A provision of a mortgage, loan, or the like that advances the date of payment under certain circumstances.
Accelerated Depreciation:
Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset.
Add-on Interest:
A method of calculating interest by adding the interest payable to the full amount of the principal loan. The add-on interest is added to the original principal amount, and becomes a part of the face amount of the promissory note.
Adjustable-rate Mortgage (ARM):
A mortgage with a periodically changing interest rate.
Adjusted Cost Basis:
A number that shows whether you profit when selling your house (used for tax purposes).
Advanced Internet Marketing Solution (AIMS):
AIMS is a HomeGain marketing program for real estate agents. AIMS provides real estate agents with 20 guaranteed homebuyer leads each month, lead management and eMarketing tools, plus a free website with IDX solution. Visit www.homegain.com/aims for more information.
Adverse Possession:
Open and exclusive occupation and use of someone else's real property without permission of the owner continuously for a period of years prescribed by law, thereafter giving title to the occupier-user.
Adverse Use:
The use of someone else's property without owner's consent.
Agent:
A person authorized to act on behalf of/represent the interests of another person.
Agreement of Sale:
A document that specifies the terms under which ownership of real estate property are conveyed from one owner to another.
ALC:
Accredited Land Consultant -To qualify for the ALC designation, a land specialist must complete the organization's rigorous LANDU education program and demonstrate a proven track record in experience and success.
The REALTORS® Land Institute is the leading membership organization for land specialists involved in brokerage, sales, consulting, appraisal, development, site selection, marketing, and management of a large range of land property, such as agricultural land; ranches; recreational land; hunting property; timberland; underdeveloped tracts of land; and special purpose properties.
American Society of Home Inspectors:
A non-profit professional organization of Home Inspectors.
Amortization:
Mortgage/loan payment through a series of periodic payments.
Annual Mortgagor Statement:
A yearly report sent to the mortgagee borrower showing the mortgage payments for the year and the remaining loan amount owed.
Annual Percentage Rate (APR):
The interest rate reflecting the total yearly cost of the interest on a loan, expressed as a percentage rate.
Annuity:
A contract or agreement by which one receives fixed payments on an investment for a lifetime or for a specified number of years.
Appraisal:
An expert estimation, assessment, of a home value.
Appraisal Report:
A document summarizing all the details of the home appraisal.
Appraised Value:
An overall price of a home as assessed by a professional appraiser.
Appreciation:
An increase or rise in the value of property over a certain time.
Arbitration:
The settling of differences between parties by a third-party person or persons chosen or agreed to by them.
Assessed Value:
The value of real estate property as determined by an assessor.
Assumable Mortgage:
A mortgage that is transferable from the home seller to the buyer once purchasing a home.
Assumption Clause:
A part of the mortgage contract that lets a home buyer take on seller's mortgage.
Concurrent closing of escrow for the purchase of one property and sale of another by the same party.
Backup Offer:
A second offer for the property, used in case the sale using the first offer doesn't work out.
Balance Sheet:
A statement of the financial position of a business on a specified date.
Balloon Mortgage:
A short-term mortgage in which small periodic payments are made until the completion of the term, at which time the balance is due as a single lump-sum payment.
Balloon Payment:
A final loan payment that is significantly larger than the payments preceding it.
Before-tax Income:
Overall earnings without the tax deductions.
Bidding War:
A situation when a number of buyers compete for a property by submitting higher offers.
Bilateral Contract:
A contract involving mutual promises.
Bill of Sale:
A document transferring title in personal property from seller to buyer.
Blanket Insurance Policy:
Insurance policy that covers a number of properties.
Blanket Mortgage:
A mortgage that covers a number of properties instead of one.
Blog:
A blog is a website in which entries provide commentary or news on a particular subject; a publishing tool.
Board of Equalization:
A state board in charge of local property taxes.
Breach of Covenant:
Lack of fulfillment of a legal contract.
Breach of Warranty:
A breach that occurs when an item is deficient according to the terms of a warranty.
Brokerage:
A firm engaged in buying and selling real estate for clients.
Broker:
An agent who buys or sells real estate for a client on a commission basis without having title to the property.
Building Code:
Set of standards established and enforced by local government for the structural safety of buildings.
Building Moratorium:
A temporary stop of home construction.
Bundle of Rights:
Various rights of the owner associated with property ownership.
