- This real estate glossary list covers all major real estate terms you need to know before you start off.
Real Estate Glossary
Adjustable Rate Mortgage (ARM)
A mortgage that provides for periodic changes in the interest rate, based on changing market conditions.
Amortize
To liquidate or extinguish (a mortgage, debt, or other obligations), especially by periodic payments to the creditor or a sinking fund, to write off a cost of (an asset) gradually.
Annual Percentage Rate (APR)
Annual percentage rate: the annual rate of interest; the total interest to be paid in a year divided by the balance due.
Appraisal
The act of estimating or judging the nature or value of something or someone. An estimate of value, as for sale, assessment, or taxation; valuation.
Backup Offer
An offer on a home under contract that becomes Active if the primary contract falls through.
Closing
The final step in a property purchase. This is where the title is transferred from the seller to the buyer. At closing the seller receives payment for the property. Also known as settlement.
Closing Costs
Fees charged to the purchaser by a bank, lawyer, etc. For services related to a sale, a title search, an appraisal, etc. Any expenses over the purchase price of the house, land, etc., that are paid by the purchaser or seller after the sale.
Closing Disclosure
A closing disclosure provides final details about the mortgage loan you have selected. It will be sent before closing and the initial document must be signed 72 business hours before closing. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).
Contingency
A clause in a purchase contract outlining conditions that must be fulfilled before the contract is executed. Both buyer and/or seller may include contingencies in a contract, but both parties must accept the contingency.
