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Real Estate Terms
Agent
An authorized person who manages or transacts business for
another
Buyer Agent:
An agent who represents the buyer only in a real estate
transaction. A buyer agent may be paid by the buyer, seller,
or listing agent at closing, provided all parties consent.
Listing Agent:
The agent who represents the sellers interests only.
Selling
Agent:
The agent who obtains a buyer. A selling agent may represent
the buyer, or may be a subagent of the seller.
Subagent:
A salesperson who works for an agent.
Amenities
Features that enhance the value or desirability of a
property.
Appraisal
An appraiser’s opinion of the value of a property.
Appreciation
An increase in home value
Assessment
An official valuation of property for tax purposes. Payments
made by condominium or cooperative owners for their share of
building maintenance expenses.
Broker
An independent business person, who sets real estate office
policies, hires employees, determines their compensation, and
supervises their activities.
Closing
The point at which real estate formally changes ownership.
Closing costs are fees paid for services associated with a
home's closing such as title insurance, surveying fees,
recording fees, deeds, and affidavits.
CMA
(Competitive Market Analysis)
A method of determining the value of a property by comparing
the prices paid for similar properties.
Code of
Ethics
A written standard of ethical conduct embraced by the NATIONAL
ASSOCIATION OF REALTORS®,
Commission
Compensation paid to a real estate agent (usually by the
seller) for services rendered in connection with the sale,
exchange, or lease of property.
Condominium
(Condo)
Individual ownership of a portion of a building, with common
areas shared by all owners. Maintenance fees called
"assessments" are paid to the condominium association to
maintain, repair, or improve the property.
Counter Offer
A new offer as to price, terms, and conditions, made in
response to a prior, unacceptable offer. A counter offer
terminates an original offer.
Disclosure
Revealing what previously was private knowledge. Any statement
of fact that is required by law.
Down Payment
A percentage of the purchase price the buyer pays in cash.
Earnest Money
A buyer's partial payment to the seller as a show of good
faith in completing the transaction.
Equity
The difference between the current market value of a property
and the claims--such as the unpaid portion of a mortgage--that
exist against it.
Escrow
The closing of a real estate transaction through a neutral
third party who holds funds and/or documents for delivery
after specific conditions have been met.
Exclusive
Listing
A written agreement in which the seller appoints only one
agent to market the property for a specific period of time. If
the owner sells the property himself, he is not required to
pay a commission.
Exclusive
Right to Sale Listing
A written agreement between an agent and a property owner
stating that the owner will pay a commission to the agent if
the property is sold during a specific time period--whether or
not the agent is responsible for the sale.
Federal Fair
Housing Law
Refers to Title VIII of the Civil Rights Act, and stipulates
that discrimination based on race, color, sex, familial
status, handicap, religion, or national origin is illegal in
connection with the sale or rental of most dwellings.
FHA (Federal
Housing Administration)
A federal agency established to improve housing standards and
conditions. The FHA provides mortgage insurance to approved
lending institutions.
HUD (U.S.
Department of Housing and Urban Development
A federal department active in a variety of national housing
programs including urban renewal and public housing.
Improvements
Additions intended to increase the value of a property.
Inspection
An examination of a property by the buyer, agent, title
insurance company, or other interested party.
Lien
A charge or claim by one party on the property of another as
security for the payment of a debt.
Listing
A written agreement between a property owner and a real estate
broker authorizing the broker to find a buyer.
Market Value
The price a property will command on the open market.
MLS (Multiple
Listing Service)
A means by which agents are informed of the properties offered
for sale by other agents.
Mortgage
A legal document pledging property as security for the payment
of a loan.
Mortgage
Insurance
An insurance plan that protects the lender if the borrower
does not repay a loan. Mortgage insurance is required when a
home buyer makes less than a 20% down payment at the time of
purchase. Private mortgage insurance (PMI) covers conventional
(fixed-year, fixed-rate) loans. The Federal Housing
Administration charges a mortgage insurance premium (MIP) on
FHA loans.
Offer
A proposal to purchase property at a specified price and
terms.
Open House
The common real estate practice of showing "For Sale" homes to
the public during established hours.
Origination
Fee
A lender's charge for establishing and processing a new
mortgage loan. It is generally computed as a percentage of the
loan and may be tax deductible.
Owner of
Record
The person named in the public record as the owner of a
property or mortgage.
Points
A one-time charge paid to the lender for issuing a loan. Each
point equals one percent of the loan amount and is used to
obtain revenue in addition to the interest rate.
Principal
The amount of money upon which interest is paid.
Qualified
Buyer
A buyer who has demonstrated the financial ability to afford
the asking price of a home. Prequalifying with a lender can
expedite the home buying transaction.
REALTOR®
A registered trade name that may only be used by members of
the NATIONAL ASSOCIATION OF REALTORS®, an organization with
over 700,000 members who represent all branches of the real
estate industry. REALTORS® subscribe to a strict Code of
Ethics which governs their conduct.
Refinance
Obtaining a new loan to pay off an existing loan. Refinancing
is a popular practice when interest rates drop.
Title
Lawful ownership of property.
Title
Insurance
An insurance policy that protects against losses arising from
title defects such as forged or misfiled documents.
Title Search
An examination of the public records to determine whether the
current title is clear or defective.
TownHouse
Generally refers to a type of dwelling having two floors, with
the living area and kitchen on the first floor, and the
bedrooms on the second. Town houses share a common wall
between units.
VA (Veterans
Administration)
A federal agency designed to
help veterans enter the housing market.
VA Loan
A loan guaranteed by the U.S. Department of Veterans Affairs
(VA). VA loans are made to honorably discharged veterans or
their un-remarried widows or widowers. Such loans require a
minimal or no down payment and offer lower interest rates.
Walk-Through
A final inspection of a property before it changes ownership.
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