Real Estate Glossary — A to Z

A summary of the history of ownership of a property — every deed, mortgage, lien, and legal action recorded against it. Your title company reviews this to ensure the seller has the legal right to sell, and that you'll receive "clear title."

A mortgage where the interest rate changes periodically after an initial fixed period (e.g., 5/1 ARM = fixed for 5 years, then adjusts annually). Lower initial rate than a fixed mortgage, but carries rate risk if rates rise. Common in rising-rate environments.

The process of paying off a loan through scheduled payments over time. Early payments are mostly interest; later payments are mostly principal. A 30-year amortization schedule means it takes 30 years to pay the loan to zero.

A licensed appraiser's professional opinion of a property's market value. Your lender orders it to confirm the home is worth at least what you're borrowing. If the appraisal comes in below the purchase price, you'll need to renegotiate or pay the difference in cash.

The seller will make no repairs and the home is sold in its current condition. Buyers can still do an inspection — they just cannot require repairs. Common in estate sales, foreclosures, or when a seller wants a quick close.

An offer submitted on a home that already has an accepted offer. The backup offer becomes active if the primary contract falls through. A smart strategy in competitive markets when you love a specific property.

A short-term loan that bridges the gap when you're buying a new home before your current one sells. Allows you to make a non-contingent offer. Higher interest rates, but gives you purchasing power without waiting.

A real estate agent who represents the buyer exclusively. Their fiduciary duty is to you — not the seller. In most NY transactions, the buyer's agent commission is paid by the seller, so using one costs you nothing while giving you full representation.

A market with more homes for sale than active buyers. Prices are lower, homes sit longer, and buyers have more negotiating power. The opposite of a seller's market. Currently, Albany is a seller's market (2026).

A property with no liens, disputes, or legal claims against it. You need clear title to close on a purchase. Title insurance protects you if a problem surfaces after closing.

The final step where all documents are signed, funds are transferred, and ownership changes hands. In New York, closing typically happens at an attorney's office. You'll bring your down payment and closing costs (usually via wire or certified check).

Fees paid at closing beyond the purchase price. For buyers in New York: typically 2–5% of the loan amount (attorney fees, title insurance, lender fees, prepaid taxes/insurance). Sellers pay their own closing costs plus the broker commission.

A report prepared by a real estate agent comparing recent sales of similar homes in the area to estimate the current market value of a specific property. Sellers use it to price their home; buyers use it to craft competitive offers. Different from an appraisal — done by an agent, not a licensed appraiser.

A condition that must be met for the sale to proceed. Common contingencies: financing (you need a mortgage), inspection (satisfactory home inspection), and appraisal (home must appraise at or above purchase price). Waiving contingencies is risky but sometimes necessary in competitive markets.

A mortgage not backed by a government agency (unlike FHA, VA, or USDA loans). Typically requires a minimum 620 credit score and 3–20% down payment. Less restrictive on property condition than FHA loans.

A seller's response to a buyer's offer that changes one or more terms (price, closing date, contingencies). Negotiations typically go back and forth through counter-offers until both parties agree or walk away.

The number of days a home has been listed for sale on the MLS. A low DOM suggests a hot property or competitive market. A high DOM can signal overpricing or issues with the home — both are negotiating leverage for buyers.

The legal document that transfers ownership of a property from seller to buyer. Recorded with the county clerk's office after closing. Different from a mortgage (which is a debt instrument).

The upfront cash payment you make toward the purchase price. The lender covers the rest. In New York, you can buy with as little as 3% down (conventional) or 3.5% (FHA). A larger down payment reduces your monthly mortgage and eliminates PMI at 20%.

The buyer's period to investigate the property — inspections, title search, reviewing disclosures, researching zoning. In New York, this largely happens between accepted offer and signed contract.

A deposit (typically 1–3% of purchase price) made by the buyer to show serious intent. Held in escrow by the attorney or brokerage. Applied toward your down payment at closing. You may lose it if you back out without a valid contingency.

