Important Real Estate Terms and Methodologies

Real Estate Terms

Whether you are buying or selling, if you intend to execute a real estate transaction, you will come across terms and concepts related to real estate that you are unfamiliar with. We have made a list of common real estate terms that will definitely help you to make things a little better. Real estate is full of jargon like (DOM, HOA, Pre equal) and so on and if you are new to the world of real estate, understanding industry jargon can be challenging as it can add a layer of confusion to an already evaluated process.

We have compiled the most common real estate terms and defined them for you and these are quite basic real estate words that are important to know for anyone who is learning about the industry. Take a look at the glossary of real estate terms below for brief, clear definitions on each of these topics that will help you make more educated decisions and correctly answer any real estate questions for your clients in 2022.

General Real estate terms.


A real estate certified who is legally licensed to buy and sell property on behalf of their clients. A licensed broker must employ an agent; they cannot act alone.


A real estate broker coordinates and negotiates real estate deals. This licensed individual has daily duties that include writing contracts and overseeing transactions for sales and purchasing activities on homes, land, and commercial properties.

Construction Loan-

It is considered to be important real estate terminology. It is a quick loan used to pay for the building of a house or other real estate project. Until long-term funding can be secured, this kind of loan compensates for construction costs.


A mortgage is a loan – provided by a mortgage lender – that enables an individual to purchase a home or property. While it’s possible to take out loans to cover the entire cost of a home, it’s more common to secure a loan for about 80% of the home’s value.

There are 2 different types of Mortgages in real estate terms.

Fixed-Rate Mortgages-

Fixed-rate mortgages offer borrowers a predetermined interest rate for a specific duration, usually 15, 20, or 30 years. With a fixed interest rate, the monthly payment increases with the significant period of time the borrower has to pay. In contrast, the monthly repayment amount decreases as the borrower delays payments. However, the longer it takes to repay the loan, the more the borrower ultimately pays in interest charges.

Adjustable-Rate Mortgages-

Interest rates on adjustable-rate mortgages (ARMs) can and frequently do fluctuate during the tenure of the loan. Interest rates change as a result of changes in market rates and other variables, which alter the amount of interest the borrower must pay and, in turn, alters the total monthly payment due. Mortgages with adjustable rates typically have a fixed review and adjustment period for the interest rate. The rate may be changed, for instance, once a year or every six months.


A realtor is a real estate agent that has registered and becomes a member of the National Association of Realtors (NAR). The NAR requires membership dues and abides by a strict code of ethics. Not all real estate agents are realtors.

Jumbo Loan-

A jumbo loan or jumbo mortgage is a larger-than-usual loan that is typically used to afford luxury properties. It exceeds the limitations set by the FHFA (Federal Housing Finance Agency) and isn’t guaranteed by federal mortgage companies, making it a much riskier investment. To qualify for a jumbo loan, the potential buyer is held to more stringent requirements like a low debt-to-income ratio and a high credit score.

Cost of fund Index (COFI)-

The cost of Fund Index is an important real estate term. The COFIs are the average interest rates on savings and checking accounts in a certain geographic region. Banks and other lenders use them to calculate variable loan interest rates.


The glossary of real estate terms defines “offer” as the primary purchase price point that the seller receives from the buyer. A seller has the liberty to accept, make a counter, or reject the offer.


A condition that must be satisfied before the sale is considered final is known as a contingency. A buyer might limit their offer, for instance, on a favorable property inspection. The transaction might not go through if this condition is not satisfied.


Escrow is a legal arrangement where a third party holds large funds until the terms of an agreement are met. In real estate, you’ll set up an escrow account to hold funds for taxes or insurance throughout the life of your mortgage.

Chain of the title-

A chain of title is one of the used real estate terms and it is considered to be the historical documentation of all previous owners of a piece of property. If all the information is accessible, it is a record that traces back to the previous owner.


We believe that the above information proves helpful when you are looking for any real estate services in your mind. The list contains all the important real estate terms that you might look for, for tremendous growth in your work that caters to all your needs and wants.

Let's Connect

Reset password

Enter your email address and we will send you a link to change your password.

Powered by Estatik