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