You speak English perfectly well, but some of the terms you’ll come across in the paperwork you’re expected to sign may cause you to panic. But don’t worry. We’ve prepared a dictionary of commonly terms that will help you get oriented in the professional mumbo-jumbo of the real estate industry.
The time between the offer and the purchase being accepted. Acceptance of the offer must be conveyed to the offerer in order that the contract can become valid.
Local government tax calculated according to value of the property, through government-certified assessors.
Certified representative, can be a leasing agent who represents the seller, a selling agent who represents the buyer, a dual agent, who represents both sides, or a transaction agent, a broker who doesn’t represent either side, but ensures that the transaction is completed. A real-estate agent must be certified according to the law of his or her state. An agent must maintain a license and function under the authority of a real-estate broker. The course of study to become a broker includes topics such as sales, specific studies on the subject in theory and practice.
Estimating a property’s value—determining a price by a professional appraiser (not necessarily an assessor). In general, they are accredited in the required assessment by mortgage companies. The value is generally determined through a combination of factors such as value of properties in the area, condition of the property, etc.
A rise in value of a property compared with economic and market conditions.
Without any responsibility concerning the condition of the property.
The price requested by the seller. The buyer can make a lower offer, offer the asking price, or offer a higher price than that requested.
Value of the property as estimated by the local authorities for the purpose of tax calculation.
Individual responsible in the events that rights and obligations for the property are transferred to another individual.
Contract or alternative offer that comes into effect if the original offer fails for one reason or another.
A situation in which a court determines that an individual’s debts are higher than his or her property and making arrangement for payment of debts determined by the court.
A type of document which serves as a reminder, declaring the intentions of seller and buyer, expressing the serious intent of both sides regarding acquisition of the property, generally accompanied by a deposit.
Individual authorized by law of the state to serve as an agent representing and managing negotiations on behalf of the seller or buyer, renter or tenant of properties. Brokers must have a real-estate business license. Additionally, agents are only authorized to work under the auspices of a broker.
A real-estate agent, real-estate broker, or a salesperson representing the buyer and his/her interests. Fees may come from the seller as is commonly accepted, or from the buyer.
Declaration which certifies the ownership or possession of the property.
Local government document which certifies that building is being conducted according to standards and is ready to be occupied.
Ownership free of leans and other ties.
Event in which the property changes hands and the seller receives payment. Declaration of sale (settlement statement) itemizes all money transferred in the transaction.
Active costs of the transaction. The cost must consider lawyer fees, registration and bureaucratic costs, property inspection, sales tax payments, and insurance.
Shared areas of the property (elevators, stairs, swimming pools, parking lots, etc.).
Real-estate ownership model in which a number of owners hold residential units or portions of a building and they have interest and areas in common.
Conditions on a contract which must be carried out in order for the contract to come into effect. These are usually a way for the buyer to ensure that some matter is taken care of or if not, the buyer is exempt from his or her commitment.
Transferring a property from one individual or organization to another.
If an initial offer is received and changed, this is considered a rejection of the first offer and this then becomes a counteroffer.
Condition or limitation on a contract.
Term of a document which obligates the buyer to meet a particular condition. These conditions are common on properties in protected or shared neighborhoods.
The document which buyer and seller sign to transfer ownership of the property. It transfers ownership in a legal way which is documented by a closing agency in the regional archive.
Failure to meet conditions—mortgage payment, taxes, or other commitment.
Legal transfer of the purchase document (deed) by the seller for the purpose of documentation.
A deposit toward the purchase price provided to show seriousness, given by the documented buyer. The deposit is generally placed in an escrow account and is held there until the deal actually closes. What happens to the money if the deal doesn’t go through? That’s a good question—this must be determined by the parties ahead of time.
Sale in which the seller is in some type of need and “must sell” and is therefore prepared to offer a lower price.
Suitability testing, declaring that all items reported about the property are correct to the best of one’s knowledge or understanding.
A legal document for a particular property providing an individual who is not the owner the right to use the property. For example—infrastructure companies may have access to the property. Details must be outlined in the sale contract.
Possession or ownership of the property.
A trusted, neutral third party who holds deposits in an escrow account.
The legal process of removal from a home, occasionally by force to remove a tenant by legal authorities.
