Real Estate Glossary
Unlock the World of Real Estate: A Comprehensive Glossary of Key Terms and Concepts for Buyers, Sellers, and Investors. Empower Yourself with the Knowledge to Navigate Every Step of Your Property Journey.
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that may change periodically based on the performance of a specific index.
Appraisal
An evaluation of a property's value by a licensed professional, typically required by lenders before approving a mortgage.
Buyer’s Agent
A real estate professional who represents the buyer's interests in a property transaction.
Closing Costs
Fees and expenses, aside from the property’s price, that buyers and sellers incur to complete a real estate transaction.
Comparative Market Analysis (CMA)
An analysis used to estimate the value of a property by comparing it to similar properties recently sold in the same area.
Contingency
A condition that must be met for a real estate transaction to proceed.
Deed
A legal document that transfers ownership of real estate from one party to another.
Down Payment
The initial payment made by a buyer, typically a percentage of the purchase price, when buying a home.
Earnest Money
A deposit made by the buyer to show their commitment to purchasing a property.
Equity
The difference between the market value of a property and the outstanding balance of any mortgage or liens on it.
Escrow
A financial arrangement where a third party holds funds or assets until certain conditions are met during a real estate transaction.
Fixed-Rate Mortgage
A mortgage with a constant interest rate for the entire term of the loan.
Foreclosure
The legal process by which a lender takes possession of a property due to the borrower’s failure to make mortgage payments.
Home Inspection
A thorough examination of a property's condition, typically required by buyers before completing a purchase.
Homeowner's Association (HOA)
An organization that oversees the maintenance and regulations of a residential community, funded by dues from homeowners.
Interest Rate
The percentage of a loan amount charged by the lender for borrowing money, typically expressed as an annual percentage.
Listing Agent
A real estate professional who represents the seller's interests in a property transaction.
Loan-to-Value Ratio (LTV)
The ratio of a loan amount to the appraised value of a property, expressed as a percentage.
Multiple Listing Service (MLS)
A database used by real estate professionals to list and access properties for sale.
Offer
A formal proposal by a buyer to purchase a property at a specified price.
Pre-Approval
A preliminary evaluation by a lender to determine how much a borrower may qualify for in a mortgage loan.
Principal
The original amount of money borrowed for a mortgage, excluding interest.
Private Mortgage Insurance (PMI)
Insurance required by lenders when a borrower makes a down payment of less than 20%, protecting the lender if the borrower defaults.
Property Tax
A tax levied by local governments based on the assessed value of a property.
Real Estate Agent
A licensed professional who assists in buying, selling, or renting properties.
Refinancing
The process of replacing an existing mortgage with a new one, typically to reduce the interest rate or change loan terms.
Title
A preliminary evaluation by a lender to determine how much a borrower may qualify for in a mortgage loan.
Title Insurance
Insurance that protects against losses arising from disputes over property ownership or liens.
Underwriting
The process by which a lender evaluates the risk of issuing a loan, based on the borrower’s financial information and the property’s value.
Zoning
Regulations governing the use of land and buildings within a municipality, including residential, commercial, and industrial areas.