A
addendum - (n.) a provision to an existing contract without altering the content of the original contract. Must be signed by all parties.
appraisal - (n.) an estimate of the quantity or value of something. An appraisal on a home is done by an appraiser typically hired by the lender (unless it's a cash deal). The appraised price cannot be lower than the sales price. The bank will only allow you to borrow market value of a home.
asbestos - (n.) a mineral once used in insulation and other materials that can cause respiratory diseases.
B
binder deposit - (n.) a sum of money that a buyer provides as a deposit when making an offer on a property, typically a residential home. The binder deposit demonstrates the buyer's serious intent to purchase the property and is often seen as a sign of good faith.
borrower - (n.) a person or an organization that takes out a loan from a bank under the agreement to pay it back.
broker/brokerage - (n.) licensed real estate person or company that manages licensed real estate salespeople.
buyers agent - (n.) the REALTOR® representing a buyer.
C
CDD fees - (n.) Community Development District fees are a type of financial assessment imposed on properties within specific residential or commercial developments in the United States. These fees are commonly used to finance and maintain essential infrastructure and community services, such as roads, water and sewer systems, stormwater management, parks, recreational facilities, and sometimes even schools, in planned communities. CDD fees generally appear as non-ad valorem assessments on your annual property tax bill.
🌴 CDD fees are commonly found in Florida
closing costs - (n.) Besides the down payment, buyers typically need to pay closing costs. Closing cost are just that; the costs incurred to close on the property. Closing costs are not considered part of the down payment. Closing costs can range anywhere from 2%-5% (over estimating just incase). Co sts incurred may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges. Prepaid costs are those that recur over time, such as property taxes and homeowners' insurance.
closing disclosure - (n.) a five-page form that provides final details about the mortgage loan the buyer have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).
comps - (n.) other similar or identical properties to compare to a specific home. These properties are compared to determine pricing and values of properties.
condominium (condo) - (n.) a privately owned individual unit within a building of other units (or detached in some markets.) Condo owners jointly own shared common areas, such as pools, garages, elevators, outside hallways and gyms, to name a few. While condos are typically found in high-rise buildings, you can find detached condos in some markets.
contingency - (n.) a provision in a contract. "Before this happens, this has to happen first." Ex. Before I you buy a house, you may want to get the home inspected while you are under contract. If the sale is contingent on a home inspection, this means you can (depending on your contract terms) get a home inspection and if you don't like the results, you have the option to cancel the contract because of the home inspection contingency.
D
debt-to-income ratio (DTI) - (n.) the percentage of your gross monthly income that contributes to monthly expenses. The DTI must be no more than 40% monthly expenses and 60% income after expenses.
deed - (n.) a written agreement that, when signed by all parties, conveys title from one party to another.
discount points - (n.) a unit of measurement issued for various loan charges. One point equals one percent (1%) of the amount of the loan.
DOM/DOMP - (n.) Days On Market -length of days a property has been on the MLS.
E
easement - (n.) the right to use land for a specific purpose. A shared driveway is an example of an easement.
earnest money deposit (EMD) - (n.) this is the deposit on the house. It is often referred to the EMD, but it is another way to say "deposit" on the house. EMD deposits are normally 1% of the offered purchase price. Deposits aren't paid unless a seller signs the offer. EMD checks are never made out to the seller directly. Deposits are held in a third party escrow account: normally a brokerage or a title company.
encroachment - (n.) a building--or a portion of a building--that extends beyond the land of the owner and illegally intrudes on adjacent lots, streets, or alleys.
escrow - 1. (n.) use of a third party, which holds an asset or funds before they are transferred from one party to another. The third-party holds the funds until both parties have fulfilled their contractual requirements. The third party that holds the EMD is normally a title company.
2. (v.) place in custody or trust
F
fee simple - (n.) the highest interest in real estate recognized by law.
fixture - (n.) a piece of equipment or furniture which is fixed in position in a building or vehicle. An example of a fixture would be a chandelier.
foreclosure - (n.) the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of the property and selling the property via traditional sale or auctions.
G
gift funds - (n.) funds received as a personal gift from an acceptable donor. An example of gift funds would be if your parents gave you $10,000 specifically for the purchase of your house.
grant - (n.) a sum of money given by an organization or a government entity to purchase a house. You can receive grants from the state to assist with closing costs.
ground rent - (n.) payments made by a holder (property owner) of a leasehold property to the freeholder or a superior leaseholder, as required under a lease. In this sense, a ground rent is created when a freehold piece of land is sold on a long lease or leases. A leaseholder owns the land on which the property stands, so rent payments are made to the leaseholder. Ground rent may be “bought out” in a lump sum of cash.
🦀 Ground Rent can be found in many Baltimore, Maryland properties.
H
homeowners association (HOA) - (n.) a group of homeowners who set costs, create and enforce covenants. HOAs are managed by a property management company. The property management company handles maintenance and service for the included amenities.
I
improvement - (n.) any structure built on the property to enhance the property value.
interest - (1.) (n.) money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. In this content, an example of interest would be the interest you pay on a mortgage.
(2.) (n.) a legal concern, title, or right in property. In this context of the word, an example of having interest in a property would be that you are under contract and a title company has your deposit. You have interest in the property because of your deposit.
