Common Real Estate Terms
Understanding Common Real Estate Terms
Appraisal: An estimated value of the property based on a professional survey.
“As is”: A contract or offer clause stating that the seller will not repair or
correct any problems with the property.
Balloon Mortgage: A type of mortgage where the buyer pays mostly interest up
front and at the end of the loan term the entire unpaid balance must be repaid in a lump sum.
Back up Offer: When an offer is accepted contingent on the fall through or voiding
of another offer.
Buyer’s Agent: The agent who shows the buyers property, negotiates the contract and
works with the buyers to close the transaction.
Closing:: The end of the transaction process where the legal documents are signed,
deeds are delivered and funds dispersed.
Commission: The compensation paid to the agent for services rendered. This is
typically paid by the sellers.
Comparative Market Analysis: A study done by the real estate agent that provides
information to the buyers or sellers in regard to similar prices of homes in the area.
Counter Offer:The response of the buyer or seller to an original offer.
Credit Score: A score assigned to the borrower’s credit report based on
outstanding debts and payment history.
Curb Appeal:How attractive and appealing the house looks from the street.
Down Payment: The amount of money a borrower puts down towards the purchase of the house.
Earnest Money Deposit: The money given to the sellers at the time of the offer as a sign
of strong sincere interest or “good faith.”
Escrow Account: An account in which the borrower pays into monthly in conjunction
with their mortgage toward taxes and interest.
Interest rate: The percentage or rate that a borrower is charged by a lender for
lending money.
Loan: Amount of money lent to the borrower who agrees to repay the amount
plus interest.
Mortgage:Amount the borrower agrees to pay each month until the loan is
paid off.
Pending: A house that already has a contract on it.
Pre-approval: The process of getting a bank or lender to evaluate your financial
buying power to see how much house you can afford.
Term: The length of time a borrower has to repay a loan.
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