Most MISUSED Real Estate Terms

Real Estate Agent with CHANE REALTY INC 3230505


Yes, I admit it!  At times, I can be a word snob when it comes to the proper use of real estate and financing terms.  For goodness sakes, I still find it difficult just to end a sentence with a preposition, even though the “grammar police” is more accepting of where you put the preposition at.  Oh, the irony!

Even the Pros Get It Wrong!
Is your loan Conforming or Conventional?  Is your document an Offer or a Contract? There are so many terms that are often interchangeable and so similar in meaning that even the pros use them incorrectly.

When I hear another agent misuse a common real estate term, although cringe-worthy, it does give me excellent insight of that agent’s true knowledge and experience. This is especially fascinating when that agent is trying to impress me or my customer with his or her expertise.

Here are some of the most confusing and misused real estate and financing terms:

Realtor vs Real-a-tor
Yes, I even have family and friends that add that extra “a” in the middle of the word Realtor.  But, they can be forgiven for this minor pronunciation faux pas.  Now, when another real estate professional pronounces it incorrectly, it makes me go nuc-u-lar!

Offer vs Contract
An offer and a contract are the same document.  However, the term offer is used when the buyer presents the written document to the seller and it is negotiated.  The offer grows up and becomes a contract only when negotiations have been finalized by all parties, all terms have been agreed upon, and all signatures have been affixed on to the document.

Executed Contract vs Executory Contract
Executed Contract is probably one of the most misused terms in the industry, especially by real estate agents.  A fully signed or effective contract is NOT an executed contract.  Instead, it can be considered or called several things, including fully signed, effective, or executory, which is the correct legal term.  Personally, I use the term fully signed.  This simply means the terms of the contract are in the process of being fulfilled.

The only time a contract becomes fully executed is once the transaction has closed and all terms and conditions have been, well…executed.

Conventional Loan vs. Conforming Loan
Both terms are used loosely.  However, a Conventional Loan includes just about everything that is NOT a government backed (FHA) or government guaranteed (VA) loan.  Fannie Mae, Freddie Mac, subprime loans, and jumbo loans are all considered Conventional Loans.  A loan is “conforming” if it conforms to Fannie and Freddie standards in loan limits and guidelines.  Therefore, a loan can be both conventional and conforming.

Currently, the conforming loan limit is $417,000 for a single-family residence, although it is higher in certain areas like Hawaii and Alaska.  Anything above $417,000 is considered a jumbo loan, which is still conventional, but NOT conforming.

By the way, any changes in loan limits are announced at the end of every year and take effect in January.  Due to the housing crisis, loan limits have changed little in the past few years.

Loan vs. Mortgage
This is simple to misunderstand, but let’s clear it up now.  The mortgage is NOT the loan.  They are two different documents. 

The mortgage is a pledge of collateral.  It’s an I.O.U. that you give the lender, and could be as simple as one page.  The property is still yours, and the deed is still in your name.

With the mortgage in hand, the lender is able to place a lien on the property (collateral) in order to secure the mortgage.  You cannot sell the property without first paying off the lien to the lender.

The actual loan encompasses the note/agreement you signed with your lender explaining how the funds they lent to you will be repaid.  Keep in mind that the note is usually not recorded with the mortgage document, since it is simply the repayment agreement between you and your bank, and may contain a lot of personal information that you and your lender would not want disclosed in a public forum.

Now you’re ready to take on the pros!


Comments (56)

Janice Zaltman
United Realty Group - Boca Raton, FL
South Florida Residential Real Estate

This is the first time  I have heard that "fully executed" meaning signed by all parties is not accurate. It is widely used here in Florida including attorneys and title companies.  Can understand how the misuse of language can be frustrating.