A right for someone else to use part of your property for a specific purpose — a utility easement allows the power company to access their lines; a shared driveway easement allows a neighbor to cross your land. Easements run with the land and transfer with ownership.

The difference between your home's market value and what you owe on your mortgage. If your home is worth $350,000 and you owe $200,000, you have $150,000 in equity. Equity builds through appreciation and mortgage paydown.

A neutral third party that holds money or documents until conditions are met. In a home purchase, your earnest money is held in escrow. Your lender also collects property taxes and insurance into an escrow account and pays them on your behalf.

A mortgage insured by the Federal Housing Administration. Minimum 3.5% down with 580+ credit score; 10% down with 500–579 credit. Requires mortgage insurance (MIP) regardless of down payment. Great for first-time buyers with less cash saved.

A mortgage where the interest rate stays the same for the entire loan term (15 or 30 years). Your principal and interest payment never changes. Offers predictability and protection against rate increases. Most common loan type for primary residences.

A legal process where the lender takes ownership of a property after the borrower fails to make payments. Foreclosure homes can be purchased at auction or as REO (bank-owned) properties, often below market value but sold strictly as-is.

Now called the Loan Estimate — a lender-provided document showing the estimated costs of your mortgage, including rate, monthly payment, and closing costs. Must be provided within 3 days of your loan application. Shop multiple lenders and compare these.

A visual examination of a property's condition by a licensed inspector — roof, foundation, electrical, plumbing, HVAC, and more. A standard buyer contingency in New York. Results are used to negotiate repairs or credits, or to walk away if issues are severe.

An organization in planned communities or condo buildings that sets rules and collects fees for shared maintenance. HOA fees vary widely — $100 to $800+/month. Review HOA bylaws, financials, and minutes before purchasing in any HOA community.

Now replaced by the Closing Disclosure — a detailed breakdown of all funds exchanged at closing. Review it carefully against your Loan Estimate before your closing date.

A clause that allows the buyer to conduct a home inspection and either request repairs, negotiate a price reduction, or walk away if the inspection reveals unacceptable issues. One of the most important buyer protections in a purchase contract.

The interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus lender fees, making it the true cost of the loan. Always compare APRs when shopping mortgages — not just the rate.

A mortgage that exceeds the conforming loan limit set by Fannie Mae/Freddie Mac (currently $766,550 in most NY counties for 2026). Jumbo loans have stricter qualification requirements — typically 700+ credit score and 10–20% down.

A legal claim against a property for unpaid debts — property taxes, contractor work, court judgments. Liens must be paid off or resolved before a property can be sold with clear title. Your title company searches for liens before closing.

The real estate agent who represents the seller. Their fiduciary duty is to the seller — to get the highest price and best terms. If you're a buyer, you need your own agent (buyer's agent) for independent representation.

The ratio of your mortgage amount to the appraised value of the home. An 80% LTV means you're borrowing 80% and putting 20% down. LTV affects your interest rate and whether you need PMI — lower LTV = better terms.

The price a buyer and seller agree on in an arm's-length transaction — what the market will actually bear. Different from assessed value (used for taxes) or list price (what the seller asks). A CMA helps establish market value.

A database where real estate agents share listings. When Asad lists your home on the MLS, it syncs to Zillow, Realtor.com, Trulia, and hundreds of other sites automatically. Buyers working with agents have MLS access for the most current, accurate listings.

A lender's written commitment (subject to appraisal and final underwriting) to lend you a specific amount at a specific rate. Stronger than pre-qualification — requires income, asset, and credit verification. Essential before making offers in any competitive market.

What the seller actually receives after paying off the mortgage, agent commissions, closing costs, and any other liens. Your net proceeds sheet should be reviewed before listing — Asad provides this as part of his free seller consultation.

A written proposal from a buyer to purchase a property at a stated price and terms. In New York, a purchase offer is typically non-binding until both parties sign a formal purchase contract prepared by attorneys.

