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ARM (Adjustable Rate Mortgage)

 

A financing technique in which the lender can raise or lower the mortgage interest rate according to a set index, such as six-month Treasury bills.

 

Agent
 

An authorized person who manages or transacts business for another. Laws governing real estate--especially relating to agents--vary considerably from state to state. While some standardization has been achieved, it is best to check the particulars in each state.
 

Buyer Agent: 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.
 

Dual Agent: An agent representing both parties in a transaction. In almost every state, dual agency is illegal and unethical without the written consent of both the buyer and the seller.

Listing Agent: The agent who represents the seller.

Selling Agent: The agent who obtains a buyer. A selling agent may represent the buyer, or may be a subagent of the seller.

Subagent: A salesperson who works for an agent.

Amenities

Features that enhance the value or desirability of a property.

 

Amortize

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

 

Appraisal

A qualified party's opinion of the value of a property.

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.

 

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Broker

An independent business person who sets real estate office policies, hires employees, determines their compensation, and supervises their activities.

 

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CRS (Certified Residential Specialist)

A professional designation awarded to experienced agents who complete an advanced course of study in residential real estate and demonstrate proficiency in sales and production. CRS Designees are members of the Residential Sales Council, a not-for-profit affiliate of the NATIONAL ASSOCIATION OF REALTORS®.

 

CLO (Computerized Loan Origination)

A computer network of major lenders that allows agents to initiate mortgage applications in their office. HUD has approved the procedure as long as 1) full disclosure is made of the fee; 2) multiple lenders are displayed on the computer screen to give borrowers a basis for comparison; 3) the fee charged is a dollar amount rather than a percentage of the loan.

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.

Code of Ethics

A written standard of ethical conduct embraced by the NATIONAL ASSOCIATION OF REALTORS®, a trade organization of more than 700,000 members representing all branches of the real estate industry.

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.

Condominium (Condo)

Individual ownership of a portion of a building, with common areas shared by all owners. Maintenance fees called "assessments" are paid to the condominium association to maintain, repair, or improve the property.

Conventional Loan

A fixed-rate, fixed term loan that is not insured by the government.

Co-operative (Co-op)

An arrangement in which a corporation made up of residents owns a building. The buyer owns a proprietary lease, rather than real property, and a corresponding number of shares in the corporation.

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.

 

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Deed

A legal document transferring ownership of a property from one party to another.

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.

 

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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.

Exclusive Listing

A written agreement in which the seller appoints only one agent to market the property for a specific period of time. If the owner sells the property himself, he is not required to pay a commission.

Exclusive Right of Sale Listing

A written agreement between an agent and a property owner stating that the owner will pay a commission to the agent if the property is sold during a specific time period--whether or not the agent is responsible for the sale.

 

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Fannie Mae (Federal National Mortgage Association)

Fannie Mae purchases home mortgages, thus serving as a source of funds for mortgage lenders. It is a privately owned corporation whose shares are traded on the New York Stock Exchange, but it is subject to the strict supervision of the secretary of the U.S. Department of Housing and Urban Development (HUD).

Federal Fair Housing Law

Refers to Title VIII of the Civil Rights Act, and stipulates that discrimination based on race, color, sex, familial status, handicap, religion, or national origin is illegal in connection with the sale or rental of most dwellings.

FHA (Federal Housing Administration)

A federal agency established to improve housing standards and conditions. The FHA provides mortgage insurance to approved lending institutions.

Freddie Mac (Federal Home Loan Mortgage Corporation)

A federally chartered corporation established to purchase mortgages in the secondary, or resale, market. Freddie Mac's policies are designed to serve the needs of savings and loan associations. It is subject to oversight by the U.S. Department of Housing and Urban Development (HUD).

 

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Guaranty

A pledge made by one person (the guarantor) to ensure that another person (the obligor) will fulfill an obligation to a third party (the obligee).

 

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HUD (U.S. Department of Housing and Urban Development

A federal department active in a variety of national housing programs including urban renewal and public housing.

 

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Improvements

Additions intended to increase the value of a property.

Inspection

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

 

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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.

 

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