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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.

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