A Guide to Real Estate Terms from A to Z

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A Guide toReal Estate Terms from A to Z

Sometimes real estate terms can become overwhelming. Home buying professionals may start to communicate in terms you have never heard of before. We have complied a list of terms from A to Z to help you get a better understanding!

A- Appraisal: the estimation of a homes market value by a licensed appraiser based on comparable homes recently sold in your area.


B- Backup Offer: a secondary offer on a home that will come into play if the offer that is under contract falls through and the home becomes active again.


C- Closing: the final step of a real estate transaction where the ownership of the property is transferred to the buyer.


D- Down Payment: a percentage of the homes purchase price that is paid up front.


E- Escrow: a third party account where funds are held until all conditions are met.


F- FHA Loan: a Federal Housing Administration loan is typically for low to moderate-income barrowers who cannot afford a large down payment.


G- Good Faith Estimate: is provided by a lender to a barrower and is a document that breaks down payments due at closing.


H- Homeowners Association: a private association in your neighborhood, which enforces rules and regulations. Typically an extra cost per year


I- Inspection: a home inspection is typically preformed prior to the closing to ensure there are no issues with the structure or systems in a home.


J- Jumbo Mortgage: typically used for luxury home purchases and is a loan that exceeds a certain amount.


K- Key Rate: interest rate set by the federal government that determines the cost to borrow money. (A Mortgage)


L- Loan: Money borrowed from a lender for the purchase of your home.


M- MLS: the Multiple Listing Service (MLS) is used by real estate agents to list and search for homes.


N- Net Proceeds: the amount the seller receives at closing after all other costs have been paid for.


O- Open House: an event hosted by the listing agent to market to potential buyers.


P- Pre-approval Letter: a letter from your lender, which states they are willing to lend a certain amount of money. (Does not guarantee mortgage approval)


Q- Quitclaim Deed: is typically used when family members transfer ownership of a property to one another. The deed transfers property rights without any validation of ownership.


R- Real Estate Owned: repossessed property owned by a lender after a sale at auction was unsuccessful.


S- Seller Disclosure: a document provided by the seller of the home listing any and all issues and history.


T- Title: the right of ownership of your property.


U- Under Contract: when a submitted offer on a property has been accepted and all parties sign contracts.


V- VA Loan: a certain type of government mortgage loan for military veterans and their spouses.


W- Walk Through: typically conducted the day of closing to ensure the property is in the same condition as when the offer was made.


X- X Marks the Spot: Sign at the X on the day of closing!


Y: Yield Spread Premium: is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower up front costs.


Z: Zero Lot Line: a residence that is built very close to the property line. Sometimes is will be built directly on the property line.







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