Glossary of Real Estate Terms
Plain-English definitions of 121+ terms agents, buyers, and sellers run into every day. Filter by category or search A–Z.
Showing 121 of 121
A tax-deferred exchange of one investment property for another of like kind under IRS Section 1031.
A mortgage where the interest rate changes periodically based on a benchmark index, typically after an initial fixed period.
The process of paying off a loan over time through scheduled payments of principal and interest.
The yearly cost of a loan including interest, fees, and certain closing costs — expressed as a single percentage.
An attachment that adds to or modifies the terms of an existing contract.
A written change to an existing executed contract, agreed to by all parties.
A property sold in its current condition, with the seller making no repairs or warranties.
A licensed appraiser's opinion of a property's market value, usually required by the lender to back the loan amount.
The rate at which available homes sell in a market over a specific time — used to gauge supply and demand.
An increase in a property's value over time due to market conditions, improvements, or demand.
The dollar value assigned to a property by a public tax assessor for the purpose of calculating property taxes.
A large lump-sum payment due at the end of a loan term after a series of smaller payments.
Paying upfront points or fees to temporarily or permanently lower the mortgage interest rate.
A secondary offer accepted by the seller in case the primary contract falls through.
An agreement where both parties exchange promises and have obligations to perform.
A contract between a buyer and brokerage outlining the agent's duties and how compensation is handled.
A market with more inventory than buyers, where buyers have more leverage on price and terms.
A licensed agent who represents the buyer's interests in a real estate transaction.
A conventional mortgage that meets Fannie Mae and Freddie Mac size and underwriting limits.
A mortgage not insured by a government agency, typically conforming to Fannie Mae or Freddie Mac guidelines.
A credit or contribution from one party to the other — typically a seller crediting the buyer toward closing costs or repairs.
A condition that must be met for the contract to move forward (financing, inspection, appraisal, sale of current home).
A response to an offer that changes one or more terms, creating a new offer the original party can accept or counter.
The final step of a real estate transaction where ownership transfers from seller to buyer.
Fees and expenses, beyond the purchase price, that buyers and sellers pay at closing (title, escrow, lender fees, taxes).
A standardized lender form delivered at least 3 business days before closing showing final loan terms and costs.
An agent's evaluation of similar recently sold, active, and pending homes used to price a property.
Capitalization rate — net operating income divided by purchase price, used to compare investment property returns.
Net rental income remaining after operating expenses and debt service.
Annual pre-tax cash flow divided by the total cash invested — measures actual return on cash deployed.
The historical sequence of ownership transfers for a property, traced through public records.
Any claim, lien, or defect that may impair a property's title and need to be cleared before sale.
Covenants, Conditions, and Restrictions — the rules that govern a planned community or HOA.
A property type where the owner holds title to an individual unit and shares ownership of common areas.
The percentage of a borrower's gross monthly income that goes toward debt payments. Lenders use it to measure ability to repay.
The portion of the purchase price the buyer pays upfront in cash, not financed by the loan.
The number of days a property has been actively listed for sale before going under contract.
A document where the seller discloses known material defects and conditions of the property.
The buyer's investigation period to inspect, review documents, and confirm the property meets expectations.
An IRS allowance to deduct the cost of an income property over its useful life (27.5 years for residential).
Net operating income divided by debt payments — lenders use it to qualify investment loans.
The legal document that transfers ownership of real property from one party to another.
When a single agent or brokerage represents both the buyer and seller in the same transaction (where legally allowed).
A lender-held account that collects monthly amounts to pay property taxes and insurance when due.
A good-faith deposit the buyer makes to show serious intent, typically held in escrow and credited at closing.
The date a contract becomes binding — usually when the last party signs and notice is delivered.
A clause that automatically raises a buyer's offer above competing offers up to a stated cap.
A neutral third party that holds funds and documents until all contract conditions are met at closing.
The difference between a property's market value and what the owner still owes on the mortgage.
A legal right for someone other than the owner to use part of a property for a specific purpose (e.g., utility access).
Any claim, lien, or restriction on a property that may affect its use or transfer.
A listing whose contract period ended without the property selling.
A government-backed mortgage insured by the Federal Housing Administration, typically with lower down payment requirements.
A mortgage with an interest rate that stays the same for the entire life of the loan.
A contract clause excusing performance due to extraordinary events (natural disasters, war) outside either party's control.
Buying a property, renovating it, and reselling it for profit in a relatively short time frame.
The price a willing buyer and willing seller would agree on in an open market with no pressure.
