A
- Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that changes over time based on an index.
- Agent: A licensed professional who stands for buyers or sellers in real estate transactions.
- Amortization: The process of paying off a debt over time through regular payments.
- Appraisal: An expert estimate of the value of a property.
- Appreciation: An increase in the value of a property over time.
- Assessment: The determination of the property value for tax purposes.
- Assumable Mortgage: A mortgage that can be taken over (“assumed”) by the buyer when a home is sold.
- Attachment: A legal seizure of property to force payment of a debt.
B
- Balloon Mortgage: A mortgage with low first payments but a large payment due at the end of the term.
- Bankruptcy: A legal process for dealing with debt problems of individuals and businesses.
- Binder: A preliminary agreement secured by the payment of an earnest money deposit, under which a buyer offers to buy real estate.
- Bridge Loan: Short-term financing used until a person or company secures permanent financing.
- Broker: A person or company licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services.
- Buydown: A financing technique to lower the interest rate on a mortgage for a temporary period.
C
- Capital Gain: Profit from the sale of property or an investment.
- Chain of Title: The sequence of historical transfers of title to a property.
- Closing: The last step in executing a real estate transaction.
- Closing Costs: Expenses over and above the price of the property in a real estate transaction.
- Commission: A fee charged by a broker or agent for their service.
- Comparative Market Analysis (CMA): An estimate of a home’s value compared with others.
- Contingency: A condition that must be met before a contract becomes legally binding.
- Conventional Mortgage: A home loan that is not insured or guaranteed by the federal government.
- Covenant: A clause in a contract that binds or restricts the parties and which, if violated, can result in legal action.
D
- Deed: The official document transferring ownership from seller to buyer.
- Default: Failure to fulfill a legal obligation or agreement.
- Depreciation: A decrease in the value of a property due to wear and tear, age, or other factors.
- Down Payment: A first payment made when something is bought on credit.
- Due Diligence: The process of thoroughly investigating a property before purchase.
E
- Easement: A right to use the property of another for a specific purpose.
- Eminent Domain: The right of a government to take private property for public use, with compensation.
- Encroachment: Intrusion on a person’s territory, rights, etc.
- Equity: The difference between the reasonable value of a property and the current balances of any liens.
- Escrow: The holding of documents and money by a neutral third party prior to closing.
- Exclusive Listing: A written contract giving a licensed real estate agent the exclusive right to sell a property for a specified time.
F
- Fair Market Value: The price that a willing buyer and a willing seller would agree to.
- Fannie Mae: A government-sponsored enterprise that buys mortgages from lenders and sells them to investors.
- FHA Loan: A loan insured by the Federal Housing Administration and made by an approved lender in accordance with the FHA’s regulations.
- Fixture: Personal property that becomes real property when attached in a permanent manner to real estate.
- Foreclosure: The process by which a lender takes control of a property due to failure to pay the mortgage.
- Freddie Mac: A government-sponsored enterprise that buys mortgages and packages them into mortgage-backed securities.
G
- Good Faith Estimate (GFE): An estimate of the fees due at closing for a mortgage loan provided by a lender to a borrower.
- Grant Deed: A legal document used to transfer ownership of real property.
H
- Hazard Insurance: Insurance coverage that protects against damage to a property from fire, wind, or other hazards.
- Home Equity Line of Credit (HELOC): A line of credit secured by the equity in a home.
- Home Inspection: An examination of the condition of a real estate property.
- UD-1 Settlement Statement: A document that lists all charges and credits to the buyer and seller in a real estate settlement.
I
- Impound Account: An account kept by a mortgage company out of which required property charges are paid.
- Income Property: Real estate developed or improved to produce income.
- Interest: The cost of borrowing money, typically expressed as a percentage of the amount borrowed.
- Interest Rate: The percentage of the sum of money charged for its use.
J
- Joint Tenancy: A form of co-ownership that gives each tenant equal interest and equal rights in the property, including the right of survivorship.
K
- Kickback: A form of bribery in which a part of the sums of money exchanged is returned or paid out because of a confidential agreement or coercion.
L
- Lease: A contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset.
- Lien: A legal right or interest that a lender has in the borrower’s property, until the debt obligation is satisfied.
- Listing Agreement: A contract between a property owner and a real estate broker authorizing the broker to represent the seller and find a buyer.
- Loan-to-Value Ratio (LTV): A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
M
- Market Value: The price at which an asset would trade in a competitive auction setting.
- Mortgage: A debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.
- Mortgage Broker: An individual or company that connects borrowers and lenders for the purpose of loan origination.
- Mortgage Insurance: Insurance that protects lenders from losses due to the default of a mortgage loan.
N
- Net Listing: A real estate sale in which the seller sets a net price for the property, and any amount above this price obtained by the agent becomes the agent’s commission.
- Notary Public: A public official authorized to attest to the authenticity of signatures.
O
- Offer: A formal bid from the home buyer to the home seller to buy a home.
