Darin and Christina Cunningham | Re/Max Elite
278 Franklin Road Suite 190 | Brentwood, TN 37027
Office: 615.661.4400 | Fax: 615.661.4115
Christina: 615.394.4168 | Darin: 615.456.4086

Basic Real Estate Terms and What They Mean

Real estate lingo can be a little hard to understand sometimes. In order to help you on your journey of buying or selling a home we put together a list of some of the most common real estate terms and what they mean:

Assessment Value – it refers to the property evaluation including inspection and price comparison for tax purposes.

Bill of Sale – it is a legal transaction document that shows details regarding a completed transfer of a property or item.

Collateral – it refers to other assets or properties a borrower presents to a lender for a loan. It serves as security in case the borrower of the loan fails to make payments as agreed.

Depreciation – it is a common term used to categorize homes that lose value due to market conditions, aging, and wear and tear.

Foreclosure – it is a legal process that grants a lender permission to sell collateral assets to recover a loan balance which a borrower has failed to pay as requested.

Grace Period – it refers to the extra time included on loans or rent contracts where participants make late payments (without additional charges) after the actual date, usually between 5 and 15 days.

Home Inspection – it is a thorough property assessment/examination carried out for a fee to determine material defects of the property.

Joint Tenancy – the term refers to a state where property co-owners have equal claim and rights to keep or dispose of a house.

Lease – it is an agreement produced by the landlord for a tenant with various terms and conditions such as rent payment, living policies, and the renting period.

Mortgage – a loan where a borrower puts their house, estate, or commercial building as collateral. The agreement allows you to obtain cash up front and make payments over a specified period.

Notice Of Default – it is a notification sent to the borrower reminding him/her of his/her outstanding payments. It can come with extra legal fees plus money owed.

Occupancy Costs – it refers to the expenses incurred due to occupying a space including rent, property taxes, amortization costs, insurance, and depreciation (loss of home value).

Pre-approval – it is a precautionary measure taken to ensure a borrower qualifies for a loan or not. Usually, lenders evaluate credit history and verify documentation to approve loans.

Qualifying Ratio – the term represents a proportion of your monthly gross income which pays for your entire housing costs.

Realtor – refers to a real estate professional licensed to assist clients in purchasing and selling properties.

Sale-leaseback – a transfer agreement where the property owner sells a fixed asset and leases it back from the buyer.

Title Deed – it refers to a legal written document that shows property ownership and can be transferred through a contract.

Underwriting – it is the loan evaluation process (for real estate purchases) where requests undergo risk analysis based on the land and the borrower.

Veterans Administration – it is a federal government agency that ensures veterans obtain low-interest rates on their mortgages as well as affordable yet comfortable housing.

Wraparound Mortgage – it is a secondary financing strategy where the lender becomes responsible for an existing home loan.

Zombie Title – it is a real estate homeownership title left with the borrower after he/she loses property and the lender begins the foreclosure process.

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