Understanding real estate terms shouldn’t feel overwhelming — yet for many buyers, sellers, and investors, the industry is filled with jargon that can slow down important decisions. As a trusted Commercial Real Estate Development Company, we believe clarity empowers better choices.

This comprehensive A–Z Real Estate Glossary breaks down 150+ essential terms in clear, simple language so you can navigate the market with confidence.

A – Real Estate Terms

Absorption Rate – Measures how quickly available homes are sold in a market.
Acceleration Clause – Allows a lender to demand full loan repayment if borrower defaults.
Accessory Dwelling Unit (ADU) – A secondary small home on the same lot as a primary residence.
Active Listing – A property currently on the market.
Adjustable-Rate Mortgage (ARM) – Mortgage with interest rates that change over time.
After-Repair Value (ARV) – Estimated property value after renovations.
Amortization – Schedule of periodic loan payments.
Annual Percentage Rate (APR) – Cost of borrowing including interest and fees.
Appraisal – Professional estimate of property value.
Assessed Value – Value assigned by the local government for tax purposes.
Assignment of Contract – Transferring contract rights to another buyer.

B – Real Estate Terms

Balloon Mortgage – Loan with small monthly payments and one large final payment.
Bidding War – Multiple buyers offering above asking price.
Broker – Licensed professional who manages real estate agents.
Bridge Loan – Temporary loan used until permanent financing is secured.
Build-to-Suit – Custom-built property designed for a tenant’s needs.
Buyer’s Agent – Represents the buyer in a real estate transaction.
Buyer’s Market – When supply exceeds buyer demand.
Bylaws – Rules governing condominiums or HOAs.

C – Real Estate Terms

Cap Rate (Capitalization Rate) – Measures investment property return.
Cash-Out Refinance – Refinancing by taking equity as cash.
Clear Title – Ownership free from liens or disputes.
Closing Costs – Fees paid at the end of a transaction.
Comparative Market Analysis (CMA) – Valuation tool based on similar properties.
Condominium (Condo) – Individual unit in a shared building.
Contingency – Condition that must be met for a deal to proceed.
Conventional Loan – Mortgage not backed by government agencies.
CRE (Commercial Real Estate) – Property used for business purposes.
Credit Score – Rating of borrower reliability.

D – Real Estate Terms

Debt-to-Income Ratio (DTI) – Measures financial responsibility.
Deed – Legal document transferring property ownership.
Default – Failure to meet mortgage obligations.
Depreciation – Decline in property value over time.
Disclosure – Seller’s duty to share known issues.
Down Payment – Upfront portion paid by the buyer.
Dual Agency – One agent representing both buyer & seller.
Due Diligence – Buyer’s research period before closing.

E – Real Estate Terms

Earnest Money – Buyer deposit showing good faith.
Easement – Right to use someone else’s land for specific purposes.
Equity – Property value minus debt owed.
Escrow – Third-party holding funds/documents during transaction.
Exit Strategy – Investor’s plan for selling a property.
Exclusive Listing – Only one agent can list the property.

F – Real Estate Terms

Fair Market Value (FMV) – Price a property would sell for in open market.
FHA Loan – Government-backed loan for first-time buyers.
Fixed-rate Mortgage – Loan with a constant interest rate.
Forbearance – Temporary pause on mortgage payments.
Foreclosure – Lender repossesses property due to default.
FSBO (For Sale By Owner) – Owner sells property without an agent.

G – Real Estate Terms

Grace Period – Extra time to make a payment.
Gross Rent Multiplier (GRM) – Investment property evaluation metric.
Ground Lease – Renting land alone, not the building.
Guarantor – Person guaranteeing loan repayment.

H – Real Estate Terms

Hard Money Loan – Short-term asset-backed loan.
Home Equity Line of Credit (HELOC) – Borrowing against home equity.
Home Inspection – Examination of property condition.
HOA (Homeowners Association) – Governing body for a community.
HUD – U.S. Department of Housing and Urban Development guidelines.