The most complete form of property ownership, with the right to use, sell, lease, or pass on the property.
A property the owner is selling without representation from a listing agent.
Property price divided by annual gross rent — a quick screening metric for rental properties.
Grantor is the party transferring property; grantee is the party receiving it.
Short-term, asset-based financing — usually from private lenders — secured by the property itself.
Home Equity Line of Credit — a revolving line of credit secured by the equity in your home.
The length of time an investor plans to own a property before selling.
An organization in a planned community or condo that enforces rules and collects dues for shared amenities and maintenance.
The percentage charged by a lender for borrowing money, separate from fees and closing costs.
A licensed inspector's evaluation of a property's condition, typically performed during the buyer's due diligence period.
The total number of homes actively for sale in a given market.
A mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
A standardized lender disclosure showing estimated rate, monthly payment, and closing costs within 3 days of application.
The ratio of the loan amount to the property's appraised value, expressed as a percentage.
A pre-agreed amount one party pays the other for breach — often the earnest money.
The contract between a seller and a brokerage that authorizes the agent to market and sell the property.
A legal claim against a property used as security for a debt that must usually be paid off at closing.
A loan secured by real property, repaid over time with interest.
Insurance that protects the lender if the borrower defaults — required on most low-down-payment loans.
A regional database where licensed agents share property listings and cooperate on commissions.
The middle price in a set of sold homes — half sold for more, half sold for less.
How long the current inventory would take to sell at the current pace — under 4 months is typically a seller's market.
A property with multiple separate housing units, such as a duplex, triplex, or fourplex.
The amount the seller actually receives at closing after paying off the mortgage, commissions, and closing costs.
Annual rental income minus operating expenses, before debt service and taxes.
A lender fee charged for processing and underwriting a new loan, typically 0.5%–1% of the loan amount.
A written proposal from a buyer to purchase a property at specified terms.
A negotiated window during which the buyer can terminate the contract for any reason, often for a small fee.
A scheduled period where a listed home is open for the public to tour without an appointment.
Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment.
Insurance lenders require when a buyer puts down less than 20% on a conventional loan.
Upfront fees paid to lower the interest rate. One point equals 1% of the loan amount.
A lender's written commitment to loan a specific amount based on verified income, credit, and assets.
An informal lender estimate of how much a borrower may be able to finance, based on self-reported information.
The original loan amount borrowed, separate from interest.
Status of a property where contingencies have been removed and it's moving toward closing.
The division of expenses like property taxes or HOA dues between buyer and seller at closing based on the date of transfer.
A projected financial statement showing expected income, expenses, and returns for a property.
A deed that transfers whatever interest the grantor has in a property without any warranties of title.
A lender's commitment to hold a specific interest rate for a set period during the loan process.
Replacing an existing mortgage with a new loan, typically to lower the rate, change the term, or pull cash out.
Total profit on an investment divided by the total cost, expressed as a percentage.
Land and anything permanently attached to it, including structures and built-in fixtures.
A property owned by a lender, typically after an unsuccessful foreclosure auction.
A legal remedy compelling a party to complete the contract as written, rather than paying damages.
A document where the seller discloses known material defects and conditions of the property.
An itemized statement of all costs and credits at closing, prepared by the title or escrow company.
A scheduled appointment for a buyer (usually with their agent) to tour a listed property.
The percentage of the asking price a home actually sells for. Above 100% indicates strong buyer demand.
A market with more buyers than inventory, where sellers can typically command higher prices and better terms.
A sale where the lender agrees to accept less than the mortgage balance owed to release the lien.
A standalone home designed for one family, on its own parcel of land.
A drawing showing a property's exact boundaries, dimensions, and improvements.
A contract clause making deadlines strictly enforceable — missing one is a default.
Legal ownership of a property, evidenced by a deed and recorded with the county.
Insurance that protects the buyer and lender from losses due to defects in the property's title.
An attached home, typically multi-story, sharing one or more walls with adjacent units, often with the lot included.
A government-backed mortgage for qualifying rural and suburban buyers, often with no down payment.
Status of a property where an offer has been accepted but the sale has not yet closed.
A government-backed mortgage available to qualifying veterans and active-duty service members, often with no down payment.
The percentage of time a rental property is unoccupied during a given period.
The buyer's final inspection of a property, typically within 24–48 hours of closing, to confirm condition.
A deed where the grantor guarantees clear title and will defend against future claims.
Local regulations that dictate how a property can be used (residential, commercial, mixed-use, etc.).