Real Estate Terms Glossary
Financial plans that allow employees to set aside tax-deferred income for retirement or emergency purposes.
Abstract of judgment,law
The summary of a court judgment that creates a lien against a property when filed with the county recorder.
Accelerated cost recovery system
A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.
A bookkeeping method that depreciates property faster in the early years of ownership.
The seller’s written approval of a buyer’s offer.
Any means by which a person can enter property.
The degree to which a building or site allows access to people with disabilities.
The gradual addition to the shore or bank of a waterway by deposits of sand or silt.
A written declaration affirming that a person acted voluntarily.
A measurement of land equal to 43,560 square feet.
The volume of material needed to cover an acre of land one foot deep.
Active solar system
A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.
The number of years a structure has been standing.
An addition or change to a contract.
Additional principal payment
Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.
The interest a borrower pays on the principal for the duration of the loan.
Adjustable-rate mortgage (ARM)
A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.
Adjusted cost basis
The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
The amount of time between interest rate adjustments in an adjustable-rate mortgage.
A person given authority to manage and distribute the estate of someone who died without leaving a will.
A legal document that an administrator of an estate uses to transfer property.
The acquisition of title to property through possession without the owner’s consent for a certain period of time.
The access and use of property without the owner’s consent.
Soil that is composed of materials deposited by the wind.
A person who makes a sworn statement.
A substitution for an oath granted to people based on religious reasons.
An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters.
The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.
Any home loan that does not conform to a standard fixed-rate mortgage.
Wooden windows with aluminum covering the exterior.
A metal covering that provides an alternative to paint for owners of wood homes.
Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments.
American Society of Home Inspectors
The American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744.
Americans with Disabilities Act
A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.
The process of paying the principal and interest on a loan through regularly scheduled installments.
Mathematical tables that lenders use to calculate a borrower’s monthly payment.
The strength of an electrical current.
A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.
Any kind of plant that must be planted every year.
Annual mortgagor statement
A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.
Annual Percentage Rate (APR)
The cost of the loan expressed as a yearly rate on the balance of the loan.
The payment of a fixed sum to an investor at regular intervals.
A communication that informs a party that the obligations of the original contract will not be fulfilled.
A document that details a potential borrower’s income, debt and other obligations to determine credit worthiness.
The fee that a lender charges to process a loan application.
An opinion of the value of a property at a given point in time.
The fee that an appraiser charges to estimate the market value of the property.
A detailed written report on the value of a property based on recent sales of comparable sites in the area.
An opinion of the current market value of a property.
An increase in the value of a home or other property..
A provision that allows a buyer to take responsibility for the mortgage from a seller.
A fee the lender charges to process new records for a buyer who assumes an existing loan.
The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.
An easement over private property near an airport that limits the height of structures and trees.
Single-sash windows that tilt outward and up.
Soil used to solidify the foundation of a structure.
Back title letter
A letter that a title insurance company gives to an attorney who then examines the title for insurance purposes.
Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.
A secondary bid for a property that the seller will accept if the first offer fails.
A valve in a sewer line that prevents sewage from flowing back into a house.
A statement that shows the assets, liabilities and net worth of an individual.
A type of framing used in two-story homes in which studs extend from the ground to the ceiling of the second floor.
A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal.
The final lump sum payment due at the end of a balloon mortgage.
Railing held up by a set of posts on a porch or stairway.
A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. Bankruptcies remain on a credit record for seven years and can severely limit a person’s ability to borrow.
The sale of a piece of property for less than market value.
Any board or molding found at the bottom of an interior wall.
Baseboard electric heat
Heating units installed in the floor that can be controlled by a central thermostat.
The area of a home below ground level.
A basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points.
The opening between two columns or walls that forms a space.
A window that projects outward in a curve.
A wall that supports its own weight in addition to other parts of a structure.
The lender who makes a loan, also called a mortgagee. The person borrowing money is the mortgagor.
Total income before taxes are deducted.
Personal property given to a person through a will.
An improvement that increases a property’s value as opposed to repairs that maintain the value.
Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale.
A contract in which the parties involved give mutual promises. Also called “reciprocal” contracts.
Bill of sale
A document that transfers ownership of personal property.
A roofed passageway with open sides.
An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house.
The rules and regulations that a homeowners association or corporation adopts to govern activities.
A clause in a loan agreement that allows a lender to ask for the balance at any time.
Cylindrical chambers with bulbs recessed into the ceiling.
A clause that details the conditions under which each party may terminate the agreement.
A projecting structure supported on one end, such as a balcony.
A limit on the amount the interest rate or monthly payment can increase in an adjustable-rate mortgage.
Cape Cod style
A wood-frame or shingled house with a steep roof and several windows projecting from the second floor.
