Glossary of Real Estate Terms

A

Adjustable-Rate Mortgage (ARM) A mortgage with an interest rate that can change periodically based on the market. Often starts lower than a fixed-rate mortgage but may rise over time.Amortization The schedule by which loan payments are divided between principal and interest over time.Appraisal A professional assessment of a property’s value, usually conducted by a licensed appraiser. Required by lenders to ensure the home’s value matches the loan amount.

B

Broker A real estate professional with additional licensing who can operate independently and manage agents.Buyer’s Agent A real estate professional who represents the buyer’s interests in a transaction. At The Happy Homes Team, we specialize in buyer advocacy with deep North Atlanta expertise.

C

Closing The final step in a real estate transaction where ownership is transferred, paperwork is signed, and keys are handed over.Closing Costs Fees associated with completing the real estate transaction, typically 2–5% of your home’s purchase price. Includes lender fees, title insurance, taxes, and more.Comparative Market Analysis (CMA) A report prepared by real estate agents to determine a home’s market value based on recently sold homes in the area.Contingency A condition in a contract that must be met for the transaction to proceed (e.g., home sale contingency, financing contingency, or home inspection).

D

Deed A legal document that transfers property ownership from seller to buyer.Down Payment The upfront cash payment made by the buyer toward the purchase price of the home. Typically ranges from 3% to 20% of the home’s value.Due Diligence The period during which the buyer can investigate the property, conduct inspections, and back out of the deal if issues arise.

E

Earnest Money A deposit made by the buyer to show serious intent. Held in escrow and applied toward closing costs or down payment.Equity The difference between your home’s market value and the amount you owe on your mortgage.Escrow A neutral third party that holds funds and documents until the transaction is completed.

F

FHA Loan A government-backed loan with lower down payment requirements, popular among first-time homebuyers.Fixed-Rate Mortgage A mortgage where the interest rate stays the same for the life of the loan.

H

Home Inspection A detailed examination of a home’s condition by a licensed inspector, typically during the due diligence period.Home Warranty A service contract that covers repairs or replacements for major home systems and appliances for a specific period after closing.HOA (Homeowners Association) An organization that enforces rules and manages shared amenities in a residential community. Fees are usually required.

I

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

L

Listing A property that is currently for sale on the market.Listing Agent The agent representing the seller in a transaction.Loan Estimate A form that outlines your estimated interest rate, monthly payment, and closing costs. Provided by your lender after applying for a loan.

M

MLS (Multiple Listing Service) A database of homes for sale shared among real estate agents to ensure widespread visibility.Mortgage Pre-Approval A lender’s written commitment stating how much they are willing to lend you based on your financial background.

O

Offer A formal proposal to purchase a home, typically including price, contingencies, and timelines.Owner’s Title Insurance A one-time purchase that protects the buyer against past claims or disputes over ownership of the property.

P

Pending A home that has an accepted offer and is under contract, but not yet closed.Pre-Qualification An initial estimate of how much you might be able to borrow based on basic financial information.Principal The original amount of money borrowed in a loan, not including interest.

R

Realtor® A licensed real estate agent who is a member of the National Association of Realtors and adheres to a strict code of ethics.Real Estate Settlement Procedures Act (RESPA) A federal law that requires lenders to disclose closing costs and prohibits certain abusive practices.Refinance Replacing your current mortgage with a new one, usually to get a better rate or different loan terms.

S

Seller’s Agent A real estate professional who represents the seller’s interests in a transaction. Often called a listing agent.Seller’s Disclosure A form where the seller outlines any known issues with the property, such as roof damage or past flooding.Survey A professional measurement of the land to establish property boundaries.

T

Title Legal ownership of a property.Title Search A background check to ensure the title is clear of liens or legal issues before the sale is completed.Transfer Tax A state or local tax paid when the property title is transferred from one owner to another.

U

Underwriting The lender’s process of verifying your income, assets, and credit to approve a mortgage loan.

V

VA Loan A mortgage loan for veterans and active military members, backed by the U.S. Department of Veterans Affairs.