Glossary

ABR®: Accredited Buyer’s Representative

AHWD®: At Home With Diversity

CBR: Certified Buyer Representative

CDPE: Certified Distressed Property Expert

CIPS®: Certified International Property Specialist

CRB: Certified Real Estate Brokerage Manager

CRS: Certified Residential Specialist

CSN: Certified Skilled Negotiator e-PRO®: Technology specialist GREEN: National Association of REALTORS® Green designation

GRI: Graduate of the REALTOR® Institute

RSPS: Resort and Second Property Specialist

SFR: Short Sales and Foreclosure Resource

SRES: Seniors Real Estate Specialist

Acceptable Offer (A/O): A non- binding agreement between buyer and seller, or tenant and landlord, as to the price, terms and conditions for a real estate sale or lease. A “meeting of the minds,” when all parties agree to the exact terms.

Adjustments: Divisions of financial responsibility between a buyer and a seller (also called prorations).

Agency: That relationship wherein an agent is employed by a principal to do certain acts on the principal’s behalf.

Agent: One who undertakes to transact some business or to manage some affair for another by authority of the latter.

Americans with Disabilities Act (ADA): Federal law requiring reasonable accommodations and accessibility to goods and services for persons with disabilities.

Amenities: Elements of a property or its surroundings that contribute to its attractiveness to potential buyers and to owner satisfaction.

Appraisal: An estimate of a property’s valuation by an appraiser who is usually presumed to be expert in this work.

Appraiser: An independent person trained to provide an unbiased estimate of value.

Assessed Value: A valuation placed on a property by a public officer or a board as a basis for taxation.

Assessment: The imposition of a tax, charge, or levy, usually according to established rates.

Associate Broker:  A broker who chooses to work as a salesperson under the name and supervision of another broker.

Broker: One who buys and sells for another for a fee.

Brokerage: The business of buying and selling for another for a fee.

Broker’s Agent: A broker who assists the listing broker in marketing a property under a formal agency agreement.

Building Codes: Regulations established by State and local governments fully stating the structural requirements for building.

Building Permit: Written permission from the local government to build or alter a structure.

Buyer Agency: An agency relationship in which the broker/agent represents the interest of the buyer.

Buyer’s Broker: A broker who has entered into an agreement to represent a buyer in finding a suitable property.

Capital Expense: Money spent on permanent improvements that add value to property.

Capital Gains: Profits realized from the sale of assets such as real estate.

Caveat Emptor: A Latin phrase meaning, “Let the buyer beware.”

Certificate of Compliance(C of C): Verification that a construction project meets certain standards, primarily safety-related.

Certificate of Occupancy(C of O): Document issued by a municipal authority stating that a building complies with building, health, and safety codes and may be occupied.

Certificate of Title: A statement of opinion of title status on a parcel of real property based on an examination of specified public records.

Chain of Title: The conveyance of real property to one owner from another reaching back to the original grantor.

Client: The principal.

Commission: Payment to a broker for services rendered, such as in the rental, sale or purchase of real property.

Comparables(Comps): Properties listed in an appraisal report that are substantially equivalent to the subject property.

Comparative Market Analysis (CMA): A study, intended to assist an owner in establishing listing price, of recent comparable sales, properties that failed to sell and properties presently on the market.

Condominium: The absolute ownership of an apartment or unit (generally in a multiunit building) plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium owners.

Confidentiality: An agent’s duty to keep the principal’s information confidential.

Contingency: A provision in a contract that requires that a certain act be done or a certain event occur before the contract becomes binding.

Contract: An agreement entered into by two or more legally competent parties by the terms of which one or more of the parties for a consideration undertakes to do or refrain from doing some legal act or acts.

Cooperating Broker: A broker other than the listing broker who is involved in a real estate transaction.

Co-operative (Co-op): A residential multiunit building where titles are held by a corporation owned by and operated for the benefit of persons living within the building, who are, the stockholders of the corporation, each possessing a proprietary lease.

