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1031: exchange or Starker
exchange: The delayed exchange of properties that qualifies for tax
purposes as a tax-deferred exchange.
1099:
The statement of income reported to the IRS for an independent
contractor.
Accompanied showings:
Those showings where the listing agent must accompany an agent and his or her
clients when viewing a listing.
Addendum:
An addition to; a document.
Adjustable rate mortgage
(ARM): A type of mortgage loan whose interest rate
is tied to an economic index, which fluctuates with the market. Typical ARM periods are one,
three, five, and seven years.
Agent:
The licensed real estate salesperson or broker who represents buyers or
sellers.
Amended value: The actual sale price after the
seller successfully markets and sells his or her home through the broker of his or her choice.
The sale is turned over to a third-party relocation company for closing, and the guaranteed
offer is amended or changed.
Annual percentage
rate (APR): The total costs (interest rate, closing
costs, fees, and so on) that are part of a borrower’s loan, expressed as a percentage rate of
interest. The total costs are amortized over the term of the loan.
Application fees:
Fees that mortgage companies charge buyers at the time of written application
for a loan; for example, fees for running credit reports of borrowers, property appraisal fees,
and lender-specific fees.
Appointments:
Those times or time periods an agent shows properties to clients.
Appraisal:
A document of opinion of property value at a specific point in
time.
Appraised price (AP):
The price the third-party relocation company offers (under most contracts)
the seller for his or her property. Generally, the average of two or more independent
appraisals.
“As-is”:
A contract or offer clause stating that the seller will not repair or
correct any problems with the property. Also used in listings and marketing
materials.
Assumable mortgage:
One in which the buyer agrees to fulfill the obligations of the existing loan
agreement that the seller made with the lender. When assuming a mortgage, a buyer becomes
personally liable for the payment of principal and interest. The original mortgagor should
receive a written release from the liability when the buyer assumes the original
mortgage.
Back on market (BOM):
When a property or listing is placed back on the market after being removed from
the market recently.
Back-up agent:
A licensed agent who works with clients when their agent is
unavailable.
Balloon mortgage:
A type of mortgage that is generally paid over a short period of time, but is
amortized over a longer period of time. The borrower typically pays a combination of principal
and interest. At the end of the loan term, the entire unpaid balance must be repaid.
Back-up offer:
When an offer is accepted contingent on the fall through or voiding of an
accepted first offer on a property.
Bill of sale:
Transfers title to personal property in a transaction.
Board of REALTORS
® (local) : An association of REALTORS® in a specific geographic
area.
Broker:
A state licensed individual who acts as the agent for the seller or
buyer.
Broker of record:
The person registered with his or her state licensing authority as the managing
broker of a specific real estate sales office.
Broker’s market analysis
(BMA): The real estate broker’s opinion of the
expected final net sale price, determined after acquisition of the property by the third-party
company.
Broker’s price opinion
(BPO): The real estate broker’s opinion of the
expected final net sale price, determined prior to the acquisition of the property.
Broker’s tour:
A preset time and day when real estate sales agents can view listings by
multiple brokerages in the market.
Buyer:
The purchaser of a property.
Buyer agency:
A real estate broker retained by the buyer who has a fiduciary duty to the
buyer.
Buyer agent:
The agent who shows the buyer’s property, negotiates the contract or offer for
the buyer, and works with the buyer to close the transaction.
Carrying costs:
Cost incurred to maintain a property (taxes, interest, insurance, utilities, and
so on).
Closing:
The end of a transaction process where the deed is delivered, documents
are signed, and funds are dispersed.
CLUE :
CLUE (Comprehensive Loss Underwriting Exchange) is the insurance industry’s national
database that assigns individuals a risk score. CLUE also has an electronic file of a
properties insurance history. These files are accessible by insurance companies
nationally. These files could impact the ability to sell property as they might contain
information that a prospective buyer might find objectionable, and in some cases not even
insurable.
Commission:
The compensation paid to the listing brokerage by the seller for selling the
property. A buyer agency agreement may require the buyer to pay a commission to his or her
agent.