Money used to create income, such as funds invested in rental property.
The cost of making improvements on a property.
Profits an investor makes from the sale of real estate or investments.
Capital gains tax
A tax placed on the profits from the sale of real estate or investments.
Any improvement that extends the life or increases the value of a piece of property.
A mathematical formula that investors use to compute the value of a property based on net income.
The percentage rate of return estimated from the net income of a piece of property.
A group of real estate agents who tour a house that has been recently listed for sale.
A roof that covers a driveway or other parking area.
A window hinged on its sides to allow it to swing open vertically.
The amount of cash a rental property investor receives after deducting operating expenses and loan payments from gross income.
A check the bank draws on itself rather than on a depositor’s account.
The refinancing of a mortgage in which the money received from the new loan is greater than the amount due on the old loan. The borrower can use the extra funds in any manner.
A high open ceiling formed by finishing exposed roof rafters.
An acrylic or silicon sealant used to fill cracks, crevices and holes in a home.
A courtyard or atrium.
A formal notice, that asks a court to suspend action until the party which filed the challenge can be heard.
A legal principle derived from Latin than means “let the buyer beware.”
The standard height of a ceiling is eight feet.
Central air conditioning
A device that generates cold air through an outside unit that is connected to ductwork inside the house.
Central business district
The area of a city where most large businesses are located.
Properties used as comparisons to determine the value of a certain property.
Comparative market analysis
An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
A term for a buyer who is legally fit to enter into a sales contract.
The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.
The process of pouring concrete into forms on the ground, allowing the forms to harden and then raising the material to a vertical position to form walls.
The process the government uses to take private property for public use without the consent of the owner.
A structure designed by an architect hired by the owner.
A movable plate in a fireplace that allows smoke and fumes to travel up the chimney’s flue.
Days on the market
The period of time a property is listed for sale until it is sold or taken off the market
Locks that require a key to open from the outside and a turn button from the inside.
Any amount one person owes to another.
A roofless, floored area that adjoins a house.
The legal document that transfers ownership of a piece of property.
Deed of trust
A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan.
Deep-seal floor drain
A drain used to dispose of water from the basement floor to a sewer line.
The failure to fulfill a duty or promise or discharge an obligation, such as making monthly mortgage payments.
Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value.
A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings.
An analysis of soil to determine if the surface can support the foundation of a house.
Any kind of pipe or channel that carries water, wiring or conditioned air through a house.
Standard language in a mortgage which states that the loan must be paid when a house is sold.
A structure that consists of two separate family units.
Dutch colonial style
A design that features barn-like gambrel roof, a ground-level front porch, and dormers.
The condition in which buyers can occupy the property before the sale is completed.
Money a buyer gives with an offer to purchase a property. Also called a deposit.
A policy that provides coverage against damage to a home from an earthquake.
A right given to a third party to use a portion of the property for certain purposes, such as power lines or water mains.
The projecting overhang at the lower edge of a roof.
The age of a structure estimated by its condition rather than its actual age.
Effective gross income
Additional income that a lender considers when assessing the loan application of a potential borrower.
Electric service panel
A panel that transfers power from the utility line into a house to be distributed through fuses or circuit breakers.
The exterior view of a home design that shows the position of the house relative to the grade of the land.
An extension or wing of a house that is at right angles to the main structure.
The government’s right to condemn private land for public use, such as the routing of a public highway.
Programs which help employees purchase homes through special plans developed with lenders.
Potential buyers who have raised their families and want to move into a smaller home.
Fences or other structures that extend into the property of another owner.
A claim or lien on a property which complicates the title process.
The conversion from a construction loan to permanent financing a condominium buyer secures after all units in a project have been completed.
A person who signs over ownership of property to another party.
A contract that gives an agent the exclusive right to market a property for a specific period of time.
A person appointed to carry out the instructions in a will. If there is no will, a probate court will appoint an executor.
Ventilating devices that remove water vapor, undesired smells or smoke.
Experian, formerly known as TRW Information Systems & Services, is one of the “Big Three” credit-reporting bureaus.. Address: 505 City Parkway West, Orange, CA 92868.
The part of a building facing the street or a courtyard.
Fair Credit Billing Act
A federal law that governs credit and charge card billing errors. If a credit or charge card company violates any provision, consumers can sue to recover damages.
Fair Credit Reporting Act.
A federal law passed in 1971 that regulates the activity of credit bureaus. It is designed to prevent inaccurate or obsolete information from staying in a consumer’s credit file and requires credit bureaus to have reasonable procedures for gathering, maintaining and disseminating credit information. The act also requires credit bureaus to show a consumer their credit file if the consumer presents proper identification, although the bureau reserves the right to charge a fee for doing so.
Fair Debt Collection Practices Act.
