Real Estate Glossary of Terms

Real Estate Glossary of Terms
Abatement Notice - A legal notice served on the owner or tenant of a property to inform him of the violation of local laws pertaining to maintenance of the property.
Abutting - The joining, reaching, or touching of adjoining land.
Addendum – An addition or change in a legal contract.
Affidavit – A written statement signed and sworn to before some person authorized to take an oath.
Alienation Clause – A provision that requires the borrower to pay the balance of the loan amount in a single large instalment after the property is sold or transferred.
Amortization – Gradually reducing mortgage loan debt over time by establishing scheduled monthly payments.
Appraisal – Official valuation of a property carried out by a certified Real Estate appraiser.
Assessed Valuation – The value that a taxing authority places on real property for the purpose of calculating the amount of tax on that property.
Asset – Anything with commercial or exchange value that is owned by a business, institution or individual.
Assumable Mortgage – A mortgage that can be transferred from a seller to a buyer. Once the loan is assumed by the buyer the seller is no longer responsible for repaying it.
Balloon Payment – A loan payment that is at least the double the amount of previous payments, done to clear a debt.
Bayana – A Hindi term used to denote the token money given by a buyer for a particular property after negotiations are done.
Blanket Mortgage – One mortgage on a number of parcels of real property.
Broker – A real estate broker is qualified to represent a seller or buyer. Brokers receive extensive education and licensing, allowing them to manage individual agents through a firm or operate independently.
Buy Down – A cash payment to a lender in order to reduce the interest rate a borrower must pay.
Call Option – A contract giving one party the right to buy and another party the right to sell a piece of property at a future time and specific price.
Capitalization Rate – A metric used in real estate to evaluate the potential return on an investment property.
Cleaning Fee – A nonrefundable fee charged by a landlord when a tenant moves in.
Conveyance – A written instrument, such as a deed or lease, that evidences transfer of some ownership interest in real property from one person to another.
Current Assets – Assets that can be converted to cash within a year.
Default – The inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms.
Depreciation – A decrease in the value of a property due to changes in market conditions or by any other issues.
Devise – A transfer of real estate by will or last testament.
Down Payment – The portion of a home’s purchase price that is paid in cash and is not part of the mortgage loan.
Dual Agency – When the real estate agent/broker represents both the buyer and seller.
Duplex – A house with two units while sharing a common wall.
Duration – An estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (higher risk) in relation to interest-rate movements.
EEM (Energy Efficient Mortgage) – A Federal Housing Administration program that helps home-buyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the home purchase.
EMD (Earnest Money Deposit) – Money put down by a potential buyer to show that he or she is serious about purchasing the home.
Encumbrance Certificate – A report issued by Registrar after due verification of the relevant documents certifying that the property in question is free from mortgages or any other kinds of restrictions.
Escrow – An arrangement in which a neutral third party provider holds the funds associated with a real estate transaction until a specific condition is met.
Escrow Account – A separate account into which the lender puts a portion of each monthly mortgage payment.
Eviction – Expulsion of an occupant or tenant from a property.
Exception – The exclusion of some part of the property conveyed, with title of that excepted part remaining with the grantor.
Fair Housing Act – A law that prohibits discrimination in all facets of the home-buying process on the basis of race, color, religion, sex, national origin, familial status, or disability.
Fair Market Value – The price that a willing buyer and seller will agree upon when they are acting freely and with complete knowledge of the situation.
Fee Simple – The owner’s rights to the property are indefinite and can be freely transferred or inherited when the owner chooses.
Fixed-rate Mortgage – A mortgage with payments that remain the same throughout the life of the loan.
Fixture – Personal property which has been attached to real estate so as to become part of the real property.
Foreclosure – A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.
General Lien – A lien that includes all the property owned by a debtor, rather than a specific property.
GNMA – Acronym for Government National Mortgage Association, also known as "Ginnie Mae".
