Real Estate Glossary

A

• Abstract of Title - A summary of the legal history of ownership of a property.

• Acceleration Clause - A contract provision that allows a lender to require a borrower to repay all of an outstanding loan if certain requirements are not met.

• Acceptance - An agreement to the terms of an offer or contract.

• Addendum - A document added to an existing contract to modify its terms.

• Amendment - A change or modification to the terms of a contract.

• Appraisal - An estimate of a property's value conducted by a licensed appraiser.

• As-Is - A property being sold in its current condition with no warranties.

• Assessed Value - The dollar value assigned to a property for tax purposes.

• Assignment - Transfer of contractual rights from one party to another.

• Attorney-in-Fact - A person authorized to act on behalf of another through a power of attorney

B

• Backup Offer - An offer accepted contingent on the failure of an existing offer.

• Breach of Contract - Violation of any of the agreed-upon terms in a contract.

• Bill of Sale - A document that transfers ownership of personal property.

• Binder - A preliminary agreement outlining the basic terms of a proposed sale.

• Broker - A licensed real estate professional who has met state-specific education and experience requirements beyond those of a salesperson and is authorized to manage their own brokerage, supervise other agents, and handle client funds 

In Virginia, brokers must complete additional coursework, pass the Virginia Broker Exam, and have actively been engaged as a salesperson for at least 36 of the preceding 48 months. A broker may operate independently or oversee agents working under a brokerage firm. 

• Buyer's Agent (Selling Agent) - An agent who represents the buyer in a real estate transaction.

C

• Certificate of Occupancy - A document that certifies a building is safe to inhabit.

• Chain of Title - A record of property ownership history.

• Clear Title - Ownership that is free from liens or disputes.

• Closing - The final step in a real estate transaction.

• Closing Costs - Fees and expenses paid at the closing of a real estate transaction.

• Cloud on Title - Any claim, lien, or encumbrance that may invalidate the title.

• Closing Disclosure (CD) - A form that outlines final loan terms and closing costs.

• Commission - The fee paid to a real estate agent or broker.

• Common Area - Portions of a property shared by all residents in a condominium or development.

• Comparative Market Analysis (CMA) - An evaluation of similar homes to determine a listing price.

• Contingency - A condition that must be met for the contract to be binding.

• Contract - A legally binding agreement between parties.

• Conventional Loan - A mortgage not insured by the government.

• Counteroffer - A response to an offer with changes.

• Covenant - A written agreement or restriction on a property.

D

• Deed - A legal document that transfers property ownership.

• Default - Failure to fulfill a legal obligation.

• Deposit - Money given to show intent to complete the purchase.

• Disclosures - Statements about a property's known issues or defects.

• Down Payment - Initial cash payment made when buying a property.

• Dual Agency - A situation where one agent represents both buyer and seller.

E

• Earnest Money - A deposit made by the buyer to show good faith when making an offer. In Virginia, this is typically due within 2 days of contract ratification and is held in escrow until settlement. 

• Easement – A legal right to use another’s land for a specific limited purpose (e.g., utility access, shared driveways).

• Electronic Signature – A legally binding digital method of signing documents, often used via platforms like Dotloop, Authentisign, or DocuSign.

• Encroachment – When a structure (like a fence or shed) illegally crosses onto another person’s property.

• Encumbrance – A claim or liability on real property, such as liens, easements, or restrictions, that may affect the property’s transfer

• Equal Credit Opportunity Act (ECOA) – A federal law that prohibits discrimination in lending based on race, religion, sex, marital status, age, etc.

• Equity – The difference between the property’s market value and the amount owed on its mortgage(s).

• Escrow – A neutral third party (often the title company) that holds funds or documents during the transaction process until all conditions are met.

• Escrow Agent – A third-party fiduciary (e.g., title company) responsible for receiving, holding, and distributing escrow funds.

• Escalation Clause – A clause in a buyer's offer allowing their price to automatically increase over competing offers up to a set maximum.

• Exclusive Right to Sell – A listing agreement giving one brokerage the exclusive right to market and sell the property. The agent receives commission regardless of who procures the buyer.

• Exclusive Agency Listing – A listing where the broker is only paid if they or another agent procure the buyer. The seller can avoid paying commission if they find a buyer themselves.