A federal law passed in 1977 which outlaws debtor harassment and other types of collection practices. The act regulates collection agencies, original creditors who set up a separate office to collect debts, and lawyers hired by the creditor to help collect overdue bills. An original creditor–the company or individual that originally granted the credit–is not covered by the act, but may be covered by similar measures approved by state governments.
Fair Housing Act
Landmark federal law passed in 1965 and amended in 1988 that makes it illegal to deny rent or refuse to sell to anyone based on race, color, religion, sex or national origin. The 1988 amendment expanded the protections to include family status and disability.
The official name of the Federal National Mortgage Association, it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Farmer’s Home Administration
A U.S. Department of Agriculture agency that provides credit to farmers and rural residents.
A board that connects the ends of the roof rafters and provides a surface to support gutters.
Federal Home Loan Mortgage Corporation,law
The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac. The company buys mortgages from lending institutions, pools them with other loans and then sells shares to investors.
Federal Housing Administration (FHA)
This government agency operates a variety of home-loan programs. Its most popular is the Sec. 203(b), program, which provides low-rate mortgages to buyers who make a down payment as small as 3 percent.
Federal National Mortgage Association
Now officially dubbed Fannie Mae, this federally chartered agency buys mortgages from lending institutions, pools them with other loans and sells shares to investors.
Federal Reserve Board
A group of economists and other experts who set the nation’s monetary policy. Its chief tool to control inflation is the power to control interest rates.
Federal Trade Commission
The government agency responsible for regulating a variety of companies and industries, from credit bureaus and collection agencies to timeshare operators and certain types of creditors. National headquarters: Sixth and Pennsylvania Avenue NW, Washington, D.C. 20580. Phone: (202) 326-2222.
This type of ownership is the maximum interest a person can have in a piece of real estate. It entitles the owner to use the property in any manner they see fit, in accordance with state and local laws.
Fee simple defeasible
The owner of the property holds a fee simple title contingent upon certain conditions.
The all-American home architecture style that evolved after the Revolutionary War. Details include bigger windows and a front doorway surrounded by glass and topped with an arched window.
Mortgages that are insured by the Federal Housing Administration. The FHA’s 203(b) loan program provides low-rate mortgages to buyers who make a down payment as small as 3 percent. The agency also operates loan plans for investors and purchasers of rural property.
An ancient Chinese belief that the physical characteristics of a house and the positioning of the home will affect the fortunes of the owner.
The relationship of trust that buyers and sellers expect from a real estate agent. The term also applies to legal and business relationships.
Modifications made on the construction site that do not match blueprints.
Soil brought in to solidify a finished foundation.
An area where the ground has been raised by adding dirt, gravel or other fill material.
A fee in any amount that is paid to someone.
A finish that prepares a lot for landscaping.
A buffer composed of fire-resistant material.
A promise made by a lender when it agrees to loan money for the purchase of property.
The primary mortgage on a property that has priority over all other voluntary liens.
The monthly payment on a home loan.
A home loan with an interest rate that will remain at a specific rate for the term of the loan. About 75 percent of all home mortgages have fixed rates.
Two adjoining doors inlaid with glass that open from the middle.
The portion of property that borders a roadway or body of water.
Fully amortized adjustable-rate mortgage
A mortgage that amortizes, or pays down, the balance of a loan.
An enclosed heating device powered by coal, oil, propane or natural gas.
A device that allows power to be channeled into a home.
A triangular wall enclosed by the sloping ends of a ridged roof or a triangular decorative feature.
A ridged roof that forms a triangle at each end.
A provision in contracts signed by new buyers that prohibits the owners from publicizing complaints about the builder.
A roof with two slopes, often seen on barns.
The person who hires all of the subcontractors and suppliers for a project.
A government’s long-range land-use plan.
Popular throughout the 18th century, this type of architecture is distinguished by a symmetrical facade, prominent front entrance and quoins-decorative blocks of masonry or wood set in the corners of the house.
A structure constructed of lightweight bars forming a grid of polygons.
A cash gift a buyer receives from a relative or other source. Lenders usually require a “gift letter” stating that the money will not have to be repaid.
An intricate, almost lacy, wood trim.
Crossbeams that support floor joists.
An estimate from an institutional lender that shows the costs a borrower will incur, including loan-processing charges and inspection fees.
Government National Mortgage Association
Commonly known as Ginnie Mae, this agency buys home loans from lenders, pools them with other loans and sells shares to investors. Ginnie Mae differs from its cousins, Fannie Mae and Freddie Mac, in that it only purchases loans backed by the federal government.
A specified amount of time to make a loan payment after its due date without penalty.
The elevation of land above level ground.
