Everyone must live somewhere. Real estate is where you live. It has its own terms and language. Some words’ meanings aren’t defined as you think they might be.
Let's search for some of the puzzling real estate terms. Print this page. Circle words that you find in the list below with a pen or highlight them.
Words can be start from the left, right, top, bottom or diagonal.
You can see definitions for these real estate terms as well as an answer key below.
I’ve Got Your Six!
Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212
DFWmark@kw.comDFWmark.com
accrued
addendum agency
agent amendment
analysis
annexation
appraisal
appreciation
block
brokerage
buyer
cash chattel
client
closing
CMA
comparables concessions
consideration construction
credit
customer debt
deduction
deed
default
disclosure
earnest easement
equity
escrow
estoppel
exception
execution
expiration financing FHA
fiduciary
fixture
freehold
gift
home homeowner
homestead
house HUD income
inspection
integrity interest intermediary intestate
inventory
landlord
lease
lender
lien
listing lot
mandatory
market MLS
mortgage
MUD note option
ownership parcel plat
points
probate
promulgate property
prorations
rate
REALTOR
realty
referral rent
repairs representation
riparian
scarcity
seller setback
settling slab
subdivision tenancy
tenant
title townhouse
transaction
underwriting VA variance
vendor
voidable
walkthrough
wire
zoning
Definitions
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
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accrued:
Accrued items are charges owed by the seller that are not yet due such as property taxes. Accrued items are prorated.
addendum: An addendum is additional terms and condition attached to and made part of a document (contract).
agency: is the relationship between a principal and an agent who acts for the principal within the specified authority granted by the principal.
agent: An individual authorized by a principal to make specified decisions on behalf of that principal and represent his or her interests.
amendment: A form used to change the terms and conditions in either the listing agreement or the purchase contract. All parties must sign the amendment for it to be valid.
analysis: A report about how marketable a home is. Also called a Comparative Market Analysis (CMA) or a Broker Price Opinion (BPO).
annexation: The way an item is attached to the land. It separates personal property from fixtures. Also, the way taxing authorities can include real property for taxation and services.
appraisal: The estimation and opinion of value placed upon a piece of land based upon a factual
analysis: by a qualified professional (appraiser); the process of estimation and the report itself.
appreciation: Property held for a period of time that is expected to increase in value and show a profit when it is sold.
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block: A grouped or connected series of lots segmented from other lots by a series of streets or major thoroughfares. A group of blocks generally makes up a subdivision tract.
brokerage: The business or service of acting as a broker. A company that buys or sells goods or assets for clients.
buyer: A person or other legal entity engaged in the process of purchasing real property.
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cash: Immediately available funds (liquid funds).
chattel: Referred to as personal property. It’s movable. Examples: Furniture, appliances, and Ect.
client: A buyer or seller who forms an agency relationship with a real estate broker; also called a principal.
closing: The final step in the home-buying process, when the actual title to the property being purchased transfers from the seller to the buyer, and fees and prorated items are paid out of the escrow fund held by the closing entity.
CMA: An informed estimate of the value of a property made by real estate professionals such as real estate brokers.
comparables: Recorded sales of properties similar in size, use, construction quality, age, and often located within the same sub-market used as comparisons to determine the fair market value of another particular property.
concessions: Cash expended by the landlord in the form of rent abatement, build-outs allowance, or other payments to induce the tenant to sign a lease.
consideration: Something of value, such as money or a promise, given to show acceptance or acknowledgement of a contract. In Texas, $10 is the ideal minimum consideration.
construction: The art and science of building structures and objects. New construction often refers to building residential or commercial structures from the dirt to completion while general construction includes maintenance, upgrades and improvements.
credit: A positive balance or a positive amount. For our purposes, it is a figure entered in a party’s favor when determining the overall costs associated with a transaction. On closing statements, credits reflect expenses that have been paid by a particular individual or expenses that are owed to that individual. Credits: stand in contrast to debits.
customer When an agent performs limited brokerage services for an individual but does not represent that individual, the individual is referred to as a customer rather than a client.
