Use this list of real estate definitions to help you understand common terms used during the home sales process.
Appraisal: A document of opinion of the property value at a specific point in time.
As-is: A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.
Backup offer: When an offer is accepted contingent on the fall through or voiding of an accepted first offer.
Buyer’s agent: The agent who shows the buyer’s property, negotiates the contract, or offer, and works with the buyer to close the transaction.
Closing: The end of a transaction where documents are signed, and funds are dispersed.
Closing costs: The fees paid at the closing of a real estate transaction.
Comparative Market Analysis: A study done by real estate sales agents and brokers using active, pending, and sold comparable properties to estimate a price for a property.
Conventional sale: When the property is owned outright and has no mortgage.
Days on market (DOM): The # of days a home has been listed on the market.
Dual Agency: The representation of opposing principals (buyers & sellers) at the same time.
Due diligence: The process of gathering information about the condition and legal status of all the assets that will be sold.
Earnest money deposit: Money given to the seller at the time an offer is made as a sign of the buyer’s good faith.
Equity: The number of dollars invested by a homeowner into their home.
Escrow: A bond, deed, or other document kept in the custody of a 3rd party and taking effect when specified conditions are met.
Home inspection: A home inspector examines your home for integrity (HVAC system, electrical, plumbing, attic, flooring, foundation, etc.
Listing agent: The agent that represents the home seller during a real estate transaction.
Listing price: The price of a property through a listing agreement.
Market value: The highest price in terms of money that a property will bring in a competitive and open market under all the conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus.
Multiple listing service (MLS): A compilation of available properties for sale by member brokers.
Natural hazards disclosure report: A report that states risks of natural hazards for the property.
Offer to purchase: When a buyer proposes certain terms and presents these terms to the seller.
Open house (public): A real estate contract that has been accepted on a property but the transaction has not closed.
Pending: A real estate contract that has been accepted on a property but the transaction has not closed.
Pre-approval: A higher level of buyer/borrower prequalification that is required by a mortgage lender. Some pre-approvals have certain conditions the borrower must meet.
Pre-qualification: The mortgage company tells a buyer in advance of the formal mortgage application, how much money the borrower can afford to borrow – some have conditions that the borrower must meet.
Purchase and sale agreement: The written contract between the buyer and seller that outlines the terms of the sale.
REALTOR©: A registered trademark of the NATIONAL ASSOCIATION OF REALTORS – used only by its members.
Seller concession: Incentives to motivate buyers to purchase a home.
Seller disclosure: Information about the property like major renovations, water damage, pest, etc.
Short sale: The property is sold for less than the debt secured by the property.
Title search: Looks at public records of a property’s history – sales, purchases, taxes, etc.
Under contract: A property that has an accepted real estate contract between seller and buyer.
You can find more terminology in our FAQ section.
Click here to download this list of real estate terms.
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