Real Estate Terms and Definitions
- Abandonment - The voluntary relinquishment of rights of ownership
or another form of interest (an easement) by failure to use the property
over an extended period of time.
- Acceptance - Refers to a legal term denoting acceptance of
an offer. A buyer offers to buy and the seller accepts the offer
- Acre - A measure of land, equal to 160 sq. rods (43,560 sq.ft.).
An acre is approximately 209' x 209'.
- Addendum - Something added. A list or other items added to
a document, letter, contract, escrow instructions, etc.
- Agent - Acts on behalf of another, representing that person's
interests and serving as an intermediary.
- Agreement of Sale - Known by various names, such as contract
of purchase, purchase agreement, or sales agreement according to location
or jurisdiction. A contract in which a seller agrees to sell and a buyer
agrees to buy, under certain specific terms and conditions spelled out
in writing and signed by both parties.
- Appraisal - An estimate of the value of property, made by
a qualified professional called an "appraiser".
- Assessed Value - Value placed on property by the tax assessor.
- Assessment - The valuation of property for the purpose of levying
a tax, or the amount of the tax levied.
- Breach - Violation of an obligation in a contract
- Broker, Real Estate - An agent licensed by the state to carry
on the business of operating in real estate. He usually receives a commission
for his services of bringing together buyers and sellers, owners and
tenants, in exchange agreements.
- Building Code - A set of stringent laws that control the construction
of buildings, design, materials and other similar factors
- Built-Ins - Items that are not movable, such a stoves, ovens,
microwave ovens, dishwashers.
- Buyers Market - A market condition which occurs in real estate
where more homes are for sale than there are interested buyers
- Capital Gains - A term used for income tax purposes which
represents the gain realized from the sale of an asset less the purchase
price and deductible expense.
- Capitalization - An appraising term used in determining value
by considering net operating income and a percentage of reasonable return
- Client - One who employs another's services, as in an attorney,
real estate agent, insurance agent, etc.
- Closing - In the sale of real estate it is the final moment
when all documents are executed and recorded and the sale is complete.
Also a general selling term where a sales person is attempting to sell
something and the buyer agrees to purchase
- Closing Costs - Expenses (such as loan fees, title fees, appraisal
fees, etc.), over and above the price of the property, incurred by buyers
and sellers in transferring ownership. Also called "settlement costs".
Closing costs may be paid by the buyer, the seller or shared by both.
In some cases, all or a portion of these costs may be included in the
- Common Area - That area owned in common by owners of condominiums and planned sight development homes within a subdivision.
- Conditional Sales Contract - A contract for the sale of property
where the buyer has possession and use, but the seller retains title
until the conditions of the contract have been fulfilled. Also known
as a land contract.
- Condominium - Individual ownership of a dwelling unit and an
individual interest in the common areas and facilities which serve the
multi- unit project.
- Contingency - A condition that must be met before a contract
is legally binding.
- Contract - An agreement between tow or more parties, written
or oral, to do or not to do certain things.
- Conveyance - The transfer of the title to land from one to
- Counter Offer - An offer in response to an offer. 'A' offers
to by 'B's' house for $90,000 which is listed for $92,000. 'B' counter
offers 'A's' offer by stating that he will sell the house to 'A" for
$91,000. The $91,000 is the counter offer.
- Deed - The legal document conveying title to a property.
- Depreciation - Decline in value of a house due to wear and
tear, adverse changes in the neighborhood, or any other reason.
- Disclosure Report - Residential real property disclosure act.
Is an act relating to disclosure by the seller of residential real property.
The purpose of this report is to provide prospective buyers with information
about material defects in the residential real property.
- Dual Agency - Some states permit a real estate licensee to
potentially act as a dual agent, that is, represent more than one party
to the transaction. A licensee may legally act as a dual agent with
the written disclosure and informed consent of a consumer in form required
- Down Payment - The part of the purchase price which the buyer
pays in cash and does not finance with a loan.
- Easement Rights - A right- of- way granted to a person or company
authorizing access to or over the owner's land. An electric company
obtaining a right- of- way across private property is a common example.
- Encroachment - An obstruction, building, or part of a building
that intrudes beyond a legal boundary onto neighboring private or public
land, or a building extending beyond the building line.
- Estate - The ownership interest of a person in real property.
Is also used to refer to a deceased person's property. And often used
to describe a large home with spacious grounds
- Equity - The market value of a property minus the amount of
any existing loans or liens.
- Fair Market Value - That price a property will bring given
that both buyer and seller are fully aware of market conditions and
- Foreclosure - A legal term applied to any of the various methods
of enforcing payment of the debt secured by a mortgage, or deed of trust,
by taking and selling the mortgaged property, and depriving the mortgagor
- Fixtures - Items affixed to buildings or land usually in such
a way that they cannot be moved without damage to themselves or the
property, such as plumbing, electrical fixtures, trees, etc.
- Lease - A contract between the owner of real property, called
the lessor, and another person referred to as the lessee, covering all
conditions by which the lessee may occupy and use the property.
- Lease With Option To Purchase - A lease where the lessee has
the option to purchase the leased property. The terms of the purchase
option must be set forth in the lease.
- Legal Description - The geographical identification of a parcel
- Listing - A contract between owner and broker to sell the owner's
- Notary Public - One who is authorized by federal or local government
to attest authentic signatures and administer oaths.
- Offer - A presentation to form a contract or agreement.
- Purchase Agreement - An agreement between buyer and seller
denoting price and terms of the sale.
- Real Estate Agent - a licensed person who works under the direction
of a broker selling and renting real estate.
- Real Estate Broker - A middle man or agent who buys and sells
real estate for a company, firm, or individual on a commission basis.
The broker does not have title to the property, but generally represents
- Realtor - A real estate broker holding membership in a real
estate board affiliated with the National Association Of Realtors or
Canadian Real Estate Association.
- Seller's Market - More buyers than sellers.
- Survey - A drawing or map showing the precise legal boundaries
of a property, the location of improvements, easements, rights of way,
encroachments, and other physical features.
- Tax - As applied to real estate, an enforced charge imposed
on persons, property or income, to be used to support the State. The
governing body in turn utilizes the funds in the best interest of the
- Title - A legal document evidencing a person's right to ownership
of a property
- Title Insurance - Insurance to protect the lender (lender's
policy) or the buyer (owner's policy) against loss arising from disputes
over ownership of property.
- Waive - To relinquish, or abandon. To forego a right to enforce
or require anything.