The Ultimate Real Estate Glossary for Buyers and Sellers

Published on: June 13, 2025

Navigating the real estate market can be overwhelming, especially for first-time buyers and sellers. Understanding common terminology is essential to making informed decisions and avoiding costly mistakes. Here is a comprehensive guide to 50 key real estate terms you must know, whether you're buying, selling, or investing in property.

1. Appraisal: A professional assessment of a property's market value, typically required by lenders.

2. Adjustable-Rate Mortgage (ARM): A loan with an interest rate that changes periodically based on market conditions.

3. Amortization: The gradual repayment of a mortgage loan through regular payments over time.

4. Annual Percentage Rate (APR): The total cost of borrowing, including interest and fees, expressed as a yearly rate.

5. Assessed Value: The dollar value assigned to a property by a public tax assessor for taxation purposes.

6. Balloon Mortgage: A mortgage with small monthly payments and a large lump-sum payment at the end.

7. Bridge Loan: A short-term loan used until permanent financing is secured or the existing property is sold.

8. Buyer’s Agent: A real estate agent who represents the buyer in a transaction.

9. Capital Gains: The profit made from the sale of a property.

10. Closing Costs: Fees and expenses paid during the finalization of a real estate transaction.

11. Closing Disclosure: A document outlining the final terms and costs of a mortgage.

12. Contingency: A condition that must be met for a real estate contract to be binding.

13. Comparative Market Analysis (CMA): A report comparing similar properties to determine a home’s market value.

14. Conventional Loan: A mortgage not insured by a government agency.

15. Counteroffer: A response to an initial offer with revised terms.

16. Deed: A legal document transferring ownership of property.

17. Down Payment: The initial payment made when buying a property.

18. Dual Agency: When one agent represents both the buyer and the seller.

19. Earnest Money: A deposit showing a buyer’s serious intent to purchase.

20. Easement: The right to use someone else’s property for a specific purpose.

21. Equity: The difference between a property’s market value and the outstanding mortgage.

22. Escrow: A neutral third party that holds funds and documents until a transaction is complete.

23. Fair Market Value: The price a property would sell for on the open market.

24. Fixed-Rate Mortgage: A loan with an unchanging interest rate over its term.

25. Foreclosure: The legal process of repossessing a property when the borrower fails to pay the mortgage.

26. Home Inspection: An evaluation of a home’s condition by a qualified inspector.

27. Homeowners Association (HOA): An organization governing a community that enforces rules and maintains common areas.

28. Home Warranty: A service contract covering repair or replacement of home systems and appliances.

29. Interest Rate: The cost of borrowing money, usually expressed as a percentage.

30. Jumbo Loan: A mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.

31. Lease Option: A rental agreement allowing the tenant to purchase the property later.

32. Listing: A property that is for sale.

33. Loan-to-Value Ratio (LTV): A ratio comparing the loan amount to the appraised value of the property.

34. Market Value: The estimated amount a property would sell for in a competitive market.

35. Mortgage Insurance: Insurance protecting the lender in case the borrower defaults.

36. Multiple Listing Service (MLS): A database of properties listed by real estate agents.

37. Offer: A proposal to purchase a property under specific terms.

38. Open House: A scheduled time when a property is open for viewing by potential buyers.

39. Origination Fee: A charge by a lender for processing a loan application.

40. Pre-Approval: A lender’s conditional commitment to lend a specific amount based on financial information.

41. Principal: The amount borrowed or the portion of the loan still owed.

42. Property Taxes: Taxes paid to local government based on the assessed value of the property.

43. Real Estate Agent: A licensed professional who represents buyers or sellers in a transaction.

44. Realtor: A real estate agent who is a member of the National Association of Realtors.

45. Refinancing: Replacing an existing mortgage with a new one, often with better terms.

46. Seller’s Agent: An agent who represents the seller.

47. Short Sale: A sale of property for less than the amount owed on the mortgage.

48. Survey: A process that measures property boundaries.

49. Title: Legal ownership of a property.

50. Title Insurance: Insurance protecting against losses from disputes over property ownership.

Understanding these essential terms can significantly enhance your confidence and clarity in real estate transactions. Whether you're buying your first home, selling an investment property, or just exploring the market, this glossary will serve as a valuable reference throughout your journey.