Graduated-payment mortgage (GPM)
A mortgage that requires a borrower to make larger monthly payments over the term of the loan. The payment is unusually low for the first few years but gradually rises until year three or five, then remains fixed.
The flat or sloping surface upon which a house is built.
Slang term for a separate unit in a house or above the garage, which in the past may have been occupied by an elderly relative.
A person conveyed an interest in a piece of property.
The person who conveys an interest in a piece of property to another person.
Greek Revival style
A style introduced in the U.S. at the end of the 18th century. Its most prominent feature is a pillar-anchored pediment forming a portico in the front of the house.
Any stretch of park, open space or other natural setting in a community.
The total income of a household before taxes or expenses are subtracted.
Ground fault circuit interrupter
Devices that detect leakage of electrical current to the ground and prevent accidental shock.
The amount of money paid for the use of a piece of property when it is a leasehold estate.
A single-family residence used as a living space for unrelated, developmentally disabled or mentally disabled people.
A fixed rate mortgage that increases payments over a specific period of time. The extra funds are applied to the principal.
A loan guaranteed by a third party, such as a government institution.
Horizontal channels installed at the edge of a roof to carry rainwater or melted snow away from the house.
Also called a powder room, a half-bath contains a toilet and a sink but no bathtub or shower stall.
This provision of homeowners insurance covers damage by fire, wind or other disaster. It is required by all lenders before a loan is approved.
Crossbeams above windows and doors.
An electric cooling and heating system.
The equivalent of 2.471 acres.
The concentration of housing units in a specific area or on a specific property.
Any building higher than six stories.
A pitched roof with sloping sides.
The physical rehabilitation of a historic home or building, and the movement of the same name begun in the 1960s in the U.S. to preserve and protect landmarks and urban neighborhoods.
A home or building listed in the National Register of Historic Places and certified as historic by the U.S. Secretary of the Interior.
Home equity conversion mortgage
Loans made to older owners who want to convert equity into money. Because borrowers are qualified on the basis of the value of their home, e, the loan is not the same as a home equity loan. Also known as reverse mortgages.
Home equity loan
A loan that allows owners to borrow against the equity in their homes.
An examination of a home’s construction, condition and internal systems by an inspector or contractor prior to purchase.
A group that governs a modern subdivision or planned community. An association collects monthly fees from all owners to pay for maintenance of common areas, handle legal and safety issues, and enforce the covenants, conditions and restrictions set by the developer.
This insurance includes hazard coverage for any damages that may affect the value of a house, in addition to personal liability and theft coverage.
Special insurance policies that cover certain home repairs for a specified amount of time.
The power of a local government to adopt its own land-use regulations.
A document that to protects some of a home’s equity from lawsuits.
A type of insurance that covers repairs to certain parts of a house and some fixtures.
A window that contains a single sash that tilts inward.
A threaded faucet connection for devices such as a washing machine.
The illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability or family status.
Housing expense ratio
The percentage of gross monthly income devoted to housing costs.
A polyethylene barrier wrapped around a house to save energy.
HUD-1 Uniform Settlement Statement
A closing statement or settlement sheet that outlines all closing costs on a real estate transaction or refinancing.
Fees collected from developers of new homes to pay for schools, parks and other facilities.
Implied warranty of habitability
Court cases which determined that all new homes are assumed to be fit for human habitation and meet all building codes.
A portion of the monthly mortgage payment that is placed in an account and used to pay for hazard insurance, property taxes and private mortgage insurance.
Property that is not occupied by the owner but is used to generate income.
A defect in a property that cannot be fixed, such as an adjacent hazardous waste site, or that would cost too much to repair relative to the value of the property.
Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills.
Individual Retirement Account
Tax-deferred savings accounts that allow people to accrue retirement funds.
In-file credit report
Computer-generated reports drawn from credit repositories that are generally regarded as objective histories.
Any significant new construction in an established area.
Home construction in established areas.
This event occurs when there is more money available than there are goods and services to be purchased. Mortgage rates, which are determined by the marketplace and the actions of the Federal Reserve Board and Wall Street, are sensitive to inflation fears.
The roads, schools, parks, utilities, bridges and communications systems in a community.
Initial interest rate
The original interest rate on an adjustable mortgage.
An examination of a home’s exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roofing and interior.
A purchase agreement in which the buyer does not receive title to the property until all installments are paid.
Materials including cellulose, glass fiber, rock wool, polystyrene, urethane foam and vermiculite that slow heat loss.
Title to property that a company agrees to insure against defects and disputes.
Owners and buyers can purchase various types of insurance: hazard, private mortgage and earthquake. The policies guarantee compensation for specific losses.
A temporary insurance arrangement usually put in force until a permanent policy can be obtained.