- Open House: A scheduled period in which a house or other dwelling is appointed to be open for viewing by potential buyers.
- Origination Fee: A fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan.
P
- Pre-Approval: A lender’s conditional agreement to lend a specific amount to a borrower based on certain criteria.
- Principal: The amount of money borrowed or the amount of the loan that is yet to be repaid excluding interest.
- Property Management: The operation, control, maintenance, and oversight of real estate and physical property.
- Purchase Agreement: A legal document outlining the terms and conditions of a real estate transaction.
Q
- Qualifying Ratios: Lenders’ criteria for deciding the maximum amount of a mortgage that a borrower can afford.
- Quitclaim Deed: A deed that transfers the seller’s interest in the property to the buyer without guarantees or warranties.
R
- Real Estate Agent: A licensed professional who arranges real estate sales and rentals.
- Refinancing: The process of replacing an existing mortgage with a new loan, typically with better terms.
- REIT (Real Estate Investment Trust): A company that owns, runs, or finances income-producing real estate.
- Right of First Refusal: A contractual right that gives its holder the choice to enter a business transaction with the owner of something, before the owner is entitled to enter that transaction with a third party.
S
- Sale Leaseback: A transaction in which the seller of a property agrees to lease it back from the purchaser at once after the sale.
- Second Mortgage: A loan taken out on a property that is already mortgaged.
- Short Sale: A sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property.
- Survey: A detailed inspection and measurement of a property’s boundaries and its features.
T
- Tax Lien: A lien imposed by law upon a property to secure the payment of taxes.
- Title: The legal right to own, use, or sell a piece of property.
- Title Insurance: Insurance that protects the holder from financial loss sustained from defects in a title to a property.
- Title Search: A check of the public record to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.
U
- Underwriting: The process by which a lender evaluates the risk of lending money to a home buyer and sets up the terms of the loan.
- Unencumbered Property: Property that is not subject to any liens or encumbrances.
V
- VA Loan: A mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA).
- Variable Interest Rate: An interest rate that moves up and down based on the changes of an underlying interest rate index.
- Variance: A request to deviate from current zoning requirements.
W
- Warranty Deed: A deed that guarantees a clear title to the buyer of real property.
- Wraparound Mortgage: A form of secondary financing for the purchase of real property.
Z
- Zoning: Regulations governing the use of land and the types of structures that can be built upon it.
- Zoning Ordinance: A law that limits the permitted uses of land and maximum density of development in a community.
This extensive glossary covers a broad spectrum of terms across various aspects of real estate and related fields, aiming to be an invaluable resource for home sellers, buyers, and real estate professionals alike.
Table of Contents
- Introduction: Welcome to the Systems……………………………………………………….…………..……8
- Unlock Your Profit Potential: The Value of Hiring a Top-Notch Agent……………….…..…..14
- Financial and Legal Foundations: Setting the Stage for a Profitable Sale……………………21
- Embark on Your Profitable Journey: Unveiling the Secrets to Selling Your Home..……35
- Unleash Your Selling Potential: The Game-Changing 80/20 Rule…………………………….49
- Invest Smart, Profit Big: Strategic Upgrades for Maximum ROI …………………………….….57
- Curbside Charm: Transforming Your Home’s Exterior for Maximum Profit………….…..…69
- Declutter For Dollars: The Profitable Power of Depersonalization and Organization……79
- Furry Friends and the Sale: Balancing Pet Presence for Home Appeal………………………90
- Green Gains: Turning Sustainability into Profitability in Real Estate…………………………..98
- Artful Impressions: Elevating Perceived Home Value Through Strategic Art Staging…108
- Stage Your Success: Crafting Irresistible Spaces to Amplify Your Home’s Value…………115
- From Pitfalls to Profit: Navigating Common Seller Mistakes……………………………….….124
- Learning from the Best: Extracting Gems from Others’ Selling Experiences………..…..133
- Market Like a Pro: Insider Strategies to Showcase Your Home’s True Worth………….…143
- Buyer Magnetism: Strategies to Attract and Secure Profitable Buyers………………………153
- Digital Showcasing Mastery: Maximizing Your Online Presence for a Quick Sale……162
- Master the Art of Negotiation: Elevate Your Profit Potential…………………………….….168
- Sweetening the Deal: The Power of Incentives in Home Sales Strategy……………….…..181
- Sealing the Deal: A Guide to Closing with Confidence………………………………………….…190
- Selling Land: Under everything is the land…………………………………………………….………199
- Selling Multi-Family Homes: Increase profits with multiple units………………………..208
- Leasing & Renting: Profiting without a sale…….………………………………………………….…216
- Analysis of 99 Home Improvements: Description & benefits…..……………….………..240
Glossary: A glossary has been provided at the end of this book. …………………………………………341
If real estate terminology is new to you, it might be beneficial to start there to enhance your understanding of the concepts.
Example Forms: Essential Tools for Real Estate Transactions………………………………..………..345