| Every business has it's jargon and residential real | | | | listing databases such as the multiple listing service. |
| estate is no exception. Mark Nash author of 1001 | | | | Inclusions: Fixtures or personal property that are |
| Tips for Buying and Selling a Home shares commonly | | | | included in a contract or offer to purchase. |
| used terms with home buyers and sellers. | | | | Independent contractor: A real estate sales agent |
| 1031 exchange or Starker exchange: The delayed | | | | who conducts real estate business through a broker. |
| exchange of properties that qualifies for tax | | | | This agent does not receive salary or benefits from |
| purposes as a tax-deferred exchange. | | | | the broker. |
| 1099: The statement of income reported to the IRS | | | | Inspection rider: Rider to purchase agreement |
| for an independent contractor. | | | | between third party relocation company and buyer |
| A/I: A contract that is pending with attorney and | | | | of transferee's property stating that property is |
| inspection contingencies. | | | | being sold "as is." All inspection reports conducted by |
| Accompanied showings: Those showings where the | | | | the third party company are disclosed to the buyer |
| listing agent must accompany an agent and his or her | | | | and it is the buyer's duty to do his/her own |
| clients when viewing a listing. | | | | inspections and tests. |
| Addendum: An addition to; a document. | | | | Installment land contract: A contract in which the |
| Adjustable rate mortgage (ARM): A type of | | | | buyer takes possession of the property while the |
| mortgage loan whose interest rate is tied to an | | | | seller retains the title to the property until the loan is |
| economic index, which fluctuates with the market. | | | | paid. |
| Typical ARM periods are one, three, five, and seven | | | | Interest rate float: The borrower decides to delay |
| years. | | | | locking their interest rate on their loan. They can float |
| Agent: The licensed real estate salesperson or broker | | | | their rate in expectation of the rate moving down. At |
| who represents buyers or sellers. | | | | the end of the float period they must lock a rate. |
| Annual percentage rate (APR): The total costs | | | | Interest rate lock: When the borrower and lender |
| (interest rate, closing costs, fees, and so on) that are | | | | agree to lock a rate on loan. Can have terms and |
| part of a borrower's loan, expressed as a percentage | | | | conditions attached to the lock. |
| rate of interest. The total costs are amortized over | | | | List date: Actual date the property was listed with |
| the term of the loan. | | | | the current broker. |
| Application fees: Fees that mortgage companies | | | | List price: The price of a property through a listing |
| charge buyers at the time of written application for a | | | | agreement. |
| loan; for example, fees for running credit reports of | | | | Listing: Brokers written agreement to represent a |
| borrowers, property appraisal fees, and | | | | seller and their property. Agents refer to their |
| lender-specific fees. | | | | inventory of agreements with sellers as listings. |
| Appointments: Those times or time periods an agent | | | | Listing agent: The real estate sales agent that is |
| shows properties to clients. | | | | representing the sellers and their property, through a |
| Appraisal: A document of opinion of property value at | | | | listing agreement. |
| a specific point in time. | | | | Listing agreement: A document that establishes the |
| Appraised price (AP): The price the third-party | | | | real estate agent's agreement with the sellers to |
| relocation company offers (under most contracts) | | | | represent their property in the market. |
| the seller for his or her property. Generally, the | | | | Listing appointment: The time when a real estate |
| average of two or more independent appraisals. | | | | sales agent meets with potential clients selling a |
| "As-is": A contract or offer clause stating that the | | | | property to secure a listing agreement. |
| seller will not repair or correct any problems with the | | | | Listing exclusion: A clause included in the listing |
| property. Also used in listings and marketing materials. | | | | agreement when the seller (transferee) lists his or |
| Assumable mortgage: One in which the buyer agrees | | | | her property with a broker. |
| to fulfill the obligations of the existing loan agreement | | | | Loan: An amount of money that is lent to a |
