Real Estate Glossary

1031 Exchange - The official government name for a trade in which a person owning one property may 'swap' his/her property for a very similar one without paying income taxes on it. There are very specific guidelines though.

Acre - A measurement of land sizing for real estate. Is equal to forty-four thousand square feet, or one six-hundred and fortieth of a square mile. The average home jot is from one-third to one-half an acre.

Adjustable Rate Mortgage - A mortgage with a fluctuating interest rate, as in not locked in. Due to the fluctuations, this can mean low interest rates in times of good economy and horrible interest rates in times of bad economy.

Annual Percentage Rate (APR) - The rate at which a company charges a user for using their money in a loan, credit card, or else wise. An APR of 7% would mean paying 7% of what you purchased to the Credit Card Company or bank.

Appraisal - How much value a home appears to have at any given time.

As is - A phrase that states an item bought cannot be returned or fixed by the seller; the buyers takes the item “as is” without any conditions.

Asking Price - The amount of money a seller would like to receive for their house. Normally, this is higher than the minimum value they will take, and as such can be knocked down a bit in negotiations.

Axial Growth - City growth so that the highways and by ways of the area, resembling a line on either side of the highway with root like extensions of civilization breaking off the arteries off the highway.

Bankruptcy - A state where a debtor can sell of his/her personal belongings to pay off all the bills he/she can. Quite a blemish on a person's credit score.

Bedroom Community - A suburban community where most of the residents live at home, but work in the city some distance away.

Build to Suit - An agreement where a land owner agrees to build and lease a specific property for a client.

Buyer's Market - A real estate market where the need to sell is greater than the need to buy.

Commission - The percentage of the sale/purchase price a seller/buyer pays to their real estate agent.

Common Area Maintenance - An area of a community of which maintenance falls to the community at large. Maintenance of the common area is normally delegated by volunteering or by the local Home Owners Association.

Counteroffer - An offer in response to a prior offer, having the effect of negating the prior offer.

Crawl Space - A sort of cramped basement or attic in which there is only room to crawl, not stand up, and is normally employed for storage purposes.

Credit Score - A measure of the quality of the credit of a person. Bad credit can be influenced by erratic payments, allowing credit card bills to pile up, and can impair the ability to obtain loans for items such as a car, house, and other expensive items.

Custom Built Home - A home designed, created, and sold as per a customer's specific needs and wants.

Duplex - Two or more dwellings above or below one another under the same roof.

Earnest Money - A deposit given along with the offer from a potential buyer of a house to the seller of the house to show that the buyer is serious in the transaction.

Eminent Domain - The government's right to seize private property for public works projects to improve the community.

Equity - The amount of money paid off on a house compared to the amount of money the home is worth. Equity can be used to obtain a Home Equity Loan.

Escape Clause - A clause in a contract where a sale will not proceed unless certain events or circumstances come to pass, contractually pardoning the buyer from buying the property.

General Contractor - The point man and coordinator, be it yourself or a hired professional, for any home project (renovation, reconstruction, etc.) whose emphasis is on organizing the subcontracting of various companies to achieve the end result.

Greenbelt - A parcel of land surrounding a city or town in which the local government has deemed that no construction will take place there for the sake of preservation.

Handyman's Special - A 'fixer upper' in that it is a relatively downtrodden home selling for a cheap price. However, once improved, it can be sold for a great profit bearing the local market in mind.

HVAC - Stands for Heating, Ventilation, and Air Conditioning, and is used in general to refer to a structures climate control system.

Interest - An annual rate a lender charges for the use of their funds.

Interim Loan - A temporary loan that is sought in lieu of a more permanent loan like a mortgage.

Intrinsic Value - The amount of money that a potential buyer gives a property based on their personal preferences.

Key Lot - A lot in a subdivision with one or more sides next to the back sides of one or more houses. Generally considered undesirable.

Lease - A contract where a property is under long-term rent. However, once the time period on the contract is expired, so is the lease, unless a new contract is negotiated.

Location, Location, Location - The oft heard realtor's saying is true: location of a property is one of the largest factors in the value of it.

Lot - A parcel of land.

Market Value - The ideal price that both the seller is comfortable with selling and a potential buyer would be comfortable buying.

MLS (Multiple Listing Service) - A conglomeration of realtors that enter into a mutual agreement to help expedite the purchase and sale of the properties they represent. This may come through online listings or references to various open houses and more.

Mortgage - A contract in which a sum of money is given from a lender (usually a bank) to a buyer. This money is then used by the buyer to purchase a property, however, the property is now collateral should the mortgage default.

Motivated Buyer - A buyer motivated by extenuating circumstances to buy a property and buy it now, even despite shortcomings in the property.

Motivated Seller - A seller motivated by extenuating circumstances to sell a property now rather than later, and may drop the price or give extra incentives to speed the process up.

Offer - The actual offer an interested buyer gives the seller that discloses the price the buyer is willing to pay, and other terms and conditions applicable to the sale of the house.

One-Hundred Percent Location - The prime real estate of the prime real estate; the most valuable lot in a given area.

Oral Contract - A contract which has been verbally agreed upon, but has not yet been physically signed by both parties. This does not have the same weight as a written contract.

PITI (Principal, Interest, Taxes, and Insurance) - The total costs a home involves, and is usually the amount of money that the mortgage will cover.

Power of Attorney - A legal document which gives a person for a certain amount of time the power to make legal decisions for a person stated in the document.

Promissory Note - A note signed at the time of a loan closing stating the note is evidence of the loan receivers intent to repay the loan.

Real Estate Agent - A certified agent licensed to transact property with the utmost attention to ethics and professionalism.

Real Estate Settlement Procedures Act - A law which demands that lenders provide all information pertaining to closing costs before the actual closing.

Refinancing - The act of taking out one loan (perhaps a better interest rate) to pay off the mortgage and any other bills that need to be paid.

Remodel - Physically changing a property because of poor maintenance and upkeep.

Seller's Market - A market where the need to buy is greater than the need to sell homes.

Subdivision - A large tract of land that is divvied up into lots for which the eventual goal is sale, lease, or construction thereon.

Swing Loan - A temporary loan that allows a property buyer to buy another property without first selling their prior property or receiving an investment from it.

Tax Write Off - Any condition, circumstance, or donation which you can document on your taxes to receive a greater tax back check.

Trading for Equity - A situation in which a house is appreciating at a higher interest rate than the rate for an equity loan taken on that property.

Zoning Ordinance - A local government ordinance which regulates the types and characteristics of properties that can be constructed in a given area.