ARM (Adjustable Rate Mortgage)

A mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate but is adjusted periodically according to the cost of funds to the lender.

Amortize

To pay a debt in periodic amounts until the total amount, including any interest, is paid.

Buyer's Agent ("CBR") :

An agent who represents the buyer in a real estate transaction. A buyer agent may be paid by the buyer, seller, or listing agent at closing, provided all parties consent.

Appraisal

A valuation of property by the estimate of an authorized person.

Appreciation

An increase in value.

Assessment

An official valuation of property for tax purposes. Payments made by condominium or cooperative owners for their share of building maintenance expenses.

Closing

The point at which real estate formally changes ownership. Closing costs are fees paid for services associated with a home's closing such as title insurance, surveying fees, recording fees, deeds, and affidavits.

CMA (Competitive Market Analysis)

A method of determining the value of a property by comparing the prices paid for similar properties.

Commission

Compensation paid to a real estate agent (usually by the seller) for services rendered in connection with the sale, exchange, or lease of property.

Counter Offer

A new offer as to price, terms, and conditions, made in response to a prior, unacceptable offer. A counter offer terminates an original offer.

Disclosure

Revealing what previously was private knowledge. Any statement of fact that is required by law.

Down Payment

A percentage of the purchase price the buyer pays in cash.

Earnest Money

A buyer's partial payment to the seller as a show of good faith in completing the transaction.

Equity

The difference between the current market value of a property and the claims--such as the unpaid portion of a mortgage--that exist against it.

Escrow

The closing of a real estate transaction through a neutral third party who holds funds and/or documents for delivery after specific conditions have been met.

Inspection

An examination of a property by the buyer, agent, title insurance company, or other interested party.

Lien

A charge or claim by one party on the property of another as security for the payment of a debt.

Listing

A written agreement between a property owner and a real estate broker authorizing the broker to find a buyer.

Market Value

The price a property will command on the open market.

MLS (Multiple Listing Service)

A means by which agents are informed of the properties offered for sale by other agents.

Mortgage

A legal document pledging property as security for the payment of a loan.

Mortgage Insurance

An insurance plan that protects the lender if the borrower does not repay a loan. Mortgage insurance is required when a home buyer makes less than a 20% down payment at the time of purchase. Private mortgage insurance (PMI) covers conventional (fixed-year, fixed-rate) loans. The Federal Housing Administration charges a mortgage insurance premium (MIP) on FHA loans.

Offer

A proposal to purchase property at a specified price and terms.

Open House

The common real estate practice of showing "For Sale" homes to the public during established hours.

Origination Fee

A lender's charge for establishing and processing a new mortgage loan. It is generally computed as a percentage of the loan and may be tax deductible.

Owner of Record

The person named in the public record as the owner of a property or mortgage.

Points

A one-time charge paid to the lender for issuing a loan. Each point equals one percent of the loan amount and is used to obtain revenue in addition to the interest rate.

Principal

The amount of money upon which interest is paid.

Refinance

Obtaining a new loan to pay off an existing loan. Refinancing is a popular practice when interest rates drop.

Title

Lawful ownership of property.

Title Insurance

An insurance policy that protects against losses arising from title defects such as forged or misfiled documents.

Title Search

An examination of the public records to determine whether the current title is clear or defective.

Townhouse

Also known as a row house, generally refers to a type of dwelling having two floors, with the living area and kitchen on the first floor, and the bedrooms on the second. Town houses share a common wall between units.

Walk-Through

A final inspection of a property before it changes ownership.