Whether you’re preparing for your real estate license exam, interested in a word, or trying to refresh your memory on popular real estate terminology, it’s always a good idea to have a thorough understanding of the real estate industry. Therefore, in this piece, we will go over the definitions of some common real estate vocabulary words that you’ll probably run into in your real estate career or when preparing for an exam.
Real Estate Vocabulary
Jargon abounds in the real estate industry. Actually, if you’ve ever used a traditional agent to buy or sell a house, you’ve probably heard different assurances along the way that the agent will “take care of it” or that you shouldn’t “worry about that because it’s complex.”
Businessyield is pleased to “take care of it” for you, but we also want to educate you along the road so that you may go into the process of purchasing or selling a property with more assurance and openness. After all, the real estate market is understandable and simple, and we want to make that the case for every buyer and seller.
Real Estate Vocabulary Words
Understanding the terminology is the first step. The top real estate vocabulary words to understand before you purchase or sell a home are listed below:
#1. Home Value Report
Someone who assesses the value of your home and offers a suggestion on your listing price creates a value report, often known as a Competitive Market Analysis or CMA. The cost is established, among other things, by the price at which comparable houses have recently sold in your neighborhood. You can also use this report to determine the value of your house.
#2. Escrow
In real estate deals, escrow essentially refers to a third party holding an account on your behalf. To transfer money between a buyer and a vendor, this account will be used. Frequently, “held in escrow” items include earnest money, property taxes, and insurance. Thus, the title company you choose to work with typically provides these escrow services.
#3. Tour/Showing
You’ll hear these phrases a lot if you’re a house buyer or seller. A tour is the same as a performance. In order to attract potential buyers to your house as a seller, your listing agent will work in tandem with a buyer’s agent. The buyer’s agent is in charge of taking clients to the properties in person. Tours are a crucial component of the selling process since people seldom purchase homes without seeing them in person.
#4. Agent
In a real estate transaction, there are fundamentally two different sorts of agents. These are known as listing agents and buyer’s agents. They can assist their clients with real estate transactions because they have a license from their state.
#5. Staging
You should probably stage your house while you’re selling it because everyone has a different sense of style, and yours can be unique. When a professional interior designer stages a property, they either come in and rearrange your furniture or bring in new furniture and decor to make it more aesthetically pleasing to potential buyers. This aids prospective buyers in imagining how the home might work for them.
#6. Offer
This is what you, the buyer, and your buyer’s agent do in order to buy a house. The purchasing price will be the key piece of information that you pay attention to. You may get everything in order with the aid of your buying agent. Your buyer’s agent will then send it to the listing agent once it is finished. Your offer includes everything legal that a contract typically entails, but you might also think about including some individualized information about your family.
#7. Counter Offer
When someone submits an offer and the seller decides they want to change the terms of the sale, it results in a counteroffer.
#8. Due Diligence Period
Following acceptance of an offer, the phase of due diligence starts. This is a period of time during which the house up for sale is carefully inspected. Everybody wants to be certain that they are making the most of their home.
#9. Earnest Money
Consider this to be your formal declaration of interest in purchasing a home. When a buyer is serious about buying a house, they put down this amount of money. The seller maintains the earnest money if the buyer cancels the transaction after the finance and appraisal deadlines have been met.
#10. Closing
When you finalize the contract and formally buy or sell a home, this is known as closing. Money is exchanged, a ton of paperwork is signed, your loan is closed, and you become a homeowner. Congrats! Your home purchase just went through. It may take some time to complete this step.
Real Estate Vocabulary for Exam
The vocabulary words you learned during your pre-licensing course will be tested during the real estate exam. They are in great numbers! So, in order to help you prepare for the big test, we’ve put up a list of the most frequent real estate exam vocabulary words. To learn them is to lay the groundwork for your job and the exam. Although they won’t cover EVERYTHING on the exam, learning the words on this list of vocabulary words will help you build a foundation for your real estate knowledge. Below are some of the real estate vocabulary terms to study for your exam:
#1. What is Real Property?
Real property includes everything that is affixed to the land’s surface, the earth beneath it, the air above it, as well as all associated legal rights. It is a term that is used to describe objects that are usually immovable. This comprises the actual building as well as any attached features like pathways, landscaping, and adjacent buildings.
#2. What is Personal Property?
In the context of real estate, the term “personal property” refers to any tangible or movable items, including equipment, furniture, automobiles, machinery, and so on. This basically means that any property that does not meet the criteria for real property would be considered personal property.
#3. Describe a fixture.
