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Heather Tindall Robillard is a 12th generation Central New Jerseyan sharing her take on the NJ real estate market and how to maximize your power in your next real estate transaction.


49 Real Estate Terms You Should Know

May 6, 2024

Last updated:

Do you find real estate jargon confusing? You are not alone. The real estate industry is riddled with abbreviations and terms that might hinder progress. Browse through this list to increase your real estate vocabulary and simplify your experience.

  1. Adjustable-Rate Mortgage (ARM): an adjustable-rate mortgage (or ARM) is a form of home loan. Its interest rates fluctuate periodically.
  2. Amortization: a pre-set installment schedule for monthly mortgage payments.
  3. Annual Percentage Rate (APR): the annual percentage rate (APR) refers to the yearly interest charged on your home loan.
  4. Appraisal: It is an unbiased assessment of a real estate property to determine its market value.
  5. Assessed Value: when the local government assigns the home’s value to calculate property taxes, most assessments require inspection and comparative analysis of other homes in the neighborhood.
  6. Assumption Agreement: the seller agrees to pay off the existing mortgage after purchasing the property via a contract.
  7. Blended Payment: blended payments cover both a principal amount and interest (P&I) that homeowners pay during the amortization period.
  8. Buyers Agent: buyer’s agents solely represent buyers and guide them during the real estate transaction.
  9. Closing: Closing (or closing date) refers to the last step of a real estate transaction. It happens when property ownership gets transferred to the buyer.
  10. Conditional Offer: it is an agreement when an offer occurs when the other party fulfills a specific condition.
  11. Contingencies: they are pre-requisite clauses that buyers and sellers must complete before moving to the next step in an ongoing transaction.
  12. Contract of Sale: it is a legal agreement where the owners agree to sell the house for an agreed price.
  13. Conventional Mortgage: a conventional mortgage is an uninsured home loan that doesn’t include any federal government guarantee. It is generally available for individuals with solid credit scores.
  14. Counter Offer: sellers set a counter offer against the initial bid to set a higher selling price.
  15. Credit Bureau: an official agency that collects and assesses individual credit scores. Creditors use this information to determine whether the borrower qualifies for a loan.
  16. Deed: it is a legal document that transfers property ownership from seller to buyer.
  17. Default: a default occurs when homeowners have not paid their monthly mortgage.
  18. Delinquency: mortgages with outstanding mortgage payments are listed as delinquent. Lenders have the right to start foreclosure proceedings if the monthly installment is 30 days late.
  19. Down Payment: it is the initial amount (i.e. 20% of the total property price). Buyers pay it at the closing to finance their home purchase.
  20. Earnest Money: when buyers pay 1-2% of the total home price to show genuine interest in the property, sellers deduct this amount from the entire down payment during closing.
  21. Estoppel Certificate: this is an official document that briefs buyers about existing tenants’ rights and privileges.
  22. FHA Loan: a Federal Housing Administration (FHA) loan requires lower down payments, reduced closing costs, and lower credit scores. These homes facilitate first-time home buyers who might not have the financial stability to receive conventional loans.
  23. Fixed Interest Rate: it is an unchangeable mortgage rate.
  24. FSBO: For Sale by Owners (FSBO), a label indicating a home was placed on sale without a real estate agent.
  25. High-Ratio Mortgage: it is a real estate transaction for homes with less than a 20% down payment.
  26. Home Inspection: it is a thorough evaluation of residential properties to ensure the house is in good condition for buyers.
  27. Insurance Broker: an insurance advisor/representative who guides you through the process.
  28. Interest: a percentage of the deposit/loan you have to pay periodically to clear your debts.
  29. Interest Rate: the percentage charges on the total amount lent to you.
  30. Land Surveyor: surveyors set boundary lines around property sites to prevent legal disputes.
  31. Lawyer/Notary: a licensed professional who authorizes legal transactions and deals.
  32. Listing: featured properties that a realtor is authorized to sell.
  33. MLS (Multiple Listing Service): the MLS is a real estate database that allows a user to search for essential details about sale properties.
  34. Mortgage Lender: lenders (i.e., banks or financial service providers) let buyers borrow money to purchase a residential or commercial property.
  35. Mortgage Loan Insurance: an insurance policy that guarantees reimbursement to lenders/investors to cover their losses.
  36. Mortgage Payments: monthly payments to pay back a mortgage loan.
  37. New Home Warranty Program: buyers of newly constructed homes receive discounted maintenance services for a designated period.
  38. Open Mortgage: a mortgage contract allows the homeowner to refinance, re-negotiate, and pay-off in one-go without any penalties.
  39. Points/Discount Points: to enjoy the benefits of reduced interest rates, buyers pay a fee to their mortgage lenders at the closing date.
  40. Principal: the principle is the total amount of money owed on a mortgage loan.
  41. Private Mortgage Insurance: buyers buy mortgage insurance to qualify for conventional or FHA mortgage loans.
  42. Property Insurance: an insurance policy that compensates for financial loss faced after property damage in the event of an accident, natural disaster, theft, etc.
  43. Property Tax: a government tax imposed on residential properties.
  44. Sales Contract: an official contract that authorizes the sales of goods (in this case, property).
  45. Seller Agent: real estate agents represent the sellers during transactions.
  46. Real Estate Agent: they negotiate real estate transactions on behalf of their clients.
  47. Term: a designated period during real estate transactions.
  48. Title Insurance: title insurance safeguards the buyer’s rights to ownership during legal disputes.
  49. Variable Interest Rate: variable interest rate changes over time, unlike fixed interest rates.

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