Ultimate Glossary of Real Estate Terms: From A to Z
Whether you’re a first-time homebuyer or a seasoned real estate investor, understanding industry jargon can make the buying and selling process smoother. To ensure you’re well-informed, we’ve compiled a glossary of essential real estate terms.
Appraisal: An estimate of a property’s fair market value, typically conducted by a licensed professional.
Assessed Value: The value of a property according to the local tax assessor, which can be used to determine property taxes.
Broker: A professional who acts as an intermediary between buyers and sellers of real estate, typically holding a state license to do so.
Buyer’s Agent: A real estate agent or broker who represents the interests of the buyer in a real estate transaction.
Closing: The final step in the sale and purchase of real estate where ownership of the property is transferred from the seller to the buyer.
Contingency: A condition that must be met for a real estate contract to be binding.
Deed: A legal document that establishes ownership of a property.
Down Payment: The amount of money a buyer pays upfront to secure a property, typically expressed as a percentage of the home’s price.
Equity: The difference between a home’s market value and the outstanding balance on its mortgage.
Escrow: A neutral third party or account used to hold funds, such as the buyer’s deposit, until the real estate transaction is completed.
Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant for the life of the loan.
Foreclosure: A legal process where a lender takes control of a property due to the borrower’s failure to meet the mortgage payment terms.
Listing: An agreement in which a real estate broker is hired to find a buyer for a property.
Mortgage: A loan taken out to buy property or land. The property or land is used as collateral.
Pre-Qualification: An initial evaluation of a potential borrower’s ability to buy a home, giving an estimate of how much they might be able to borrow.
Principal: The amount borrowed for a loan, not including interest or additional fees.
Seller’s Agent (or Listing Agent): A real estate agent or broker who represents the interests of the seller in a real estate transaction.
Title: A legal document that proves ownership of a property.
Title Insurance: Insurance that protects against losses due to defects in the title of a property.
Zoning: Regulations that determine how land can be used in specific geographic areas.
This list is by no means exhaustive, as the real estate industry has many nuanced and specialized terms. However, these are some of the most commonly used and understood terms in the field.