Home Seller & Real Estate Glossary

Absentee Owner – A property owner who does not live in the property, often renting it out or leaving it vacant.

Abstract of Title – A summary of the legal history of a property, including ownership and liens.

Acceleration Clause – A mortgage clause that allows the lender to demand full repayment if certain conditions are not met.

Acquisition Cost – The total cost of acquiring a property, including purchase price and closing costs.

Adjustable-Rate Mortgage (ARM) – A mortgage with an interest rate that may change periodically based on market conditions.

After-Repair Value (ARV) – The estimated value of a property after renovations or repairs are completed.

Appraisal – A professional estimate of a property’s market value.

As-Is – A property sold in its current condition without repairs or warranties.

Assignment of Contract – The transfer of rights and obligations in a purchase agreement to another buyer.

Balloon Payment – A large final payment due at the end of a loan term.

Bankruptcy – A legal process where individuals or businesses seek relief from debts, often affecting property sales.

Breach of Contract – Failure to meet the terms agreed upon in a real estate contract.

Bridge Loan – A short-term loan used until permanent financing or property sale is secured.

Broker Price Opinion (BPO) – An estimate of property value prepared by a licensed real estate broker.

Buyer’s Agent – A licensed agent who represents the interests of the buyer in a transaction.

Capital Gains Tax – A tax on the profit from selling a property.

Cash Offer – An offer to purchase a property without financing, closing more quickly.

Clear Title – Ownership free of legal claims, liens, or disputes.

Closing Costs – Fees and expenses paid at closing, such as title fees, attorney fees, and recording costs.

Closing Date – The date when ownership of a property is legally transferred to the buyer.

Cloud on Title – Any claim or unresolved issue that may affect property ownership.

Comparative Market Analysis (CMA) – A report comparing similar recently sold homes to estimate value.

Commission – A fee paid to real estate agents for services, typically a percentage of the sale price.

Contingency – A condition that must be met for a real estate contract to proceed (e.g., inspection).

Contract for Deed – An agreement where the buyer makes payments directly to the seller until the property is paid off.

Conventional Loan – A mortgage not insured by government programs like FHA or VA.

Counteroffer – A new offer made in response to an initial offer, altering terms.

Deed – A legal document transferring property ownership.

Deed in Lieu of Foreclosure – When a homeowner voluntarily transfers property to the lender to avoid foreclosure.

Default – Failure to meet mortgage obligations, often leading to foreclosure.

Delinquency – A borrower’s failure to make mortgage payments on time.

Disclosure – Information a seller must legally share about a property’s condition or issues.

Divorce Sale – A property sold as part of dividing assets during divorce proceedings.

Down Payment – The initial cash payment made toward a property purchase.

Earnest Money Deposit – A deposit made to show serious intent to buy a property.

Encumbrance – A claim, lien, or liability attached to a property.

Equity – The difference between a property’s market value and the amount owed on the mortgage.

Escrow – A neutral third party that holds funds and documents until conditions are met.

Estate Sale – The sale of property from a deceased owner’s estate.

Fair Market Value – The price a property would sell for in a competitive market.

FHA Loan – A government-backed loan insured by the Federal Housing Administration.

Final Walkthrough – A last inspection before closing to ensure the property’s condition has not changed.

Fire Damage – Property damage caused by fire or smoke, often requiring remediation.

Fix and Flip – Buying, renovating, and reselling a property for profit.

Forbearance – A lender temporarily reduces or suspends mortgage payments.

Foreclosure – The legal process where a lender repossesses property due to missed payments.

FSBO (For Sale by Owner) – A property listed and sold directly by the owner, without a real estate agent.

Hard Money Loan – A short-term, high-interest loan often used by investors.

Home Inspection – An examination of a property’s condition by a licensed inspector.

Homeowners Association (HOA) – An organization that manages a community and enforces rules, funded by dues.

Hoarder House – A property with excessive clutter, making it difficult to sell without cleanup.

HUD-1 Settlement Statement – A detailed list of all charges and credits in a real estate transaction.

Inheritance Sale – Property sold by heirs after being passed down through probate.

Inspection Contingency – A contract clause allowing buyers to cancel or renegotiate after inspection results.

Judgment Lien – A court ruling that gives a creditor a claim on a property until a debt is paid.

Lease Option – A lease agreement giving the tenant the right to purchase the property later.

Lien – A legal claim against a property for unpaid debt or obligation.

Listing Agreement – A contract between a property owner and an agent to sell the property.

Loan Modification – A lender changes the terms of a mortgage to help a borrower avoid foreclosure.

Market Value – The most likely price a property would bring in an open market.

Mechanic’s Lien – A lien placed by contractors or suppliers who haven’t been paid.

MLS (Multiple Listing Service) – A database of properties listed by real estate professionals.

Mortgage – A loan secured by real estate, requiring repayment with interest.

Mortgagee – The lender in a mortgage agreement.

Mortgagor – The borrower in a mortgage agreement.

Notice of Default (NOD) – A public notice that a borrower has defaulted on a mortgage.

Offer – A formal proposal to purchase a property under stated terms.

Open House – An event where a home for sale is open for public viewing.

Option to Purchase – A contract giving a buyer the right to buy a property at a later date.

Owner Financing – When the seller provides financing directly to the buyer instead of a bank.

Pending Sale – A property under contract but not yet closed.

Power of Attorney – A legal document allowing one person to act on another’s behalf in a transaction.

Pre-Foreclosure – The stage after default but before foreclosure sale.

Pre-Qualification – An estimate of how much a buyer can borrow based on basic financial info.

Probate – The court process of transferring ownership from a deceased person to heirs.

Promissory Note – A written promise to repay a loan under stated terms.

Quitclaim Deed – A deed that transfers any ownership interest without guarantees.

Real Estate Owned (REO) – Property owned by a lender after an unsuccessful foreclosure auction.

Recording Fees – Charges for entering a property transaction into public records.

Redemption Period – The time after foreclosure when the borrower can reclaim the property by paying debt.

Refinance – Replacing an existing mortgage with a new one, often with better terms.

Relocation Sale – When a homeowner sells due to job transfer or moving.

Reverse Mortgage – A loan for homeowners 62+ that converts home equity into cash.

Seller Concessions – Costs the seller agrees to cover on behalf of the buyer.

Short Sale – Selling a property for less than the mortgage balance with lender approval.

Subject-To – An investment strategy where the buyer takes over payments on the seller’s existing mortgage.

Survey – A professional measurement of property boundaries and land features.

Tax Lien – A government claim against a property for unpaid taxes.

Tax Sale – A sale of property due to unpaid property taxes.

Tenant-Occupied – A property that currently has renters in place.

Title – Legal ownership of property.

Title Insurance – Insurance that protects against issues with property ownership.

Trustee Sale – A foreclosure auction handled by a trustee.

Upside Down Mortgage – When a homeowner owes more on a mortgage than the property’s market value.

Vacant Property – A property not occupied by an owner or tenant.

Warranty Deed – A deed guaranteeing clear ownership and right to sell.

Water/Mold Damage – Property damage caused by leaks, flooding, or mold growth.

Wholesaling – Contracting to buy a property and assigning it to another buyer for a fee.