Commission split:
The percentage split of commission compensation between the real estate sales
brokerage and the real estate sales agent or broker.
Comparative market
analysis: A study done by real estate sales agents
and brokers using active, pending, and sold comparable properties to estimate a listing price
for a property.
Competitive market analysis
(CMA): The analysis used to provide market
information to the seller and assist the real estate broker in securing the listing.
Condominium
association: An association of all owners in a
condominium.
Condominium budget:
A financial forecast and report of a condominium association’s expenses and
savings.
Condominium by-laws:
Rules passed by the condominium association used in administration of the
condominium property.
Condominium
declarations: A document that legally establishes a
condominium.
Condominium right of first
refusal: A person or an association that has the
first opportunity to purchase condominium real estate when it becomes available or the right to
meet any other offer.
Condominium rules and
regulation: Rules of a condominium association by
which owners agree to abide.
Contingency:
A provision in a contract requiring certain acts to be completed before the
contract is binding.
Continue to show:
When a property is under contract with contingencies, but the seller requests
that the property continue to be shown to prospective buyers until contingencies are
released.
Contract for deed:
A sales contract in which the buyer takes possession of the property but the
seller holds title until the loan is paid. Also known as an installment sale
contract.
Contract of sale:
An agreement between the third-party relocation company and the seller
(transferee) whereby the third-party company purchases property owned by the seller.
Conventional
mortgage: A type of mortgage that has certain
limitations placed on it to meet secondary market guidelines. Mortgage companies, banks, and
savings and loans underwrite conventional mortgages.
Cooperating
commission: A commission offered to the buyer’s
agent brokerage for bringing a buyer to the selling brokerage’s listing.
Cooperative (Co-op):
Where the shareholders of the corporation are the inhabitants of the building.
Each shareholder has the right to lease a specific unit. The difference between a co-op and a
condo is in a co-op, one owns shares in a corporation; in a condo one owns the unit fee
simple.
Corporate client:
The company with whom the third-party relocation company has an agreement to
handle the relocating employees.
Counteroffer:
The response to an offer or a bid by the seller or buyer after the original
offer or bid.
Credit report:
Includes all of the history for a borrower’s credit accounts, outstanding debts,
and payment timelines on past or current debts.
Credit score:
A score assigned to a borrower’s credit report based on information contained
therein.
Curb appeal:
The visual impact a property projects from the street.
Days on market:
The number of days a property has been on the market.
Decree:
A judgment of the court that sets out the agreements and rights of the
parties.
Desk fees:
A fee charged by the real estate company or brokerage for the real estate
agent to use a desk.
Destination services:
Services provided to the transferee at the new location. They can include
familiarization tours, temporary housing, school searches, and so on.
Direct home-selling costs
(DHSC): Carrying costs, loss on sale, repairs and
improvements, commission, closing costs, principal, interest, taxes and insurance, interest on
equity loans, and utilities.
Disclosures:
Federal, state, county, and local requirements of disclosure that the seller
provides and the buyer acknowledges.
Divorce:
The legal separation of a husband and wife effected by a court decree that
totally dissolves the marriage relationship.
DOM:
Days on market.
Down payment:
The amount of cash put toward a purchase by the borrower.
Drive-by:
When a buyer or seller agent or broker drives by a property listing or
potential listing.
Dual agent: Otherwise
known as a "limited agent". A state-licensed individual who represents the
seller and the buyer in a single transaction.
Earnest money
deposit: The money given to the seller at the time
the offer is made as a sign of the buyer’s good faith.
E-mail:
Electronic or Internet-based communication.
Escrow account for real estate taxes and
insurance:An account into which borrowers pay monthly
prorations for real estate taxes and property insurance.
Exchange/service
account: A brokerage expense account that accrues
charges for marketing.
Exclusions:
Fixtures or personal property that are excluded from the contract or offer to
purchase.
Expired (listing):
A property listing that has expired per the terms of the listing
agreement.
Fax rider:
A document that treats facsimile transmission as the same legal effect as
the original document.
Feedback:
The real estate sales agent and/or his or her client’s reaction to a
listing or property. Requested by the listing agent.
