Real Estate Glossary
Appraisal: the process of developing an opinion of value for real property – usually market value. Real estate transactions often require appraisals because they occur infrequently and every property is unique; especially it’s condition. The location also plays a key role in valuation. Often the upgrades or improvements to the home can change its value. Appraisal reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on. Sometimes an appraisal report is used to establish a sale price for a property.
Buyer’s Agent: a real estate professional who enters into a contract of agency relationship with the buyer and typically gets paid by splitting the sales commission with the listing agent (seller’s agent).
Capital: the funds a potential homebuyer has available for the upfront coast of home ownership, such as the down payment and closing costs.
Closing costs: expenses over and above the purchase price of the property which buyers and sellers incur in transferring ownership of a property.
Closing: the final steps in the transfer of property ownership which usually occurs at a formal meeting between the buyer, seller, closing agent and real estate agents. At settlement, the buyers signs the mortgage and mortgage note, the seller receives payment for the property, the buyer or seller, or both, pay closing costs and the title is transferred from the seller to the buyer.
Comparative Market Analysis or CMA: an analysis of comparable properties currently being on the market and comparable houses sold in the past six months (depending on the area). This is used to help determine a price and the value of a home.
Consumer: buyer, seller, client, customer.
Deed: a legal document conveying title to a property.
Down payment: the amount of cash a borrower pays towards purchasing a home.
Earnest Money: funds that are included with an offer to purchase to show good faith in following through with the transaction.
Escrow: the period between the date the purchase contract is signed and the date of the loan closing.
Fair market value: the price a willing buyer will pay and a willing seller will accept for real property.
Multiple Listing Service (MLS): the service real estate agents subscribe to and pay for that allows them to use features such as access to public records, most up-to-date property searches, MySite, online contracts, etc.
Realtor®: a real estate agent who is a member of the National Association of REALTORS®, which means that he or she must uphold the standards of the association and its code of ethics, according to Realtor.com.
Seller’s Agent: a listing agent is a real estate professional who has a contract with the seller of a house to advertise the property for sale and represent the seller when offers are made.
Settlement Sheet: also called the HUD-1 is a standard form used to itemize services and fees charged to the borrower by the lender. A settlement statement is also used to summarize all the fees and charges that both the home-buyer and seller face during the settlement process of a housing transaction.
Title Commitment: A title insurance commitment is an offer to issue a title insurance policy. The title commitment will describe the various conditions, exclusions and exceptions that will apply to that particular policy. Once the commitment is issued, the title insurance company has promised the proposed insured that if all the requirements set forth in Schedule B-Section 1 of the commitment are satisfied, the company will issue a policy of title insurance.
Transaction Broker: a broker who neither represents a seller or buyer but rather a neutral resource to assist both parties in completing a home sale. In Colorado, the transaction broker is the default role of an agent when there is no signed agency agreement between the agent and the buyer.
Survey: according to Flatirons Surveying, each survey is unique. The land survey process begins with researching documents like deeds, plats, title commitment, previous surveys, etc. Each property has its own history.