Buyer's Agency Agreement:
The document a prospective buyer signs once she decides to work with a buyer's agent at a particular brokerage. Each Multiple Listing Service (MLS) has a standard buyer's agency form, but the brokerage the agent works for may also provide its own agreement listing the conditions of the relationship between the buyer's agent, his brokerage and the prospective buyer. Prospective buyers sign buyer's agency agreements to ensure that the brokerage and the buyer's agent is compensated if a sale occurs. The length of the agreement varies, but usually lasts three to twelve months. Before signing a binding buyers agency agreement, the buyer should be sure that they want to work with the agent. Many buyer's agency agreements require the buyer to pay the agreed-upon commission to the buyer's agent even if that agent didn't end up finding the buyer the home. Buyer's agency agreements also list the conditions of a dual agency policy. Dual agency occurs when an agent represents both the buyer and the seller in the same transaction.
Buyer Broker:
A broker exclusively focused on representing home buyers.
A condition in a contract that allows its termination prior to its expiration.
Capital Expenditure:
Funds spent for the acquisition of a long-term asset.
Capital Gains Tax:
The tax applicable to gains realized from the sale of capital assets.
Capitalization:
The total investment of the owner/s in a business enterprise.
Capitalization Rate:
The rate used to convert an income stream into a present value lump sum.
CCIM:
Certified Commercial Investment Member - CCIMs are recognized experts in commercial real estate brokerage, leasing, valuation and investment analysis.
Certificate of Deposit (CD):
A written acknowledgment of a bank that it has received from the person named a specified sum of money as a deposit, often for a fixed term at a specified interest rate.
Certificate of Occupancy:
A certificate issued by a local authority indicating that a building meets building-code requirements.
Certificate of Title:
A certificate of ownership stating that the title to the specified property is free and clear except for any encumbrance (as a mortgage) listed on it.
Chain of Title:
The succession of conveyances of the title to a particular item of real property (as a house).
CIPS:
Certified International Property Specialist - The Certified International Property Specialist Network (CIPS Network) comprises 2,500 real estate professionals from 50 countries and is the specialty membership group for global business practitioners of the National Association of REALTORS®. The CIPS® designation prepares REALTORS® to service the growing international market in their local community by focusing on culture, exchange rates, investment trends, and legal issues.
Closing:
The final procedure in a home sale in which documents are signed and recorded. This is the time when the ownership of the property is transferred.
Closing Costs:
Expenses over the purchase price of a house, land, etc., that is paid by the purchaser or seller at the completion of the sale.
Closing Statement:
A document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership to take place. This document is prepared by a closing real estate agent and is also known as a "settlement sheet".
Cloud on Title:
Interest (as a lien) in real property that if valid impairs the owner's title.
CPM:
Certified Property Manager
Co-insurance:
A co-sharing agreement between the insured and the insurer under a health-insurance policy which provides that the insured will cover a set percentage of the covered costs after the deductible has been paid. Similar to co-pay insurance plans except co-pays require the insured to pay a set dollar amount at the time the service is rendered.
Commission:
A sum or percentage allowed to agents, sales representatives, etc., for their services.
Community Reinvestment Act:
A United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "redlining." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.
Comparative Market Analysis (CMA):
The best method available to home sellers to learn their home's current value so they can select the best sale price is a CMA, or Comparative Market Analysis. CMA is the term real estate agents use when they conduct an in-depth analysis of a home's worth in today's market.
Compound Interest:
Interest paid on both the principal and on accrued interest.
Consumer Credit Counseling Service (CCCS):
CCCS is an organization that offers free credit counseling and a non-profit debt management program.
Contingency:
Conditions included with an offer on a home that must be fulfilled before the deal can close. If a buyer or seller is unable to satisfy a contingency, then the offer on a home may become void. Contingencies usually include time frames in which a buyer can get his earnest money back if the contingency isn't fulfilled before the deadline. For example, if a buyer schedules an inspection within the time specified on his contract and decides that he needs to make too many repairs, he can rescind his offer and get his earnest money back. Here are the most common contingencies:
Financing Contingency: the buyer must get approved for a mortgage loan to be able to buy the home. He will have a set amount of time to receive a loan commitment letter from a lender to confirm the approval of his loan application.
Inspection Contingency: gives the buyers the right to get the home inspected and negotiate further if there are repair issues. The inspection usually happens 5 - 7 business days after mutual acceptance. With REOs, the banks rarely agree to pay for any repairs; buyers should still get an inspection, but they'll need to cover any repair costs.