| that the seller made with the lender. When assuming | | | | borrower who agrees to repay the amount plus |
| a mortgage, a buyer becomes personally liable for | | | | interest. |
| the payment of principal and interest. The original | | | | Loan application: A document that buyers who are |
| mortgagor should receive a written release from the | | | | requesting a loan fill out and submit to their lender. |
| liability when the buyer assumes the original | | | | Loan closing costs: The costs a lender charges to |
| mortgage. | | | | close a borrower's loan. These costs vary from |
| Back on market (BOM): When a property or listing is | | | | lender to lender and from market to market. |
| placed back on the market after being removed | | | | Loan commitment: A written document telling the |
| from the market recently. | | | | borrowers that the mortgage company has agreed |
| Back-up agent: A licensed agent who works with | | | | to lend them a specific amount of money at a |
| clients when their agent is unavailable. | | | | specific interest rate for a specific period of time. |
| Balloon mortgage: A type of mortgage that is | | | | The loan commitment may also contain conditions |
| generally paid over a short period of time, but is | | | | upon which the loan commitment is based. |
| amortized over a longer period of time. The | | | | Loan package: The group of mortgage documents |
| borrower typically pays a combination of principal and | | | | that the borrower's lender sends to the closing or |
| interest. At the end of the loan term, the entire | | | | escrow. |
| unpaid balance must be repaid. | | | | Loan processor: An administrative individual who is |
| Back-up offer: When an offer is accepted contingent | | | | assigned to check, verify, and assemble all of the |
| on the fall through or voiding of an accepted first | | | | documents and the buyer's funds and the borrower's |
| offer on a property. | | | | loan for closing. |
| Bill of sale: Transfers title to personal property in a | | | | Loan underwriter: One who underwrites a loan for |
| transaction. | | | | another. Some lenders have investors underwrite a |
| Board of REALTORS® (local): An association of | | | | buyer's loan. |
| REALTORS® in a specific geographic area. | | | | Lockbox: A tool that allows secure storage of |
| Broker: A state licensed individual who acts as the | | | | property keys on the premises for agent use. A |
| agent for the seller or buyer. | | | | combo uses a rotating dial to gain access with a |
| Broker of record: The person registered with his or | | | | combination; a Supra® (electronic lockbox or ELB) |
| her state licensing authority as the managing broker | | | | features a keypad. |
| of a specific real estate sales office. | | | | Managing broker: A person licensed by the state as a |
| Broker's market analysis (BMA): The real estate | | | | broker who is also the broker of record for a real |
| broker's opinion of the expected final net sale price, | | | | estate sales office. This person manages the daily |
| determined after acquisition of the property by the | | | | operations of a real estate sales office. |
| third-party company. | | | | Marketing period: The period of time in which the |
| Broker's tour: A preset time and day when real | | | | transferee may market his or her property (typically |
| estate sales agents can view listings by multiple | | | | 45, 60, or 90 days), as directed by the third-party |
| brokerages in the market. | | | | company's contract with the employer. |
| Buyer: The purchaser of a property. | | | | Mortgage banker: One who lends the bank's funds to |
| Buyer agency: A real estate broker retained by the | | | | borrowers and brings lenders and borrowers |
| buyer who has a fiduciary duty to the buyer. | | | | together. |
| Buyer agent: The agent who shows the buyer's | | | | Mortgage broker: A business that or an individual who |
| property, negotiates the contract or offer for the | | | | unites lenders and borrowers and processes |
| buyer, and works with the buyer to close the | | | | mortgage applications. |
| transaction. | | | | Mortgage loan servicing company: A company that |
| Carrying costs: Cost incurred to maintain a property | | | | collects monthly mortgage payments from |
| (taxes, interest, insurance, utilities, and so on). | | | | borrowers. |
| Closing: The end of a transaction process where the | | | | Multiple listing service (MLS): A service that compiles |
| deed is delivered, documents are signed, and funds | | | | available properties for sale by member brokers. |
