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Important Real Estate Jargon and Real Estate Lingo Property Terminology GuideIf you are new to property, real estate jargon and property terminology can sound like alien language. No worries we are here to rescue you with a list of important and common real estate lingo that every property investor and landlord should know.This Page Lists Real Estate Jargon from A to M - Click here for Real Estate Lingo from N to Z 1031 Tax Deferred Exchange An important IRS rule in the U.S. allowing property owners to avoid paying capital gains taxes if they sell their investment property to buy another like-kind property. The rule will apply only if the real estate owner meets certain requirement such as using the property for investment purposes and completing the deal within certain time limits. Agent Thie real estate jargon refers to the 3rd party person who represents a seller, a buyer (or both) in the sale or purchase of real estate. Appraisal An appraisal is an estimated value of a real estate property by a professional third party such as a certified real estate appraiser. A written property appraisal my help the buyer borrow the required funds to buy the property. Every non-owner financed mortgages will require an appraisal and is generally paid for by the buyer. Assessment This real estate lingo refers to the value of a property as calculated by the local tax laws. This assessment is then used to determine the amount of property taxes the property owner owes. Comparable Market Analysis CMA A comparable market analysis is a comparison of the prices of similar houses in the same geographic area. A buyer or seller can use a CMA to help determine the true value of a property. CMA is more reliable and accurate than simply looking to see what other home sellers are asking for their properties. Closing This property terminology refers to the process where the deed of the property is formally transferred from the seller to the buyer. Closing also finalises all aspects of the mortgage of the property. Closing Costs These are the additional costs incurred at the time of closing. Closing costs can include loan origination fees, discount points, recording fees, pre-paids and lawyer fees. Do note that down payment is not considered as a closing cost. Closing costs usually add to 3 to 5% of the selling price of the property Contingencies Contingencies are real estate lingo for the conditions written into real estate offers and contracts to prevent a buyer from being forced to buy a property that is unsatisfactory - either structurally or financially. One most common example of this real estate lingo is "This offer is subject to the buyer's obtaining adequate financing." This means that the buyer does not have to buy the property if he is not able to obtain a bank loan or financing within a fixed period of time. Deed This important real estate jargon refers to the legal document that determines who has ownership of a property. A deed is transferred from seller to buyer during closing. Earnest Money Earnest money is a sum of money that is submitted together with an offer to purchase. It is essentially proof that the buyer is sincere and serious in purchasing the property. "Good Faith Sum" is another name for this real estate lingo. The earnest money will be held by a neutral third party until the time of closing when it becomes part of the down payment. Escrow Money such as deposits and earnest money that is held for safekeeping before closing by a third party. After closing, part of the escrow money will be used for paying taxes and insurance. Escrow Agent This property terminology refers to a neutral third party whose job is to ensure that all the conditions of a real estate transaction are being met by the buyer and seller. He is also responsible for the safekeeping of the escrow money. For Sale By Owner FSBO This real estate jargon refers to property that is sold directly by the owner of the property without enlisting the help of any real estate agents. Foreclosure Foreclosure is a legal process where the lender of a loan (usually banks) takes control of the property of a borrower who has repeatedly defaulted on his loan. The bank will then put the real estate up for auction in order to recover the debt owed by the borrower. This property is known as a foreclosure property. Homeowner's Association An owners' group (within a condominium, apartment, town house or single family subdivision) that enforces the general guidelines and standards for the operation of the community. Inspection A thorough check of a property that is being considered for purchase. Inspection can be conducted by the buyer himself or professionally done by a home inspector or licensed contractor. The main point of an inspection is to assess the condition of the property and check for any defects. Legal description This property terminology refers to a specific way of identifying and locating a piece of real estate that is acceptable to a court of law. Lien If someone owes you money or if you are awarded payments from a court case, you can apply to have a lien placed on the property owned by your borrower. This lien gives you the right to claim payment from the sale of the borrower's real estate. Listing This property terminology refers to a property that is for sale by a real estate brokerage and agent. Multiple Listing Service MLS A multiple listing service combines the listings for all available properties in an area into one database. Since this database is pooled by a group of brokers, property that are for sale by owners FSBO are excluded from it. In general, access to a multiple listing service database is restricted to licensed real estate agents. They will usually have a fee to view the database. Return from this Real Estate Jargon page to our First Time Landlord guide
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