J
joint tenancy - (n.) equal ownership of a property by two or more parties. If an owner passes away, their interest in the property passes onto the co-owners. Joint tenancy is one of the three forms of co-ownership. (See also: tenancy in common and tenancy by the entirety)
K
kick out addendum/clause - (n.) allows the sellers the ability to continue marketing a property and in the event that they receive an offer without contingencies, or conditions that must be met. One of the most common contingencies is that the buyers require an appraisal for their loan. But a kick-out clause in the sales contract allows the seller to "kick out" a buyer with contingencies within an agreed upon deadline if a better offer comes around. So if a buyer needs a loan to purchase a property, but another buyer came along and offered to pay cash, then the current buyer must drop the appraisal contingency or the seller can accept a new offer without contingencies.
L
lender - (n.) usually referring to the bank/institution providing financing. The word can refer to the bank or the loan officer. Synonyms would be bank, mortgage officer (if referring to the bank's representative), or borrowee.
latent defect - (n.) a fault in the property that could not have been discovered before a reasonable inspection before a sale.
lien - (n.) a right given by law by certain creditors to have their debts paid out of the property of a defaulting debtor. An example of a lien would be for unpaid taxes.
listing agent - (n.) the REALTOR® who represents the seller. Listing agents can also be referred to as sellers agents.
M
month-to-month lease - (n.) a rental agreement for a one month period that is renewed automatically at the start of each new month.. In order to end a month-to-month lease normally requires advance notice. Landlords sometimes require 30 days notice.
mortgage insurance - (n.) required with FHA loans., funds provided to the lender in the event you stop your mortgage payments. You will be required to pay mortgage insurance if your down payment is lower than 20%.
multiple listing service (MLS) - (n.) an online website network used by a group of real estate brokers to advertise homes for sale with their real estate brokerage.. Data from the MLS can often be distributed to third party companies who provide an MLS search service.
N
null - (adj.) with no legal standing or enforcement (synonym: void).
O
occupancy - (n.) the use or intended use of a building or a portion of a building. If the seller is living in the home while it is listed on the market, it means the home is occupied.
P
pre-qualification - (n.) in order to get a mortgage, a buyer must first apply with a lender to find out how much a borrower can afford. For more information on financing, go to Get Money. To get pre-qualified, go to Get Started and check off "Yes" that you would like to get pre-qualified.
Q
quitclaim deed - (n.) a deed where no money is exchanged.
R
REO (Real Estate Owned) - (n.) bank owned property. There's one key difference between a house that's in foreclosure and a house listed as "real estate owned," or REO. A home in foreclosure is being taken back by the mortgage lender; an REO home has already been taken back, but the lender hasn't been able to sell it.
ratify - (v.) to receive signatures by all involved parties to create a binding agreement. When a seller has signed a buyer's signed offer, it becomes a ratified contract.
S
seller subsidy - (n.) contribution from a seller towards buyers closing costs and other fees.
settlement - (n.) ownership of a property conveys to a new owner. On the settlement date in your contract, the buyer and seller meet at an agreed upon location to sign final paperwork. The new owners receive their keys. Settlement can also be known as closing.
sellers agent - (n.) the real estate agent who represents the seller, also known as a listing agent.
short sale - (n.) when a property owner's mortgage lender allows the owner to sell the home for less than the amount due on the home. If the homeowner fails to continue paying while the home is listed as a short sale, the foreclosure process will beginning. In which case, the ownership will have changed to the lender.
survey - (n.) boundaries and property lines are marked and recorded. Sometimes, buyers would like to know the property lines of a property. The only way to do that accurately is to hire a surveyor to conduct a land survey.
T
tenancy in common - (n.) another form of co-ownership, in which owners can own a specific amount of interest in the property. For example, 3 buyers buy a home--one buyer owns 50%, one owns 25% and the and buyer owns 25% interest. In the event of the death of an owner, the deceased owner's interest in the property does not automatically convey to the other two owners. Other forms of co-ownership, see: tenancy by the entirety (below) and joint tenancy.
tenancy by the entirety - (n.) another form of co-ownership, which is only provided to married couples. Other forms of co-ownership, see: tenancy in common and joint tenancy.
title- (n.) legal history/ownership of a property. Cars have titles as well.
title company - (n.) the company that handles the legal transfer of ownership.
title insurance - (n.) the insurance to protect your legal ownership past, present, and future.
U
under contract - (n.) when you are legally bound to follow through with the purchase or sale of a home.
underwriting - (n.) a process that the lender uses to access risk and ensure a borrower meets all of their minimum requirements for a mortgage. The lender will build a file for the borrower, including all required documents which is turned in to the underwriter for the loan. Underwriting is the process used to calculate the level of risk that is involved and to determine whether to grant financing.
V
void - (adj.) not valid or legally binding (synonym: null)
voidable - (adj.) voidable, in law, is a transaction or action that is valid but may be annulled by one of the parties to the transaction.
W
walk-through - (n.) A final inspection of a property by the buyer before closing to ensure that the property is in the agreed-upon condition and that any negotiated repairs have been completed.
withdrawn - (adj.) when a property is no longer actively marketed, and potential buyers are not able to view or make offers on the property as a result.