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debt: It is an obligation to repay a borrowed (owed) amount. Secured debt has a physical guaranty such as real estate, automobiles or heavy equipment. Unsecured debt includes credit cards and signature loans.
deduction: An amount of money subtracted from income when calculating federal income tax.
deed: an instrument that conveys title to real property. Deeds and wills can convey real property. Title insurance is evidence of title but does not convey any ownership.
default: The failure to make timely debt payments or to comply with other conditions of an agreement.
disclosure: The act of revealing previously unknown information. Disclosure can be compulsory or obligatory. Full disclosure requires that one make known any adverse details that may affect the results of the transaction, even if sharing those facts works against one’s own (or one’s client’s) interests.
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earnest: A deposit made by a real estate buyer to show an offer is serious and it is being made in good faith. This money is also often used as a kind of “marker” to reserve the property while the final contracts: are being drawn up or the offer is being considered.
easement: Non-possessory interest in land. An easement is classified as an interest in real estate but is NOT an estate in land. The party that owns the property still has full ownership; the party that uses the easement only has the right to pass over or use the other party’s land. Easements are classified as either appurtenant or in gross.
equity: The value of one's interest in a property, consisting of its fair market value less any outstanding debt or other encumbrances. Equity is the difference between the value of the property and the current loan balance.
escrow: The term escrow has two meanings in real estate. Title escrow's purpose is to have a disinterested third party hold money and/or documents until the terms of the contract are met. The holder (usually a title company) is the special and impartial agent for both parties and acts in accordance with the instructions given by both. An escrow account is established on a new loan to collect taxes and insurance reserve and any interest due from the buyer. The mortgage company will then pay the taxes and insurance, when due, on the buyer’s behalf.
estoppel: A legal doctrine that forbids asserting rights or facts inconsistent with one’s previous position or any representation one has made by one’s act, conduct or silence.
exception: As used in the conveyance of real estate, the exclusion of some part of the property conveyed, with the title of that excepted part remaining with the grantor.
execution: Signing and acknowledgement of the Grantor’s signature on a deed.
expiration: The end of the time period covered by a listing agreement or the clause in a listing agreement that defines when the broker employment contract expires.
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financing: The business of providing the funds necessary to complete real estate transactions.
FHA: The Federal Housing Administration, which operates under the Department of Housing and Urban Development, administers the government home loan insurance program. This program allows prospective homebuyers to get a loan to finance a home by removing the risk from the lender.
fiduciary: (noun) A trustee; a person who, in good faith and candor, under his or her own volition acts primarily for the benefit of another; (adjective) relating to a trust or like a trust in nature. A legal relationship of trust between two or more parties in which one party is authorized to act on behalf of another.
fixture: Personal property, which has been converted to real property by method of attachment, character and adaptation, or contractual intent of the parties. Examples: Blinds, ceiling fans, television mounts and curtain rods.
freehold: A form of real estate interest that requires the property owner to have actual ownership and possession of the property. In a freehold estate, the estate has an unspecified duration.
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gift: Consideration is love and affection.
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home: The place where a person lives. Typically, a home is a physical location and/or residence such as a house, townhouse, condominium or apartment.
homeowner: The person or legal entity who has and holds residential property as a primary residence (owner-occupant as opposed to property owner).
homestead: A person's or family's residence, which comprises the land, house, and outbuildings, and in most states is exempt from forced sale for collection of debt. In Texas, a homeowner has automatic state constitutional homestead rights on their owner-occupied primary residence. In an urban environment, the maximum amount of land cannot exceed 10 contiguous acres. Rural property has a maximum homestead of 200 acres for a family and 100 acres for a single person.
house: A building or shelter that serves as living quarters for individuals or families. A house can be a unattached single-family structure, or a multi-family structure such as a duplex, multiplexes, townhouses or row houses.
HUD: HUD was established in 1965 to develop national policies and programs to address housing needs in the U.S. One of HUD’s primary missions is to create a suitable living environment for all Americans by developing and improving the country’s communities and enforcing fair housing laws.
