Common Real Estate Terms

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Concession: Something given up or agreed to in negotiating the sale of a
house such as the sellers may agree to help pay for closing costs.

Contingency: A condition that must be met before a contract is legally binding such
as an inspection.

Earnest Money: The deposit given by a buyer to a seller to show they are serious about purchasing the home. Usually refundable to buyers in the event a contingency of the sales contract cannot be met.

Easement: A right to the use of, or access to, land owned by another.

Encumbrance: A claim on a property, such as a lien, mortgage or easement.

Fair Market Value: The price at which property would be transferred between a willing buyer and willing seller.

Home Inspection: A professional inspection to determine the condition of the property. Evaluation of plumbing, heating, cooling systems, roof, wiring, foundation and pest infestation.

Homeowner’s Warranty: Policy covering certain repairs of a newly purchased home for a certain period of time.

Real Property: Land and anything permanently affixed: buildings, fences, trees, and minerals.

Seller Financing: A financing agreement in which a seller provides part (or all) of the financing needed by a buyer to purchase the seller’s home.

Survey: A precise measurement of a property by a licensed surveyor, showing legal boundaries, the dimensions and location of improvements.

Title: A legal document establishing the right of ownership of a property.

Title Insurance: Protects the buyer and lender against losses arising from disputes over the ownership of a property.

Transfer Tax: State or local tax payable when title to property passes from one owner
to another.

Walk-Through: Common clause in a contract allowing buyer to examine the property being purchased at a specified time immediately before the closing.