Sale contingency: the success of the offer on a home depends on the sale of the buyer's current home.
Title Contingency: the offer depends on whether the title of the home that documents the history of ownership is clear of any liens. This contingency grants the buyer the right to review a title report.
Appraisal Contingency: the success of the offer depends on an appraisal confirming a value for the home that is equal to or greater than the buyer's offer amount.
Contingency Fee:
A fee paid to a lawyer conducting a suit, esp. a suit for damages, in the event that the suit is successful and generally based on a percentage of the sum recovered.
Conveyance Tax:
A tax imposed on the transfer of real estate property.
Cost-plus Contract:
A contract in which the contractor is paid his total cost plus a stated percentage of profit.
Covenants, Conditions and Restrictions (CC&Rs):
CC&Rs are the governing documents that dictate how the homeowners association operates and what rules the owners must obey.
CPM:
Cost per thousand. Online advertising model where the advertiser pays per thousand of impressions.
CRB:
Certified Real Estate Brokerage Manager - The CRB designation is awarded to REALTORS® who have completed advanced educational and professional requirements. CRB Designees are better positioned to streamline operations, integrate new technology and apply new trends and business strategies.
CRE:
Counselor of Real Estate - The Counselor of Real Estate - or CRE - is a member of The Counselors of Real Estate, an international group of recognized professionals who provide seasoned, objective advice on real property and land-related matters. Only 1,100 practitioners throughout the world carry the CRE® designation. Membership is by invitation only.
CRS:
Certified Residential Specialist
Credit Rating:
A classification of credit risk based on investigation of a customer's financial resources, prior payment pattern, and personal history or degree of personal responsibility for debts incurred.
Credit Report:
A credit report is a detailed report of an individual's credit history prepared by a credit bureau and used by a lender to in determining a loan applicant's creditworthiness.
Curb Appeal:
Curb appeal will help increase the value of a home with updates to landscaping and the home's exterior.
A written instrument legally conveying property to a trustee often used to secure an obligation such as a mortgage or promissory note.
Deferred Maintenance:
Deferred maintenance is a practice of allowing something to deteriorate by postponing prudent but non-essential repairs to save cost, labor and/or material.
Delinquent Mortgage:
A mortgage for which the borrower has failed to make payments as required in the loan documents. If the borrower can't bring the payments current within a certain time period, the lender may initialize foreclosure proceedings.
Down Payment:
An initial amount paid at the time of purchase.
Dual Agency:
Dual Agency is the process by which one real estate broker represents both the home seller and the buyer in a transaction.
Due-on-sale Clause:
A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
The money buyers pay one to three business days after agreeing with the seller on a price for the home to show that they're serious about the offer. Usually 1 - 3% of the purchase price (though sometimes it's a fixed amount), the money is deposited into an escrow account via a cashier's check or money order. If the buyer is working with an attorney on the deal, the earnest money is held by the listing broker. If the sale is completed, the earnest money becomes part of the buyer's down payment; if the sale fails due to a contingency outlined in the initial Purchase and Sale Agreement, the buyer recovers the earnest money. If the buyer backs out for reasons not covered in any of the contingencies, the seller gets the earnest money.
End Loan:
A permanent, long-term loan used to pay off a short-term construction loan or other form of interim financing.
Environmental Impact Statement:
A technical report that details the effect proposed legislation or action will have on the natural and human environment and that is sometimes required to be furnished esp. by a governmental body for official and public review in the regulatory and decision-making process called also an "environmental impact report."
Equal Credit Opportunity Act (ECOA):
The ECOA is a United States law that states that creditors must evaluate candidates based on credit worthiness only, not on factors that have nothing to do with their ability to repay the debt.
Equity:
The amount of a home's value that the owner actually owns, calculated by taking the fair market value of the home and subtracting the amount the owner still owes on her mortgage loan. In practical terms, the equity is the amount of money you would get from the sale of a home after paying off the bank. If you borrow $400,000 to buy a $500,000 house, your equity the day you move in is $100,000 and it increases as your mortgage payments reduce what you owe the bank, assuming the market value remains constant. Another reason your equity can increase is if the value of the property increases relative to the loan; if that $500,000 property increases in value to $600,000, your equity with a $100,000 loan is $200,000. On the other hand, the amount of equity you have in a home decreases if you have a negative-amortizing loan (where your mortgage payment is too low to cover even the interest, and so your loan gets bigger over time) or if the home value falls faster than you can make mortgage payments. In a steeply declining market, the same $500,000 house can be worth only $300,000; if you still owe the bank $400,000, you have negative equity because you're underwater by $100,000.
