Some Simple Real Estate Terms Defined

Posted by on Friday, January 24th, 2014 at 9:01pm.

If you're new to the world of real estate there are probably going to be some terms that you don't understand. Here are some basic real estate words defined to help you get more familiar with the language.

Appraisal - This is an analysis conducted by a qualified appraiser that provides an estimated property value in writing.

Closing - This is the last step in the process of purchasing a home that involves transferring the title over to the new owner.

Escrow - A third party holds the title to the property and the cash deposit until all of the agreements have been fulfilled. Once this has taken place, the third-party will give the buyer and the seller their assets.

Amortization schedule - This is the schedule followed when paying down a mortgage. It lists how much principal and interest have been paid and how much is still owing.

Pre-approval - A pre-approved loan gives you an interest rate that is locked in for a specified amount of time. It will indicate the maximum mortgage you will qualify for once you have found a home and are ready to place an offer.

Agreement - Don't be confused if you hear this word mentioned quite often. It refers to the written contract for the purchase and sale of the home. 

House flipping - This involves buying a piece of real estate with the end goal in mind of reselling it for more money. Usually it involves buying a fixer-upper, doing repairs and renovations on it and then selling it for a higher amount.

Contingency - This is a condition that is part of the contract and it is legally binding. For example, a person may ask for a satisfactory report from a home inspector as a condition. If this isn't met and the report comes back with a lot of problems listed, the buyer can decide not to go ahead with the purchase.

Amenity - This is a feature that makes a property stand out and appear more attractive. For example, if a home is close to a shopping mall then the mall can be considered as an amenity.

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