Real estate words, in plain English

Real estate has its own language, and no, it isn't Italian (we checked). Here are the words you'll hear while buying or selling in Clearwater, Dunedin, Largo, Safety Harbor and around Tampa Bay, explained like a friend would. These are short, general definitions, not legal advice.

A

Abstract of Title – A summary of the public records about a property's ownership history. The title company reviews it to spot problems before you buy.

Acceleration Clause – A mortgage clause that lets the lender demand the whole loan balance right away if payments stop or other terms are broken.

Adjustable Rate Mortgage (ARM) – A loan whose interest rate can change over time.

Appraisal – A professional's estimate of what a property is worth, usually ordered by the lender. Think of it as the house's report card.

APR (Annual Percentage Rate) – The yearly cost of a loan, including interest and certain fees, shown as a percentage.

Assessed Value – The value the county puts on a property to figure out property taxes.

Assumption of Mortgage – When a buyer takes over the seller's existing mortgage, if the lender allows it.

B

Balloon Mortgage – A loan with smaller payments for a set time, then one big final payment. The balloon pops at the end.

Broker – A person licensed by the state to run a real estate brokerage business independently. (Hi, Paola!)

C

Cap – The maximum an adjustable interest rate can rise.

Closing – The final step, when ownership passes from seller to buyer and the keys change hands.

Closing Costs – Fees paid at closing on top of the price, such as title insurance, inspection and appraisal fees.

Condominium – A home you own inside a larger building or community, where the common areas are shared with the other owners.

Contingency – A condition that must be met before a contract becomes binding, like a satisfactory inspection or loan approval.

Conventional Loan – A mortgage that isn't backed by a government agency like the FHA or VA.

D

Deed – The legal document that transfers ownership of a property.

Default – Failing to keep the terms of a loan or contract, like missing mortgage payments.

Documentary Stamps – A state tax on deeds and mortgages when property changes hands. Not the kind you lick.

Down Payment – The part of the price you pay up front; the loan covers the rest.

E

Earnest Money – A deposit a buyer puts down to show they're serious about buying.

Easement – A right for someone else to use part of a property for a specific purpose, like a utility line.

Encroachment – Something built that crosses onto a neighbor's property, like a fence a little too eager.

Equity – The part of the home you truly own: its value minus what you still owe.

F

FHA Mortgage – A loan insured by the Federal Housing Administration.

Foreclosure – The legal process a lender uses to take back a property when the loan isn't paid.

L

Lien – A legal claim against a property for an unpaid debt.

M

Market Value – The price a property would likely sell for between a willing buyer and a willing seller.

MLS (Multiple Listing Service) – The shared database where brokers list homes for sale so other brokers can find them.

Mortgage – A loan that uses the property as security.

Mortgage Insurance – Insurance that protects the lender if the borrower doesn't pay, often required with a small down payment.

P

PITI – Principal, Interest, Taxes and Insurance: the four parts of a typical monthly mortgage payment.

Points – Fees paid to the lender at closing; one point equals 1% of the loan amount.

Postulate – To claim or assume something as true. Also the "postulate" in clearwaterpostulate.com, because we claim Clearwater is the best place to live.

Principal – The amount you borrowed, not counting interest.

R

REALTOR® – A real estate professional who is a member of the National Association of REALTORS® and follows its Code of Ethics.

Refinancing – Replacing your current mortgage with a new one, often to get a better rate or terms.

S

Survey – A map made by a licensed surveyor showing a property's boundaries and what's built on it.

T

Title – Legal ownership of a property.

Title Insurance – Insurance that protects the buyer and lender against problems with the title.

V

VA Mortgage – A loan guaranteed by the U.S. Department of Veterans Affairs for eligible veterans and service members.

Z

Zoning – Local rules about how land can be used, such as homes, shops or offices.

Still confused?

That's what we're here for. Text (727) 488-4825 or email info@clearwaterpostulate.com and we'll explain it, espresso optional. Join the family!