| are dispersed. | | | | Multiple offers: More than one buyers broker present |
| CLUE (Comprehensive Loss Underwriting Exchange): | | | | an offer on one property where the offers are |
| The insurance industry's national database that | | | | negotiated at the same time. |
| assigns individuals a risk score. CLUE also has an | | | | National Association of REALTORS® (NAR): A |
| electronic file of a properties insurance history. These | | | | national association comprised of real estate sales |
| files are accessible by insurance companies nationally. | | | | agents. |
| These files could impact the ability to sell property as | | | | Net sales price: Gross sales price less concessions to |
| they might contain information that a prospective | | | | the buyers. |
| buyer might find objectionable, and in some cases | | | | Off market: A property listing that has been |
| not even insurable. | | | | removed from the sale inventory in a market. A |
| Commission: The compensation paid to the listing | | | | property can be temporarily or permanently off |
| brokerage by the seller for selling the property. A | | | | market. |
| buyer may also be required to pay a commission to | | | | Offer to purchase: When a buyer proposes certain |
| his or her agent. | | | | terms and presents these terms to the seller. |
| Commission split: The percentage split of commission | | | | Office tour/caravan: A walking or driving tour by a |
| compen-sation between the real estate sales | | | | real estate sales office of listings represented by |
| brokerage and the real estate sales agent or broker. | | | | agents in the office. Usually held on a set day and |
| Competitive Market Analysis (CMA): The analysis | | | | time. |
| used to provide market information to the seller and | | | | Parcel identification number (PIN): A taxing authority's |
| assist the real estate broker in securing the listing. | | | | tracking number for a property. |
| Condominium association: An association of all owners | | | | Pending: A real estate contract that has been |
| in a condominium. | | | | accepted on a property but the transaction has not |
| Condominium budget: A financial forecast and report | | | | closed. |
| of a condominium association's expenses and savings. | | | | Personal assistant: A real estate sales agent |
| Condominium by-laws: Rules passed by the | | | | administrative assistant. |
| condominium association used in administration of the | | | | Planned unit development (PUD): Mixed-use |
| condominium property. | | | | development that sets aside areas for residential use, |
| Condominium declarations: A document that legally | | | | commercial use, and public areas such as schools, |
| establishes a condominium. | | | | parks, and so on. |
| Condominium right of first refusal: A person or an | | | | Preapproval: A higher level of buyer/borrower |
| association that has the first opportunity to purchase | | | | prequalification required by a mortgage lender. Some |
| condominium real estate when it becomes available or | | | | preapprovals have conditions the borrower must |
| the right to meet any other offer. | | | | meet. |
| Condominium rules and regulation: Rules of a | | | | Prepaid interest: Funds paid by the borrower at |
| condominium association by which owners agree to | | | | closing based on the number of days left in the |
| abide. | | | | month of closing. |
| Contingency: A provision in a contract requiring certain | | | | Prepayment penalty: A fine imposed on the borrower |
| acts to be completed before the contract is binding. | | | | by the lender when the loan is paid off before it |
| Continue to show: When a property is under contract | | | | comes due. |
| with contingencies, but the seller requests that the | | | | Prequalification: The mortgage company tells a buyer |
| property continue to be shown to prospective | | | | in advance of the formal mortgage application, how |
| buyers until contingencies are released. | | | | much money the borrower can afford to borrow. |
| Contract for deed: A sales contract in which the | | | | Some prequalifications have conditions that the |
| buyer takes possession of the property but the seller | | | | borrower must meet. |
| holds title until the loan is paid. Also known as an | | | | Preview appointment: When a buyer's agent views a |
| installment sale contract. | | | | property alone to see if it meets his or her buyer's |
| Conventional mortgage: A type of mortgage that has | | | | needs. |
| certain limitations placed on it to meet secondary | | | | Pricing: When the potential seller's agent goes to the |
