Real Estate Glossary

Many industry specific terms are tossed around when buying and selling real estate.  Don’t be confused by the vernacular used by agents, brokers and lenders.  Your Classic Homes GMAC Real Estate Sales Partner is your best source in decoding terms that may be confusing at first. In addition, use this guide as a reference to help you understand real estate lingo.

Terms to know

Abstract of title: A history of ownership of a property and any documents that affect the title during that ownership.

Appraisal: An opinion by a licensed real estate appraiser about the fair market value of a home.

Broker: A person who has a real estate broker’s license, who not only makes real estate transactions for others in exchange for a fee (or other consideration), but who may also operate a real estate business and employ sales professionals and other brokers.

Buyer pool: The entire market of prospective home buyers in a specific area or looking for a type of home.

Clear or marketable title: A title that does not have any liens or claims against it that would keep it from being transferred, put the buyer in a position to sue for property rights or be obligated for claims.

Closing or settlement: The date that the buyer and seller exchange funds and property.

Deed: The legal document that is used to transfer the title from one owner to another.

Earnest money: Money deposited by a potential buyer to show serious intent to buy.

Equity: The amount of ownership that one has in a home. Equity is the sale price minus selling costs and the remaining mortgage principal.

Exclusive right-to-sell contract: A listing contract whereby the real estate broker has sole right to sell, and receives a commission, regardless of who produces the buyer.

General warranty deed: The type of deed considered to provide the most protection to an owner, because the seller guarantees that he or she is the true owner of the property and that no claim will be brought against the property.

Listing contract: A contract with the broker or firm you hire to represent you in the sale of your home, according to the terms of the sale that you specify. In exchange for producing a ready, willing and able buyer for you, the agent is paid a commission.

Multiple Listing Service (MLS): A networking system, frequently on computer, in which a number of real estate firms share information about their clients’ houses that are for sale.

Offer to purchase/Purchase offer/Earnest money agreement/Contract of purchase/Deposit receipt: A document that lists the price, conditions and terms under which the buyer is willing to purchase the property.

Offer to purchase and acceptance/Contract of sale/sales contract: An offer of purchase that has been signed by both buyer and seller. A firm contract that outlines all details of the property transaction.

Realtor®: An active member of a local board of realtors. Local boards are affiliated with the National Association of Realtors.

Title: The right to ownership in real estate, which is transferred by a deed.

Title search: Checking all the records relating to the title.