Any object that was formerly personal property but has evolved into the real property through a strong bond with real property is referred to as a fixture. Kitchen cabinets, ceiling fans, chandeliers, and window coverings are a few examples of fixtures.
#4. What is the Bundle of Rights?
The phrase “bundle of rights” refers to a group of legal rights that are often granted to a real estate owner following the sale of the property and receipt of the title deed.
#5. What is Commingling?
When a real estate agent combines their personal finances with those of their customer, it is referred to as commingling. Typically, these monies may be allocated for various goals, and in some cases, the cash may come from many sources.
#6. How Do You Steer?
When a real estate salesperson unfairly impacts a buyer’s decision by only showing them homes in particular neighborhoods, this practice is known as steering in the real estate industry. The buyer’s gender, color, sexual orientation, religion, or other protected characteristics are frequently the basis for this discrimination.
#7. Describe Escrow.
Escrow, in the context of real estate, is a contractual agreement between the buyer and the seller to temporarily place the cash in the hands of a neutral third party until the fulfillment of certain criteria, typically a title transfer. The money is given to the seller once the predetermined condition is satisfied. Escrow often serves to safeguard both the buyer and the seller against dishonest business practices.
#8. What Does Acreage Mean?
A vast area of property that has not yet been subdivided into smaller lots for residential use is also referred to as acreage in real estate. The area of a single acre is 43,560 square feet. A survey township consists of 36 sections, each of which is comprised of 640 acres.
#9. What is Eminent Domain?
The ability of local, state, and federal governments to take private property from an individual for public purposes is thus known as eminent domain. Typically, the government provides reasonable remuneration in exchange for this.
#10. How Do Easements Work?
An easement is a person’s authorized access to and use of another person’s real property for a particular purpose. For instance, utility firms have access to electricity wires on a property thanks to easements they possess.
#11. What is a Beneficiary?
The beneficiary of a mortgage is the entity that will gain from your payments. This is typically the bank or lender from which you are borrowing money to purchase the home. This is so that the lender, who receives benefits from your pledge to pay back the loan together with interest, can count on you to do so.
#12. What is Equity?
Equity is the difference between a property’s current market worth and the amount you owe on it. In general, the longer it has been since you purchased a property, the more equity you will have in it. You will then be able to cash out on this value and profit from your investment when it comes time to sell the house.
#13. An FHA Loan is What?
The Federal Housing Administration (FHA) provides loan insurance in the form of an FHA loan. The Housing and Urban Development Agency established this program in 1934 to make it simpler for people to purchase homes because it requires a lesser down payment than normal loans.
#14. Describe Zoning.
The municipal authority divides the land into zones through zoning. These ordinances are neighborhood rules that specify how the land may be used. These choices are based on the district’s master plan and take into account a number of variables, including local resource protection, traffic issues, noise levels, and economic development.
#15. What Does Escheat Mean?
A property may be returned to the state after an owner’s death if there are no designated heirs or successors. Since the property cannot be left unoccupied or in limbo without owners, the state will have to assume possession of it.
#16. What Does Intestate Mean?
A person’s estate is referred to as intestate if they pass away without leaving a will. This could imply that the state is given control of the person’s property, much like escheat. The absence of a will may subject a person’s estate to government control, albeit these rules differ from state to state.
#17. A Holdover Tenant is What?
A lessee who resides in the property longer than permitted is known as a holdover tenant. They are required to leave the premises after their lease expires. However, a holdover renter occupies the property after their lease has expired. The renter may be sued for being a holdover tenant even if they are making rent payments while past the end of their term.
Is There a Real Estate Dictionary?
You may get free, immediate access to thousands of real estate definitions and hundreds of images with Real Estate Dictionary by Farlex, which features content from McGraw-Hill and other top publishers.
What Is the M Word in Real Estate?
M. Mortgage: A lengthy loan provided by a lender to fund a piece of real estate.
What Is ROI in Real Estate?
The term “return on investment” (ROI) refers to the amount of money, or profit, you have made as a percentage of an investment’s overall cost.
Is Real Estate Tricky?
Selling real estate for a living requires a lot of effort.
What Is the 4 Rules in Real Estate?
The amount you should remove annually from your retirement account is determined by the 4% rule in retirement planning.
Related Posts
- Holdover Tenant: How to Calculate Hold Over Rent Without Stress (+Detailed Guide)
- HOLDOVER TENANT: When Should You Evict a Holdover Tenant
- Escrow Agent: A Simplified A-Z Guide (+ Updated Sample)
- WHAT IS ESCROW SHORTAGE? Causes & How To Avoid It
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