Exclusive agreement between seller and broker for a given fee. Authorized agents acting under the broker can market the property.
Lengthening the time to apply the contract.
Average price in a competitive market.
Legal right providing a particular individual with the first opportunity to buy or lease a property.
Insurance which covers damages caused by floods, relevant in particular areas located alongside rivers, bodies of water, or near the coast.
Prevented from taking legal steps despite non-performance of obligations.
Legal process carried out when borrower does not meet obligations to the lender. In this situation, the lender can sell the property in a public auction to reclaim the value of the mortgage.
Inspection of the property by a third-party which is not connected to the seller or buyer (structure and infrastructure).
Organization or building / neighborhood committee which collects money for maintenance. Committees in the U.S. have the authority to impose conditions such as requiring residents to mow lawns.
Government branch responsible for urban renewal, residential and community, as well as mortgages and grants for residents in need.
Individual who owns the property, renting it out to tenants.
Special rental agreement in which rental payments accumulate to pay for purchase of the property.
Document for the piece of land which describes its distribution tax (parceling), neighborhood, etc. This document must be attached as part of the transaction paperwork.
Security interest in a property or registered warning (with the land registry) against a property.
Real-estate agent who represents the seller.
Broker who represents the seller and registers the property for sale. Generally, the buyer is represented by another broker, and the brokers cooperate, with the fee for the transaction divided between them.
Agreement between seller and broker (or agent acting on broker’s behalf) which outlines the power of the broker to market and publicize the property in return for an agreed-upon fee in the event of sale.
Measurement of a property by a certified surveyor.
A centralized database of details from numerous listing databases across the entire United States in which agents can present their properties for sale or rent.
Internal or external mold growth on any part of a property. Before purchasing a property, it’s a good idea to determine whether a mold or termite problem exists in a building.
Documented presented by the buyer outlining his or her interest in acquiring the property.
Registered with a non-exclusive listing with a particular broker.
The right to purchase or rent a property at a time or for a price determined ahead of time. Does not obligate buyer but the seller commits to sell if the buyer is interested in completing the transaction. An option is provided with money as a deposit.
Obligation and personal responsibility.
Detailed map of the property area and its boundaries.
The individual with the keys to the property and those operating under his or her authorization (owner, tenant). Receiving the keys during purchase is done after transfer of all payments.
Taxes to local authority where the property is located. This tax is usually billed on an annual basis.
Sales contract which details all terms of the transaction.
Natural gas which accumulates in a home, and which, if present in over a particular concentration, could constitute a risk to health.
The real estate agent is authorized to promote and conduct negotiations for purchasing and renting property.
Property owned by a bank or other financial body, generally ownership has transferred to it as a result of failure to meet mortgage payments.
1974 law which outlines the process of sale of real-estate property. It tends to protect those involved in the transaction through detail and transparency.
A broker or agent who is a member of the national real-estate agent organization, NAR. Members of the organization are obligated in an ethical code of the Realtors® organization.
Restrictions placed in the contract on the use of the property (for example, forbidding bringing in animals) or enacting a change to the contract.
Yield, income, generally calculated as an annual percentage rate.
The right of refusal is the right to refuse sale or rental of a property (before any others).
Statistical law which says that in order to calculate the number of years after which money will have doubled at a particular interest rate, 72 must be divided by the annual rate of interest.
Agent who serves as a representative of the seller.
Event at which the transaction is actually conducted, in which all documents are signed and the property changes ownership.
Details of all payments required and fees of every individual involved in the transaction.
Taxation against improvements in the property (improvement tax).
Unique passages of a contract which are not part of a standard contract.
Warning notice or lien following non-payment of taxes.
The possibility to delay tax payment by acquiring a similar property.
Passage in a contract which emphasizes the timetable and deadlines.
Every purchase offer must specify a time limitation for which the seller can delay or reply with his or her own counteroffer.
Company which searches and guarantees that the transaction is free from liens and other warnings, ownership claims, etc.
An insurance policy which can be purchased in order to protect against leans or other problems which could be created in ownership. Policy issuer will conduct a search in local registries.
Does not represent either of the parties to the deal but rather, the transaction itself. Responsible for aiding both sides in processes and documentation connected with transfer of ownership.
Tax assessed on transfer of ownership.