Every business has its jargon and residential real estate is no exception. Mark Nash, author of 1001 Tips for Buying and Selling a Home, shares commonly used terms with home buyers and sellers.
1031 Exchange or Starker Exchange: The deferred exchange of goods that qualifies for tax purposes as a tax-deferred exchange.
1099: The income statement reported to the IRS for an independent contractor.
A/I: Pending contract with supply and inspection contingencies.
Accompanied Shows: Those shows where the listing agent must accompany an agent and their clients while viewing an ad.
Appendix: An addition to; a document.
Variable Rate Mortgage (ARM): A type of home loan whose interest rate is linked to an economic index, which fluctuates with the market. Typical ARM periods are one, three, five, and seven years.
Agent: The licensed real estate seller or broker who represents buyers or sellers.
Annual Percentage Rate (APR): The total costs (interest rate, closing costs, fees, etc.) that go into a borrower’s loan, expressed as a percentage of the interest rate. Total costs are amortized over the term of the loan.
Application Fee – Fees that mortgage companies charge buyers at the time of a written loan application; for example, fees for running borrower credit reports, property appraisal fees, and lender-specific fees.
Appointments: Those hours or periods during which an agent shows properties to clients.
Estimate: An opinion document of the value of the property at a specific time.
Appraised Price (AP): The price the third-party relocation company offers (in most contracts) to the seller for their property. Usually the average of two or more independent ratings.
“As Is”: A contract or offer clause that states that the seller will not repair or correct any problem with the property. It is also used in lists and marketing materials.
Assumable mortgage: one in which the buyer agrees to fulfill the obligations of the existing loan agreement that the seller has entered into with the lender. By assuming a mortgage, the buyer becomes personally liable for payment of principal and interest. The original mortgagee must receive a written release of liability when the buyer assumes the original mortgage.
Return to Market (BOM): When a property or listing is put back on the market after being recently taken off the market.
Backup Agent – A licensed agent who works with clients when their agent is unavailable.
Balloon mortgage: A type of mortgage that is usually paid off in a short time, but is amortized over a longer period. The borrower usually pays a combination of principal and interest. At the end of the term of the loan, the entire outstanding balance must be paid.
Relief offer: when an offer is accepted subject to the fall or cancellation of a first accepted offer on a property.
Bill of Sale: Transfers title to personal property in a single transaction.
Board of REALTORS® (Local): An association of REALTORS® in a specific geographic area.
Broker: A state-licensed person who acts as an agent for the seller or buyer.
Broker of record: the person registered with the competent authority in your state as the managing broker of a specific real estate sales office.
Broker’s Market Analysis (BMA): The real estate broker’s opinion of the expected final net selling price, determined after the property is acquired by the third-party company.
Broker Tour: A predefined time and day where real estate agents can view listings from multiple brokers in the market.
Buyer: The buyer of real estate.
Buyer’s Agency: A real estate broker hired by the buyer who owes a fiduciary duty to the buyer.
Buyer’s Agent: The agent who shows the buyer’s property, negotiates the contract or offer for the buyer, and works with the buyer to complete the transaction.
Maintenance costs: costs incurred to maintain a property (taxes, interest, insurance, utilities, etc.).
Closing: The end of a transaction process where the deed is delivered, the documents are signed and the funds are distributed.
CLUE (Comprehensive Loss Underwriting Exchange): The national insurance industry database that assigns individuals a risk score. CLUE also has an electronic file of a property insurance history.