The fee borrowers pay to obtain a loan. It is calculated based on a percentage of the total loan.
Interest accrual rate
The rate at which interest accrues on a mortgage.
The pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.
The sum, expressed as a percentage, charged for a loan. Interest payments on most home loans are tax- deductible.
Interest rate buy-down plans
For cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer’s monthly obligation.
Interest rate caps
A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.
Interest rate ceiling
The highest interest a lender can charge for an adjustable-rate mortgage.
Real estate that generates income, such as an apartment building or a rental house.
A window that consists of vertical rows of horizontal glass slats that operate together by a crank mechanism that connects all the slats.
The responsibility of two or more people to fulfill the terms of a home loan or debt.
Ownership by two or more people that gives equal shares of a piece of property. Rights pass to the surviving owner or owners.
A floor or ceiling support member supported by foundation walls, piers or beams. Subflooring is connected to floor joists.
The decision of a court or law. If a court decides that a person must repay a debt, a lien may be placed against that person’s property.
A procedure to handle foreclosure proceedings as civil matters.
Loans that exceed limits set by Fannie Mae and Freddie Mac. The current limit is $300,700.
A loan that subordinate to the primary loan.
A structure that contains prefabricated components and is put together by a contractor.
A wall-like structure that supports roof rafters.
An old-fashioned wiring system that has been replaced by fuses and circuit breakers.
A home’s surroundings can range from a shrub-studded emerald lawn to a native-plant xeriscape. It is a major component of curb appeal.
A professional who holds a degree in landscape architecture, which involves training in horticulture, landscape design and planning.
A landscape designer has training in horticulture and landscape planning, but does not necessarily hold a degree.
A professional who carries out the plans of a landscape architect or a landscape designer.
A fee a lender imposes on a borrower when the borrower does not make a payment on time.
A payment a lender receives after the due date has passed.
An invisible problem in a piece of property such as bad wiring, termite damage or lead paint.
A metallic chemical element present in older dwellings, primarily in the form of lead-based paint and lead plumbing. Exposure to lead has been found to be a health risk.
A binding agreement that contains the terms and conditions of a renter’s occupancy.
An arrangement in which the borrower does not own a specific piece of property but possesses a long-term lease.
A lease that contains the right to purchase the property for a specific price within a certain time frame.
A bank, savings institution or mortgage company that offers home loans.
Blemishes on a piece of property, such as a zoning violation or fraudulent title claim.
A specific way of identifying and locating a piece of real estate that is acceptable to a court.
Letter of intent
A formal statement that the buyer intends to purchase the property for a certain price on a certain date.
The use of a small amount of cash–a 5 percent or 10 percent down payment–to buy a piece of property.
A borrower’s debts and financial obligations.
A policy that protects owners against any claims of negligence, personal injury or property damage.
A claim laid by one person or company on the property of another as security for money owed.
A limit on the amount that a loan rate can move during the term of the mortgage. For example, the rate on an adjustable-rate mortgage that begins at 5 percent and has a lifetime cap of 6 percentage points cannot rise above 11 percent, even if rates on fixed-rate mortgages soar to 20 percent.
Life-cycle cost analysis
An analysis of a building project’s expected operating, maintenance and replacement costs, calculated by an architect.
Real estate syndicates and other investment groups use this type of ownership.. A general partner makes the group’s investment decisions, oversees the investment and is principally liable for any losses.
A horizontal piece over a door or window that carries the weight of the structure above it.
Cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and checking accounts, money-market accounts, and most certificates of deposit.
Homes constructed of rough-hewn timbers and a standard housing form in the early European settlement of the U.S.
An offer made to a seller that is substantially below market value. The longer a property stays on the market, the more likely there are to be such offers.
A low concentration of housing units in a specific area.
A mortgage that requires only minimal verification of income and assets.
A home loan that requires the borrower to make only a small down payment before obtaining the financing needed to purchase a house.
Main water shut-off valve
The primary valve that halts the flow of water from the water meter into a home.
A roof with four sides that slope upward from the roof edge to the square peak.
Prefabricated homes that can range from simple trailers to larger dwellings.
The facing of stone, marble or other material around a fireplace.
The monthly assessment members of a homeowners’ association pay for the repair and maintenance of common areas.
Lots in which buyers choose between one of several builders.
The lender’s “retail markup” on the mortgage. For example, if the index rate for an adjustable-rate mortgage is 5 percent but the lender has a 2.5 percentage-point margin, the rate the borrower will pay is 7.5 percent.
Factors affecting the sale and purchase of homes at a particular point in time.
The price that a piece of property sells for at a particular point in time.
The brick or stone work on a building.
A suburban plan that includes homes and commercial, work, educational and community facilities.
A loan amount within 5 percent of the highest loan-to-value ratio allowed for a property.
