Definition of Real Estate Terms


It can be a tough sport for many when it comes to real estate because of the massive vocabulary used. We have compiled a list of important Real Estate terms for you so that you can be able to navigate through this industry.

Lender– A lender is a financial institution or person that loans money to another party for the purpose of purchasing real estate.

Mortgage– A mortgage is a loan that is used to purchase a home or any other form of real estate.

Trust Sale– Property being sold by a trustee after the original owner has passed away and the asset has been signed to that person.

Escrow– An account where your money is protected by a third party until the real estate transaction is closed.

Property deed and title– A legal document that represents the legal ownership of the property after a sale.

Offer Letter– A price offer on a property for purchase considering the fair market value for the asset.
Deposit- Money that signifies intent to buy a property

Appraisal– An approximation of a home’s current value based on a range of factors such as the price of similar properties in the area.

Appreciation– The increase in a property’s value over time.

Down payment– an initial payment made when an asset is bought on credit.

Community property- refers to property acquired by a married couple and owned equally by both spouses.

Lease– This is simply a rent-to-own for real estate.

Blind offer- When a buyer makes an offer on a property they haven’t seen, even when it was possible to see it. This is mostly in high-demand areas.

Purchase and sale agreement (PSA)- It is a written contract between the buyer and seller, which outlines the terms of the parties to sell and purchase real property.

Tenancy in common (TIC)- Tenancy in common describes a legal arrangement in which two or more parties have ownership interests in a real estate property or parcel of land

Homeowner’s association– When a group of homeowners in a community, such as an apartment, join in paying fees that cover the maintenance of the entire property like a service charge.

Service charge- payment by tenants to cover the operating expenses of the houses or apartments they are living in.

Homeowner’s insurance– Financial protection that helps with covering costs associated with repairs of a property or even replacement if necessary.

Transfer of ownership– This means that a property has a new owner.

Due Diligence– When a buyer examines an asset’s condition and contract terms before legally purchasing it. 

Closing– This is when the ownership of the property is officially transferred from seller to buyer and all necessary payments are made legally. 

What have you learned? Share any more terms that you have come across and let us break them down for you. 

Join The Discussion

Compare listings