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Glossary of MA Real Estate Terms


Active Status: Most MLS systems use specific status to show if a home is available. Active means the home is available and has no accepted offers on it. Active/backup means the home has an accepted offer, but the seller is accepting backup offers. Pending means the home has an accepted offer and the seller is not accepting backup offers. The status meaning can vary by MLS.

Adjustable Mortgage Loans:  Mortgage loans under which the interest rate is periodically adjusted. The amounts and times of adjustment are set at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARMs), Flexible Rate Loans and Variable Rate Loans.


Amenity: A feature of a home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural ( such as location, woods, water) or man-made ( such as a garden or patio).


Amortization:  Payment of a debt in equal installments of principal and interest, rather than interest-only payments.


Annual Percentage Rate (A.P.R.): The yearly interest percentage of a loan, as expressed by the total finance charge actually paid (interest, loan fees, and points). The A.P.R. is disclosed as a requirement of federal truth in lending statutes.


Appraisal: A document that gives an estimate of a property's fair market value; an appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property.


Assessed Value: The valuation placed on a property by a public tax assessor for purposes of taxation.


Assignment: Is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee.


Attached home: Any property that is attached to another property. This could be half of a duplex, a condo or town home, which is attached to another unit.


Backup Offer: A backup offer can be accepted by the seller but will not go into effect unless the current offer terminates.

Broker: A real estate broker has different definitions in different states. Usually a broker has more experience and education than an agent, which allow them to work independently or manage an office of agents. In most states real estate agents who are not brokers must work under a broker.


Buydown: A payment to the lender from the seller, buyer, or third party, or some combination of these, which causes the lender to reduce the interest rate during the early years of the loan.


Buyer's Agent: An agent who represents the buyer and owes fiduciary duties to the buyer


Cap: In adjustable rate mortgages, the limit on how much the interest rate or monthly payment can change.


Central Air Conditioning: Circulate cool air through a system of supply and return ducts.


Client: The party for which professional services are rendered. In real estate, a buyer or seller to whom an agent owes all the fiduciary responsibilities of obedience, loyalty, disclosure, confidentiality, accountability and reasonable care.


Closing: The final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed.

Closing Costs: Expenses over and above the price of the property in a real estate transaction. Costs incurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.


Closing Statement: The statement which lists the financial settlement between buyer and seller, and the costs each must pay to close the transaction.


CMA: CMA, or Comparative Market Analysis, is a comparison of homes similar to a seller's home in terms of size, style, features, and location that has sold recently or are on the market.

Commercial Real Estate: Properties that are used for commercial purposes: stores, offices, etc.


Commissions: A fee paid to a broker / salesperson in exchange for services in facilitating or completing a sale transaction.

Condominium: A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title.


Contingency: Commonly, a stated event which must occur before a contract is binding. For example, a home sale may be contingent upon the buyer obtaining financing.


Counter Offer: The seller can accept, reject or counter an offer. When they counter an offer, the seller can change the price, dates, contingencies, or many other terms. Any changes the seller wants must be listed in the counter

Covenants: Most HOAs have covenants which are rules the properties within the HOAs must follow. They could cover parking, size of the home, out buildings and much more.

Deposit: A portion of the down payment given by the buyer to the seller or escrow agent with a written offer to purchase to show good faith.


Designated Agency: A brokerage practice whereby the Designating Broker assigns or designates a single agent to be the sole representative for a buyer or a seller. As such, no other agents of the firm will represent the buyer's or seller's best interests.


Designated Agent: A real estate licensee who as been appointed by a Designating Broker to be the sole and exclusive representative for a buyer or seller.


Disclosure: What a seller has to tell the buyer of a home. They must disclose any material facts that are known.



Double Closing: The simultaneous purchase and sale of a real estate property involving three parties: the original seller, an investor (middleman), and the final buyer.


Down Payment: Cash portion of the purchase price paid by a buyer from his own funds as opposed to that portion which is financed.


Dual Agent: An agent representing both the buyer and the seller in the same transaction.


Dual Agency: The occurrence of an agent representing both the buyer and the seller in the same transaction. In this arrangement, the dual agent will not be able to satisfy all of his fiduciary responsibilities to either party


Earnest Money Deposit: The money needed for a deposit to buy a property. This can be refundable under certain circumstances based on inspection, loan approvals, appraisal and other contingencies.


Easement: A right to cross or otherwise use someone else’s land for a specified purpose.

Escrow: A procedure in which a third (neutral) party holds all funds, documents, etc. necessary to the sale, with instructions from both buyer and seller as to their use and disposition.


Equity: A home owner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owned on the mortgage and other liens.


Exclusive Listing: A written contract that gives a licensed real estate agent the exclusive right to market a property for a specified period of time.


FHA Loan: A loan insured by the Federal Housing Administration, a part of the Department of Housing and Urban

Development. FHA insurance enables lenders to loan a very high percentage of the sale price.


Fiduciary Relationship: A relationship of trust and confidence, as between trustee and beneficiary, attorney and client or principal (client) and agent.


Forced Air Heat: One which uses air as its heat transfer medium. These systems rely on ductwork, vents, and plenums as means of air distribution, separate from the actual heating and air conditioning systems.

Foreclosure: If a homeowner stops making payments on their loan, the bank can take the home back. The foreclosure process is different in every state in regards to how the bank takes possession of a home.