Escrow:
A contract, deed, bond, or other written agreement deposited with a third person, by whom it is to be delivered to the grantee or promisee on the fulfillment of some condition.
Examination of Title:
A close examination of all public records that affect the title to the real estate being purchased.
Exclusive Listing:
A written contract in which a licensed real estate agent is given the sole right to sell a property for a specified time (typically three months); during that time the owner is still allowed to try to sell the property on his/her own, without the payment of a commission.
A United States federal law enacted as an amendment to the Truth in Lending Act whose purpose is to protect consumers from unfair billing practices.
Fair Credit Reporting Act (FCRA):
An American federal law that regulates the collection, dissemination, and use of consumer credit information.
Fair Debt Collection Practices Act (FDCPA):
A United States statute whose purpose is to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy.
Fair Housing Act:
The Fair Housing Act prohibits discrimination by direct providers of housing, such as landlords and real estate companies.
Federal Housing Administration (FHA):
FHA provides mortgage insurance on loans made by FHA-approved lenders.
Federal National Mortgage Association:
A U.S. government-sponsored private corporation whose chief function is to supply funds for home mortgages through continuous purchases of mortgages from lending institutions.
Fixed Installment:
The monthly payment due on a mortgage loan.
Fixed-rate Mortgage:
A home mortgage for which equal monthly payments of interest and principal are paid over the life of the loan, usually for a term of 30 years.
Foreclosure:
A proceeding in which the financer of a mortgage seeks to regain property because the borrower has defaulted on payments.
Forfeiture:
The loss of an asset, or rights to an asset, as a result of defaulting on contractual obligations or conditions.
For Sale By Owner (FSBO):
FSBO is a real estate term which describes the situation in which a property is offered for sale directly by its owner and without that owner having solicited the help of a real estate broker, implying that no real estate commission is associated with the sale.
General Accredited Appraiser - The GAA designation is awarded to appraisers whose education and experience exceed state appraisal certification requirements and is supported by the NATIONAL ASSOCIATION OF REALTORS®.
Government National Mortgage Association:
A U.S. government-owned corporation whose chief function is to help finance government-guaranteed home mortgages through the sale of bonds.
Graduated-payment Mortgage (GPM):
A mortgage on which the payment starts low and rises over time.
GREEN:
NAR's Green Designation - The National Association of REALTORS® created NAR's Green Designation to provide ongoing education, resources and tools so that real estate practitioners can successfully seek out, understand, and market properties with green features. The course curriculum requires completion of a 12hr Core Course and a 6hr Elective Course in either residential, commercial, or property management.
GRI:
Graduate, REALTOR® Institute
Home Equity Loan:
A loan secured by equity value in the borrower's home.
Home Inspection:
A home inspection is an objective visual examination of the physical structure and systems of a house.
Homeowners' Association (HOA):
HOA is the legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes.
Homeowners' Insurance:
Homeowners insurance provides coverage in the event of damage to your property, as well as liability for injuries and damage you cause to other people.
Homeowners' Warranty:
A home warranty offers benefits for both home buyers and sellers. It can help protect persons involved in a real estate transaction from unforeseen repair/replacement costs and problems on covered items.
Home Warranty:
An insurance contract that covers the repair and replacement costs of home appliances.
Housing Expense Ratio:
This ratio compares the sum of monthly housing expenses to monthly gross income.
Web functionality that allows a website to display local MLS listings.
Impact Fees:
A fee that is implemented by a local government on a new or proposed development to help assist or pay for a portion of the costs that the new development may cause with services to the new development within the United States.
Implied Warranty of Habitability:
A warranty implied by law that by leasing a residential property, the lessor is promising that it is suitable to be lived in, and will remain so for the duration of the lease.
Income Property:
Real estate that produces current income, typically from rental payments.