• Exemption Disclosure – A seller disclosure form stating why they are exempt from providing the full residential property disclosure (e.g., estate sales, foreclosure sales).

• Extended Title Coverage – A title insurance policy that offers additional protection (e.g., against survey issues, unrecorded liens) beyond a standard title policy.

F

• Fair Housing Act – A federal law that prohibits discrimination in housing based on race, color, religion, sex, national origin, familial status, or disability.

• FHA Loan – A government-backed mortgage insured by the Federal Housing Administration, often used by first-time homebuyers due to lower credit and down payment requirements.

• Final Walkthrough – A buyer’s final inspection of the property before closing to ensure it’s in the agreed-upon condition.

• Financing Contingency – A clause in the purchase agreement allowing the buyer to cancel the contract if they cannot secure a loan by a specified date.

• Fixture – Any personal property that becomes real property when attached to a structure (e.g., lighting, built-in cabinets).

• Flood Zone – A designation from FEMA indicating areas at risk of flooding. Properties in certain zones may require flood insurance.

• For Sale By Owner (FSBO) – A property listed directly by the seller without a real estate agent.

G

• Good Faith Estimate (GFE) – An older term; now replaced by the Loan Estimate. It was a form lenders used to provide estimated closing costs. 

• Grantor – The person or entity transferring property rights via a deed.

• Grantee – The person receiving property rights via a deed

• General Warranty Deed – A deed that offers the highest level of protection to the buyer, guaranteeing clear title through the entire ownership history.

• Good Faith – Honest intention to fulfill obligations. Often referred to in the context of deposits and contract execution.

H

• HOA (Homeowners Association) – An organization that enforces rules and manages common areas in planned communities or condos.

• HOA Disclosure Packet – A legally required packet in Virginia that must be delivered to the buyer during the listing or contract period, containing rules, budget, and fees.

• Home Inspection – A professional evaluation of the condition of a property, typically conducted during the due diligence period.

• Home Warranty – A service contract covering repairs or replacements for major home systems and appliances for a specified time post-closing.

• HUD-1 Settlement Statement – The closing disclosure used in cash and some government-backed transactions (replaced by CD for most financed sales after 2015).

I

• Inspection Contingency – A clause allowing the buyer to cancel or renegotiate the contract based on the home inspection results.

• Interest Rate – The cost of borrowing money, expressed as a percentage of the loan.

• Installment Contract – A financing arrangement where the buyer makes payments directly to the seller over time (rare but seen in owner-financed deals).

• Installment Sale – A method of financing where the buyer pays the seller in regular installments instead of getting a mortgage. 

• Inclusions/Exclusions – Items that will or will not be transferred with the sale (e.g., appliances, light fixtures).

• Initial Escrow Disclosure – A statement from the lender outlining how escrow funds will be collected and used.

J

• Joint Tenancy – A form of property ownership by two or more people with equal interest and right of survivorship.

• Judgment Lien – A court ruling that gives a creditor legal claim to a debtor’s property to satisfy a debt.

K

• Kick-Out Clause – A provision allowing the seller to continue marketing their property and accept a better offer if the current buyer has contingencies (often seen in contingent offers).

• Keybox/Lockbox – A device that holds the property key and tracks agent showings (e.g., SentriLock or Supra).

L

• Lead-Based Paint Disclosure – A federally required form for homes built before 1978 to disclose any known lead-based paint hazards.

• Lien – A legal claim on a property due to unpaid debt. Must typically be cleared before or at closing.

• Listing Agreement – A contract between a seller and listing broker authorizing the broker to market and sell the property.

• Loan Estimate (LE) – A standardized form provided by lenders outlining estimated loan terms, monthly payment, and closing costs.

M

• Market Analysis (CMA) – A comparative market analysis prepared by an agent to estimate a property’s value based on recent sales.

• Mortgage Insurance (PMI) – Insurance required by lenders when the buyer puts down less than 20%, protecting the lender if the buyer defaults.

• Mortgage Note – A legal document outlining the loan terms and repayment obligations.

• Mechanic’s Lien – A lien filed by a contractor or vendor who hasn’t been paid for work on a property.

• Market Value – The price a property would likely sell for under normal market conditions.

• MLS (Multiple Listing Service) – A cooperative database used by real estate agents to share property listings and details.

