Real Estate Glossary (Part 2 of 10)

Broker

A person who is licensed to act on behalf of another person. For example, a real estate broker.

Building Inspection

An inspection of a property on behalf of a buyer in which defects are identified. Usually performed by a licensed home inspector. The buyer may have the right to cancel the sale if he does not like the building inspector’s report.

Buyer

In a sales contract, the person who arranges to pay the sales price and takes ownership of the property.

Buyer’s Agent

A real estate licensee who represents the buyer in a transaction. Also known as a Buyer Broker.

Cap

The highest limit of the interest rate on an Adjustable Rate Mortgage (ARM).

Closing Costs

Dollar amounts which the seller and buyer must pay in a real estate sale. May include appraisal, title policy, property inspection, brokerage commissions, recording fees, loan points, and credit check fees. May equal approximately 10 percent of the property sales price.

Covenants, Codes, & Restrictions (CC&R)

Rules and regulations which apply to a certain property. It can limit things such as what color the house can be painted. Usually found on condos, PUDs, and homes in newer developments.

Collateral

Property which is held for payment of a debt. In a real estate loan, the lender holds a deed of trust against the property.

Community Property

Property accumulated through joint efforts of husband and wife and owned by them in equal shares. Husband and wife must agree to all real estate transactions involving community property. Also, a way of holding legal title.

Comparables (comps)

Properties which are similar to a certain unit being compared. Appraisers find comparable properties to arrive at an estimate of the property being appraised.