Glossary of Terms 

• Amenities
  Amenities are the enhancements that buildings offer its owners or tenants.  These usually include a doorman, health club, garage, children's playroom, common lounge, etc.

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• Appraisal
  An appraisal is the evaluation of a property by a licensed appraiser on its price based on previous sales of similar properties.  The appraised value is used by a bank to determine the lending limit on a given property.  A seller may also have a property appraised to determine the offering price during a sale. 

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• Assessment
  An assessment is a levy against property and can be an extraordinary payment called for by the board of directors of a cooperative or condominium for the purpose of making a capital improvement or to provide some other essential service for which funds in the reserve account are inadequate.

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• Buyer's Broker
  A buyer's broker is a broker who represents the buyer in effectuating a purchase.  Normally in residential real estate transactions, the buyer's broker shares the commission received by the listing broker, who represents the seller.

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• By-Laws 
  By-laws are the rules by which the cooperative corporation or condominium operates, including those regulating elections, officers, and authorizations. 

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• Capital Gain 
  Capital gain is the seller's gain on an asset used in a trade or business or for investment, including real estate.  This gain is taxed at varying rates depending on whether the asset was held for more or less than one year. 

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• Chain of Title 
  Chain of Title is a successive conveyance of title to a specific parcel of land.

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• Closing 
  The closing is when the transfer of ownership of a property from the seller to the buyer occurs according to the sales contract.

 

• Closing Costs 
  Closing costs are the expenses incurred in the purchase and sale of real property paid at the time of settlement or closing.  Some examples of closing costs are title insurance, attorney fees, appraisal fees, recording fees and taxes.

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• Closing Statement 
  A closing statement is an accounting of the funds received and distributed in a real estate transaction.

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• Comparables (Comps) or Comparative Market Analysis 
  Comps are used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities.

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• Contract 
  A contract is a legally binding agreement between two parties, and in order to have a valid Contract of Sale in real estate there must be: an offer, an acceptance, competent parties, consideration, legal purpose, written documentation, description of the property, and signatures of the principals.

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• Counter-offer 
  A counter-offer is a new offer made by either the buyer or seller when rejecting a previous offer.

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• Deed 
  A deed is a written instrument transferring an interest in real property when delivered to the grantee.

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• Down Payment 
  The down payment is the amount of money a buyer pays upfront in order to purchase a property. It is usually paid at the signing of the contract in the form of a certified check. The amount is typically 10% of the sales price.

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• Dual Agent 
  A dual agent is a broker or salesperson who represents both the buyer and seller in the same transaction.

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• Due Diligence 
  Due diligence is the investigation and review of a property to determine any legal liability.

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• Earnest Money Deposit 
  Earnest money deposit is the deposit a buyer makes at the time of submitting an offer to demonstrate the true intent to purchase.  It is also called a binder or good faith deposit.

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• Easement 
  An easement is a non-possessory right of the use of land. 

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• Encroachment 
  Encroachment is the trespassing on the land of another by a structure or other object.

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• Encumbrance 
  An encumbrance is a claim, lien, charge or liability attached to and binding upon real property.

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• Equity 
  Equity is the difference between what something is worth and any loan secured by the asset (i.e. the value of a property less the outstanding mortgage).  For example, if a home is worth $100,000 and the owner/borrower owes $65,000 on the mortgage loan secured by the borrower's home, then the borrower's equity is $35,000 or 35% equity in the home.

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• Escrow 
  A state where consideration, benefits, legal rights, document, or a sum of money is held by one person in trust for another, for the purpose of assuring performance under an agreement.  Normally in a residential real estate sale, the attorney for the seller is the escrow agent for the deposit money securing the deal until closing.  The money is held in an escrow account.

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• Estate 
  Estate refers to the collection of all assets of a deceased person.  It is also the extent of interest a person has in real property.

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• Fixture 
  A fixture is an item (appliance, light fixture, etc.) that is permanently attached to a property.

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• Inspection

       An examination of a property by a qualified inspector or engineer to understand the condition and to check for structural damage,

       termites, any required repairs or equipment replacement, etc.

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• Listing Broker 

       The listing broker represents the interests of the seller or landlord in the sale or rental of his or her property.

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• Parcel 

       A parcel is a specific portion of land such as a lot.

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• Percolation (Perc) Test

       A perc test determines if the soil is sufficiently porous for the installation of a septic tank.

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• Plat 

       A plat is a property map that is part of the public record. 

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• Pre-Approval 

       A pre-approval is a process in which a conditional commitment is issued after a loan profile is underwritten with all

       standard documentation except a property appraisal and a title search.

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• Pre-Qualification 

       A pre-qualification is a process in which a loan officer calculates the housing-to-income ratio and the total debt-to-income ratio

       to determine an approximate maximum mortgage loan amount. 

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• Radon

       Radon is a colorless, odorless gas present in soil that enters a home through small spaces and openings.

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• Real Estate Broker 

       A real estate broker is an individual employed on a fee or commission basis as an agent to bring buyers and sellers together and                      assist in negotiating real estate contracts between them. 

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• Real Estate Settlement Procedures Act (RESPA)

       RESPA is a federal law that regulates the activities of lending institutions in making mortgage loans.

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• Recording 

       Recording is registering the ownership, lien, or claim of a party to a specific parcel of real estate with the local county.

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• Seller Contribution 

       The seller contribution is a payment by the seller of a property of some, or all, of the buyer's closing costs. 

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• Survey 

       A survey is a document indicating measurements, boundaries and the area of a property.

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• Title 

       The title of a property is the evidence or documentation that an owner is in lawful possession of the property, such as a                                      property deed.

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• Title Insurance

       Title insurance is an insurance policy protecting the insured from financial loss caused by a defect or question about the title to real                property. 

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• Title Search 

       Title search is a process that examines local public records, laws and related court decisions to determine if any other parties have valid          claims against the subject property (such as past due taxes, judgments or mechanics' liens).  It also discloses past and current facts

       about the subject property's ownership. 

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• Zoning 

       Zoning are the laws regulating land use.