Glossary Of Terms

Addendum: form explaining an addition or change to a purchase agreement

Affidavit: statement signed by the buyer or seller to indicate the information provided is the truth

Appraisal: determination of the fair market value of property

Appraiser: qualified professional in the appraisal of real estate

Appraisal Fee: the cost that an appraiser charges in order to provide an estimate of a property’s market value

Appreciation: an increase in the property's value

Balloon Loan: loan with monthly payments and a leftover balance due in a lump sum payment at the end of the loan term

Blanket Mortgage: one mortgage that includes more than one property

Closing: the final part or settlement of the process to transfer property ownership

Closing costs: the transaction fees that home buyers (or sellers) must pay at the close of escrow when real estate is transferred

Closing Date: date for the property to officially be exchanged

Contingency: contract provision stating that some or all of the contract's terms will be altered or voided by the occurrence of a specific event, usually by specific dates leading up to the closing

Deed: document that indicates the transfer of a property’s ownership

Default: the lack of ability to pay mortgage payments as agreed

Depreciation: gradual loss of value to property due to the property's age, natural wear and tear, or deterioration

Down Payment: the percentage of the total purchase price paid when an agreement of sale has been signed

Earnest money deposit (EMD): a partial payment demonstrating commitment in a contract

Escrow: funds or documents that a neautral third party holds until closing

Fixed-Rate Mortgage: a loan with a constant interest rate and payment amount for the term of the loan

Foreclosure: when a property is sold to handle the losses when an owner defaulted on a loan

Holding Period: the time period in which a property is owned

Homeowner’s Insurance: insurance that protects property from hazards such as storms or fire

Inquiry: a credit report request

Inspections: checking a property for defects

Interest Rate: cost to borrow money from a lender

Listing Agent: the agent representing a property's seller

Mortgage: a legal document and term that indicates a loan; the property is pledged to a lender and is the security for a loan's payment

Mortgagee: the lender in a mortgage agreement

Mortgagor: the borrower in a mortgage agreement

Origination Fee: expense paid to the lender processing a loan application

PITI: an abbreviation for the expenses that make up a mortgage payment: the principal,
interest, taxes, and insurance

Pre-Qualification: used to determine if a borrower is able to qualify for a loan

Price-to-Income Ratio: how a property's affordability is measured

Purchase Offer: a document that provides an offer to buy a property

Real Estate Agent: a licensed professional who assists in a property sale

Real Estate Broker: a licensed real estate professional or company negotiating the purchase of real estate between a buyer and seller

Realtor®: A real estate agent who is a member of the National Association of Realtors

Real Estate Salesperson: a licensed professional who has similar tasks as a real estate broker, and is connected to and supervised by a broker

Second Deposit: another deposit that is paid when the purchase agreement is signed

Title: the evidence that a person has the legal right to own real estate or personal property

Transfer Taxes: state and local taxes applied upon the transfer of real estate

Zoning: the laws and regulations created by local governments regarding a property’s use in a particular location