Fee simple:
A form of property ownership where the owner has the right to use and dispose of
property at will.
FHA:
Federal Housing Administration.
FHA (Federal Housing Administration) Loan
Guarantee: A guarantee by the FHA that a percentage
of a loan will be underwritten by a mortgage company or banker.
Fixture:
Personal property that has become part of the property through permanent
attachment.
Flat fee:
A predetermined amount of compensation received or paid for a specific
service in a real estate transaction.
Floor duty or time:
That a time, usually assigned, when a real estate sales agent answers
telephones, e-mails, or walk-in requests for information on property.
For sale by owner
(FSBO): A property that is for sale by the owner of
the property.
Gift letter:
A letter to a lender stating that a gift of cash has been made to the buyer(s)
and that the person gifting the cash to the buyer is not expecting the gift to be repaid. The
exact wording of the gift letter should be requested of the lender.
Good faith estimate:
Under the Real Estate Settlement Procedures Act, within three days of an
application submission, lenders are required to provide in writing to potential borrowers a
good faith estimate of closing costs.
Gross closed commission
income: The total amount of commission income a
real estate sales agent or broker receives from closed transactions.
Gross sale price:
The sale price before any concessions.
Guaranteed offer:
The amount, after appraisals, the employer offers the transferring employee for
his or her property.
HAFA:
Home Affordable Foreclosure Alternative.
HAMP: Home Affordable
Modification Program.
Hazard insurance: Insurance that
covers losses to real estate from damages that might affect its value.
Home-finding
assistance: Additional assistance provided by a
third-party relocation company that can include information about the destination
community.
Homeowner’s
insurance: Coverage that includes personal
liability and theft insurance in addition to hazard insurance.
HUD:
U.S. Department of Housing and Urban Development.
HUD/RESPA
(Housing and Urban Development/Real EstateSettlement Procedures Act):A document and statement that
details all of the monies paid out and received at a real estate property
closing.
Hybrid adjustable
rate: Offers a fixed rate the first 5 years and
then adjusts annually for the next 25 years.
IDX :
(Internet Data Exchange) Allows real estate brokers to advertise each other’s listings posted
to listing databases such as the multiple listing service.
Inclusions:
Fixtures or personal property that are included in a contract or offer to
purchase.
Independent
contractor: A real estate sales agent who conducts
real estate business through a broker. This agent does not receive salary or benefits from the
broker.
Inputting:
The process of entering new listings or changes to a current listing in
the multiple listing services.
Inspection rider:
Rider to purchase agreement between third-party relocation company and buyer of
transferee’s property stating that property is being sold “as is”. All inspection reports
conducted by the third party company are disclosed to the buyer and it is the buyer’s duty to
do his/her own inspections and tests.
Installment land
contract: A contract in which the buyer takes
possession of the property while the seller retains the title to the property until the loan is
paid.
Interest rate float:
The borrower decides to delay locking their interest rate on their loan. They
can float their rate in expectation of the rate moving down. At the end of the float period
they must lock a rate.
Interest rate lock:
When the borrower and lender agree to lock a rate on loan. Can have terms and
conditions attached to the lock.
Inventory:
A transferee’s property the third party relocation company has
acquired.
List date:
Actual date the property was listed with the current broker.
List price:
The price of a property through a listing agreement.
Listing:
Brokers written agreement to represent a seller and their property. Agents
refer to their inventory of agreements with sellers as listings.
Listing agent:
The real estate sales agent that is representing the sellers and their property,
through a listing agreement.
Listing agreement
: A document that establishes the real estate
agent’s agreement with the sellers to represent their property in the market.
Listing appointment
: The time when a real estate sales agent meets
with potential clients selling a property to secure a listing agreement.
Listing exclusion:
A clause included in the listing agreement when the seller (transferee) lists
his or her property with a broker.
Loan:An
amount of money that is lent to a borrower who agrees to repay the amount plus
interest.
Loan application:
A document that buyers who are requesting a loan fill out and submit to their
lender.