Habendum Clause (To Have and Hold) – Defines or limits the quantity of the estate granted in the premises of the deed.
Home Appraisal – The process during which a licensed appraiser evaluates different elements of a property to determine its fair market value.
Home Inspection – An examination of the structure and mechanical systems to determine a home’s safety. It is ordered by a real estate buyer.
Incidents of Ownership – Any control over property.
Index – A number, usually a percentage, used by lenders to determine changes to the interest rate charged on an adjustable rate mortgage.
Inspection – Home inspections are required once a potential buyer makes an offer.
Joint Tenancy – When two or more people share ownership of a real estate or other property.
Jumbo Loan (Jumbo Mortgage) – Financing that exceeds the limits set by the Federal Housing Finance Agency.
Landlord – The owner of any real estate, which is rented or leased to an individual or a business organisation.
Lien – A monetary claim against a property.
Life Estate – An interest in property only for the duration of someone’s life.
Lis Pendens – A notice indicating that legal action is pending on a property.
Marginal Land – Property which is barely profitable to use.
Mineral Rights – An ownership interest in the minerals contained in a particular parcel of land, with or without ownership of the surface of the land.
Mortgage – Agreement between a borrower and a lender giving the lender the right to the borrower’s property if the borrower is unable to make loan payments within an agreed upon timeline.
Mortgage Banker – Provides mortgage loans.
Negative Amortization – Occurs when a repayment that is made is less than the interest charged on a loan, causing the outstanding balance of the loan to increase.
NOI (Net Operating Income) – A value that determines how much profit a commercial real estate property generates.
Open Listing – When a property owner chooses to sell their home on their own.
Origination Fee – A fee charged by lenders (in addition to interest) for services in connection with granting of a loan.
Panic Peddling – The illegal practice of inducing panic selling in a neighborhood by making representations of the entry of minority group members.
Personal Property – Property which is tangible, movable, and not fixed to the land.
PITI – Principal, Interest, Taxes, and Insurance, the four elements of a monthly mortgage payment.
Pocket Listing – A property that is up for sale but hasn’t been made publicly available to buyers.
Puffing – Non-factual statements and opinions made to enhance the perceived desirability of a property.
Real Estate – The right to own land and improvements and the right to own or use them.
Real Estate Agent – A person who is licensed to negotiate and arrange real estate sales.
Real Property – The right to own land and improvements. Commonly used interchangeably with Real Estate and Realty.
Realty – Land, buildings and other improvements from a physical standpoint.
Redlining – The illegal practice of refusing to originate mortgage loans in certain neighborhoods on the basis of racial or ethnic composition.
RESPA (Real Estate Settlement Procedures Act) – A law protecting consumers from abuses during the real estate purchase and loan process by requiring lenders to disclose all settlement costs and relationships.
Riparian Owner – Who owns land bounding upon a river or water course.
Security Deposit – A payment required by a landlord to ensure that a tenant pays rent on time and keeps the rental unit in good condition.
Servient Tenement – Property that is subject to use by another for a specific purpose.
Short Sale – A property that is sold for less than the amount that is owed on the mortgage.
Spite Fence – A fence erected for no other purpose than to irritate a neighbor.
Steering – The illegal practice of directing members of minority groups away from certain areas or neighborhoods.
Tenancy by the Entirety – A special kind of property ownership that’s only for married couples.
Title Insurance – Insurance that protects the lender against any claims that arise from arguments about ownership of the property.
Title Search – A check of public records to be sure that the seller is the recognized owner of the real estate and that there are no unsettled liens against the property.
Transfer Tax – A transaction fee charged upon the transfer of a property’s title.
USDA Loan – A government-backed mortgage loan available to US residents that live in rural areas.
Usufruct – The right to use property, or income from property, that is owned by another.
View Ordinance – Laws designed to protect a property's view from obstructions. A view ordinance allows the property to sue the tree owner.
Virtual Home Tour – Provides internet users with a graphical presentation of a home.

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