A home’s plumbing, wiring, heating and cooling systems.
Subcontractors or suppliers sometimes will file an encumbrance, or mechanic’s lien, against a property to seek payment.
A dispute-resolution process in which a neutral party works to resolve contract differences.
A buyer who has purchased a home before and is looking for a bigger or more expensive home.
A vertical dividing bar between window lights or panels.
A property that contains individual units for several households but carries only one mortgage.
A mortgage on a multifamily dwelling with more than four families, typically an apartment building.
Multiple listing service (MLS)
The service combines the listings for all available homes in an area, except For-Sale-By-Owner (FSBO) properties, in one directory or database.
Multiple purchase offers occur in hot markets or hot neighborhoods.
Municipal housing inspector
Inspectors employed by cities or counties to check all construction sites and verify that contractors are meeting building codes.
Nails in load-bearing parts of new homes that pop out slightly because of settling of the structure.
A seller’s asking price that is based on factors such as the required funds to pay off the mortgage, the cost of remodeling or the purchase of another house.
The situation occurs when a borrower’s monthly payment is not large enough to cover both the principal and interest of a loan. As a result, the outstanding balance of the loan actually grows larger with each payment rather than smaller. Most fixed-rate loans are not subject to negative amortization, but many adjustable-rate mortgages are susceptible.
A driveway that drops from street level to the garage.
Planning of a community that favors the return of new-home development with such traditional features as grid-street patterns, prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas.
Net cash flow
Investment property that generates income after expenses such as principal, interest, taxes and insurance are subtracted.
The worth of a person or company based on the difference between total assets and liabilities.
A community design philosophy that favors the return of new-home development with such traditional features as prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas.
A small recessed area in a wall, traditionally arched at the top.
NIMBY (Not In My Back Yard)
The response sometimes given by neighborhoods and communities to proposed changes or development.
No cash-out refinance
The amount of the new mortgage covers the remaining balance of the first loan, closing costs, any liens and cash no more than 1 percent of the principal on the new loan.
A lot in which the buyer’s home will be constructed by a particular builder.
A loan application that does not require verification of income but typically is granted in cases of large down payments.
A loan provision that prohibits the transfer of a mortgage to another borrower without lender approval.
An asset such as a house that is not easily turned into cash.
Non-recurring closing costs
Costs that are one-time only fees for such items as an appraisal, loan points, credit report, title insurance and a home inspection.
The legal document that requires a borrower to repay a mortgage at a certain interest rate over a specified period of time.
The interest rate specified in a mortgage note.
Notice of default
A lender’s initial action when a mortgage payment is late and attempts to reconcile the issue out of court have failed.
Online real estate listings
Properties listed for sale on the Internet.
A marketing tool in which a listing agent opens a house for view.
A property given to a number of brokers to market at the same time.
Undeveloped land or common areas in a planned community reserved for parks, walking paths or other natural uses.
A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.
Contractual arrangements that are not in writing and are usually not legally binding.
Original principal balance
The amount of principal owed on a loan before a borrower makes any payments.
A fee charged by most lenders–also called points–for processing a loan. A point is 1 percent of the total loan amount.
A protruding structural feature.
A transaction in which the seller of a property agrees to finance all or part of the purchase.
An officially described piece of land.
An interior wall.
There are several partnership options for unmarried individuals to buy a piece of property, such as live-in partnerships (in which both buyers share the residence) or a shared-equity partnership (in which one buyer lives in the home and the other is an investor in the property).
A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate.
Passive solar system
A system that supplies solar heat without the use of electric fans or pumps.
A visible deficiency in a piece of property, such as a cracked basement slab or a sagging porch.
A legal limit on the amount a monthly payment can increase on an adjustable-rate mortgage.
A test used to determine the ability of soil to accommodate a septic system.
Interest charged or accrued daily.
A section or division of a wall, ceiling or a flat piece of building material that forms the part of the surface of a wall, door or cabinet.
Strips of wood or wood material applied as a finish to a wall.
The strip of grass between the sidewalk and the street in front of a house.
Any kind of structure dividing one room or space from another.
An interior courtyard or a paved backyard area.
Any plant that produces leaves, flowers and seeds from year to year, such as irises or peonies.
An arbor with an open roof of rafters supported by posts or columns.
Any moveable property in a house such as furniture or appliances.
A common pest-control inspection is a termite inspection, which is required in some states, such as California.
A rectangular masonry support column.
PITI (Principal, Interest, Taxes, Insurance)
When a buyer applies for a loan, the lender will calculate the principal, interest, taxes and insurance. The figure is designed to represent the borrower’s actual monthly mortgage-related expenses.
The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals.
Residents own the home and the land, and share the use and financial responsibility for common areas.