Graduated Payment Mortgage: Referred to as GPM, is a mortgage with initial low monthly payments which gradually increase over a specified period of time.


Green Glossary: A glossary of real estate related environmental terms.

Habitable: Suitable or good enough to live in.

Hard Money: A loan typically used for fix and flips that is short (6 months to 18 months usually). Hard money loans normally have interest rates from 10 to 16


Hazard Insurance: Otherwise known as homeowners insurance. This is a usual requirement of a mortgage lender and an advisable safeguard for any homeowner to protect against loss.


HOA: Home Owners Association. HOAs are present in most newer subdivisions and regulate neighborhood ordinances or covenants. They may also take care of yard maintenance, common utilities, trash service and other services for a monthly, quarterly or yearly fee.


Hold Harmless Agreement: An agreement or contract in which one party agrees to hold the other free from the responsibility for any liability or damage that might arise out of the transaction involved.

Home Inspection: A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included in a contingency by the purchaser.


Home Owner's Insurance: An insurance policy that combines protection against damage to a dwelling and its contents with protection against claims of negligence or inappropriate action that results in bodily injury or property damage


Hot Water Heat: Central heating by means of hot water circulated through pipes or radiato


Index or Rate Index: A measure of interest rate changes used to adjust the interest rate of an Adjustable Mortgage Loan. Example: the change in U.S. Treasury securities (T-bills) with a 1-year maturity, based upon their weekly average yield.

Inspection: Most contracts allow a buyer to conduct an inspection on a home, which allows the buyers to look for problems or code violations.


Lien: A legal claim or charge on property as security for payment of a debt or for the discharge of an obligation.


Loan-to-Value Ratio: The ratio - expressed as a percentage - of the amount of a mortgage loan to the appraised value or selling price of the property.


Lockbox: A key storage system placed on a home entrance that is accessible only by active, licensed real estate agents who must abide by a strict set of guidelines when showing a seller's home.


Margin: In Adjustable Rate Mortgage Loans, the number of percentage points the lender adds to the index rate to determine the new interest rate at each adjustment.


Mixed Use Real Estate: Properties that are used for a variety of uses, usually residential and commercial.


MLS: MLS stands for multiple listing service, a data sharing service of cooperating members that facilitates the sale of each others listings.


Multifamily: A multifamily or multi-unit property has more than one unit on the same property. An apartment complex or a duplex could be multifamily if they are on the same lot.


New Construction: Refers to site preparation for, and construction of, entirely new structures whether or not the site was previously occupied.

Offer: Indication by a potential buyer of willingness to purchase a home at a specific price, terms, and conditions, generally put forth in writing.


PITI: Principal, Interest, Taxes, and Insurance. Used to indicate the four major items included in a monthly mortgage payment.


Points: A fee charged by a lender as a service charge or as an amount needed to make the yield on a mortgage competitive with other types of investments. Each point represents 1% of the loan amount.


Principal: Amount of debt, not including interest; the face value of a loan.


Private Mortgage Insurance: Insurance issued by a private company against a loss by the lender in the event of default. Private mortgage insurance is generally required for conventional financing whenever less then 20% is put down.


Purchase and Sale Agreement: A detailed written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.


Real Property: Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.


Realtor: A Realtor belongs to the National Association of Realtors (NAR) and is also a licensed real estate agent. NAR is a trade association for agents.


Recording Fees: The fee charged by a government agency for registering or recording a real estate purchase or sale, so that it becomes a matter of public record. Recording fees are generally charged by the county.


Residential Real Estate: Properties that are zoned for residential use. You may not be able to legally run a business out of them.

REI: Real Estate Investors


Senior Living: Some subdivisions are designated for seniors only, usually 65 or older. Only people who are seniors are able to buy or rent properties in those areas.


Septic System: A septic system is a type of OWTS (Onsite wastewater treatment system).

Settlement Statement: Is an itemized document of services and charges relating to the closing of a property.


Second Mortgage: A mortgage which ranks after the first mortgage lien in priority.


Seller's Agent: An agent who represents the seller and owes a fiduciary duty to the seller.


Settlement: Same definition as closing.


Short Sale: A short sale is when the mortgage company allows a homeowner to sell a house, but pay less to the mortgage company than what they are owed. Mortgage companies allow this in some cases when the homeowners are behind on payments because it is faster and cheaper than a foreclosure.


Staging: Is the act of preparing a private residence for sale in the real estate marketplace. The goal of staging is to make a home appealing to the highest number of potential buyers.

Survey: A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.


Title Insurance: Insurance against loss resulting from defects of title of public records.


Townhouse: A townhouse is like a condo but there aren’t any neighbors above or below the unit.

Turn-key Rental Property: A fully renovated home or apartment building that an investor can purchase and immediately rent out.

Under Contract: A home goes under contract when a buyer and seller accept a contract. A new buyer cannot buy a home that is under contract unless the accepted offer terminates.


Underwriting: The process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower's credit history and judgment of the property value.


VA Loans: Loans partially guaranteed by the Veteran's Administration, enabling veterans to buy a home with little or no down payment.

Wholesaling: A real estate wholesaler contracts with a home seller, markets the home to his potential buyers, and then assigns the contract to the buyer.


Zoning: How the city, state or county classifies the use of land.

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