Aug 04, 2015 11:56 AM
Susan Emo
Sotheby's International Realty Canada - Brokerage - Kingston, ON
Kingston and the 1000 Islands Area

I think "Real-a-tor" is one of the kinder things we've been called! :)

Aug 04, 2015 12:22 PM

Hi Janice, I'm also in Florida and you are correct.  We all use this "fully executed" term all the time to describe what is actually an effctive or executory contract.  I know what the other party actually means when they say it, but in legal terms it is not correct.  It does not matter what state you are in.  The term "executed contract" is a universal legal term describing a completed contract.  The term is not specific to real estate.

I have a friend who is a real estate instructor for one of the large real estate schools, and he says he has given up trying to correct his students, even when his explanation is actually part of the class!

Aug 04, 2015 12:35 PM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I am a real estate instructor and I have people challenge me over terms all the time.  Oh and one of my areas of practive for real estate has higher conforming loan amounds.  Greene County GA.  I think it's 515,000 (ish), but it actually used to be around 700,000.

Aug 04, 2015 01:34 PM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Sad that there are so many folks who don't know the difference regarding these terms.

Aug 04, 2015 01:45 PM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

FELIX SANTIAGO - yep, we just 'forgive' and move ahead with some of these terms (many times, interchangeable!)

Aug 04, 2015 03:12 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Felix - These are terms that get confused, and it's nice vocabulary lesson.

Aug 04, 2015 03:32 PM
Andrew Mooers | 207.532.6573
Northern Maine Real Estate-Aroostook County Broker

The images, the videos... lots of times no words needed to confuse. Just present what is already there... let it do the talking. Talk the way the layman do sometimes is where the real estate slang keeps going round and round the block.

Aug 04, 2015 07:44 PM
Blatt + Cutino
Coldwell Banker Realty - Monterey, CA
Broker-Associate 831/206-8070*Call today*

Thanks for the vocabulary lesson. Terms can be confusing for most folks in this business and many are used much so that it can be even more confusing...especially for the consumers.

Aug 04, 2015 10:16 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

All you agent-less people out there...take note! Thank you FELIX SANTIAGO 

Aug 04, 2015 11:20 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

FELIX SANTIAGO A lot of agents have a problem with these terms. Can you imagine what the general public thinks?

Aug 04, 2015 11:40 PM
Chris and Dick Dovorany
Homes for Sale in Naples, Bonita Springs and Estero, Florida - Naples, FL
Broker/Associate at Premiere Plus Realty

Unfortunately unless someone is called out on their misuse of terms it will continue.  Taking classes does not really help because the teacher often assumes too much and does not at least touch on some of the basics.

Aug 05, 2015 12:00 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

I was with all the way until we got to mortgage and loan, and then I realized you are on the East Coast. In the West we use promissory notes, which are secured by a deed of trust and not be confused with states that use mortgages allowing for a different and somewhat more complicated way to foreclose. But no matter how you cut it, most people don't know what we're talking about. :)

Aug 06, 2015 11:12 AM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Ha? the comments 31-49~ what is that about? How someone can create so many accounts and use so many useless comments? I hope, I'll get my ''report spam'' points:)

Aug 07, 2015 05:54 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA


Here is what legal definition of:


That which is yet to be fully executed or performed; that which remains to be carried into operation or effect; incomplete; depending upon a future performance or event. The opposite of executed.

Aug 07, 2015 05:58 PM
Dan Dee McGinnis The Pumpkin Man
HomeSmart - Phoenix, AZ
The Pumpkin Man


Great information, thank you for your time.

Aug 08, 2015 06:24 AM
Ron Mast - Colorado Springs, CO
Homes for Sale in Colorado Springs Colorado

I would add   "Relator"  

Aug 09, 2015 04:25 AM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

I use the term RATIFIED when the contract is complete and dated. 

Sep 03, 2015 05:24 AM
Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

I just read this (or perhaps reread it) from Praful's reblog.  Great explanations.  But, 1 minor grammar should be "grammar police" ARE more accepting.

Sep 13, 2015 08:19 PM
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West - Carlsbad, CA
Presence, Persistence & Perseverance

FELIX SANTIAGO Great post and it is indeed frustrating when others mis-pronounce Reelator!

Sep 13, 2015 10:31 PM