Loan closing costs:
The costs a lender charges to close a borrower’s loan. These costs vary from
lender to lender and from market to market.
Loan commitment:
A written document telling the borrowers that the mortgage company has agreed to
lend them a specific amount of money at a specific interest rate for a specific period of time.
The loan commitment may also contain conditions upon which the loan commitment is
based.
Loan package:
The group of mortgage documents that the borrower’s lender sends to the closing
or escrow.
Loan processor:
An administrative individual who is assigned to check, verify, and assemble all
of the documents and the buyer’s funds and the borrower’s loan for closing.
Loan
underwriter:One who underwrites a loan for another.
Some lenders have investors underwrite a buyer’s loan.
Lockbox:
A tool that allows secure storage of property keys on the premises for
agent use. A combo uses a rotating dial to gain access with a combination; a Supra®
(electronic lockbox or ELB) features a keypad.
Managing broker:
A person licensed by the state as a broker who is also the broker of record for
a real estate sales office. This person manages the daily operations of a real estate sales
office.
Market familiarization
trip: A visit by the transferee to the new location
to view housing market options and location highlights.
Marketing period:
The period of time in which the transferee may market his or her property
(typically 45, 60, or 90 days), as directed by the third-party company’s contract with the
employer.
Mortgage banker:
One wholends the bank’s funds to borrowers and brings
lenders and borrowers together.
Mortgage broker:
A business that or an individual who unites lenders and borrowers and processes
mortgage applications.
Mortgage loan servicing
company:A company that collects monthly mortgage
payments from borrowers.
Multiple listing service
(MLS): A service that compiles available properties
for sale by member brokers.
Multiple Offers:
More than one buyers broker present an offer on one property where the offers
are negotiated at the same time.
NATIONAL ASSOCIATION OF REALTORS®
(NAR): A national association comprised of real
estate professionals.
Net sales price:
Gross sales price, less concessions, to the buyers.
Niche:
A special area or interest.
Off market:
A property listing that has been removed from the sale inventory in a market. A
property can be temporarily or permanently off market.
Offer to purchase:
When a buyer proposes certain terms and presents these terms to the
seller.
Office tour/caravan:
A walking or driving tour by a real estate sales office of listings represented
by agents in the office. Usually held on a set day and time.
Open house (public):
When a listing that is on market is available to the public for viewings and
showings.
Parcel identification number
(PIN): A taxing authority’s tracking number for a
property.
Payoff letter:
A written document from a seller’s mortgage company stating the amount of money
needed to pay the loan in full.
Pending:
A real estate contract that has been accepted on a property but the
transaction has not closed.
Personal assistant:
A real estate sales agent administrative assistant.
Planned unit development
(PUD): Mixed-use development that sets aside areas
for residential use, commercial use, and public areas such as schools, parks, and so
on.
Preapproval:
A higher level of buyer/borrower prequalification required by a mortgage lender.
Some preapprovals have conditions the borrower must meet.
Prepaid interest:
Funds paid by the borrower at closing based on the number of days left in the
month of closing.
Prepayment penalty:
A fine imposed on the borrower by the lender when the loan is paid off before it
comes due.
Prequalification:
The mortgage company tells a buyer in advance of the formal mortgage
application, how much money the borrower can afford to borrow. Some pre-qualifications have
conditions that the borrower must meet.
Preview appointment:
When a buyer’s agent views a property alone to see if it meets his or her
buyer’s needs.
Pricing:
When the potential seller’s agent goes to the potential listing property
to view it for marketing and pricing purposes.
Principal:
The amount of money a buyer borrows.
Principal, interest, taxes, and insurance
(PITI): The four parts that make up a borrower’s
monthly mortgage payment.
Private mortgage insurance
(PMI):A special insurance paid by a borrower in
monthly installments, typically of loans of more than 80 percent of the value of the
property.
Professional
designation: Additional nonlicensed real estate
education completed by a real estate professional.
Professional
regulation: A state licensing authority that
oversees and disciplines licensees.
Promissory note:
A promise-to-pay document used with a contract or an offer to
purchase.
