Every business has it’s jargon and residential real estate is no exception. Mark Nash author of 1001 Tips for Buying and Selling a Home shares commonly used terms with home buyers and sellers.
1031 exchange or Starker exchange: The delayed exchange of properties that qualifies for tax purposes as a tax-deferred exchange.
1099: The statement of income reported to the IRS for an independent contractor.
A/I: A contract that is pending with attorney and inspection contingencies.
Accompanied showings: Those showings where the listing agent must accompany an agent and his or her clients when viewing a listing.
Addendum: An addition to; a document.
Adjustable rate mortgage (ARM): A type of mortgage loan whose interest rate is tied to an economic index, which fluctuates with the market. Typical ARM periods are one, three, five, and seven years.
Agent: The licensed real estate salesperson or broker who represents buyers or sellers.
Annual percentage rate (APR): The total costs (interest rate, closing costs, fees, and so on) that are part of a borrower’s loan, expressed as a percentage rate of interest. The total costs are amortized over the term of the loan.
Application fees: Fees that mortgage companies charge buyers at the time of written application for a loan; for example, fees for running credit reports of borrowers, property appraisal fees, and lender-specific fees.
Appointments: Those times or time periods an agent shows properties to clients.
Appraisal: A document of opinion of property value at a specific point in time.
Appraised price (AP): The price the third-party relocation company offers (under most contracts) the seller for his or her property. Generally, the average of two or more independent appraisals.
“As-is”: A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.
Assumable mortgage: One in which the buyer agrees to fulfill the obligations of the existing loan agreement that the seller made with the lender. When assuming a mortgage, a buyer becomes personally liable for the payment of principal and interest. The original mortgagor should receive a written release from the liability when the buyer assumes the original mortgage.
Back on market (BOM): When a property or listing is placed back on the market after being removed from the market recently.
Back-up agent: A licensed agent who works with clients when their agent is unavailable.
Balloon mortgage: A type of mortgage that is generally paid over a short period of time, but is amortized over a longer period of time. The borrower typically pays a combination of principal and interest. At the end of the loan term, the entire unpaid balance must be repaid.