Real Estate Terms

A/I: A contract that is pending with attorney and inspection contingencies.

Addendum: An addition to; a document.

Application fees: Fees that mortgage companies charge buyers at the time of written application for a loan; for example, fees for running credit reports of borrowers, property appraisal fees, and lender-specific fees.

Appraisal: A document of opinion of property value at a specific point in time.

Back on market (BOM): When a property or listing is placed back on the market after being removed from the market recently.

Back-up offer: When an offer is accepted contingent on the fall through or voiding of an accepted first offer on a property.

Broker: A state licensed individual who acts as the agent for the seller or buyer.

Buyer agency: A real estate broker retained by the buyer who has a fiduciary duty to the buyer.

Buyer agent: The agent who shows the buyer’s property, negotiates the contract or offer for the buyer, and works with the buyer to close the transaction.

Closing: The end of a transaction process where the deed is delivered, documents are signed, and funds are dispersed.

Commission: The compensation paid to the listing brokerage by the seller for selling the property. A buyer agency agreement may require the buyer to pay a commission to his or her agent.

Comparative market analysis (CMA): A study done by real estate sales agents and brokers using active, pending, and sold comparable properties to estimate a listing price for a property.

Contingency: A provision in a contract requiring certain acts to be completed before the contract is binding.

Continue to show: When a property is under contract with contingencies, but the seller requests that the property continue to be shown to prospective buyers until contingencies are released.

Counteroffer: The response to an offer or a bid by the seller or buyer after the original offer or bid.

Curb appeal: The visual impact a property projects from the street.

Days on market (DOM): The number of days a property has been on the market.

Disclosures: Federal, state, county, and local requirements of disclosure that the seller provides and the buyer acknowledges.

Down payment: The amount of cash put toward a purchase by the borrower.

Earnest money deposit: The money given to the seller at the time the offer is made as a sign of the buyer’s good faith.

Escrow account for real estate taxes and insurance: An account into which borrowers pay monthly prorations for real estate taxes and property insurance.

Exclusions: Fixtures or personal property that are excluded from the contract or offer to purchase.

Expired (listing): A property listing that has expired per the terms of the listing agreement.

Fax rider: A document that treats facsimile transmission as the same legal effect as the original document.

Fixture: Personal property that has become part of the property through permanent attachment.

HUD/RESPA (Housing and Urban Development/Real Estate Settlement Procedures) Act:
A document and statement that details all of the monies paid out and received at a real estate property closing.

IIDX: (Internet Data Exchange) Allows real estate brokers to advertise each other’s listings posted to listing databases such as the multiple listing service.

Inclusions: Fixtures or personal property that are included in a contract or offer to purchase.

Inspection rider: Rider to purchase agreement between third-party relocation company and buyer of transferee’s property stating that property is being sold “as is”. All inspection reports conducted by the third party company are disclosed to the buyer and it is the buyer’s duty to do his/her own inspections and tests.

List date: Actual date the property was listed with the current broker.

List price: The price of a property through a listing agreement.

Listing agreement: A document that establishes the real estate agent’s agreement with the sellers to represent their property in the market.

Listing exclusion: A clause included in the listing agreement when the seller (transferee) lists his or her property with a broker.

Loan closing costs: The costs a lender charges to close a borrower’s loan. These costs vary from lender to lender and from market to market.

Loan commitment: A written document telling the borrowers that the mortgage company has agreed to lend them a specific amount of money at a specific interest rate for a specific period of time. The loan commitment may also contain conditions upon which the loan commitment is based.

Lockbox: A tool that allows secure storage of property keys on the premises for agent use. A combo uses a rotating dial to gain access with a combination; a Supra® (electronic lockbox or ELB) features a keypad.

Marketing period: The period of time in which the transferee may market his or her property (typically 45, 60, or 90 days), as directed by the third-party company’s contract with the employer.

Multiple listing service (MLS): A service that compiles available properties for sale by member brokers.

Multiple Offers: More than one buyers broker present an offer on one property where the offers are negotiated at the same time.

Off market: A property listing that has been removed from the sale inventory in a market. A property can be temporarily or permanently off market.

Offer to purchase: When a buyer proposes certain terms and presents these terms to the seller.

Open house (public): When a listing that is on market is available to the public for viewings and showings.

Pending: A real estate contract that has been accepted on a property but the transaction has not closed.

Planned unit development (PUD): Mixed-use development that sets aside areas for residential use, commercial use, and public areas such as schools, parks, and so on.

Preapproval: A higher level of buyer/borrower prequalification required by a mortgage lender. Some preapprovals have conditions the borrower must meet.

Prequalification: The mortgage company tells a buyer in advance of the formal mortgage application, how much money the borrower can afford to borrow. Some pre-qualifications have conditions that the borrower must meet.

Pricing: When the potential seller’s agent goes to the potential listing property to view it for marketing and pricing purposes.

R & I: Estimated and actual repair and improvement costs.

Real estate agent: An individual who is licensed by the state and who acts on behalf of his or her client, the buyer or seller. The real estate agent who does not have a broker’s license must work for a licensed broker.

REALTOR®: A registered trademark of the NATIONAL ASSOCIATION OF REALTORS that can be used only by its members.

Relist: Property that was listed with another broker but relisted with a current broker.

Rider: A separate document that is attached to a document in some way. This is done so that an entire document does not need to be rewritten.

Seller (owner): The owner of a property who has signed a listing agreement or a potential listing agreement.

Showing: When a listing is shown to prospective buyers or the buyer’s agent (preview).

Special assessment: A special and additional charge to a unit in a condominium or cooperative. Also a special real estate tax for improvements that benefit a property.

Temporarily off market (TOM): A listed property that is taken off the market due to illness, travel, repairs, and so on.

Transaction: The real estate process from offer to closing or escrow.

Transaction fee: A fixed amount in addition to commission charged to sellers.

Transaction management fee (TMF): A fee charged by listing brokers to the seller as part of the listing agreement.

Transaction sides: The two sides of a transaction, sellers and buyers. The term used to record the number of transactions in which a real estate sales agent or broker was involved during a specific period.

24-hour notice: Allowed by law, tenants must be informed of showing 24 hours before you arrive.

Under contract: A property that has an accepted real estate contract between seller and buyer.

VA Loan Guarantee: A guarantee on a mortgage amount backed by the U.S. Department of Veterans Affairs.

Vacate date: The date on which the seller (transferee) vacates the property (generally the date when responsibility for property expense by the transferee ends) and the third-party company assumes ownership for the property through a buyout.

Virtual tour: An Internet web/cd-rom-based video presentation of a property.

Walk-through: A showing before closing or escrow that permits the buyers one final tour of the property they are purchasing.

Worksheet (transaction): The real estate sales company form that records all information relevant to a transaction.