REAL ESTATE TERMS
ADJUSTABLE-RATE MORTGAGE (ARM): A type of home loan with an interest rate that fluctuates over time, typically based on a specific financial index. AGENT: A licensed professional who facilitates real estate transactions for buyers or sellers under the supervision of a broker. AMORTIZED LOAN: A loan where the borrower makes regular payments that include both principal and interest until the balance is fully paid off. APPRAISAL: An expert assessment of a property’s market value, determined through analysis of comparable sales and the property’s condition. APPRECIATION: The increase in a property’s value over time due to market conditions, economic factors, or improvements made to the home. ASSESSED VALUE: The valuation assigned to a property by a tax assessor, used to calculate property taxes. BROKER’S LISTING COOPERATIVE (BLC): A network of brokers who share property listings to connect buyers and sellers more efficiently. BROKER: A licensed individual who manages real estate transactions, supervises agents, and often facilitates negotiations. BROKERAGE: A real estate firm or company where brokers and agents work to connect buyers and sellers in property transactions. CHAIN OF TITLE: The chronological record of a property’s ownership history, showing transfers from one owner to the next.
CLOSING: The final step in a real estate transaction, where the buyer signs necessary documents, pays closing costs, and officially takes ownership of the property. CLOSING AGENT: A professional who oversees the closing process, ensuring that the title and ownership of the property are transferred smoothly from the seller to the buyer. CLOSING COSTS: Additional expenses associated with finalizing a property sale, such as taxes, title fees, and lender charges. CLOSING STATEMENT: A detailed financial summary provided at closing, outlining all payments, credits, and disbursements related to the transaction. CLOUD ON TITLE: Any claim, lien, or unresolved issue that could affect the clear ownership of a property, typically identified through a title search. COLLATERAL: An asset, such as real estate, pledged as security for a loan or mortgage. COMMISSION: The fee paid to real estate agents or brokers for their services, usually calculated as a percentage of the property’s sale price. COMPARATIVE MARKET ANALYSIS (CMA): A report comparing recently sold homes in the area to estimate a property’s value based on size, location, and features. CONTINGENCY: A specific condition that must be met for a real estate contract to remain valid, such as a successful inspection or financing approval. CONVENTIONAL LOAN: A type of mortgage that is not backed by government guarantees or insurance.
COUNTEROFFER: A response to an offer in negotiations, proposing changes to terms or price before an agreement is finalized. DEBT-TO-INCOME RATIO: A calculation used to measure a borrower’s ability to repay a loan, comparing monthly debt obligations to total monthly income. DEED: A legal document that officially transfers ownership or interest in a property from one party to another. DEFAULT: The failure to meet mortgage payment obligations or other terms of the loan agreement. DISCOUNT POINT: A fee paid at closing to reduce the mortgage interest rate; one point typically equals one percent of the loan amount. DOWN PAYMENT INVESTMENT: The portion of the home’s purchase price paid upfront in cash by the buyer, not financed through a mortgage. EARNEST MONEY: A deposit made by the buyer to show their serious intent to purchase the property. This amount is applied to the purchase price if the sale closes but may be forfeited if the buyer defaults. EASEMENT: A legal right to use another person’s property for a specific purpose, such as access to utilities or a driveway. EQUITY: The portion of a property’s value that the owner fully owns, calculated as the difference between the market value and any outstanding loan balance. ESCROW ACCOUNT: A secure account managed by a neutral third party to hold funds or documents until the conditions of a transaction are fulfilled.
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