AGENT - A person authorized to act on behalf of another in dealings with third parties.

AGREEMENT OF SALE - A written contract detailing the terms under which a buyer agrees to buy and the seller agrees to sell.

APPRAISAL - An expert judgment or estimate of the quality and fair market value of real estate as of a given date. Usually used for qualification for the loan amount.

ARMs - Adjustable Rate Mortgages, also called variable rate mortgages. The interest rate on this loan is adjusted per a national index at pre-determined time intervals. Usually popular when loan rates are high.

ASSESSED VALUE - The value placed on property for tax purposes. Usually does not reflect fair market value.

ASSUMABLE MORTGAGE - Loan which may be passed to the next owner of the property.

BALLOON PAYMENT MORTGAGES - A fixed-rate mortgage which typically runs between 3 and 7 years and requires the unpaid portion to be paid in full at the end of the loan's term. Usually the loan is refinanced.

BROKERAGE FEE (COMMISSION) - Fee paid (usually by seller) for the broker's services in securing a buyer for the property. It is commonly a percentage of the sales price.

CERTIFICATE OF TITLE - The document that indicates rights of ownership, control and possession of property.

CLOSING (SETTLEMENT) - Conclusion of a real estate sale, at which time title transfers and necessary funds change hands.

CLOSING COSTS - Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc.

COMMISSION (BROKERAGE FEE) - Fee paid (usually by the seller) for the broker's services in securing a buyer for the property. It is commonly a percentage of the sales price.

COMPETITIVE MARKET ANALYSIS (CMA) - A method of valuing property using a study of recently sold similar properties, property that failed to sell and other property currently on the market.

CONTRACT - A legally enforceable agreement to do (or not do) a particular thing.

CONVEY - A deed or transfer title of property from one person to another.

DEED - A formal deed or transfer title of property from one person to another.

DEED OF TRUST (MORTGAGE) - A document by which title to property is held for security by a third party until a debt is paid.

EARNEST MONEY - The money given to the seller by the potential buyer upon the signing of the agreement of sale to show that the buyer is serious about buying the house. Also known as deposit. Not usually refundable.

EARNEST MONEY AGREEMENT - Otherwise called the Purchase and Sales Agreement. A contract indicating the buyer's intent to complete the sale. Usually requires a non-refundable deposit. Guarantees that the seller cannot sell to another buyer.

EASEMENT - A right afforded to a person to make limited use of another's real property.

ESCROW - Funds given to a third party to be held pending some occurrence. May refer to earnest money, funds collected by a lender for the payment of taxes and insurance charges, funds withheld at closing to ensure uncomplicated repairs or in some states, the entire process of closing.

EQUITY - A homeowner's share of the market value of their property after mortgage debt and other liens.

FAIR MARKET VALUE - Price that probably would be negotiated between a willing seller and willing buyer in a reasonable time. Usually arrived at by comparable sales in the area.

FHA - Federal Housing Administration, which insures mortgages to protect the lending institution in the case of the default on the loan.

FHA LOAN - The Federal Housing Administration offers fixed-rate mortgages on low-cost housing. An FHA loan requires a down payment and approval from an authorized appraiser. Any U.S. resident is eligible low income is not a prerequisite.

GRADUATED PAYMENT MORTGAGES - A fixed-rate mortgage with monthly payments increasing gradually over the life of the loan, allowing the borrower to "grow into" the mortgage as his income increases.

GROWING EQUITY MORTGAGE - Similar to the Graduated Payment Mortgage, but for a shorter term, usually 15 years.

HAZARD INSURANCE - Pays for damages from fire, storms, etc. Also known as "Homeowner's Insurance."

LIEN - A claim against property for the payment of a debt, i.e., unpaid taxes, mortgage, or judgments.

LISTING AGREEMENT - Contract between a property owner and a real estate broker, authorizing the broker to find a buyer.

MARKET PRICE - The actual amount for which property is sold. Also called sale price or purchase price.

MARKET VALUE - The highest price which a buyer would pay and the lowest price a seller would accept.

MORTGAGE - The legal document pledging the property as a security for debt.

MORTGAGOR - The lender.

MULTIPLE LISTING SERVICE (MLS) - An arrangement by which the brokers work together on the sale of each others' listed homes with shared brokerage fees (commissions).

ORIGINATION FEE - A fee made by a lender for making a real estate loan. Usually a percentage of the amount loaned.

P.I.T.I - An abbreviation for principle, interest, taxes and insurance, often lumped together in a monthly mortgage payment.

PMI (PRIVATE MORTGAGE INSURANCE) - Insurance written by a private company protecting the mortgage lender against loss occasioned by a mortgage default.

POINT - One percent of a loan amount, paid in a one-time lump sum to the lender.

PRE-PAYMENT PENALTY - A charge levied by the lender to the borrower for paying off a mortgage before its maturity date.

PRO-RATE - To allocate between the seller and the buyer their proportionate share of an obligation paid or due. Examples include property taxes, fire insurance or condominium fee.

STATUTORY WARRANTY DEED - Deed that guarantees that the property title is good and marketable.

SURVEY - A map made by a licensed surveyor who measures the land and charts its boundaries, improvements and relationship to the property surrounding it.

TITLE - The document that indicates rights of ownership, control and possession of property.

TITLE ABSTRACT - A summary of the public records relating to a title on a piece of land.

TITLE COMPANY - A company that specializes in examining and insuring titles to real estate.

TITLE INSURANCE - A policy protecting the insured against loss or damage due to defects in title records (generally at the local courthouse) to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims.

TRANSFER TAX - State tax, local tax (where applicable) and tax stamps (where applicable) required by law when title passes from one owner to another.

VA LOAN - A home financing benefit of Veterans' Administration.