Are you looking to expand your real estate vocabulary? Look no further than this comprehensive worksheet! With clear definitions and helpful examples, you’ll be speaking the language of real estate in no time.
Property
When it comes to real estate, the term “property” refers to a piece of land and the structures or improvements on that land. This can include everything from single-family homes to commercial buildings.
Deed
A deed is a legal document that transfers ownership of a property from one person or entity to another. It includes a description of the property, identification of the parties involved, and any relevant terms or conditions.
Mortgage
When purchasing a property, many people take out a mortgage - a loan specifically designed for buying real estate. The lender provides funds to the borrower, who then pays back the loan with interest over a set period of time.
Appraisal
An appraisal is an evaluation of a property’s value. This is typically done by a professional appraiser, who considers factors such as the property’s location, condition, and comparable sales in the area.
Homeowner’s Association (HOA)
Many communities have homeowner’s associations, which are organizations created to manage and maintain common areas and amenities. Homeowners in the community pay dues to the HOA, which uses the funds for maintenance, repairs, and other expenses.
Zoning
Zoning refers to the regulation of land use by local governments. This can include rules around what types of properties can be built in certain areas, as well as restrictions on how properties can be used (such as prohibiting businesses in residential neighborhoods).
Equity
Equity refers to the difference between the value of a property and the amount owed on any mortgages or other liens. For example, if a property is worth $500,000 and the owner owes $300,000 on their mortgage, they have $200,000 in equity.
Closing Costs
Closing costs are fees and expenses associated with purchasing a property. These can include things like title search fees, appraisal fees, and any legal fees associated with the transaction.
Listing Agent
A listing agent is a real estate agent who represents the seller of a property. They help to market the property, negotiate with potential buyers, and handle the transaction on behalf of the seller.
Buyer’s Agent
A buyer’s agent is a real estate agent who represents the buyer of a property. They help the buyer to find suitable properties, negotiate with sellers, and provide guidance throughout the transaction.
Amortization
Amortization refers to the process of paying off a mortgage over time. Each payment includes both principal (the amount borrowed) and interest (the cost of borrowing), and as the loan is paid down, the amount of interest owed decreases.
Home Inspection
A home inspection is an assessment of a property’s condition by a professional inspector. They will check everything from the foundation to the roof, and provide a detailed report outlining any issues or areas that may require attention.
Escrow
When purchasing a property, funds are often held in escrow - a third-party account - until the transaction is complete. This helps to ensure that both the buyer and seller fulfill their obligations before funds are released.
Real Estate Agent
A real estate agent is a professional who helps buyers and sellers with property transactions. They must be licensed in their state and adhere to a strict code of ethics.
Commission
When a property is sold, the real estate agents involved typically receive a commission - a percentage of the sale price. This is generally split between the listing and buyer’s agents.
Closing
Closing refers to the final steps taken in a real estate transaction, including the transfer of funds and ownership of the property. This typically takes place at a title company or attorney’s office.
Title
A title is a legal document that proves ownership of a property. When a property is sold, the title must be transferred from the seller to the buyer.
Offer
When a buyer is interested in purchasing a property, they will typically make an offer - a proposal outlining the terms and conditions of the purchase. The seller can then accept, reject, or make a counteroffer.
Contingency
A contingency is a clause in a real estate contract that outlines certain conditions that must be met before the transaction can be completed. Common contingencies include financing, home inspection, and appraisal contingencies.
Down Payment
The down payment is the amount of money paid upfront by the buyer when purchasing a property. This is typically a percentage of the sale price and can range from 3-20% or more.
Interest Rate
The interest rate is the cost of borrowing money for a mortgage. It is usually expressed as a percentage and can be fixed or variable, meaning it may change over time.
Multiple Listing Service (MLS)
The Multiple Listing Service is a database used by real estate agents to share information about properties for sale. This allows agents to search for properties on behalf of their clients and to market properties to potential buyers.