The four components of a monthly mortgage payment: Principal, Interest, Taxes (property), and Insurance (homeowners). Lenders calculate your debt-to-income ratio using your full PITI payment, not just principal and interest.

Insurance that protects the lender (not you) if you default. Required on conventional loans with less than 20% down. Typically 0.5–1.5% of the loan amount annually. Automatically cancels when your LTV reaches 78% based on original value.

An informal estimate of how much you might be able to borrow, based on self-reported income and credit. Not the same as pre-approval — no documentation is verified. Most sellers in a competitive market want to see a pre-approval, not just pre-qualification.

The original loan amount — what you actually borrowed, separate from interest. Each mortgage payment reduces the principal (paydown) and pays interest. In early years, most of your payment is interest; in later years, most is principal.

An annual tax levied by local governments based on the assessed value of your home. In New York, property taxes vary widely by municipality and school district. Albany County taxes can be a significant expense — always verify the annual tax amount before purchase.

The legally binding document signed by buyer and seller once all terms are agreed upon. In New York, this is drafted by attorneys after the initial offer. It specifies price, contingencies, closing date, what's included, and all other terms of the sale.

A deed that transfers whatever interest the grantor has in a property — without any warranties of title. Common in divorce transfers, adding a family member to title, or correcting a name on a deed. Not used in standard sales because it provides no title guarantee.

A licensed real estate agent who is a member of the National Association of Realtors (NAR) and is bound by its Code of Ethics. Not all real estate agents are Realtors, though the terms are often used interchangeably. Asad is a licensed NYS real estate salesperson.

Replacing your existing mortgage with a new one — typically to get a lower interest rate, reduce your monthly payment, change loan terms, or access equity (cash-out refinance). Comes with closing costs, so calculate your break-even point before refinancing.

A document where the seller discloses known material defects about the property — leaks, pest problems, past flooding, structural issues, etc. Required in New York. Buyers can credit $500 instead of providing the disclosure, but this is a red flag.

A market where demand from buyers exceeds the supply of homes for sale. Sellers have the advantage — multiple offers, above-asking prices, and fewer concessions. Albany and the Capital Region has been a seller's market since 2020.

When a home sells for less than what the owner owes on the mortgage, with lender approval. The lender agrees to accept less than the full payoff. Short sales take longer (bank approval required) and are sold as-is, but can be good value for buyers who are patient.

Insurance that protects against past title defects that weren't caught in the title search — a forged deed, an undisclosed heir, unpaid liens. There are two policies: lender's title insurance (required by your bank) and owner's title insurance (optional but strongly recommended). A one-time premium paid at closing.

A tax on the transfer of real property. In New York, the state imposes a basic transfer tax of $2 per $500 of consideration (0.4%), plus additional NYC taxes if applicable. In most Capital Region transactions, the seller pays the transfer tax as part of closing costs.

A property with a signed purchase contract between buyer and seller — the sale is in progress but not yet closed. The home may still show as "active" on some sites, but it is not available. Sometimes called "accepted offer" or "pending."

The process by which a lender verifies all your financial information and the property to approve your mortgage. The underwriter reviews income, employment, assets, credit, and the appraisal. Can take 1–3 weeks. A "clear to close" from underwriting means your loan is approved.

A mortgage benefit for eligible veterans, active-duty military, and surviving spouses. No down payment required, no PMI, and competitive interest rates. One of the best mortgage products available. Must purchase through a VA-approved lender.

A final inspection of the property typically done within 24–48 hours of closing. The buyer confirms the home's condition matches the contract — seller has vacated, agreed repairs are done, and nothing has changed since the inspection.

The most common type of deed in home sales — the seller guarantees they have clear title and the right to sell, and will defend the buyer against any future title claims. Stronger protection than a quitclaim deed.

Local regulations that govern how land can be used — residential, commercial, industrial, or mixed-use. Zoning determines what you can build, the size of structures, setbacks from property lines, and whether you can run a business from your home.