
20 Real Estate Terms Defined
When getting into real estate, you will find there is a learning curve and beyond that a language barrier. While we are both speaking English or any other language, I am more referring to the jargon that you will see and discuss as your work through the buying process of a property. Here are some of the top terms and their definitions.
- Adjustable Rate Mortgage – this is a mortgage that will change its rates based upon the market
- Amortization – is when you are combining the interest and principal into payments versus paying interest first
- Appraisal – a 3rd party report that highlights the value of the property
- Assessed Value – the value of the property from a tax perspective
- Association Fee – additional monthly costs that are attached to some condos and townhomes
- Closing Disclosure – this will itemize all of the costs and fees associated with the sale
- Closing Costs – the additional costs and fees in addition to the final price
- Collateral – what is held to ensure that you pay a loan back
- Comparative Market Analysis – a report on similar homes in the area that can give an understanding of the value of your property
- Contingencies – conditions that must be met by a certain date for the contract to be valid
- Dual Agency – an agent that works for the buyer and seller
- Equity – is what you own and as you pay into the principal you gain equity
- Escrow – an account that is set up to receive payments
- Fixed Rate Mortgage – a mortgage where the interest is the same throughout the loan
- Principal – the amount of money borrowed through a loan
- Refinancing – when you restructure your loan with lower rates and/or different payment plans
- REO – real estate owned by the bank or lender that offered the original loan to the buyer
- Short sale – a property that is offered lower than is currently owed
- Title – a document that states who is the owner of the property and will also include the history of owners
- Underwriting – the process that banks vet out buyers for their ability to pay back the loan
While this is just the tip of the iceberg, I hope these 20 terms will assist you in finally “talking real estate to real estate people”.