Hello All! I hope you find this post informative and useful. I have put together a list of real estate terms with the meanings. You can view a larger list at http://www.kristytayloronline.com/
Adjustable Rate Mortgage (ARM)
A mortgage with an interest rate that changes over time in line with movements in a financial index. ARMs can also be referred to as AMLs (adjustable mortgage loans) or VRMs (variable rate mortgages).
Amortization
Repayment of a loan in installments of principal and interest, rather than interest-only payments.
Appraisal
An estimate of the property's value.
Assessed Value
The value placed on a property for purposes of taxation.
CC&Rs or Covenants, Conditions and Restrictions
A recorded document that controls the use, requirements and restrictions of a property.
Commission
An amount paid by the seller to the listing and selling agent for handling the real estate transaction.
Condominium
A form of real estate ownership in which the owner receives exclusive title to a particular unit and shares ownership in certain common areas with other unit owners. The unit itself is generally a separately owned space whose interior surface (walls, floors and ceiling) serve as its boundaries.
Contingency
A condition that must be satisfied before a contract is binding. For example, a sales agreement or offer may be contingent upon the buyer obtaining financing.
Deed
A document which, when properly executed and delivered, conveys title of real property.
Disclosure
To make known or public. By law, a seller of real property must disclose facts which affect the value or desirability of the property.
Earnest Money
The portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith.
Escrow
A procedure in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties' instructions and assuming responsibility for handling all of the paperwork and distribution of funds. An escrow fee, typically paid by the buyer, is charged by the title company to service the transaction and to escrow money and documents.
Equity
The difference between what is owed and the amount for which the property could be sold.
FHA Loan
A loan insured by the Federal Housing Administration (of the Department of Housing and Urban Development).
Federal Home Loan Mortgage Corporation (FHLMC)
Often referred to as "Freddie Mac," they purchase loans from savings and loan lenders within the Federal Home Loan Bank Board.
Federal National Mortgage Association (FNMA)
Popularly known as "Fannie Mae," they purchase and sell residential mortgages insured by FHA or guaranteed by the VA, as well as conventional home mortgages.
Fixtures
Personal property that is attached to real property and is legally treated as real property while it is attached - such as light fixtures, window treatments and medicine cabinets.
Government National Mortgage Association (GNMA)
Known as "Ginnie Mae," a governmental part of the secondary market that deals primarily with recycling VA and FHA mortgages, particularly those that are highly leveraged.
Home Warranty Plan
Protection against failure of mechanical systems within the property and usually includes plumbing, electrical, heating and cooling systems and installed appliances.
List-to-Sale Ratio
The ratio between the price at what a property is listed and the amount for which it is actually sold.
Loan-to-Value Ratio
The relationship between the amount of the mortgage and the appraised value of the property, typically expressed as a percentage of the appraised value.
Mortgage Insurance Premium (MIP)
The mortgage insurance required on FHA loans for the life of said loan. The MIP is either paid in cash at the time of closing or financed over the course of the loan.
Multiple Listing Service
The pooling in a central bureau of all properties for sale. The listings are held individually by members of a group of real estate brokers, with the agreement that any member of the group may sell the properties and the commission will be divided between the broker that sold the property and the broker who filed the listing.
Private Mortgage Insurance (PMI)
Insurance written by private companies to protect the lender against loss if the borrower defaults on the mortgage. PMI is often required on mortgage loans in which less than 20% has been put forth for the down payment. Depending on the conditions of the mortgage, the borrower may request cancellation of PMI when equity in the property reaches 20%.
Purchase Agreement
A written document in which the purchaser agrees to buy a certain real estate and the seller agrees to sell under stated terms and conditions. Also called a sales contract, earnest money contract, or agreement for sale.
Realtor
A real estate broker or sales associate active in a local real estate board affiliated with the National Association of Realtors.
Title
The rights of ownership recognized and protected by law. It is a combination of all elements that constitute the highest legal right to own, possess, use, control, enjoy, transfer and dispose of real estate.
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