Glossary of Real Estate Terms
Appraisal | An expert estimate of the value of a property. |
Closing | The final step in the real estate buying process where property title is transferred. |
Deed | A legal document that confirms or conveys the ownership of a property. |
Escrow | A financial arrangement where a third party holds funds until certain conditions are met. |
Foreclosure | The process by which a lender takes back property when the owner fails to make mortgage payments. |
Home Inspection | A thorough assessment of a property’s condition by a professional before sale. |
Mortgage | A loan specific to purchasing real estate. |
Principal | The original amount of a loan, excluding interest. |
Real Estate Agent | A professional who represents buyers or sellers in real estate transactions. |
Title | A legal document providing evidence of an individual’s ownership of property. |
Underwriting | The process by which a lender evaluates the risk of giving a loan to a homebuyer. |
Zoning | Local laws that regulate how property in a specific area can be used. |
Equity | The difference between the market value of a home and the outstanding amount on its mortgage. |
Contingency | A provision in a real estate contract that specifies a condition or action that must be met. |
Earnest Money Deposit (EMD) | A deposit made to a seller to demonstrate a buyer’s commitment to the purchase. |
Adjustable Rate Mortgage (ARM) | A mortgage with an interest rate that can change periodically based on an index. |
Fixed Rate Mortgage | A mortgage with a fixed interest rate for the entire term of the loan. |
Pre-qualification | An initial assessment of the creditworthiness of a potential borrower. |
Pre-approval | A deeper assessment that results in a commitment to lend a specific amount. |
Lien | A legal claim on a property as security for a debt or obligation. |
Capital Gains | The profit from the sale of a property or investment. |
Depreciation | A decrease in the value of a property over time. |
MLS (Multiple Listing Service) | A service used by real estate agents to view listings of properties for sale. |