Common Real Estate Definitions

Posted by on Friday, September 30th, 2016 at 2:24pm

Buying and selling a home is a confusing process, full of baffling terminology that makes you wonder what you’re really signing up for. This quick list of some common real estate definitions might be a handy reference sheet for you to take along the next time you are out looking for houses.

Amortization: length of time over which your mortgage will be paid.

Appraisal: process of estimating the value of a property, done by an appraiser - a professional skilled in appraisals.

Closing costs: costs that you pay on the close of the home, which can include legal fees, land transfer tax and more.

Counter offer: when you original offer is not accepted, you may give a second offer with amended conditions.

Curb appeal: how the home looks from the street (on first appearance).

Down payment: portion of the home price that you’ve put down from your own funds on the purchase of a home.

Equity: difference between the value of the home and its debts.

Foreclosure: legal process where the lender takes possession of the property due to non-payment of the mortgage.

Mortgage broker: a person who will find you the best rates and terms for your mortgage.

Offer to purchase: written contract setting out the terms of buying a home.

Open house: a home is held open for public viewing, as set up by the real estate agent listed to sell it.

Owner financing: Where the property seller provides all or some of the financing on the sale of the house.

Principal: the amount borrowed of the loan that is not interest.

Property insurance: insurance for the building in the event of damage or destruction.

Property taxes: taxes charged by the municipality, based on the value of the home.

Real estate agent: a person who represents a buyer or a seller in the sale of a home.

Second mortgage: A mortgage that has a lien that is subordinate to the first mortgage.

Secured loan: A loan backed by collateral.

Title: gives the holder of the title full and exclusive ownership of the land and buildings on it.

Trustee: A fiduciary who controls the property for the benefit of another.

Truth-in-Lending: A federal law that requires all lenders to disclose in writing all terms and conditions of a mortgage.

Two-step mortgage: An adjustable rate mortgage that has one interest rate for the first few years and a different one for the remainder of the term.

Title insurance: insurance against loss or damage from a matter that affects the property.

Vendor: the seller of the property.

If you need any more help deciphering real estate terms, feel free to contact me at any time!


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