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income: The amount of money an investor receives from income producing properties. Cash flow is the amount of money remaining after all expenditures have been paid, including taxes, operating costs, and mortgage payments.
inspection: The business of giving an opinion as to the condition of a property. Inspectors should have a state license and insurance.
integrity: The quality of being honest and having strong moral principles; moral uprightness. A real estate broker has an obligation to exercise integrity in the licensee’s responsibilities, including prudence and caution to avoid misrepresentation by acts of commission or omission.
interest: Interest is the cost incurred for the use of money over a certain period of time. It can be calculated in the form of simple or compound interest. Compound interest will always produce a higher number.
intermediary: In Texas real estate law, this term describes a real estate broker who represents both the buyer and the seller. A salesperson or affiliated licensee cannot act as an intermediary; only a broker may hold this position.
intestate: Legal designation of a person who has died without leaving a valid will.
inventory: The total amount of housing properties and/or rentable square feet of existing and delivered space in a given category within a market. In new construction residential housing, it refers to houses built on speculation and available for immediate sale.
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landlord: the owner, lessor or sublessor of a dwelling but does not include a manager or agent of the landlord unless the manager or agent purports to be the owner, lessor or sublessor in an oral or written lease.
lease: A written or oral contract between a landlord (the lessor) and a tenant (the lessee) that transfers the right to exclusive possession and use of the landlord's real property to the lessee for a specified period of time and for a stated consideration (rent). A lease is essentially a mixture of ownership conveyance and a contract.
lender: (Loan Originator) The lender is most often regarded as the institution that is able to provide the funding directly to the borrower. The lender provides money to fund the loan either with their money directly or funds from investors that either provide the money up front or by buying the loan when it is sold to them by the lender.
lien: An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances, but all encumbrances are not liens. A creditor’s right to have debts paid out of the property when a debtor defaults.
listing: A written contractual agreement between a property owner (or owners) and the real estate broker who will market that property; this agreement establishes the contractual terms and conditions of the listing. The agreement covers the marketing of the property and defines any fees or commissions that a licensee is to receive if he or she procures a buyer during the term of the listing agreement.
lot: An individual parcel of land for sale or development having a mapped perimeter and located in a tract. A group of lots makes up a Block.
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mandatory: Required by law or rules. Often seen in a Mandatory Homeowners Association (HOA) where all homeowners must be part of and pay dues to a homeowner or property owner association (POA).
market: A particular geographic region or demographic section in which there may be a demand for certain goods or services; for our purposes, the goods demanded would be realty.
MLS: (Multiple Listing Service) A sizeable inventory of properties in a specified area that is maintained by the local real estate brokerage industry and is viewable by all members of that multiple-listing organization.
mortgage: The instrument that evidences an interest in real estate and created to provide a pledge as security for the performance or repayment of a loan. The borrower (i.e., mortgagor) retains possession and use of the property.
MUD: A Municipal Utility District (MUD) is a political subdivision of the State of Texas authorized by the Texas Commission of Environmental Quality (TCEQ) to provide water, sewage, drainage and other utility-related services within the MUD boundaries.
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note: Also known as a promissory note; it is a written promise to pay back a loan, stating the conditions under which this promise is to be met.
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option: An option is a contract in which a seller gives a potential buyer the right to buy the property or terminate with no reason at a fixed price within a stated period of time. The optionee (buyer) must pay a fee for this right to terminate.
ownership: Rights to the use, enjoyment and alienation of property to the exclusion of others.
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parcel: A piece of land or realty. Parcels are the individual lots that are combined to make a “block.” Blocks combine to make a “tract,” which is the totality of the property represented on the plat.
plat: plan out or make a map of (an area of land, especially a proposed site for construction). The term “plat” refers to a surveyor or developer's map detailing the borders of the individual lots that he or she will develop or sell. When a surveyor or developer records his or her plat in the public records office of the county where the land is located, then the map becomes a legal description of property for ownership.
points: Discount points, also called mortgage points or simply points, are a form of pre-paid interest available in the United States when arranging a mortgage. One point equals one percent of the loan amount.
probate: The legal process to determine the validity of a will and establishes the assets of a decedent. Probate proceedings must take place in the county where the real estate is located. If the will is upheld, the property is distributed according to the will’s provisions.
promulgate: To mandate for use or require for use. To openly declare or announce. This term is especially relevant to real estate licensees because in many states, the regulatory agencies that govern real estate practice offer what they call “promulgated forms.” The use of some of these forms—often including contract forms—is mandatory; that is, licensees may not substitute other forms or their own paperwork.
property: Property is something that belongs to a person or entity. It can be real property (land) or non-realty property (personal property). It can even be emblements, which are crops prior to harvest.
prorations: To allocate between seller and buyer their proportionate share of an obligation paid or due; for example, to prorate real property taxes or insurance. Prorate aims to divide proportionately. Prorating typically takes place at real estate closing and involves equitable division of money owed obligations between the buyer and seller. These obligations vary depending on the details of the property transfer.
