Here is a helpful page full of real estate terms that you should learn when buying, selling, or investing in real estate. I’ve broken this vocabulary list of real estate terms into multiple sections covering:

And here’s a bonus video walking you through an A to Z list of real estate words you should know. By the end of this guide, you’ll be one educated home buyer / seller.

See more videos here at my YouTube channel – Nick Foy Under 30 Wealth

30 General Real Estate Terms to Learn First

  1. Appraisal: An assessment of a property’s value by a licensed appraiser to determine its fair market value.
  2. Closing: The final step in a real estate transaction when ownership of the property is transferred from the seller to the buyer, and all financial obligations are settled.
  3. Escrow: A third-party account where funds are held until all conditions of a real estate transaction are met.
  4. Mortgage: A loan used to purchase real estate, with the property itself serving as collateral for the loan.
  5. Down Payment: The initial payment made by the buyer toward the purchase of a property, typically a percentage of the purchase price.
  6. Title: A legal document that proves ownership of a property.
  7. Deed: A legal document that transfers ownership of a property from one party to another.
  8. Foreclosure: A legal process through which a lender repossesses a property due to the borrower’s failure to make mortgage payments.
  9. Amortization: The process of paying off a mortgage through regular, equal payments over time.
  10. Principal: The amount of money borrowed in a mortgage loan, excluding interest.
  11. Interest Rate: The cost of borrowing money, expressed as a percentage of the loan amount.
  12. Closing Costs: Expenses incurred by buyers and sellers during the closing of a real estate transaction, including fees for appraisals, inspections, and title searches.
  13. Real Estate Agent: A licensed professional who represents buyers or sellers in real estate transactions.
  14. Multiple Listing Service (MLS): A database that real estate agents use to list properties for sale and share information with other agents.
  15. Listing: A property that is officially available for sale on the market.
  16. Buyer’s Agent: A real estate agent who represents the interests of the buyer in a real estate transaction.
  17. Seller’s Agent: A real estate agent who represents the interests of the seller in a real estate transaction.
  18. Dual Agency: When a real estate agent represents both the buyer and the seller in the same transaction, which can create potential conflicts of interest.
  19. Contingency: A condition that must be met for a real estate contract to become binding. Common contingencies include financing and inspections.
  20. Home Inspection: A thorough examination of a property’s condition to identify potential issues or needed repairs.
  21. Title Insurance: Insurance that protects the buyer and lender against any defects or disputes related to the property’s title.
  22. Easement: The legal right to use someone else’s property for a specific purpose, such as accessing a neighboring property.
  23. Housing Market: The overall supply and demand for real estate properties in a specific area.
  24. Zoning: Local regulations that dictate how land and properties can be used, such as residential, commercial, or industrial.
  25. FHA Loan: A mortgage loan insured by the Federal Housing Administration, often requiring a lower down payment and more lenient credit requirements.
  26. VA Loan: A mortgage loan guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans and active-duty military personnel.
  27. Adjustable-Rate Mortgage (ARM): A mortgage loan with an interest rate that can change over time, typically based on market conditions.
  28. Fixed-Rate Mortgage: A mortgage loan with a stable interest rate that does not change over the life of the loan.
  29. Home Equity: The difference between the market value of a property and the outstanding balance of any mortgages or loans secured by the property.
  30. Real Estate Investment Trust (REIT): A company that owns or finances income-producing real estate and is traded on stock exchanges like a regular stock.

These are just a few of the many terms you may encounter in the world of real estate. Understanding these terms can help you navigate the buying or selling process with confidence.

Financing Real Estate Terms to Learn

When it comes to financing real estate, there is a specific set of terminology and jargon that you should be familiar with. Whether you’re obtaining a mortgage, exploring real estate investment, or dealing with other financial aspects of real estate, these terms will be helpful:

  1. Amortization: The process of gradually paying off a loan (e.g., a mortgage) through regular, equal payments, which include both principal and interest.
  2. Appraisal: An assessment of the value of a property, typically performed by a licensed appraiser to determine its fair market value.
  3. Balloon Payment: A large, lump-sum payment that is due at the end of a loan term, typically associated with certain types of mortgages.
  4. Lender Closing Costs: Expenses incurred by the buyer during the closing of a real estate transaction. These can include fees for appraisals, underwriting, points, mortgage insurance.
  5. Collateral: Property or assets used as security for a loan. In real estate, the property itself often serves as collateral for a mortgage loan.
  6. Debt-to-Income Ratio (DTI): A financial ratio used to assess a borrower’s ability to manage their debt payments, calculated by dividing monthly debt payments by monthly income.
  7. Equity: The difference between the market value of a property and the outstanding balance of any loans or mortgages secured by the property.
  8. Interest Rate: The cost of borrowing money, typically expressed as a percentage of the loan amount.
  9. Lien: A legal claim against a property used as collateral to secure a debt or obligation, such as a mortgage or tax lien.
  10. Loan-to-Value (LTV) Ratio: The ratio of the loan amount to the appraised value or purchase price of a property. A lower LTV ratio indicates a smaller loan relative to the property’s value.
  11. Mortgage: A loan used to purchase real estate, where the property itself serves as collateral for the loan.
  12. Origination Fee: A fee charged by a lender to cover the costs of processing a loan application and establishing a new mortgage.
  13. Principal: The initial amount of money borrowed in a loan, excluding interest.
  14. Private Mortgage Insurance (PMI): Insurance required by lenders when a borrower makes a down payment of less than 20% of the home’s purchase price. PMI protects the lender in case of default.
  15. Refinancing: The process of obtaining a new mortgage with better terms to replace an existing mortgage. This is often done to lower interest rates or change loan terms.
  16. Underwriting: The process of evaluating a borrower’s creditworthiness and the risk associated with a loan application to determine whether it should be approved or declined.
  17. Good Faith Estimate (GFE): An estimate provided by a lender to a borrower that outlines the expected costs associated with a mortgage loan.
  18. Closing Disclosure (CD): A document provided to the borrower before closing, detailing the final terms and costs of the mortgage loan.
  19. Points: Upfront fees paid by the borrower to the lender to lower the interest rate on a mortgage loan. One point is equal to 1% of the loan amount.
  20. Down Payment: The initial payment made by the buyer toward the purchase of a property, typically a percentage of the purchase price.
  21. Escrow Account: A separate account set up by the lender to hold funds for property taxes and homeowners’ insurance payments.
  22. Adjustable-Rate Mortgage (ARM): A mortgage loan with an interest rate that can change over time, often based on market conditions.
  23. Fixed-Rate Mortgage: A mortgage loan with a stable, unchanging interest rate over the life of the loan.
  24. Home Equity Line of Credit (HELOC): A line of credit secured by a homeowner’s equity in their property, allowing them to borrow against that equity as needed.
  25. Fannie Mae and Freddie Mac: Government-sponsored enterprises that buy and guarantee mortgages to provide liquidity to the housing market.
  26. Federal Housing Administration (FHA) Loan: A government-backed mortgage loan insured by the Federal Housing Administration, often requiring a lower down payment and more lenient credit requirements.
  27. Veterans Affairs (VA) Loan: A mortgage loan guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans and active-duty military personnel.

These financial terms are essential for understanding the complexities of real estate financing. Whether you’re a first-time homebuyer, a real estate investor, or simply involved in a real estate transaction, having a grasp of these terms can help you make informed decisions.

Real Estate Contracts – Terms to Know

A purchase agreement in real estate, also known as a sales contract or purchase contract, is a legally binding document that outlines the terms and conditions of a property sale. It includes various terms and provisions to protect both the buyer and seller.

Here is a list of common terms and provisions found in a purchase agreement:

  1. Buyer: The party purchasing the property.
  2. Seller: The party selling the property.
  3. Property Description: Detailed information about the property, including its address, legal description, and any included fixtures or appliances.
  4. Purchase Price: The agreed-upon price the buyer will pay for the property.
  5. Earnest Money Deposit: A sum of money provided by the buyer as a sign of good faith and commitment to the purchase. It’s typically held in an escrow account.
  6. Closing Date: The date on which the property sale will be finalized, and ownership transferred from the seller to the buyer.
  7. Contingencies: Conditions that must be met for the sale to proceed, such as financing, inspection, and appraisal contingencies.
  8. Financing Contingency: A clause that allows the buyer to cancel the contract if they cannot secure the necessary financing within a specified time frame.
  9. Inspection Contingency: A provision that permits the buyer to have the property inspected by a licensed inspector. If issues are found, the buyer may request repairs or cancel the contract.
  10. Appraisal Contingency: A condition that allows the buyer to cancel the contract if the property does not appraise for at least the purchase price.
  11. Title Contingency: A clause stating that the buyer will only proceed with the purchase if the seller can provide clear and marketable title to the property.
  12. Closing Costs: The costs associated with the sale, which may include fees for title insurance, escrow, recording, and more. The purchase agreement may specify which party (buyer or seller) is responsible for these costs.
  13. Prorations: Adjustments made for property-related expenses, such as property taxes, homeowner association dues, and utilities. Prorations ensure that both parties pay their fair share for expenses incurred during the closing process.
  14. Warranties and Disclosures: A section where the seller provides information about the property’s condition and any known defects. Sellers may also make specific warranties about the property.
  15. Fixtures and Personal Property: Specifies which items in the property are included in the sale (fixtures) and which are not (personal property).
  16. Default: Outlines the consequences of either party failing to meet their obligations under the contract.
  17. Timeframes: Specifies deadlines for various aspects of the transaction, such as when inspections must be completed, when contingencies must be waived, and when closing will occur.
  18. Special Terms: Any additional terms or conditions negotiated between the buyer and seller. These may include repair requests, leaseback arrangements, or seller financing terms.
  19. Signatures: The agreement is typically signed by both the buyer and seller to indicate their acceptance of the terms.
  20. Addenda: Additional documents or attachments that modify or clarify the terms of the purchase agreement. Common addenda include lead-based paint disclosures and property disclosure statements.
  21. Escrow: Details the use of an escrow account to hold funds and documents until all conditions of the agreement are met.
  22. Default and Remedies: Specifies what happens in the event of a default by either party and outlines potential remedies, such as the return of earnest money or legal action.
  23. Governing Law: Indicates the state or jurisdiction whose laws will govern the contract.
  24. Survival of Terms: States which terms and conditions will continue to apply after the closing, such as warranties and disclosures.
  25. Counteroffers: If either party makes changes to the terms of the agreement, those changes are documented in a counteroffer, which must be accepted or rejected by the other party.
  26. Notices: Specifies how and where formal notices should be delivered between the parties.
  27. Attorney Review: In some states, there may be a provision allowing for an attorney to review and approve the contract.

