Real Estate Glossary

98 plain-English definitions for the terms you'll hear during a cash sale, foreclosure, probate, or distressed property situation. Every term reviewed by John Quigley.

7

Terms starting with 7

70 percent ruleThe standard formula cash home buyers use to make offers: take the After Repair Value (ARV...
A

Terms starting with A

After repair valueOften abbreviated ARV. The market value a property would sell for on the MLS after all rep... Adjustable-rate mortgageA mortgage where the interest rate adjusts periodically based on a benchmark index (typica... AmortizationThe schedule by which a loan is paid down over time. Each monthly mortgage payment is spli... As-is saleA property sold in its current condition, with no repairs, improvements, or warranties fro... Assignment of contractA real estate practice where the original buyer (often a wholesaler) transfers their purch... AuctionA public sale of property to the highest bidder. Foreclosure auctions and tax-sale auction...
B

Terms starting with B

Bankruptcy stayWhen a homeowner files Chapter 7 or Chapter 13 bankruptcy, an 'automatic stay' instantly h... BasisFor tax purposes, your basis in a property is what you paid for it plus capital improvemen...
C

Terms starting with C

Cash offerAn offer to purchase real estate using cash from the buyer's own funds, without bank finan... Certificate of titleA document issued by a title company or attorney certifying that the property's title is f... Chain of titleThe historical sequence of ownership transfers for a property, recorded in public records.... ClosingThe final step in a real estate transaction where ownership transfers, money changes hands... Closing costsFees paid at closing by the buyer, seller, or both. Includes title insurance, transfer tax... Comparative market analysisOften abbreviated CMA. An estimate of property value based on recent sales of similar prop... Conditional approvalA lender's preliminary OK on a mortgage application, subject to specific conditions (emplo... ContingencyA condition that must be met for a real estate contract to proceed. Common contingencies: ... CureBringing a delinquent loan current by paying all missed payments, late fees, and attorney ...
D

Terms starting with D

DeedThe legal document that transfers ownership of real estate from seller (grantor) to buyer ... Deed in lieu of foreclosureAn agreement where a homeowner signs the property's deed back to the lender to avoid forec... Deficiency judgmentA court order requiring a foreclosed homeowner to pay the difference between what they owe... Delinquent property taxProperty taxes that haven't been paid by their statutory due date. Delinquent taxes accrue... Distressed propertyA property in poor physical condition, owned by a financially distressed seller, or both. ... Due diligenceThe investigation a buyer conducts before closing — title search, inspection, survey, lien...
E

Terms starting with E

Earnest moneyA deposit from the buyer to the seller, held in escrow, to demonstrate good-faith commitme... EncumbranceAny claim, lien, restriction, or burden on property that affects its title. Includes mortg... EquityThe portion of a property's value that the owner actually owns, free of debt. Calculated a... EscrowA neutral third party (typically a title company or attorney) that holds funds and documen... Estate saleA real estate sale handled by an estate after the property owner has died. Different from ... EvictionThe legal process of removing a tenant or occupant from a property. After foreclosure, the...
F

Terms starting with F

Fair market valueThe price a willing buyer would pay a willing seller, both knowledgeable about the propert... FHA loanA mortgage insured by the Federal Housing Administration, allowing lower down payments (3.... ForeclosureThe legal process by which a lender takes back property from a borrower who has stopped ma... For sale by ownerOften abbreviated FSBO. A property sold without a real estate agent. The seller avoids the... Free and clearA property with no mortgage and no liens. The owner has 100% equity. Free-and-clear homes ...
G

Terms starting with G

Good faith estimateA document showing estimated closing costs for a mortgage borrower. Required by federal la...
H

Terms starting with H

Hard money loanA short-term loan secured by real estate, typically from a private lender, at high interes... HELOCHome Equity Line of Credit. A revolving line of credit secured by your home, similar to a ... Holding costsThe ongoing expenses of owning a vacant or listed property: mortgage, taxes, insurance, ut... HOAAn organization that governs a planned community or condominium, collecting monthly dues a...
I

Terms starting with I

IibuyerAn institutional cash home buyer using algorithms to make rapid offers. Examples: Opendoor... InheritanceReceiving property or assets from a deceased person via will or intestate succession. Inhe... InspectionA professional examination of a property's condition (roof, foundation, systems, etc.), ty... InvestorA buyer purchasing real estate for profit rather than personal use. Cash investors typical...
J

Terms starting with J

Judicial foreclosureA foreclosure that requires the lender to sue the borrower in court and obtain a judgment ...
L

Terms starting with L

LienA legal claim against property to secure payment of a debt. Common types: mortgage lien (f... Lis pendensLatin for 'lawsuit pending.' A notice recorded in property records when litigation that co... Loan modificationA change to the terms of an existing mortgage — typically a lower interest rate, extended ... Loan-to-valueOften abbreviated LTV. The ratio of loan amount to property value, expressed as a percenta...
M

