Real estate glossary

Agent

A person acting on behalf of another, called the principal.

Agreement of sale

Known by various names, such as “contract of purchase”, “purchase agreement”, “sales agreement”, or “binder”, according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties.

Annual Percentage Rate (APR)

Includes quoted interest rate on the loan plus all additional service and finance charges associated with the loan. Includes all costs of financing; those paid at the time of closing and those paid over the term of the loan. The APR is usually slightly higher than the note rate.

Appraisal

An expert judgment or estimate of the quality or value of real estate as of a given date.

Bill of Sale
An instrument which transfers title to personal property (chattels); a “Deed” transfers real property.

Certificate of Title
A document signed by a title examiner or attorney, stating that the seller has a good marketable and insurable title.
Closing Statement (Settlement)
The computation of financial adjustments between the buyer and seller as of the day of closing a sale to determine the net amount of money which the buyer must pay to the seller to complete the purchase of the real estate and seller’s net proceeds. Also, “Settlement Sheets”, “HUD-1”.

Commission
Payment to a real estate broker for services performed.
Convey
To deed or transfer title of property from one person to another.
Deed
A formal written instrument by which title to real property is transferred from one owner to another. Also, “conveyance”.
Deed of trust
Like a mortgage, a security instrument whereby real property is given as security for a debt. However, in a deed of trust there are three parties to the instrument: the borrower, the trustee, and the lender (or beneficiary).
Earnest money
The money given to the seller by the potential buyer (usually held in escrow) upon the signing of the agreement of sale to show that buyer is serious about buying the house. Also, “Deposit”.
Equity
The interest or value which the owner has in real estate over and above the debts against it. (Sales Price – Mortgage Balance = Equity.)

Escrow
Funds, property, or other things of value left in trust to a third party. The escrow may be released upon the fulfillment of certain conditions or by agreement of the parties.

Fixture
What was formerly personal property which is now permanently attached to real property and goes with the property when it is sold.

Hazard insurance
Protects against damages caused to property by fire, windstorms, and other common hazards.
Listing contract
Between a homeowner (as principal) and a licensed real estate broker (as agent) by which the broker is employed to market the real estate within a given time for which service the owner agrees to pay a commission. Also, “listing agreement”.
Market Value
The highest price which a buyer, ready, willing and able but not compelled to buy, would pay, and the lowest price a seller, ready, willing and able but not compelled to sell, would accept. Basis for “listing price”, or “asking price”.

Market Price
The actual amount for which a piece of property is sold. Also, “Sales Price”, “Purchase Price”.
Mortgage
A lien or claim against real property given by the buyer to the lender as security for money borrowed.
Mortgage Note
A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. Also, “Deed Of Trust Note”.

Quick contact

Christy Honaker, realtor

Tammy Berfield, realtor

Long & Foster Real Estate 1910 William Street Fredericksburg, Va. 22401 540-842-8289 540-840-3651 tammy.christy@LNF.com

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