Inspection
A thorough investigation of a home by a licensed inspector to discover any issues or repairs that need to be made before buying the home. Once an offer reaches mutual acceptance, the buyer's agent will provide a list of recommended inspectors and help the buyer schedule an inspector to go through every nook and cranny of the home to look for problems. Inspections usually cost around $500 - $800, depending on the market. Afterwards, buyers will have a chance to negotiate with the sellers to cover the costs of certain repairs or to ask for concessions. However, when putting in an offer on a REO (Real Estate Owned Home), buyers may want to schedule a "pre-inspection" before making an offer. Banks will usually include an "as-is" addendum with the Purchase and Sale Agreement, stating that the buyer can get an inspection but that the bank won't pay for any home repairs. In this case, getting the home inspected before making an offer may save a buyer a lot of hassle and money down the road. The buyer's agent should contact the listing agent to make sure all the utilities in the home are turned so the inspector can be thorough.
General Inspection:
General inspections typically cover:
Plumbing
Electrical
Foundation, wall, doors, windows, ceiling and floor structure
Water heater, air conditioner, furnace functionability
Issues with home appliances like the dishwasher and refrigerator
Additional Inspections
In some markets, inspections for termites/pests are handled separately from the general inspection and will be scheduled by the buyer's agent. The inspector may recommend that the buyers get additional inspections for the roof, sewage system, stucco, mold, radon and lead-based paint.
Interest-only Loan:
A loan in which for a set term the borrower pays only the interest on the principal balance, with the principal balance unchanged.
Interest Rate:
The percentage of a sum of money charged for its use.
A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process.
Lead Generation:
A marketing term that refers to the creation or generation of prospective consumer interest or inquiry into a business' products or services.
Lead Management:
A system that helps organizing leads in a strategic manner. HomeGain's AIMS program includes lead management system for Realtors.
Leasehold Estate:
An ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord.
Lease Option (or Lease Purchase):
The abbreviated form of the appropriate term lease with option to purchase. It is a type of contract used in residential real estate.
Letter of Intent:
A document outlining an agreement between two or more parties before the agreement is finalized.
Lien:
The legal claim of one person upon the property of another person to secure the payment of a debt or the satisfaction of an obligation.
Listing Agent
An individual that helps homeowners sell their home. Not to be confused with the selling agent that represents buyers, the listing agent is in charge of helping the owners sell their home at the highest price possible. The listing agent negotiates with the selling agent to come to a price agreed upon by both the buyers and the sellers, then works with escrow or the attorney handling the closing to make sure the deal closes on time
Loan-to-Value Ratio (LTV)
The ratio of the amount of money borrowed over the appraised value of the home expressed as a percentage. The difference between these two numbers is the amount of the home-buyer's down payment. For example, a borrower may purchase a home appraised at $200,000 with a down-payment of $40,000. This means he has a loan-to-value ratio of 80%. Or in other words, he has 20%equity in the home. The LTV is a key risk factor that lenders consider when evaluating a loan application. If a borrower's LTV is greater than 80%, the lender will most likely require him to purchase mortgage insurance; or depending on the loan program, he may have the option for the lender cover the insurance in exchange for a loan with a higher interest rate.
Low-ball Offer:
A lowball offer is one that's far below a property's true fair market value.
Characteristic of a market into which a firm is entering or into which a new product will be introduced, such as number of the competitors, level or intensity of competitiveness, and the market's growth rate.
Market Value:
Highest estimated price that a home buyer would pay and a home seller would accept for an item in an open and competitive market.
Marketing:
A process which discerns consumers' wants, focusing on a product or service to fulfill those wants, attempting to move the consumers toward the products or services offered. Marketing is fundamental to any businesses growth. Marketing essentially is the process of creating or directing a business or organization to be successful by selling a product or service that people not only desire, but are willing to buy.
Median Price:
The threshold which divides the real estate market into two equal halves, in reference to pricing. One half of all homes in the market were sold at a price above the median home price, while the other half were sold below that price.
Money Market Account:
A savings account that offers the competitive rate of interest (real rate) in exchange for larger-than-normal deposits. Also known by the acronym "MMDA", which stands for "money market demand account" or "money market deposit account".
Mortgage Acceleration Clause:
A common provision of a mortgage or note providing the holder with the right to demand that the full outstanding balance is immediately due in the event of default.
Mortgage Broker:
The matchmaker between a homebuyer and a lender with the goal of them originating a mortgage loan. The broker draws from a pool of various lenders to find the right match.
Multiple Listing Service (MLS):
A group of private databases which allows real estate brokers representing sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller's broker in finding a buyer for the property.
Municipal Housing Inspector:
Inspectors employed by cities or counties to check all construction sites and verify that contractors are meeting building codes.
