Real estate glossary

Real Estate Glossary

Confused about some of the terms being used when checking out homes? Use our Real Estate Glossary to help find the definitions of some of the terms, jargon and lingo you're bound to come across!

Transparent Pricing

noun

The price that the seller is willing to accept for selling the house without countering for a higher price. This means that if a home is listed for $1.5m, the seller will sell it at this price rather than countering at $1.6m or more.

Sharon was thrilled to buy her house at $1.02m that was listed at a transparent price of $1m.

Market Value

noun

An opinion of what a property could sell for based on factors such as the current market conditions, demand and supply, the property features, and the sale price of comparable properties. Usually, the market value of a home is always more in the eyes of the seller than that of the buyer.

Based on the recent sale of his neighbour's home with similar area and house features, Bob believed that the market value of his home should also be a little over a million dollars.

MLS

noun

A multiple listing service (MLS) is a database or repository of properties that are available for sale. Established by cooperating real estate brokers and agents, MLS has the most relaible and comprehensive data available for those looking to buy or sell a home. Brokers can use this system to look at one another's listings and connect home buyers to sellers.

As a real estate agent, Rob relies on the properties listed on MLS to find homes that are best suited to his client's needs.

Contingencies

noun

A contingency is a clause/condition in the sale agreement that must be met in order for the real estate transaction to be completed. If the contingencies in the contract are not met, the contract becomes void.

A contingency in the agreement allowed Sam to ensure that he had 30 days to get the property inspected and to cancel the transaction if something unexpected was discovered.

CD

noun

A Closing Disclosure (CD) is a a form that lists the final details of your mortgage loan including the loan terms, monthly interest payments, additional fee and more. The lender provides the CD to the homebuyer at least 3 days prior to closing the loan as a final document containing the actual details.

By comparing his Closing Disclosure form with the loan estimate, Ben was happy to note that it met his expectations and he was clear to close the escrow.

Comps

noun

Comparable Properties or Comps refer to recently sold properties than can be used to determine the value of similar available properties. It helps a seller/buyer determine the fair value of the home they are selling/buying based on other homes with similar characteristics that were sold recently.

Based on comps, Rita declared that Brian's home would have a good chance at being sold if it were priced at $50k lower than the current list price.

COE

noun

In simple terms, Close of Escrow (COE) is the transfer of home ownership from the seller to the buyer. It is the completion of the real estate transaction and marks the final sale of the home.

Even though the close of escrow was overwhelming, Shayne and Bree were glad it was over and that now they could move into their new home.

Transaction Coordinator

noun

A real estate professional who assists the agent in by managing all the administrative tasks required in a real estate transaction. From opening escrow, to managing paperwork, to meeting deadlines, and closing the contract, a TC or transaction coordinator performs all the administrative duties.

Allowing a TC to take care of every little detail in the contract, Rebecca was able to ensure that she had more time to provide an excellent experience to the client.

MIL

noun

A Mother-in-law unit is similar to an accessory dwelling unit except that it is attached to the main single-family home. A basement apartment is the perfect example of a MIL unit. A mother-in-law suite comes with an attached bathroom and can also sometimes have a separate entry, a small kitchen and a living area.

Sia converted her basement into a MIL unit to ensure her grandparents had their own space in the house.

ADU

noun

An accessory dwelling unit (ADU) is a secondary dwelling unit on the same grounds as your primary single-family house. It could be in the form of a a small cottage in the backyard, or an apartment over the garage. It is important to note that an ADU cannot be sold separately like a condominium. The owner of the home and ADU is the same and it is part of the same property as the main home.

Matt added an ADU to his backyard and rented it out as a long-term BnB to earn some extra income.

As-is

adjective

Selling a home as-is means that the seller will sell the home in its current condition, and will make no changes or improvements to the home before the sale. Usually, a home is sold as-is when the seller can't afford to fix the flaws before the sale, or the home has gone through foreclosure and is now in possession of the lender.

Even though the deal was great, Adam was reluctant to buy the home being sold as-is because of the amount of work required to fix it up.

Refinance

verb

Renegotiating your existing mortgage loan, or paying off your existing loan by taking on a new loan. Typically, homeowners refinance mortgage loans to take advantage of lower interest rates, or to shorten the term of their mortgage.

When the mortgage rates hit an all-time low in San Francisco, Dan decided it was the right time to refinance his existing loan.

Closing Costs

noun

The fee that buyers and sellers pay, over and above the price of the property, to complete a real estate transaction. These include costs such as credit check fee, insurance, real estate commission, taxes, and appraisal fee.

Joe agreed to cover a number of the closing costs in order to complete a quick sale of his house.

Fixed Rate Mortgage

noun

A mortgage where the interest rate does not change over the lifetime of the loan. This makes budgeting easier for homeowners who want to have a predictable payment month on month.

Taking into account their job and savings, Rob and Seema decided that a fixed-rate mortgage was the safest bet for them.

Assessed Value

noun

It is the value assigned to a home by the municipality in order to assess property taxes. This takes into consideration the sale price of comparable homes, square feet area, home features and inspections. Typically, the assessed value is lower than the market value of the property.

The assessed value of Mira's property has increased considerably over the last 10 years.

Foreclosure

noun

A legal process that allows lenders to take ownership of the mortgaged property if the buyers defaults on the loan. The lender can exercise the right to sell the property to recover the loan amount.

Before filing for foreclosure, the bank gave Bob one last chance to settle the mortgage payments in the next 30 days.

Pre-approval Letter

noun

A document detailing how much loan a lender will be willing to give to a potential home buyer after evaluating their credit history. SP: This is a document you'd get from a lender if you are interested in buying a home. It indicates they have pre-approved you for a loan up to a specific dollar amount (for instance, up to $600,000) based on two things: how much money you make and your credit score. The process to get a pre-approval letter can be quite quick. A buyer provides the pre-approval letter alongside an offer they make on a house. Once your offer is accepted, there is a vigorous underwriting process by which a lender makes a final decision on the loan amount and interest rate they can offer to you.

After getting her pre-approval letter, Maria was able to narrow down homes that were in her price range.

Escrow (and "in escrow")

noun

Escrow refers to a neutral third party that handles the property transaction, funds, and other related documents during the sale of a home, and ensures that the change of ownership is properly recorded in the public records. Being "in escrow" refers the period of time when funds are being held by the third party account before the final transfer to the seller. This gives the buyer time to perform due diligence on the property while also allowing the seller the confidence that once the due diligence is completed, the buyer has sufficient funds to close the deal.

The escrow company sent Sam (the owner) a number of papers to sign, including a copy of the deed to be recorded. The house deed will then be held in escrow until Shelly (the buyer) meets all the conditions of the sale contract. After that, it'll be released to the buyer

PMI

noun

Private mortgage insurance (PMI) is a type of insurance that you might be required to buy as a condition of a conventional mortgage loan. Most lenders require PMI when a homebuyer makes a down payment of less than 20% of the home's purchase price. PMI costs can range from 0.25% to 2% of your loan balance per year, depending on the size of the down payment and mortgage, the loan term, and the borrower's credit score.

Sam and I were able to avoid private mortgage insurance by ensuring we met the minimum downpayment requirement for our home.

Disclosures

noun

Sellers are required by law to disclose any and all flaws in the home, that the sellers or their agents are aware of, to the buyer.

The sellers included in the disclosures that the property was the subject of an insurance claim a couple of years ago for water damage.

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