Does some of the real estate jargon thrown around confuse you? Do you know what a closing disclosure or PMI is? No worries! Mr. Z does and has included some of the most common here.

Active — A property that is on the market and available for sale. It may have received offers but none have been accepted.

ARM — Adjustable-Rate Mortgage. A mortgage loan with a fluctuating interest rate.

APR — Annual Percentage Rate. APR is a broader measure of the cost of borrowing money. It reflects not only the interest rate but also points, fees and other charges paid to obtain a loan.

Appraisal — An estimate of the market value of a property based on comparable recent sales of homes nearby. It is done by a licensed appraiser for a lender.

Appraised Value — An appraised value of a property is the value of a property based on a given point in time. The evaluation is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower.

Arms-Length Transaction — Both parties to a transaction are acting in their own self-interest. Neither party is pressured by or acts in connection with the other to assure the fair market value of the property.

Assessed Value — An estimate of the home’s value for property tax purposes.

Closing Costs — The expenses and fees associated with the purchase and sale of a home, such as taxes, title insurance, appraisal fees and lender fees.

Closing Disclosure — A final statement of loan terms and closing costs. The buyer must receive it three business days before closing. Replaced the old HUD-1 form.

Commission — A fee charged by a real estate agent for his services. In many cases, the seller pays the commission to his agent as well as the buyer’s agent.

Contingency — A condition that must be met before a sale can close. Common contingencies include home inspection, financing and home appraisal.

DTI — Debt-to-Income. The total percent of a borrower’s income that is paid toward debt each month calculated as a ratio of a borrower’s gross monthly income over his debts including car payments, student loans and credit card bills. A borrower’s DTI affects his credit rating.

Deed — A legal document filed with the county that records homeownership.

Down Payment — The amount of money a buyer pays at closing toward a home purchase.

Earnest Money Deposit — A partial payment by a buyer when submitting a contract that demonstrates the buyer’s commitment to the deal. The money, which is held in an escrow account, goes toward closing costs.

Equity — The amount remaining after subtracting the amount of a mortgage loan from the sales price of the home.

Escalation Clause — A tool used by buyers to outbid competitors for a property. In the contract offer submitted by the buyer to the seller, the buyer states he will increase his offer by a certain amount if the seller receives offers higher than his.

Escrow — A neutral or third party who handles the exchange of money and documents on behalf of two other parties before the closing of a sale.

Fixed-Rate Mortgage — A mortgage loan with an interest rate that won’t change during the length of the loan.

FSBO — For Sale By Owner. The owner of the property is selling without a real estate agent.

Home Inspections — There are several types of home inspections. A home inspection is a limited, non-invasive examination of the condition of a home, often requested by the buyer in connection with the purchase of that home. The home inspector describes the condition of the home in a written report at the time of inspection but does not guarantee future condition, efficiency, or life expectancy of systems or components.

Listing — Property for sale that is listed on the multiple listing service. A FSBO is not a listing.

LTV — Loan-to-Value. The ratio of the amount of money borrowed over the appraised value of the home. It is a key risk factor that lenders consider when evaluating a loan application.

Millennials – Millennials are a generational group of people also known as “Generation Y”.  While some researchers define this group as born between 1981 to 1996, others claim that this group was born between the years of 1982 and the year 2002.  No matter what the years, they are considered to be among the most privileged generation on Earth, since they were born at a time of great technological advancement and general education.  As previously stated, Millennials are sometimes referred to as Generation Y, since they come immediately after Generation X. Millennials are said to be more technologically advanced because they were born in environments characterized by things, such as cell phones, computers, airplanes and televisions.

MLS — Multiple Listing Service. A local or regional real estate service that compiles available properties for sale submitted by real estate brokers and agents. An MLS can only be accessed by real estate brokers and agents.

Pending — An offer has been accepted, a contract has been executed and the contingencies have been met.

Points — A one-time fee paid to a lender equal to 1 percent of the loan amount to reduce the interest rate.

Preapproved — A buyer completes an application, pays a fee and supplies the necessary documentation to the lender who performs an extensive financial background check. The lender will issue a conditional commitment in writing for an exact loan amount. Preapproval does not guarantee a loan.

Prequalified — An informal estimate of how much a buyer can afford to borrow for a mortgage. It does not include an analysis of a buyer’s credit report or an in-depth look at his ability to purchase a home.

Prequalification Letter — A written document from a lender that specifies how much the lender is willing to lend to you, up to a certain amount based on certain assumptions. These letters provide useful information, but are not guaranteed loan offers.

PITI — Principal, Interest, Taxes and Insurance. The major homeownership costs included in many monthly mortgage payments.

PMI — Private Mortgage Insurance. Insurance that protects a lender against loss if a borrower defaults on a loan. PMI is required for conventional loans that have less than a 20 percent down payment.

Rate Lock — An agreement between a borrower and a lender that allows the borrower to lock in an interest rate on a mortgage for a specified period of time.

Remedy Request— A residential, real estate remedy request is a list of items to be repaired and/or replaced by the seller, prior to the closing, requested by the buyer based on a report from the buyer’s home inspection.

Title Insurance — Compensates the buyer or lender if title defects, liens or competing claims of ownership on a property arise after closing.

Show Status — When a listing indicates “SHOW STATUS”, it means the Seller has accepted an offer with deposit (EMD) on their property. It also tells potential Buyers that the Seller is willing to allow others to view the property for backup offers, should the accepted offer be canceled, for any number of reasons.

SMART HOME REALTOR – 

A smarthome REALTOR is a Professional, Licensed REALTOR who has studied smarthome technology, knows what types of devices are considered smarthome devices and has the knowledge and experience to advise his/her clients as to the most efficient applications for their home and lifestyle.

As more people are discovering smartphone mobile apps to remotely automate and efficiently control their daily activities & home environments,   smarthome devices are becoming increasingly main stream.    With the proper technological training and experience, Your smarthome REALTOR is able to educate their clients as to the benefits & value of incorporating smarthome technology devices into their homes.  Starting with a simple device such as an AMAZON ECHO SPOT, GOOGLE HOME or APPLE Home – APPLE HomeKit, one is entering the world of smarthome technology.  Once you have a smarthome HUB, your options to connect devices to be controlled remotely with your smartphone or locally, on site, are only limited by your imagination and budget.

SMART HOME Technology – SMART HOME Technology promises to make your living space more comfortable, more convenient and more secure.  Mr. Z can help you better understand what it is and help you find the right gadgets and devices for your lifestyle, budget and home.

What is a SMART HOME?

A property that is equipped with products or tools that aid in controlling functions such as temperature, lighting, security, safety, appliances and entertainment either remotely via a phone, tablet, computer or with a separate automatic system within the property itself.  -CNET

Under Contract — A seller has accepted the buyer’s offer but any contingencies have yet to be met.