I – Real Estate Terms

Inspection Contingency – Deal proceeds only if inspection is satisfactory.
Interest Rate – Cost of borrowing money.
Investment Property – Real estate purchased for income or appreciation.
Infill Development – Building on vacant near-urban land.
Infrastructure – Utilities, roads, and essential services supporting a property.

J – Real Estate Terms

Joint Tenancy – Shared ownership with survivorship rights.
Jumbo Loan – Mortgage exceeding conventional loan limits.
Judgment Lien – Court-ordered claim against a property.

K – Real Estate Terms

Key Money – Fee paid to secure a prime rental space (commercial).
Kick-Out Clause – Allows seller to accept other offers under certain conditions.
Knockdown Rebuild – Demolishing and reconstructing a property.

L – Real Estate Terms

Lease Agreement – Contract between landlord and tenant.
Lease Purchase – Rent with option to buy.
Lien – Claim against a property for unpaid debt.
Listing Agreement – Contract between seller and broker.
Loan-to-Value Ratio (LTV) – Mortgage amount vs. property value.
Lot Size – Total area of land a property sits on.

M – Real Estate Terms

Market Value – Expected sale price under normal conditions.
Mixed-Use Property – Combines residential & commercial spaces.
MLS (Multiple Listing Service) – Database of homes for sale.
Mortgage Broker – Middleman who connects borrowers to lenders.
Maintenance Fee – Monthly cost in condos/HOAs.

N – Real Estate Terms

Net Operating Income (NOI) – Income after expenses, before financing.
Non-Contingent Offer – Offer with no conditions.
Notary Public – Verifies signatures for legal documents.
Notice to Vacate – Notice ending a rental agreement.

O – Real Estate Terms

Offer Letter – Buyer’s proposal to purchase.
Open House – Property open for public viewing.
Option Fee – Payment for the right to back out during option period.
Owner Financing – Seller finances the purchase.

P – Real Estate Terms

Pending Sale – Offer accepted; waiting to close.
Pre-Approval – Lender confirms creditworthiness before home search.
Principal – Amount borrowed excluding interest.
Property Tax – Taxes based on property value.
Punch List – Final repairs before closing.

Q – Real Estate Terms

Quitclaim Deed – Transfers ownership without guarantees.
Qualified Borrower – Meets mortgage eligibility requirements.

R – Real Estate Terms

Refinance – Replace an existing mortgage with a new one.
Right of First Refusal – Opportunity to buy before others.
ROI (Return on Investment) – Profit compared to cost.
Real Estate Investing (REI) – Buying property to generate returns.
Real Property – Land + anything permanently attached.

S – Real Estate Terms

Seller’s Market – High demand, low inventory.
Short Sale – Selling for less than mortgage owed with lender approval.
Survey – Diagram showing property boundaries.
Subdivision – Land split into smaller plots.
Sublease – Tenant rents property to another tenant.
Square Footage – Size of a home or commercial space.

T – Real Estate Terms

Title Insurance – Protects against ownership disputes.
Triple Net Lease (NNN) – Tenant pays taxes, insurance & maintenance.
Turnkey Property – Ready-to-rent immediately.
Tax Lien – Government claim for unpaid taxes.

U – Real Estate Terms

Underwriting – Loan approval process.
Upsizing – Moving to a larger home.
Use Variance – Permission to use land differently from zoning.

V – Real Estate Terms

Vacancy Rate – Percentage of empty rental units.
Variable Rate – Changing interest rate over time.
Veterans Affairs Loan (VA Loan) – Loan for U.S. military veterans.

W – Real Estate Terms

Warranty Deed – Guarantees clear ownership.
Walkthrough – Final buyer check before closing.
Wraparound Mortgage – New loan “wrapped” around an old one.

X – Real Estate Terms

Xeriscaping – Drought-resistant landscaping to reduce water usage.
Exit Fee – Payment due when vacating or selling certain properties.

Y – Real Estate Terms

Yield – Investment income expressed as percentage.
Year-over-Year (YoY) – Comparison of real estate metrics to previous year.

Z – Real Estate Terms

Zoning – Land-use rules set by municipalities.
Zero-Lot Line – Building constructed along property boundary.
Zestimate – Zillow’s automated value estimate (U.S.).

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