A labor-intensive and more costly wall finish.
A sliding door that retreats into the wall when opened.
Fees charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount.
A mortgage that a borrower obtains to acquire a property.
Lenders compute qualifying ratios to determine how much a potential buyer can borrow.
Queen Anne style
A Victorian-era style that originated in San Francisco.
A document that releases a party from any interest in a piece of real estate.
A construction term that refers to the resistance of to heat loss. The higher the R-value, the slower the rate of heat loss.
A ground-generated radioactive gas that seeps into some homes through sump pumps, cracks in the foundation and other inlets. A leading cause of lung cancer , radon is found in mostly the northern half of the country.
Rafters form the slope of a pitched roof and are analogous to floor joists.
An alternative building process in which dirt is compacted into large structural frames to create walls.
Modern ranch-style homes, popularized in the 1950s, were championed by such architectural giants as Frank Lloyd Wright.
A loan with a clause that entitles a borrower to a one-time cut in the interest rate without going through refinancing.
When interest rates are volatile, many borrowers want to “lock in” an interest rate and many lenders will oblige, setting a limit on the amount of time the guaranteed interest rate is in effect.
Land and anything permanently affixed to it, including buildings, fences and other items attached to the structure.
Real estate agent
A real estate agent has a state license to represent a buyer or a seller in a real estate transaction in exchange for a commission. Most agents work for real estate brokers.
Real estate attorney
A lawyers who specializes in real estate transactions.
Real estate broker
A real estate agent who is licensed by the state to represent a buyer or seller in a real estate transaction in exchange for a commission. Most brokers also have agents working for them, and are entitled to a portion of their commissions.
Real estate investment trusts (REITs)
The trusts are publicly traded companies that own, develop and operate commercial properties.
Real Estate Settlement Procedures Act (RESPA)
A federal law designed to make sellers and buyers aware of settlement fees and other transaction-related costs. RESPA also outlaws kickbacks in the real estate business.
Land and any permanent fixtures on it, including buildings, trees and minerals.
A designation for an agent or broker who is a member of the National Association of Real Estate Brokers.
A designation for an agent or broker who is a member of the National Association of Realtors.
The cancellation of a contract by law or consent by the parties involved.
When a borrower completely pays off the mortgage, the property is reconveyed to them from the lender.
A public official responsible for keeping the records of all real estate transactions.
The filing of a specific document to the appropriate government entity.
A vent located along the ridge board of the roof that allows moisture to escape.
Right of first refusal
An agreement by a property owner to give another person the right to buy or rent the property before it goes on the open market.
Right to recission
A provision in the federal Truth-in-Lending Act that allows borrowers to cancel certain kinds of loans within three days of signing.
The installation of plumbing, electrical and other mechanical systems.
Rural Housing Service
A U.S. Department of Agriculture program that provides financing to farmers and certain borrowers to purchase rural property when other funds are not available.
A transaction in which the buyer leases back the property to the seller for a specified period of time.
A contract signed by the buyer and sellerthat details the terms of a home purchase.
A design that dates to colonial times and takes its name from the shape of saltboxes.
The drain line in a house that carries away food and human wastewater to a municipal sewer system or a septic system.
One of two windows in a double-hung window.
Renderings of floor plans and the exterior of a house.
Another loan placed upon a piece of property.
Secondary mortgage market
A market of packaged home loans that are resold as securities to investors. Major players are Fannie Mae and Freddie Mac.
Any loan backed by collateral.
Apiece of property designated as collateral.
A seller broker represents the interest of the seller.
An agreement in which the seller provides financing for a home purchase.
An agreement in which the seller provides financing for a home purchase.
A hot real estate market in which sellers have the advantage and multiple offers are common.
The buyer of a semi-custom home is free to make some design changes but not to the home’s structural plan.
A self-contained sewage treatment system that distributes wastewater to an underground storage area and relies on bacterial action to decompose solid waste matter.
A firm that collects mortgage payments and manages borrowers’ escrow accounts.
The minimum distance a house or buildings must be from the lot line.
A document that details who has paid what to whom.
A loan that allows a lender or other party to share in the borrower’s profits when the home is sold.
A transaction in which two buyers purchase a property, one as a resident co-owner and the other as an investor co-owner.
A shed ceiling pitches upward at one end.
A shed roof pitches up longer on one side than the other.
An alternative style of Victorian homes that evolved in the late 19th century to simplify the complexity of the traditional Victorian house.
Thin, wedge-shaped pieces of wood or flat rectangular pieces of slate, mineral fiber, glass fiber or composition asphalt installed on a roof to prevent water seepage.
An unobtrusive finish trim between the floor and the baseboard designed to hide any irregularities in the seam between the floor and wall or baseboard.
