Whether you are looking to buy a home or invest in real estate property, there are several important terms that you should know. Understanding common real estate terminology will help you make sound financial decisions.
15 Common Real Estate Terms to Know
- Agent: A realtor who represents a buyer or seller in a transaction
- Title Company: An organization that ensures that the legal and physical title to real estate property is free of legal disputes
- Beneficiary: The individual to whom property is left in a will.
- Closing: The final step in purchasing real estate property, which involves the exchange of money, documents, and keys between seller and buyer
- Client: A person or company who hires a real estate agent to represent them in the purchase or sale of the property
- Commission: The amount of money that a real estate agent receives for facilitating the sale or purchase of a property
- Down Payment: The amount of money paid to acquire real estate property
- Escrow: A service provided by a third party that ensures that funds are properly distributed between buyer and seller in a real estate transaction
- Equity: The difference between the fair market value and what is owed on it, known as equity
- Fair Market Value: The price that a home would sell for on the open market if similar properties were sold in your area
- Home Inspection: An inspection of the home to determine its condition and whether repairs are necessary
- Homeowners Association: An organization that manages and governs common areas in subdivisions or housing development
- Prequalification: A process that evaluates a potential buyer’s financial status
- Adjustable-Rate Mortgage: A mortgage with either fixed or variable interest rates for a period of time
- VA Loan: A government-backed loan available to veterans that requires zero down payment and has a lower interest rate than conventional loans
Learn More with a Real Estate Professional
There are many more real estate terms that can help you better understand the industry and make more informed decisions about purchasing or selling real estate property. Learn more about the real estate terms that matter to you by working with a local real estate agent.