NAR, whose members are known as Realtors, is North America's largest trade association representing over 1.2 million members (as reported February 2008), including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. NAR also functions as a Self Regulatory Organization for real estate brokerage.
NAR's membership is composed of residential and commercial real estate brokers, real estate salespeople, immovable property managers, appraisers, counselors, and others engaged in all aspects of the real estate (immovable property) industry, where a state license to practice is required.
Negative Amortization:
The increase of the principal of a loan by the amount by which periodic loan payments fall short of the interest due, usually as a result of an increase in the interest rate after the loan has begun.
Net Cash Flow:
Income from an investment property after expenses such as principal, interest, taxes, and insurance are subtracted.
No Cash-out Refinance:
The refinancing of an existing mortgage for an amount equal to or less than the existing outstanding loan balance plus an additional loan settlement cost. It is done primarily to lower the interest rate charge on the loan and/or to change the term of the mortgage.
Offline Marketing:
Marketing tactics that include non-Internet related vehicles, such as TV, radio, direct mailings and yard signs.
Open Listing:
A property that is simultaneously marketed by multiple real estate agents.
Online Marketing:
Marketing tactics that include Internet related vehicles, including Web sites, email, banner ads and blogs.
Original Principal Balance:
The total amount of principal owed on a mortgage before any payments are made.
Origination Fee:
A fee, often a percentage of the total principal of a loan, charged by a lender to a borrower on initiation of the loan.
A loss incurred through a rental property, limited partnership, or other enterprise in which the individual is not actively involved.
Percolation Test:
A test to determine the absorption rate of soil for a septic drain field, in which the results are required to properly design a septic system.
Per-diem Interest:
The amount of interest that is earned or that accrues on a daily basis.
PMN:
Performance Management Network
Pre-approval Letter:
A pre-qualification letter simply states that you are "qualified" to purchase a home in a certain price range.
Prepaid Interest:
The interest on a loan that has been paid but is not due until a following period. The Internal Revenue Service (IRS) does not allow taxpayers to claim an itemized deduction on tax returns for prepaid interest.
Prepayment Penalty:
A provision of your contract with the lender that states that in the event you pay off the loan entirely, you will pay a penalty. Penalties are usually expressed as a percent of the outstanding balance at time of prepayment, or a specified number of months of interest. Usually, prepayment penalties decline or disappear over time.
Probate Sale:
The sale of a property due to the death of the owner with the proceeds divided among creditors or legal heirs of the deceased.
Property Report:
Summary of facts about undeveloped land required to be given to purchasers.
Property Tax:
A tax based on the market value of the property as assessed by the county assessor's office.
Property Tax Deduction:
The US tax code allows homeowners to deduct the amount they have paid in property taxes.
Proration:
The allocation of property taxes, interest, insurance premiums, rental income, etc., between buyer and seller proportionate to time of use.
Purchase Agreement:
A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions.
The ratio of the borrower's fixed monthly expenses to his gross monthly income.
Quit-claim Deed:
A document that releases a party from any interest in a piece of real estate.
RAA:
Residential Accredited Appraiser - The RAA designation is awarded to appraisers whose education and experience exceed state appraisal certification requirements and is supported by the NATIONAL ASSOCIATION OF REALTORS®.
Rate Lock:
A lender's guarantee that the mortgage rate quoted will not change for a specific period.
RCE:
REALTOR® association Certified Executive
Real Estate Agent:
A person licensed to negotiate and transact the sale of real estate on behalf of the property owner. Click here to find and compare real estate agents in your area.
Real Estate Broker:
An agent employed to effect bargains and contracts, as a middleman or negotiator, between other persons, for a compensation commonly called brokerage.
Real Estate Investment Trust (REIT):
An unincorporated trust created for the purpose of investing in real property or to extend credit to those engaged in construction.
Real Estate Settlement Procedures Act (RESPA):
RESPA controls or prevents certain undisclosed amounts of money between various companies that were associated with the buying and selling of real estate, such as lenders, realtors, and title insurance companies, which was inflating the costs of real estate transactions and obscuring price competition by facilitating bait and switch tactics.
Real Property:
An estate or property consisting of lands and of all appurtenances to lands, as buildings, crops, or mineral rights.
Realtor:
A person who works in the real-estate business and is a member of the National Association of Real Estate Boards, or one of its constituent boards, and abides by its Code of Ethics.
