title company, insurance company, tax authorities, homeowners associations, real estate agents, etc.
7) CLOSING DATE
The date that both Buyer and Seller have agreed on to fulfill the purchase agreement terms.
8) CONTINGENCY
A clause in a purchase agreement to specify an action or requirement that must be met in order for the contract to become legally binding.
9) COUNTER OFFER
A response from a seller countering the terms or conditions of an offer from the buyer.
10) COVENANTS
Guidelines for architecture, design guidelines, or any rules for the subject property.
11) DAYS
Unless otherwise stated, all dates on contracts are calendar days and not business days.
12) DEED
The physical recorded document that passes ownership rights from seller to buyer.
13) DUE DILIGENCE
An agent owes their client reasonable steps to satisfy their legal obligations.
14) EARNEST MONEY
A deposit generally held by a third party, such as a title company, that represents the good faith intention of a buyer to purchase a property.
15) EQUITY
The property’s market value minus any mortgages or liens.
16) ESCROW
When funds, like earnest money, are held by a third party until the real estate transaction is complete or the contract is fulfilled.
17) FAIR HOUSING ACT
A law enacted as part of civil rights legislation that prohibits discrimination in home sales, rentals, and financing based on race, color, national origin, religion, sex, familial status, or disability.
18) FIDUCIARY
An established relationship between an agent and their client. An agent has responsibility to their client’s interests above all other parties.
19) HOME INSPECTION
A licensed inspector will report the condition of the home as part of due diligence to the buyer. Then the buyer can decide if they want to move forward with the agreement as is, or they can ask for the seller to either handle or reimburse for certain repairs.
20) HOME OWNER ASSOCIATION
The association that manages a planned community or condominium. You must pay the monthly, quarterly, or annual dues and comply with their guidelines.
21) HOME OWNER INSURANCE
Generally purchased before closing on the home. There are various insurance policies offering different levels of coverage.
22) LETTER OF INTENT
Formal document reviewing the Client’s overall intentions.
23) LIEN
A right to keep possession of property belonging to another person until a debt owed by that person is discharged.
24) MULTIPLE LISTING SERVICE
The database that allows a real estate agent and broker members to access the properties in a given area.
25) NOTARY SIGNING AGENT
The license agent trained to handle the complex paperwork and documents that come along with real estate and mortgage transactions. They witness the authenticity of the signed documents.
26) OFFER
This is the agreement that the buyer intends on fulfilling within a real estate transaction. There are many strategies to having your offer accepted.
27) PRE-APPROVAL
The letter a lender gives a buyer after assessing their financial status. It includes the amount their loan has been approved for as well as what they can afford.
28) RECORDING
Meaning the document is "on record". It has been entered into county records and provides a traceable chain of title. Recording does not establish ownership.
29) SOURCE OF FUNDS
In a normal purchase agreement you will need to list the type of funds being used for the purchase. Cash, Loan, Seller Financing.
30) TITLE
Someone’s right to legal ownership and use of a property, including the right to sell it. Everything shown on the property that has been recorded. Title insurance protects you from claims against ownership of the home before closing. Required by lenders and encouraged by the title company. Identifies any liens on the property.
