Navigating the world of real estate can sometimes feel like learning a new language. Whether you're a buyer, seller, or new realtor, understanding common real estate terms is crucial in making informed decisions. Here's a concise guide to some of the key terms you'll encounter:
Real Estate Agent / Realtor
A licensed professional dedicated to helping you buy, sell, or rent properties. Before you continue--would you like to learn the difference between buyer agents and seller agents?
Listing
This is an agreement between a real estate agent and a homeowner to sell their property. It signifies that the property is actively being marketed.
Closing
The final step in a real estate transaction, this is when the property officially changes hands from the seller to the buyer.
Mortgage
A loan taken out to purchase a property, with the property itself serving as collateral.
Pre-Approval
A lender's preliminary commitment to loan a buyer a certain amount based on financial review.
Homeowners Association (HOA)
An organization that manages a community's common areas and enforces community rules.
Equity
The difference between the property's market value and the mortgage amount owed.
Deed
A legal document transferring property ownership.
Title
Legal ownership of property.
Appraisal
An expert estimate of a home's market value.
Inspection
A thorough examination of a property's condition, identifying any issues such as structural damage, outdated systems, or needed repairs.
Contingency
Specific conditions outlined in a contract that must be met for the transaction to proceed.
Earnest Money Deposit (EMD)
A deposit made by the buyer into an escrow account, showing commitment to the purchase.
Escrow
A neutral third party that holds funds and documents until the transaction meets all agreed-upon conditions. You can learn more about how escrow works in real estate and why it matters here.
Curb Appeal
The attractiveness of a property from the street.
Closing Costs
Additional expenses, separate from the property price, paid at closing.
Down Payment
An initial payment made when buying a home.
Interest Rate
The cost of borrowing money, expressed as a percentage.
Principal
The owner or manager of a real estate agency, or the amount borrowed on a mortgage before interest.
Comparative Market Analysis (CMA)
A report estimating a home's value based on similar, recently sold properties.
Foreclosure
A legal process where a defaulted loan results in the sale of the property.
Short Sale
A sale where the property goes for less than the amount owed on its mortgage, typically as a last resort to avoid foreclosure.
Square Footage
This measures the total finished, livable space within a property.
Lot Size
Represents the entire area a property occupies.
Offer / Purchase Agreement
A legally binding document outlining the terms for buying a property.
Multiple Listing Service (MLS)
A shared database for real estate agents to list and find properties for sale.
Appraised Value
The value assigned to a house by a professional appraiser, different from market value or selling price.
Appreciation
When a property’s value increases over time.
Depreciation
Accounting for the property's cost recovery over several years.
Staging
Enhancing a home’s appeal through decoration and arrangement to attract buyers.
Fixer-Upper
A property needing significant repairs, sold at a lower price.
Move-In Ready
A home that requires no major repairs post-closing.
Turnkey
A fully renovated home ready for immediate occupancy.
Pocket Listing
A privately sold property not listed on the MLS.
Open House
A scheduled event for the public to view a property for sale.
Virtual Staging
Digitally adding furniture to property photos to boost appeal.
Smart Home
A residence with integrated technologies for automation and control.
Walk Score
A rating indicating the walkability of an area for daily tasks.
Bonus Room
An extra room with flexible use potential.
Loft
An open-plan apartment with minimal interior walls.
Home Office
A space designated for business activities within a home.
This dictionary is your starting point to demystify the complex language of real estate, empowering you with the knowledge needed to navigate your real estate journey confidently!