Real Estate Term Glossary
Annual Percentage Rate (APR)
Expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment. (the cost to borrow money).
Appraisal
A report highlighting the estimated value of the property completed by a qualified 3rd party. This is typically done for the benefit of the buyer or the buyer's lender to ensure the property is worth the purchase price.
Closing
When the new title and the property is officially recorded by the County Recorder's Office and the ownership of the property transfers to the new buyer.
Closing Costs
The buyer and the seller have expenses associated with the transaction other than that of the actual cost of the home.
Closing Disclosure
A form that provides the final details about the mortgage loan. It includes loan terms, projected monthly payments and how much extra fees will be.
Commission
A percent of the sale price of the home that is paid to real estate agents. The seller pays commission to both the buyer and listing agent.
Comparables
Homes in the area of interest that have recently sold that have similar features.
Contingencies
Conditions which must be met in order to close on a home. Contingencies are typically tied to a date, referred to as a deadline. If the contingency is not satisfied the contract may be cancelled.
Contingent
Offer on a home has been accepted but the finalized sale is contingent upon certain criteria. Typically; appraisal, home inspection or mortgage approval.
Counteroffer
Debt to Income Ratio
Down Payment
Earnest Money
Escrow
The response from the seller or buyer in regard to an offer.
A lender will evaluate whether a borrower's income is large enough to handle their payments on existing debts plus their new mortgage payments.
A percent of the cost of the property that is paid up front as a part of the mortgage.
The good faith deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in a non-interest bearing trust account by a third party. Upon closing, the money will generally be applied to the buyer's down payment or closing costs.
Expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment.
Equity
The difference in the market value of the home versus what is owed on the home.
FHA
A mortgage that is financed through a private lender and insured by the Federal Housing Administration, often requiring a lower down payment and income to qualify.
Fixed Rate
HOA Fee
Home Inspection
Mortgage Insurance (PMI)
Multiple Listing Service
Possession
Preapproval
Purchase Agreement
Offer
Signing
Title
Recording
The interest rate will remain the sale for the entire life of the mortgage.
In addition to a mortgage, certain housing communities such as condos have a monthly fee associated with maintaining the common areas and amenities.
The process in which a professional inspects the seller's home for issues that may not be readily apparent, and then creates a report for the buyer to review.
Insurance written in connection with a mortgage loan that protects the lender in the event the borrower cannot repay their loan.
The national list of real estate properties that are available for sale. These are the most reliable sources to receive up-to-date listing information.
The date agreed in the purchase agreement when you'll get the keys to your new home or hand the keys over of your recently sold home.
The process in which a lender makes an initial evaluation of how much money a buyer might be qualified to borrow based on the preliminary financial information provided.
The legal document explaining the terms of the sale/purchase of the home.
An agreement between a buyer and a seller to purchase real estate.
Scheduled closing as soon as you receive the clear to close from a lender. This is when you will be signing for the home and mortgage.
A bundle of rights in a piece of property. The title company will provide you with the preliminary title report for you to review before accepting the property.
The day after signing the ownership of the property will be transferred to the buyer.