| market guidelines. Mortgage companies, banks, and | | | | potential listing property to view it for marketing and |
| savings and loans underwrite conventional mortgages. | | | | pricing purposes. |
| Cooperating commission: A commission offered to | | | | Principal: The amount of money a buyer borrows. |
| the buyer's agent brokerage for bringing a buyer to | | | | Principal, interest, taxes, and insurance (PITI): The |
| the selling brokerage's listing. | | | | four parts that make up a borrower's monthly |
| Cooperative (Co-op): Where the shareholders of the | | | | mortgage payment. Private mortgage insurance (PMI): |
| corporation are the inhabitants of the building. Each | | | | A special insurance paid by a borrower in monthly |
| shareholder has the right to lease a specific unit. The | | | | installments, typically of loans of more than 80 |
| difference between a co-op and a condo is in a | | | | percent of the value of the property. |
| co-op, one owns shares in a corporation; in a condo | | | | Professional designation: Additional nonlicensed real |
| one owns the unit fee simple. | | | | estate education completed by a real estate |
| Counteroffer: The response to an offer or a bid by | | | | professional. |
| the seller or buyer after the original offer or bid. | | | | Professional regulation: A state licensing authority that |
| Credit report: Includes all of the history for a | | | | oversees and disciplines licensees. |
| borrower's credit accounts, outstanding debts, and | | | | Promissory note: A promise-to-pay document used |
| payment timelines on past or current debts. | | | | with a contract or an offer to purchase. |
| Credit score: A score assigned to a borrower's credit | | | | R & I: Estimated and actual repair and |
| report based on information contained therein. | | | | improvement costs. |
| Curb appeal: The visual impact a property projects | | | | Real estate agent: An individual who is licensed by the |
| from the street. | | | | state and who acts on behalf of his or her client, the |
| Days on market: The number of days a property has | | | | buyer or seller. The real estate agent who does not |
| been on the market. | | | | have a broker's license must work for a licensed |
| Decree: A judgment of the court that sets out the | | | | broker. |
| agreements and rights of the parties. | | | | Real estate contract: A binding agreement between |
| Disclosures: Federal, state, county, and local | | | | buyer and seller. It consists of an offer and an |
| requirements of disclosure that the seller provides | | | | acceptance as well as consideration (i.e., money). |
| and the buyer acknowledges. | | | | REALTOR®: A registered trademark of the |
| Divorce: The legal separation of a husband and wife | | | | National Association of REALTORS® that can be |
| effected by a court decree that totally dissolves the | | | | used only by its members. |
| marriage relationship. | | | | Release deed: A written document stating that a |
| DOM: Days on market. | | | | seller or buyer has satisfied his or her obligation on a |
| Down payment: The amount of cash put toward a | | | | debt. This document is usually recorded. |
| purchase by the borrower. | | | | Relist: Property that was listed with another broker |
| Drive-by: When a buyer or seller agent or broker | | | | but relisted with a current broker. |
| drives by a property listing or potential listing. | | | | Rider: A separate document that is attached to a |
| Dual agent: A state-licensed individual who represents | | | | document in some way. This is done so that an |
| the seller and the buyer in a single transaction. | | | | entire document does not need to be rewritten. |
| Earnest money deposit: The money given to the | | | | Salaried agent: A real estate sales agent or broker |
| seller at the time the offer is made as a sign of the | | | | who receives all or part of his or her compensation in |
| buyer's good faith. | | | | real estate sales in the form of a salary. |
| Escrow account for real estate taxes and insurance: | | | | Sale price: The price paid for a listing or property. |
| An account into which borrowers pay monthly | | | | Seller (owner): The owner of a property who has |
| prorations for real estate taxes and property | | | | signed a listing agreement or a potential listing |
| insurance. | | | | agreement. |
| Exclusions: Fixtures or personal property that are | | | | Showing: When a listing is shown to prospective |
| excluded from the contract or offer to purchase. | | | | buyers or the buyer's agent (preview). |