Real Estate Investor
A real estate investor is a person or entity that purchases properties with the goal of generating income or appreciating value over time. This can include everything from buying and flipping homes to investing in commercial real estate.
ROI (Return on Investment)
ROI, or return on investment, is a measure of the profitability of a real estate investment. It reflects the amount of money earned (or lost) on an investment relative to the amount invested.
FSBO (For Sale By Owner)
FSBO, or For Sale By Owner, is a term used to describe a property that is being sold by the owner without the assistance of a real estate agent. This can be a more cost-effective option for the seller, but typically requires a greater amount of time and effort.
Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit is a type of loan that allows homeowners to borrow against the equity they have built up in their property. This can be a useful tool for home renovations or other expenses, but carries some risk if the borrower is unable to make payments.
Leasehold
Leasehold is a type of property ownership in which the holder has the right to use the property for a set period of time, typically 99 years or less. This is commonly seen in condo or townhome properties, where the homeowner owns the unit itself but not the land it sits on.
Capital Gains Tax
Capital Gains Tax is a tax on the profit earned from the sale of an investment property. The tax rate varies depending on a variety of factors, including the length of time the property was owned and the owner’s income level.
Short Sale
A Short Sale is a type of real estate sale in which the proceeds from the sale are less than the amount owed on the property’s mortgages or liens. This requires the agreement of all lenders involved, and can have a negative impact on a homeowner’s credit score.
Foreclosure
Foreclosure is the process by which a lender takes possession of a property when the owner is unable to make mortgage payments. This can be a lengthy and complex legal process, but can result in the sale of the property at auction.
Landlord
A landlord is a person or entity that owns a rental property and collects rent from tenants. They are responsible for maintaining the property and ensuring that it meets all legal requirements.
Tenant
A tenant is a person or entity that rents a property from a landlord. They are responsible for paying rent on time and maintaining the property according to the lease agreement.
Rental Application
When applying to rent a property, potential tenants must typically fill out a rental application. This includes personal and financial information, as well as references from previous landlords.
Security Deposit
The security deposit is a sum of money paid by a tenant at the start of a lease to cover any damages or unpaid rent at the end of the lease. This is typically equal to one or two months’ rent.
Lease Agreement
A lease agreement is a legal document outlining the terms and conditions of a rental agreement. It includes information about rent, security deposit, and the responsibilities of both the landlord and tenant.
Eviction
Eviction is the legal process by which a landlord can forcefully remove a tenant from a rental property for violating the lease agreement (such as failing to pay rent).
Lease Renewal
When a lease agreement ends, tenants and landlords can choose to renew the lease for an additional period of time. This typically includes negotiating a new rent and signing a new lease agreement.
Property Manager
A property manager is a professional responsible for managing rental properties on behalf of the owner. This includes tasks like advertising vacancies, screening tenants, and handling maintenance and repairs.
Rent Control
Rent control is a policy implemented by some cities or states to limit the amount that landlords can increase rent on a property from year to year. This is typically done to help combat rising rental costs and ensure affordable housing for low-income residents.
Fixed-Rate Mortgage
A fixed-rate mortgage is a type of mortgage where the interest rate remains the same for the entire term of the loan. This can provide stability and predictability for homeowners, as their payments will not change over time.
Adjustable-Rate Mortgage (ARM)
An adjustable-rate mortgage, or ARM, is a type of mortgage where the interest rate can change over time based on market conditions. This can provide lower initial payments, but also carries more risk as payments can increase over time.
PMI (Private Mortgage Insurance)
PMI, or Private Mortgage Insurance, is insurance that protects the lender in the event that the borrower is unable to repay their mortgage. It is typically required on loans where the down payment is less than 20% of the sale price.
Amortization Schedule
An amortization schedule is a table that shows the breakdown of each mortgage payment, including the amount of principal and interest paid. This can help homeowners understand how their payments are being applied over time and how much they will owe at the end of the loan term.
Real Estate Broker
A real estate broker is a professional licensed to operate their own real estate business and to employ other agents. They typically have more experience and training than standard agents, and may