Property or home-finding assistance status
reports: Reports filed weekly or monthly by the
listing or buying agent representing the transferee.
R & I:
Estimated and actual repair and improvement costs.
REPC: Real Estate purchase contract
Real estate agent: An
individual who is licensed by the state and who acts on behalf of his or her client, the buyer
or seller. The real estate agent who does not have a broker’s license must work for a licensed
broker.
Real estate contract:
A binding agreement between buyer and seller. It consists of an offer and an
acceptance as well as consideration (i.e., money).
REALTOR®:
A registered trademark of the NATIONAL ASSOCIATION OF REALTORS that can be
used only by its members.
Release deed:
A written document stating that a seller or buyer has satisfied his or her
obligation on a debt. This document is usually recorded.
Relist:
Property that was listed with another broker but relisted with a current
broker.
Rider:
A separate document that is attached to a document in some way. This is
done so that an entire document does not need to be rewritten.
Salaried
agent : A real
estate sales agent or broker who receives all or part of his or her compensation in real
estate sales in the form of a salary.
Sale price:
The price paid for a listing or property.
Sales meetings:
An informational meeting conducted by the managing broker held in the real
estate sales office.
Sales volume:
The total amount of all sales prices for all transactions completed by a real
estate agent, broker, or real estate sales office.
Secondary market:
An institutional investment market that purchases mortgages from mortgage
lenders.
Seller (owner):
The owner of a property who has signed a listing agreement or a potential
listing agreement.
Showing:
When a listing is shown to prospective buyers or the buyer’s agent
(preview).
Sign rider:
An additional sign placed on a brokerage yard sign; it may include the agent’s
name, “open Sunday,” “contract pending,” “sold,” the new price, and so on.
Special assessment:
A special and additional charge to a unit in a condominium or cooperative. Also
a special real estate tax for improvements that benefit a property.
State Association of
REALTORS®: An association of Realtors® in a
specific state.
Supra®:
An electronic lockbox (ELB) that holds keys to a property. The user must
have a Supra keypad to use the lockbox.
Temporarily off market
(TOM): A listed property that is taken off the
market due to illness, travel, repairs, and so on.
Temporary housing:
Housing a transferee occupies until permanent housing is selected or becomes
available.
Third-party company:
A relocation company hired by an employee’s employer to coordinate the
employee’s move to a new location.
Trailing spouse:
The spouse or partner of the employee being moved to a new location by an
employer.
Transaction:
The real estate process from offer to closing or escrow.
Transaction fee:
A fixed amount in addition to commission charged to sellers for additional
services required of broker.
Transaction management fee
(TMF): A fee charged by listing brokers to the
seller as part of the listing agreement.
Transaction sides:
The two sides of a transaction, sellers and buyers. The term used to record the
number of transactions in which a real estate sales agent or broker was involved during a
specific period.
24-hour notice:
Allowed by law, tenants must be informed of showing 24 hours before you
arrive.
Under contract:
A property that has an accepted real estate contract between seller and
buyer.
VA: U.S. Department of Veterans Affairs.
VA Loan Guarantee:
A guarantee on a mortgage amount backed by the U.S. Department of Veterans
Affairs.
Vacate date:
The date on which the seller (transferee) vacates the property (generally the
date when responsibility for property expense by the transferee ends) and the third-party
company assumes ownership for the property through a buyout.
Virtual tour:
An Internet web/cd-rom
-based video presentation of a property.
Voice mail : A telephone message system where voice messages can be
retrieved directly or from a remote location.
VOWs
(Virtual Office Web sites): are an Internet based real estate brokerage
business model that works with real estate consumers in same way as a brick and mortar
real estate brokerage.
W-2:
The Internal Revenue form issued by employer to employee to reflect
compensation and deductions to compensation.
W-9:
The Internal Revenue form requesting taxpayer identification number and
certification.
Walk-through:
A showing before closing or escrow that permits the buyers one final tour of the
property they are purchasing.
Will:
A document by which a person disposes of his or her property after
death.
Work sheet
(transaction): The real estate sales company form
that records all information relevant to a transaction.
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