Recording Fee:
The fee a government charges for reporting a real estate purchase or sale into the public record.
Refinance:
To provide new financing or new financing for, as by discharging a mortgage with the proceeds from a new mortgage obtained at a lower interest rate.
Repayment Plan:
A Repayment Plan will take a delinquent amount and allow small amounts of money to be added to each Mortgage payment until the delinquency is caught up.
Return on Investment (ROI):
ROI is the amount of profit or cost saving that is realized as a result of an investment.
Right of First Refusal:
A contractual right granted by the owner of property, that gives the holder of the right an option to enter a business transaction with the owner, according to specified terms, before the owner is entitled to enter that transaction with a third party.
Rural Housing Service (RHS):
An agency of the United States Department of Agriculture (USDA). Located within the Department's Rural Development mission area, RHS operates a broad range of programs to provide homeownership options to individuals; housing rehabilitation and preservation funding; rental assistance to tenants of RHS-funded multi-family housing complexes; farm labor housing; help to developers of multi-family housing projects, like assisted housing for the elderly and disabled, or apartment buildings; and community facilities, such as libraries, child care centers, schools, municipal buildings, and firefighting equipment to Indian groups, nonprofit organizations, communities and local governments.
The disposal of a building, land, or other property to a buyer under special arrangements for simultaneously leasing it on a long-term basis to the original seller, usually with an option to renew the lease.
Secured Loan:
A loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan.
Seller Broker:
A broker who has a fiduciary responsibility to the seller.
Seller Disclosure
Documents completed by the seller of a home listing any known issues with the property, as well as any remodel projects completed during the time they owned the home. Sellers disclosure forms usually include information about the title of the home, the water/sewage system, the roof, and the electrical system. This information is useful, but don't use it as a substitute for an inspection by a licensed inspector.
Most often, prospective buyers can ask their agent for access to the seller's disclosure on the home, provided by the listing agent before making an offer. However, when buying bank-owned homes (REOs), buyers won't receive these documents since the bank isn't required to provide details about the condition of the home.
Seller's Market:
A market condition characterized by high prices and a supply of commodities below demand.
SFR:
Short Sales and Foreclosure Resource
Shared-equity Transaction:
A transaction in which two buyers purchase a property, one as a resident co-owner and the other as an investor co-owner.
SIOR:
Society of Industrial and Office REALTORS® - Individuals certified with the SIOR® designation are top producers in industrial and office real estate brokerage. SIOR's network includes more than 3,000 members in 580 cities in 20 countries. SIOR® represents today's most knowledgeable, experienced and successful commercial real estate brokerage specialists
Social Media:
An umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words and pictures. Examples include blogs, forums, message boards, social networking sites, video and photo sharing etc.
Social Networking:
The use of a website to connect with people who share personal or professional interests, place of origin, education at a particular school, etc.
SRES:
Seniors Real Estate Specialist
Standard Payment Calculation:
The monthly payment required to repay the remaining balance of a mortgage in equal installments over the remaining term of the mortgage at the current interest rate.
Sub-agent:
An agent who is appointed by another agent (as an insurance agent) and for whom the principal agent is responsible or liable.
Sweat Equity:
Unreimbursed labor that results in the increased value of property or that is invested to establish or expand an enterprise.
An expenditure that is deducted from taxable income.
Tax Lien:
Lien of which a tax collector may avail himself in default of taxes (analogous to a judgment lien).
Tax Sale:
The sale of real property, as land, usually at auction by a public authority, in order to pay delinquent taxes assessed upon its owner.
Teaser Rate:
The initial interest rate on an adjustable rate mortgage (ARM).
Third-party Origination:
A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.
Title:
Legal right to the possession of property, esp. real property.
Title Insurance:
Insurance that compensates for loss from title defects or encumbrances (as liens) that were unknown but should have been discovered at the time the policy was issued.
Total Expense Ratio:
The Total Expense Ratio, or TER, is measuring the total costs of a fund investment. Total costs may include various fees (trading, auditing) and other expenses. The TER is calculated by dividing the total cost by the fund's total assets and is denoted as a percentage.
Traffic:
The number of visitors that land on a website or web page.
Transfer of Ownership:
The means/procedure by which the ownership of a property changes hands.
Transfer Tax:
A tax on the transfer of securities that is paid by the seller.
Trust Account:
An account opened with a trust company, such as a bank, under which a testamentary trust is set up (as for the escrow of funds).
