The ABCs of Real Estate
A glossary of Real Estate Terms. Learn how to "talk the talk" of Real Estate before you buy or sell!
Whether you're a seasoned Seller brushing up or a first-time Buyer dipping your feet in the water, you've probably heard a ton of real estate jargon thrown around during your research and preparation. At Fine New England Living we are committed to cutting through the confusion of the real estate world for our clients. If you ever have any questions about real estate, please do not hesitate to get in touch with us. In the meantime, though, here's a helpful glossary of terms to assist you in your journey.
TERMS
Conventional Mortgage (aka Conventional Loan)
A mortgage made through a private lender or federally backed mortgage companies (“Fannie Mae” or “Freddie Mac”), as opposed to a mortgage insured by a government entity such as the FHA or VA. They typically require a lower debt-to-income ratio, higher credit scores, and higher down payments than Government Loans.
Cooperative
A building or group of dwellings owned by a corporation with stockholders who are residents of the dwellings. When you buy into a co-op, the corporation holds the title for all units and common areas; you purchase a share of the property, which entitles you to a lease to occupy a unit for as long as you own the stock. Co-ops are differentiated from condominiums, in which the Buyer owns the unit and a percentage share of the common areas.
Counter-Offer
An offer made in response to a previous offer; i.e., an offer made by a Seller in response to an initial offer received from a Buyer
Curb Appeal
A term to describe the initial first impression a Buyer gets from the outside of a home when viewed from the street. For example, a home with a well-maintained yard, freshly painted siding, and desirable amenities such as shutters or a front porch, may attract a larger pool of Buyers, regardless of what’s on the inside.
Days on Market (DOM)
The number of days that have passed since a property was listed. Typically, the longer a property sits on the market, the more unlikely it is that the Seller will get their asking price on a property. Average DOM can be influenced by a variety of factors, including market conditions, time of year, price point, house style, etc.
Debt-to-Income Ratio
Monthly debt payments divided by gross monthly income. “Debts” can include, but are not limited to, housing expenses, alimony, child support, car payments, other installment debts, and revolving or open-ended accounts such as credit cards. This figure can be used by lenders to determine your interest rate and/or eligibility for a loan - the lower the ratio, the better.
Deed
A written legal document transferring title or ownership of a property from a grantor (i.e., Seller) to a grantee (i.e., Buyer).
Default
Refers to failure to comply with a legal obligation, financially or otherwise. For example, a loan account may be considered “in default” after a period of multiple delinquencies (see below).
Delinquent
Refers to failing to make a loan payment on time or missing an installment.
Depreciation
An decrease in the market value of a home over time, due to market conditions, lack of upkeep or improvements, and many other factors. Contrasted with “Appreciation” (see above).
Disclosure Statement
A statement given by a Seller to a prospective Buyer that provides details on the property including issues or negative aspects
Discount Points
Fees paid by a borrower to a lender at closing which allow a reduced interest rate on the loan.