Real Estate Glossary

Acceptance
Agreeing to the terms of an offer, thereby creating a contract. As soon as the seller signs on to the purchase offer, you’re in contract for the sale of the house, and neither party can back out without facing consequences — for the buyer, losing the earnest money deposit and, in the seller’s case, a potential lawsuit.
Addendum
Additional pages of material that are added to and become part of a contract.
Agent
A real estate agent is an individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker. This can comprise showing and listing properties, filling in contracts, e.g. listing agreements, and purchase contracts.
Appraisal
A professional analysis used to estimate the value of the property. This may include examples of sales of similar properties.
Assessed Value
Typically the value placed on property for the purpose of taxation.
Arbitration
A process where disputes are settled by a neutral third party.
Broker
An individual or firm that acts as an agent between providers and users of products or services, such as a real estate broker.
Clear Title
Ownership that is free of liens, defects, or other legal encumbrances.
Closing
A process by which all parties to a real estate transaction conclude the sale, or mortgage. The process includes the signing and transfer of documents and distribution of funds.
Commission
Compensation paid to an agent for services performed, usually based on a percentage of the price of the items sold.
Contingency
A condition that must be met before a contract is legally binding.
Counter Offer
An offer made in response to a previous offer. A counter offer is a rejection of the original offer, and does not create a binding contract unless accepted by the original offeror.
Deed
The legal document which conveys ownership or title of property from one party to another.
Deed in Lieu of Foreclosure
The transfer of title from a borrower to the lender to satisfy the mortgage debt and avoid foreclosure.
Duplex
Usually refers to a structure used for residential purposes and consisting of two living units with a common.
Earnest Money
Deposit/partial payment made by a buyer of real estate as evidence of good faith.
Easement
A right or privilege to use, or access to, land owned by another.
Equity
The interest or value which an owner has in real estate above the total amount of the liens against the property.
Escrow
The deposit of documents and/or funds with instructions with a third neutral party to carry out the provisions of a contract.
Estate
The quantity, degree, nature and extent of interest a person has in real property.
Fair Market Value
The price at which property would be transferred between a willing buyer and willing seller, each of whom has a reasonable knowledge of all pertinent facts, and with neither party being under pressure to buy or sell.
Fixtures
Appurtenances attached to the land or improvements, which usually cannot be removed
without agreement as they become real property; examples — plumbing fixtures, store fixtures built into the
property, etc.
Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood hazard zones.
Home Inspection
A professional inspection of a home to determine the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.
Homeowner's Warranty
Insurance offered by a seller that covers certain home repairs and fixtures for a specified period of time.
Homeowners' Association
An organization of homeowners residing within a particular area whose principal purpose is to ensure the provision and maintenance of community facilities and services for the common benefit of the residents.
HUD
The Department of Housing and Urban Development which is responsible for U.S. government housing and urban development programs.
Landlord
One who rents his/her property to another. The lessor in a lease.
Lease
A contract between owner and tenant, setting out conditions upon which tenant may occupy and use the property and the term of the occupancy.
Multiple Listing Service (MLS)
An association through which member real estate agents exchange information on listings of real estate properties and share commissions with members who locate purchasers.
Planned Unit Development (PUD)
A real estate development in which individuals hold title to a residential lot and home while the common facilities are owned and maintained by a homeowners’ association for the benefit and use of the individual PUD unit owners. Sometimes the owners of separate interests also have an undivided interest in the common area.
Recording
The filing of legal documents in the appropriate public record. Documents filed with the Recorder are considered to be placed on open notice to the general public of that county.
Tenant
Someone who has legal possession and use of real property belonging to another.
Title
The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land. Combination of all elements constituting proof of ownership.
Title Report
A report which discloses condition of the title, made by a title company preliminary to issuance of title insurance policy.
Veterans Affairs (VA)
A federal government agency that provides benefits to veterans and their dependents, including guaranteed home loans.
Zoning
The act of a city or county authority specifying type of use to which property may be put in a given area.
MENU