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A thorough examination of a property's condition, identifying any issues such as structural damage, outdated systems, or needed repairs.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!