• Mortgage Commitment Letter – A lender’s written promise to fund a loan, subject to final underwriting conditions.

N

• Net Sheet – A seller-focused estimate of proceeds after costs, commissions, and other fees. Often prepared by listing agents or TCs. 

• Note – A promissory agreement to repay a loan. It’s the borrower’s written promise to pay the lender.

• Notice to Proceed – In new construction, a document authorizing contractors to start work.

O

• Offer – A written proposal from a buyer to purchase a property under specified terms.

• Open House – A scheduled time for prospective buyers to view a home without an appointment.

• Origination Fee – A lender fee for processing a new loan, typically a percentage of the loan amount.

• Owner’s Title Insurance – A policy that protects the buyer’s interest in the property from defects not found during the title search.

P

• Pending – The MLS status of a property after an offer has been accepted and the property is under contract.

• POA (Power of Attorney) – A legal document allowing one person to act on another’s behalf. May require title company approval in real estate deals.

• Pre-Approval – A lender’s confirmation of the buyer’s ability to purchase, often stronger than prequalification.

• Prequalification – A preliminary assessment of the buyer’s financial status before applying for a mortgage.

• Purchase Agreement – A legally binding contract between buyer and seller outlining the terms and conditions of the property sale.

Q

• Quitclaim Deed – A deed that conveys only the grantor’s current interest in the property, with no warranties of title. Often used between family members or in divorce situations.

R

• Ratification – In Virginia, this is the moment the contract becomes legally binding—when all parties have signed and delivered.

• Ratified Contract – In Virginia, a contract that has been signed and delivered by all parties, making it legally binding.

• Recording – Filing documents with the local government to make them part of the public record

• Refinance – Replacing an existing mortgage with a new one, often to obtain better terms.

• Remediation – The process of fixing hazardous issues such as mold, radon, or lead paint.

• Right of First Refusal – A contractual right allowing a person to purchase a property before it’s offered to someone else.

• REALTOR® – A licensed real estate professional who is a member of the National Association of REALTORS® and adheres to its Code of Ethics.

• REIN MLS – The Real Estate Information Network, a regional MLS used in Hampton Roads and parts of southeastern Virginia.

S

• Settlement Agent – Usually the title company or attorney responsible for preparing closing documents and disbursing funds

• Settlement Statement (CD/HUD) – The closing disclosure showing a full breakdown of fees, credits, and cash required at closing.

• Short Sale – A sale where the seller owes more on the mortgage than the property’s market value, requiring lender approval.
  
  

T

• Title – Legal ownership of a property.

• Title Commitment – A report issued by the title company before closing, detailing findings from the title search and what will be covered by insurance.

• Title Company – A neutral third party that ensures legal title transfer and facilitates closing.

• Transaction Coordinator (TC) – A person who manages deadlines, paperwork, communication, and compliance from contract to close.

• Transfer Tax – A state or local tax paid when a property changes ownership; in Virginia, typically split or paid by the seller depending on the area.

• Title Insurance – Insurance that protects the buyer and lender against defects in title or ownership claims.

• Title Search – A review of public records to confirm legal ownership and identify liens or encumbrances.
  
  

U

• Under Contract – A status indicating that the buyer and seller have agreed to terms and signed a purchase agreement.

• Underwriting – The lender’s process of evaluating the buyer’s financials, property, and risk before final loan approval.

V

• VA Loan – A mortgage guaranteed by the U.S. Department of Veterans Affairs, offering zero-down payment options for eligible service members and veterans. 

W

• Walkthrough – The buyer’s final property inspection, usually 24–48 hours before closing, to ensure everything is as agreed.

• Wire Instructions – Secure directions provided by the title company for sending closing funds. Always verify by phone to avoid wire fraud. 

• Wire Fraud – A risk in real estate where scammers trick parties into wiring funds to fraudulent accounts. TC should always remind clients to verify wire instructions via phone with the title company.

• Warranty Deed – A deed that guarantees clear title to the buyer and the right to sell the property. 

Z

• Zoning – Local government regulations that determine land use (e.g., residential, commercial, industrial).

• Zoning Ordinance – Local laws that govern land use, determining whether property can be used for residential, commercial, agricultural, etc. 

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