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rate: The cost per unit that is charged to an assessed value such as taxes, insurance, or interest.
REALTOR®: A real estate professional who subscribes to the National Association of REALTORS® (NAR) Code of Ethics as a member of the local and state boards. This is the professional designation for a member of the National Association of REALTORS® or its affiliated local groups.
realty: All interests in real property or real estate in the form of land and/or buildings.
referral: The act or action of directing or suggesting a good or service (a referral to a trusted vendor).
rent: Consideration paid for the occupancy and use of real property. A general term covering any consideration (not only money).
repairs: The action of mending or fixing something.
representation: A action of speaking or acting on behalf of a party in within specified agency relationship. Also, the state of being represented by an agent.
riparian: Riparian rights govern the use of flowing water, such as rivers and streams, that pass through or border a property. In accordance with riparian rights, a property owner does not own the water, but he or she may use the water and shares those same rights and uses with other property owners whose land also borders the water.
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scarcity: The element of value that establishes the lack of availability of an item creates value.
seller: A person or other legal entity engaged in the process of liquidating real property.
setback: The distance from a lot line or other reference point, within which no structure may be located.
settling: The division of expenses and funds between a buyer and a seller. This term is sometimes used interchangeably with “closing,” but it more accurately describes the process that occurs as a buyer and a seller settle their costs and payments with one another.
slab: The exposed wearing surface laid over the structural support beams of a building.
subdivision: Subdivision is the act of dividing land into pieces that are easier to sell or otherwise develop, usually via a plat. The former single piece as a whole is then known in the United States as a subdivision. If it is used for housing it is typically known as a housing subdivision or housing development, although some developers tend to call these areas communities.
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tenancy: (Tenancy at will) Is a leasehold estate that exists for as long as both the lessor and lessee desire it to last. It may be created by express agreement or by operation of the law (including the payment of rent at regular intervals). The term of tenancy at will is indefinite. Creates a holdover tenant with consent of the landlord.
tenant: (i) A holder of property under a lease. (ii) Originally, one who had the right to possession, irrespective of the title interest.
title: The means whereby one has just and full possession of real property. Legal evidence—often in the form of a written document—that an individual has legitimate ownership rights to a particular parcel of real estate. A title constitutes the most basic legal connection between a piece of land and the person who owns it.
townhouse: Townhouses or townhomes are very similar to a single-family dwelling. The configuration differs greatly as some may be stand alone or have adjoining common walls such as in row houses or brownstones. The major difference between a condominium or townhouse is the conveyance of the land with the residence by the deed.
transaction: An exchange of any kind. Consideration - typically monetary but can be other property or "love and affection" - is exchanged for something physical such as real property on non-realty items (chattel).
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underwriting: The process of approving or denying a loan application on the basis of an evaluation of the property to be mortgaged and the applicant’s creditworthiness. The process, if it results in approval, involves the underwriter’s selecting an appropriate interest rate and loan term.
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VA: The Veterans Administration is responsible for providing federal benefits for veterans and their dependents.
variance: A permit that grants a property owner relief from certain provisions of a zoning ordinance when, because of the particular physical surroundings, shape or topographical condition of the property, compliance would result in a particular hardship or practical difficulty which would deprive the owner of the reasonable use of the land or building involved.
vendor: Any contractor who provides good or services for a fee. In transactions vendors range from lawn maintenance to title companies. Also, the seller in a transaction (i.e., Vendor's lien for unpaid sums).
voidable: (contract) A contract structured so it may be terminated or rescinded by either party.
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walkthrough: A tour, demonstration or superficial inspection to ensure inventory and condition is present and in agreed-upon repair.
wire: Any transfer of funds which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account.
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zoning: A legal method for controlling the use and development of land. Zoning ordinances aim to prevent conflicting land uses. Zoning promotes orderly development. Local governments employ zoning to regulate the use and development of privately owned real property.
Answer Key
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