Real Estate Lingo Decoded: Your Essential Glossary

1. Appraisal: An assessment of a property’s value conducted by a licensed appraiser, often required by lenders to determine the loan amount.
2. Closing Costs: Expenses incurred by buyers and sellers during the final stages of a real estate transaction, including fees for title insurance, attorney fees, and taxes.
3. Contingency: A condition that must be met for a real estate contract to become binding. Common contingencies include financing, appraisal, and home inspection.
4. Deed: A legal document that transfers ownership of a property from one party to another.
5. Equity: The difference between the market value of a property and the amount owed on the mortgage.
6. Escrow: Funds held by a third party (often an escrow agent or title company) on behalf of the buyer and seller until the completion of a real estate transaction.
7. Foreclosure: The legal process by which a lender repossesses and sells a property when the borrower fails to make mortgage payments.
8. Home Inspection: A thorough examination of a property’s condition, typically conducted by a licensed inspector before purchase to identify any issues or potential problems.
9. Listing: A property that is listed for sale with a real estate agent or broker.
10. Mortgage: A loan used to finance the purchase of a property, with the property itself serving as collateral for the loan.
11. Multiple Listing Service (MLS): A database used by real estate agents and brokers to share information about properties for sale, facilitating cooperation and compensation between agents.
12. Principal: The original amount of money borrowed in a mortgage loan, excluding interest and other charges.
13. Title Insurance: Insurance that protects against financial loss due to defects in the title of a property, such as undisclosed liens or ownership disputes.
14. Underwriting: The process by which a lender evaluates the risk of a borrower and decides whether to approve a mortgage application.
15. Zoning: Local government regulations that dictate how a property can be used, such as residential, commercial, or mixed-use.

These definitions cover essential terms commonly encountered in real estate transactions. Understanding these terms can help both buyers and sellers navigate the complexities of buying and selling property more confidently.