A second or third mortgage.
A pump that moves water from a basement sump pit.
A precise measurement of a piece of property by a licensed surveyor.
The non-cash value put into a piece of property by the owner, such as do-it-yourself home improvements.
Most companies charge a tap fee for hooking up utilities.
A tax break given by the government. Mortgage interest, loan points and property taxes can be deducted.
An impediment placed against a property, such as back taxes.
The public sale of a property by the government for nonpayment of taxes.
A term often applied to real estate investment and refers to various tax advantages.
A house that requires the entire interior to be rebuilt.
An low, short-term rate offered on a mortgage to entice the borrower.
Tenancy by the entirety
When a married couple owns a home, it is usually considered tenancy by the entirety If the property must be sold to pay the debts of one spouse, both must agree.
Tenants in common
Two or more owners who share interest in a specific property.
A terrace can be several things: an unroofed paved area right next to a house; a roofed balcony; a veranda; or a raised bed of earth constructed to enhance a landscape.
The 72-hour clause
When a buyer has a house to sell before they can purchase another home, most sellers insist on a 72-hour clause. In the event of a better offer coming in before the contingency is settled, this clause entitles the seller to give the buyer 72 hours to remove the contingency or lose the house.
In a third-party origination transaction, the lender has another institution originate all or part of a mortgage.
Ownership that involves the acquisition of a specific period of time, or that percentage of interest, in a vacation home or resort.
A federal law that protects consumers in a variety of ways. One of its key provisions allows a consumer to cancel a home-improvement loan, second mortgage or other loan if the home was pledged as security (except for a first mortgage or first trust deed) until midnight of the third business day after the contract was signed.
The process of removing old mortar from between bricks and replacing it with new mortar.
An adjustable mortgage with two interest rates, one for the first five or seven years of the loan, and the other for the remainder of the loan term.
Two- to four-family property
A piece of property that is owned by one person but provides housing for up to four households.
A layer of wood between the subfloor and the floor.
The process that lenders go through to evaluate the risks posed by a particular borrower and to set appropriate conditions for the loan.
A person who claims the right to a piece of property after the death of an owner without a will.
An unidentified marital partner who can claim the right to a piece of property.
An unrecorded deed transfers ownership from one party to another without being officially recorded.
U.S. Department. of Housing and Urban Development (HUD)
A federal agency that oversees the Federal Housing Administration and a variety of housing and community development programs.
Any loan that is not backed by collateral.
Options than the standard carpeting, lighting, finish carpentry and other amenities offered to all buyers in a new-home project.
The process in which a property is zoned from a lower to a higher use.
The unplanned expansion of development over a large area.
A reference to illegally excessive interest charged on any loan.
Variable interest rate
A loan rate that moves up and down based on factors including changes in the rate paid on bank certificates of deposit or Treasury bills.
Variable rate mortgage
A loan with an interest rate that hinges on factors such as the rate paid on bank certificates and Treasury bills.
An interest rate that changes with fluctuations in such indexes as the U.S. Treasury bill index.
An elongated half-cylinder that arches above the floor.
Verification of deposit
Part of the loan process, in which a lender will ask a borrower’s bank to sign a statement verifying the borrower’s account balances and history.
Verification of employment
Part of the loan process, in which a lender asks the borrower’s employer for confirmation of the borrower’s position and salary.
A small entrance hall or room.
Veterans Administration (VA)
The U.S. Department of Veterans Affairs operates a variety of programs to help veterans. One of the key plans it oversees is the VA loan program, which allows most veterans to purchase a house without a down payment.
An architectural style that dates from the mid-19th century.
Wood windows sheathed in vinyl on the outside.
A lien that a homeowner willingly gives to a lender.
A program that allows most veterans to purchase a house without a down payment.
Wood paneling, tongue-and-groove boards or similar material installed between a baseboard and a chair rail.
A voluntary relinquishing of certain rights or claims.
A feature that allows a door to open onto ground level.
A buyer’s final inspection of the home to determine if conditions in the purchase agreement have been satisfied.
A legally binding promise to do something in the future.
Watery areas such as swamps, marshes and floodplains.
An improperly recorded deed.
The most basic legal document outlining the disposition of a person’s estate in the event of death.
An individual pane of glass.
A bench built under an interior window.
A curved, corrugated steel insert used to isolate basement windows from moisture if they’re below the soil line.
Window well covers
Curved plastic covers designed to be installed on top of a window well to cover the opening.
A loan to a buyer for the remaining balance on a seller’s first mortgage and an additional amount requested by the seller. Payments on both loans are made to the lender who holds the wraparound loan.
Houses built without space between them and with little or no yard.
Regulations that control the use of land within a jurisdiction..
A one-time modification of existing zoning law.