Real Estate Terms A–Z: A Simple Guide for Buyers & Sellers
Real Estate language can feel confusing and overwhelming at times. Here is a simple guide to many common real estate terms and information that you will hear when working through the buying and selling process:
A – Appraisal
Often required by a Buyer’s lender, an appraiser will determine the fair market value of a home after an offer has been accepted.
B – Buyer’s Agent
A real estate agent who is representing the Buyer of a property.
C – Closing Costs
Closing costs include lender fees, appraisal fees, title and escrow fees, and taxes.
D – Down Payment
The out-of-pocket cash that a Buyer must bring to the table at the time of closing.
E – Escrow
Escrow is a neutral third party that only listens to what the contract says between a Buyer and Seller. They receive, hold, and disperse funds throughout the transaction.
F – Fair Market Value
The price that a property will sell for based on recent and local comparable sales.
G – Gross Rent
The total rent that a landlord receives before taxes or expenses are deducted.
H – Home Inspection
Something a Buyer typically orders after an offer is accepted. The Buyer will hire a professional home inspector to inspect all aspects of the home.
I – Interest Rate
The cost of borrowing money, expressed as a percentage of the loan amount.
J – Jumbo Loan
A type of mortgage that exceeds conventional loan limits set by Fannie Mae and Freddie Mac. These loans are common for higher-priced homes and often require stronger credit and larger down payments.
K – Key Box (Lockbox)
A lockbox used by real estate agents to allow access to only licensed real estate agents in the area.
L – Listing Price
The price that a home or property is asking for.
M – Mortgage
The money a Buyer borrows from a lender, which, most of the time, is paid back with interest.
N – Net Proceeds
The amount a seller receives after all expenses and fees are deducted from the sale.
O – Offer
A Buyer’s proposal to purchase a property. The price and terms can vary based on the Buyer’s desired interest.
P – Pre-Approval
A lender’s tentative approval to provide a person with a loan to purchase a property. Often determined by income, debts, credit, and more.
Q – Quitclaim Deed
A legal document transferring ownership without guaranteeing a clear title. This can be used for adding or subtracting a person from the title of a home.
R – Realtor
A licensed real estate professional who is a member of the National Association of Realtors. Not all real estate agents are Realtors.
S – Seller Concessions
Costs the seller agrees to pay on behalf of the buyer, often to help with closing costs or interest rate buy-downs.
T – Title Insurance
Protection against potential disputes over property ownership.
U – Under Contract
A property that has an accepted offer but has not yet closed. For a deal to close, certain items must take place once a property is under contract.
V – VA Loan
A mortgage program available to eligible veterans and active-duty service members. VA loans often provide additional advantages to Buyers.
W – Walkthrough (Final Walkthrough)
The buyer’s final inspection of the property before closing to ensure agreed-upon conditions are met. This is a Buyer’s chance to make sure significant damage has not occurred.
X – eXchange (1031 Exchange)
A strategy used by real estate investors to defer capital gains taxes by reinvesting proceeds from the sale of one property into another property. This is based on Section 1031 of the Internal Revenue Code and is commonly used to build wealth through real estate. A 1031 exchange cannot be used for a primary residence, and can only be used for investment properties.
Y – Yield
A measure of return on an investment property. Typically important for real estate investors.
Z – Zoning
Local regulations that determine how a property can be used (residential, commercial, etc.). Having a basic understanding of these terms will help you in navigating the real estate transaction process. It is not expected for a Buyer or Seller to know all of these terms, but a basic understanding can assist you in having high-level conversations when working with your real estate agent.
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About Shane Servoss, Real Estate Broker
Shane brings a unique combination of local roots, coaching experience, and a strong passion for real estate to every client relationship. A lifelong resident of Skagit County, he offers deep familiarity with the community and a strong understanding of the region’s unique real estate landscape.
Licensed in 2022, Shane transitioned into real estate after serving as an academic advisor and head baseball coach at Skagit Valley College. His background in coaching and education shapes the way he works with clients today, emphasizing clear communication, guidance, and a supportive approach throughout every step of the real estate process. Previously affiliated with Weichert Realtors Edge Homes Sales and now working with Team Kelli Lang at RE/MAX Gateway, he brings a diverse and well-rounded perspective to each transaction.
Shane specializes in residential and small multi-family properties and began his own real estate investing journey in 2022. Committed to ongoing learning and professional growth, he enjoys sharing his knowledge and helping clients understand the long-term potential and opportunities that real estate investing can provide.
Learn More About Shane HERE: https://servossrealestate.com