Terms starting with M

Market valueWhat a property would sell for in current market conditions, given typical exposure on the... MortgageA loan secured by real estate, where the property serves as collateral. If the borrower de... Multiple listing serviceOften abbreviated MLS. A database of properties for sale, used by real estate agents to sh...
N

Terms starting with N

Non-judicial foreclosureA foreclosure conducted outside of court, using a 'power of sale' clause in the deed of tr... Notary publicAn official authorized to witness signatures and certify documents. Most real estate docum... Notice of defaultOften abbreviated NOD. The formal notice from a lender that begins the foreclosure process... Notice of saleA foreclosure notice setting the date, time, and place of the foreclosure sale (auction). ...
O

Terms starting with O

Owner-occupantA buyer who will live in the property as their primary residence (as opposed to an investo...
P

Terms starting with P

Personal representativeAlso called executor or administrator. The person appointed by a probate court to manage a... PITIAcronym for Principal, Interest, Taxes, Insurance — the four components of a typical month... Power of saleA clause in a deed of trust (used in non-judicial states) giving the lender or trustee the... Pre-approvalA lender's preliminary commitment to finance a borrower up to a specified amount. Stronger... Pre-foreclosureThe period between when a homeowner receives a Notice of Default and when the foreclosure ... PrincipalThe amount of money borrowed in a loan, separate from interest. As the borrower pays the l... ProbateThe court-supervised process of administering a deceased person's estate. Probate validate... Property taxTax levied by local government (county, city, school district) based on assessed property ...
Q

Terms starting with Q

Quitclaim deedA deed that transfers whatever interest the grantor has in a property, without warranties....
R

Terms starting with R

Real estate ownedOften abbreviated REO. Property that a lender has acquired through foreclosure when no thi... RealtorA real estate professional licensed by their state who is also a member of the National As... Redemption periodA window of time after a foreclosure sale during which the former owner can buy back the p... RefinancePaying off an existing mortgage with a new mortgage, typically to get a better interest ra... ReinstatementBringing a delinquent loan current by paying all missed payments plus fees. The lender mus... Right of redemptionThe legal right to redeem property after foreclosure or tax sale by paying the full sale p...
S

Terms starting with S

Sale-leasebackAn arrangement where the property owner sells the home to a buyer and then leases it back ... Seller's marketMarket conditions favoring sellers — high demand, low inventory, rising prices. Sellers re... Short saleA sale where the lender agrees to accept less than the loan balance to release the lien. U... Specific performanceA legal remedy requiring a party to perform their contract obligations — for example, requ... Stepped-up basisA tax rule that resets the basis of inherited property to its fair market value on the dat... Subject-toA real estate transaction where the buyer takes title 'subject to' the existing mortgage —... Substitute trusteeAn entity appointed to conduct a non-judicial foreclosure sale in place of the original tr... SurveyA drawing showing the exact boundaries, dimensions, easements, and improvements on a prope...
T

Terms starting with T

Tax assessorThe local government official responsible for determining the assessed value of property f... Tax certificateA document issued at a tax-lien sale that gives the holder the right to collect delinquent... Tax deedA deed issued at a tax-deed sale, transferring ownership of property to the highest bidder... Tax saleA public auction of property (or tax certificates) due to unpaid property taxes. Held by c... TitleLegal ownership of property. 'Holding title' means owning the property. Title is transferr... Title insuranceInsurance protecting the buyer (and/or lender) against defects in the property's title tha... Title searchAn examination of public records to verify a property's chain of title and identify any li... TrusteeIn a deed of trust, the neutral third party (often a title company or attorney) who holds ... Trustee saleA non-judicial foreclosure auction conducted by the trustee under a deed of trust. Held at...
U

Terms starting with U

Underwater mortgageA mortgage where the loan balance exceeds the property's market value (negative equity). T... UnderwritingThe lender's review process to evaluate a borrower's creditworthiness and the property's v...
V

Terms starting with V

Vacant propertyA property without occupants. Often has insurance challenges (most policies cancel after 3... VA loanA mortgage backed by the Department of Veterans Affairs, available to eligible service mem...
W

Terms starting with W

Walk-throughThe buyer's final inspection of the property, typically within 24-48 hours before closing,... Warranty deedA deed where the grantor warrants (guarantees) clear title and the right to convey it. Str... WholesalingA practice where someone puts a property under contract, then assigns or sells that contra... Writ of possessionA court order giving a new property owner (typically after foreclosure) the right to take ...
Z

Terms starting with Z

ZoningLocal government regulations on how property may be used (residential, commercial, industr...