These terms and provisions are essential components of a real estate purchase agreement. It’s crucial for both parties to carefully review and understand the contract before signing it, and consulting with a real estate attorney or agent can provide further guidance and clarification if needed.

Selling Real Estate – Terms to Know

When selling a home, you’ll encounter various real estate terms and concepts related to the process. Familiarizing yourself with these terms can help you navigate the sale more effectively.

Here’s a list of common home-selling real estate terms:

  1. Listing Agent: The real estate agent responsible for representing the seller in the sale of the property.
  2. Seller: The homeowner or property owner who is selling the property.
  3. Buyer’s Agent: The real estate agent who represents the buyer in the transaction.
  4. Multiple Listing Service (MLS): A database used by real estate agents to list properties for sale and share information with other agents.
  5. Comparative Market Analysis (CMA): An evaluation of similar recently sold properties in the area to determine a competitive listing price.
  6. Staging: The process of preparing a home for sale by enhancing its appearance to make it more appealing to potential buyers.
  7. Open House: A scheduled event where potential buyers can tour a property without an appointment.
  8. Marketing Plan: A strategy developed by the listing agent to promote the property to potential buyers, which may include online listings, print advertising, and social media.
  9. Home Appraisal: An assessment of the property’s value by a licensed appraiser to determine its fair market value.
  10. Title Search: A review of public records to confirm the property’s ownership history and ensure there are no outstanding liens or title issues.
  11. Earnest Money Deposit: A sum of money provided by the buyer as a sign of good faith and commitment to the purchase.
  12. Contingency: A condition that must be met for the sale to proceed, such as financing, inspection, or appraisal contingencies.
  13. Closing Costs: Expenses incurred by the buyer and seller during the closing of the transaction, including fees for appraisals, inspections, and title searches.
  14. Seller’s Disclosure: A document that provides information about the property’s condition, known defects, and other relevant details as required by law.
  15. Negotiation: The process of discussing and settling the terms and price of the sale between the buyer and seller.
  16. Counteroffer: A response to an offer from the other party that includes changes or amendments to the terms of the agreement.
  17. Closing: The final step in the real estate transaction when ownership of the property is transferred from the seller to the buyer, and all financial obligations are settled.
  18. Closing Date: The agreed-upon date when the property sale will be finalized.
  19. Escrow: A third-party account where funds and documents are held until all conditions of the transaction are met.
  20. Deed: A legal document that transfers ownership of the property from the seller to the buyer.
  21. Prorations: Adjustments made for property-related expenses, such as property taxes and homeowner association dues, to ensure that both parties pay their fair share during the closing process.
  22. Title Insurance: Insurance that protects the buyer and lender against any defects or disputes related to the property’s title.
  23. Walkthrough: A final inspection of the property by the buyer before closing to ensure that it is in the agreed-upon condition.
  24. Closing Disclosure (CD): A document provided to the buyer before closing, detailing the final terms and costs of the transaction.
  25. Home Warranty: A service contract that covers the repair or replacement of major home systems and appliances for a specified period after the sale.
  26. Real Estate Commission: The fee paid to the real estate agents involved in the transaction, typically a percentage of the sale price.
  27. Home Inspection: A thorough examination of the property’s condition to identify potential issues or needed repairs.
  28. Appraisal Contingency: A condition that allows the buyer to cancel the contract if the property does not appraise for at least the purchase price.
  29. Home Equity: The difference between the market value of the property and the outstanding balance of any mortgages or loans secured by the property.
  30. For Sale by Owner (FSBO): A property listed for sale without the representation of a real estate agent.

These terms are essential for understanding the home-selling process. Working with a qualified real estate agent can provide additional guidance and support throughout the transaction.