| Expired (listing): A property listing that has expired | | | | Special assessment: A special and additional charge to |
| per the terms of the listing agreement. | | | | a unit in a condominium or cooperative. Also a special |
| Fax rider: A document that treats facsimile | | | | real estate tax for improvements that benefit a |
| transmission as the same legal effect as the original | | | | property. |
| document. | | | | State Association of REALTORS®: An association |
| Feedback: The real estate sales agent and/or his or | | | | of REALTORS® in a specific state. |
| her client's reaction to a listing or property. | | | | Supra®: An electronic lockbox (ELB) that holds |
| Requested by the listing agent. | | | | keys to a property. The user must have a Supra |
| Fee simple: A form of property ownership where the | | | | keypad to use the lockbox. |
| owner has the right to use and dispose of property | | | | Temporarily off market (TOM): A listed property that |
| at will. | | | | is taken off the market due to illness, travel, needed |
| FHA (Federal Housing Administration) Loan Guarantee: | | | | repairs, and so on. |
| A guarantee by the FHA that a percentage of a loan | | | | Temporary housing: Housing a transferee occupies |
| will be underwritten by a mortgage company or | | | | until permanent housing is selected or becomes |
| banker. | | | | available. |
| Fixture: Personal property that has become part of | | | | Transaction: The real estate process from offer to |
| the property through permanent attachment. | | | | closing or escrow. |
| Flat fee: A predetermined amount of compensation | | | | Transaction management fee (TMF): A fee charged |
| received or paid for a specific service in a real estate | | | | by listing brokers to the seller as part of the listing |
| transaction. | | | | agreement. |
| For sale by owner (FSBO): A property that is for sale | | | | Transaction sides: The two sides of a transaction, |
| by the owner of the property. | | | | sellers and buyers. The term used to record the |
| Gift letter: A letter to a lender stating that a gift of | | | | number of transactions in which a real estate sales |
| cash has been made to the buyer(s) and that the | | | | agent or broker was involved during a specific period. |
| person gifting the cash to the buyer is not expecting | | | | 24-hour notice: Allowed by law, tenants must be |
| the gift to be repaid. The exact wording of the gift | | | | informed of showing 24 hours before you arrive. |
| letter should be requested of the lender. | | | | Under contract: A property that has an accepted real |
| Good faith estimate: Under the Real Estate | | | | estate contract between seller and buyer. |
| Settlement Procedures Act, within three days of an | | | | VA (Veterans Administration) Loan Guarantee: A |
| application submission, lenders are required to provide | | | | guarantee on a mortgage amount backed by the |
| in writing to potential borrowers a good faith | | | | Department of Veterans Affairs. |
| estimate of closing costs. | | | | Virtual tour: An Internet web/cd-rom-based video |
| Gross sale price: The sale price before any | | | | presentation of a property. |
| concessions. | | | | VOW's (Virtual Office web sites): An Internet based |
| Hazard insurance: Insurance that covers losses to real | | | | real estate brokerage business model that works |
| estate from damages that might affect its value. | | | | with real estate consumers in same way as a brick |
| Homeowner's insurance: Coverage that includes | | | | and mortar real estate brokerage. |
| personal liability and theft insurance in addition to | | | | W-2: The Internal Revenue form issued by employer |
| hazard insurance. | | | | to employee to reflect compensation and deductions |
| HUD/RESPA (Housing and Urban Development/Real | | | | to compensation. |
| Estate Settlement Procedures Act): A document and | | | | W-9: The Internal Revenue form requesting taxpayer |
| statement that details all of the monies paid out and | | | | identification number and certification. |
| received at a real estate property closing. | | | | Walk-through: A showing before closing or escrow |
| Hybrid adjustable rate: Offers a fixed rate the first 5 | | | | that permits the buyers one final tour of the |
| years and then adjusts annually for the next 25 | | | | property they are purchasing. |
| years. | | | | Will: A document by which a person disposes of his |
| IDX (Internet Data Exchange): Allows real estate | | | | or her property after death. |
| brokers to advertise each other's listings posted to | | | | |