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Real Estate Terminology Guide
Dated: April 13 2023
- Real Estate Agent - A professional with a real estate license who sells/rents out buildings and land for clients and assists in the home buying or selling process. A licensed Real Estate Agent MUST register their license with a Real Estate Broker to be able to conduct Real Estate Business.
- Real Estate Broker - A professional who has passed a state broker’s exam. Brokers are able to work on their own or hire their own agents to work for them.
- MLS - Multiple Listing Service - The MLS is a database that real estate agents use to share their listings with other agents and to search for homes for sale. Each MLS database serves specific regions and is available to agents who pay the membership.
- Adjustable-Rate Mortgage - A type of mortgage in which the interest rate applied to the outstanding balance varies throughout the life of the loan. With an adjustable-rate mortgage, the initial interest rate is fixed for a period of time. After this initial period of time, the interest rate resets periodically, at yearly or even monthly intervals.
- Fixed-Rate Mortgage - A type of mortgage in which the interest rate of a fixed-rate mortgage remains the same throughout a loan term.
- Appraisal - In order to get a loan from a bank to buy a home, you first need to get the home appraised so the bank can be sure they are lending the correct amount of money. The appraisal is an independent valuation conducted by a lender to determine a property’s value, based on its condition and comparable listings. This process helps validate the agreed upon purchase price between a buyer and seller.
- Survey - A determination of property boundaries conducted by a licensed surveyor. The survey defines what’s yours and what’s not by defining the property boundary lines and the improvements within the boundaries.
- Closing - A meeting at which a buyer and seller finalize a real estate transaction. Both the buyer and seller are required to fill out legal paperwork to officially transfer ownership of the property at the time of closing and conduct closing costs.
- Escrow - Escrow is a legal arrangement in which a third party temporarily holds large sums of money or property until a particular condition has been met (e.g., the fulfillment of a purchase agreement). Neither party has access to the funds in escrow without mutual consent. The buyer's Escrow Deposit, also referred to as Earnest Money Deposit or Good Faith Deposit, is applied to the buyer's funds at closing.
- Contingencies - Conditions that must be met, either by the seller or the buyer, before the purchase of a property can close. Contingencies are intended to protect buyers and sellers and often include items such as inspections, mortgage approvals, and appraisals.
- Depreciation - Describes the decrease of a property’s value over time - attributed to wear and tear.
- Addendum - An addendum is an additional document that gets added to the purchase and sale agreement. The document will include any additional information or requests that the buyer did not put into the original purchase and sale agreement
- Appreciation - Appreciation is the increase in a home's value over time. How much a home appreciates each year depends on the local real estate market and any improvements to the home. A home's appreciation is calculated based on the fair market value of comparable homes for sale in the neighborhood.
- Equity - is the difference between the value of a house less any debts owed on the property. To calculate your home’s equity subtract your outstanding loan balance from the current market value of your property. Home equity will increase as you pay down your loan or the market value of your home increases.
- Refinance - Homeowners often restructure their home loan with a new one, typically to obtain a lower interest rate.
- Property Management - Property managers are individuals or entities that oversee the operations of a rental property. Activities include screening and selecting tenants, collecting rents and deposits, handling maintenance issues, and even responding to tenant disputes or complaints.
- Days on Market (DOM) - defined as the number of days from the date on which the property is listed for sale on the local real estate broker’s MLS (multiple listing service) to the date when the seller has signed a contract for the sale of the property with the buyer.
- HOA - Homeowners association - A homeowner’s association or HOA is a private organization within a planned community, subdivision, or condominium tasked to create and enforce rules for the homes in the community and its residents. Those who buy a property within an HOA’s jurisdiction are automatically included as members and are required to pay dues or HOA fees
- Foreclosure - Foreclosure is a legal process that happens whenever a homeowner is unable to make a mortgage payment, usually for a period exceeding 90 days. In a foreclosure, the owner forfeits all of their rights to the property. Should the owner fail to pay off any outstanding debts on the property or sell it through a short sale, the home will enter a foreclosure auction. If it’s still not sold during the auction, the lender will then have control over the property.
- Pre-approval - A home buyer who is pre-approved means a lender has verified their information, checked their credit, and has approved them for a specific loan amount for up to 90 days. The process requires buyers to fill out an application in order to allow a lender to examine their current financial situation, including their creditworthiness, debt-to-income ratio, and ability to repay.
- Title insurance – This type of insurance is acquired to protect against any unknown liens or debts that may be placed against the property. Before issuing title insurance, public records are searched to ensure that the current owner has legal rights to the title as well as the legal ability to sell the home and that no liens are held against the property.
Born in the UK and now a naturalized US Citizen, I pride myself in customer service and building valued relationships with my clients. With over 20 years experience in the Tampa Bay real estate market....