Counter-offer: A new offer made as a reply to an offer received.

Credit: On a closing statement, an amount entered in a person’s favor.

Curb Appeal: Common term for everything that perspective buyers can see from the street.

Debit: On a closing statement, a charge or amount a party owes and must pay at closing.

Deed: A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

Default: The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due.

Disclosure: A broker is responsible for keeping a principal fully informed of all facts that could affect a transaction. If a broker fails to disclose such information, he or she may be liable for any damages that result.

Down Payment: The amount of cash that a purchaser will pay at closing.

Dual Agency: Representing both parties in a transaction.

Due Diligence: A fair and responsible degree of care.

Earnest Money Deposit: Money deposited by a buyer under the terms of a contract, to be applied to the purchase price if the sale is closed.

Easement: A right to use the land of another for a specific purpose, as for a right-of-way or utilities; an incorporal interest in land. An easement appurtenant passes with the land when conveyed.

Easement by Necessity: An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor’s land.

Equity: difference in dollars between a house’s anticipated sale price and the mortgage plus other liens.

Exclusive-Right-To-Represent: The most common form of buyer agency agreement.

Exclusive-Right-To-Sell Listing: A listing contract under which the owner appoints a real estate broker as his or her exclusive agent and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner or another broker.

Executed Contract: A contract in which all parties have fulfilled their promises and thus performed the contract.

Fair Market Value: The highest price that an informed buyer will pay, assuming there is not unusual pressure to complete the purchase.

Fiduciary: One in whom trust and confidence is placed; a reference to a broker employed under the terms of a listing contract or buyer agency agreement.

First Substantive Contact: The point at which agents must disclose and obtain signed acknowledgements of their agency relationships.

Highest and Best (Sealed Bids): The time at which a seller will ask one or more potential buyers to provide their highest and best price, term and conditions to buy a property.  Buyers should not expect a second opportunity to make an offer nor should they expect a counteroffer.

Inspection: formal survey on a home’s structure and systems, often performed by a licensed professional.

Interest: Charge paid to a lender for borrowed money.

Lease-Purchase Agreement: Agreement between a tenant and a landlord that a portion of monthly rent may be credited toward eventual purchase of the rental property.

Lessee: Tenant

Lessor: Landlord

Listing Agent: The broker with whom the seller enters into a valid listing agreement for the sale of his or her real estate.

Loyalty: The fiduciary duty that requires and agent to put the principal’s interest above all others, including the agent’s.

Market Price: The actual selling price of a property.

Market Value: The probable price a ready, willing and informed buyer would pay and a ready, willing and informed seller would accept.

Memo of Sale(Purchase Memo): A nonbinding information sheet prepared by brokers in some NY localities that states the essential terms of the agreement.

Mortgagee: A lender in a mortgage loan transaction.

Mortgagor: A borrower who conveys his or her property as security for a loan.

Multiple-Listing Service: A marketing organization composed of member brokers who agree to share their listings with one another in the hope of procuring ready, willing and able buyers more quickly and efficiently.

Obedience: The agent’s fiduciary duty to obey all lawful instructions from the principal.

Offer and Acceptance: Two essential components of a valid contract; “a meeting of the minds,” when all parties agree to the exact terms.

Open House: opportunity for prospective buyers to view a house for sale in a low-pressure environment.

Over-improvement: addition or improvement in which the cost is greater than the value of the house.

PITI: Principal, interest, taxes and insurance: components of a regular mortgage payment.

Prepaid Item: A bill paid by the seller for something the buyer will benefit from: the coming year’s property taxes, for example.  Buyer will reimburse seller at closing for the unused portion.

Professional Home Inspection: Examination of a property’s structure and systems performed by a trained professional for prospective buyers, lenders or home owners.

Proprietary Lease: A written lease in a cooperative apartment building, held by the tenant/shareholder, giving the right to occupy a particular unit.

Prospectus: A printed statement disclosing all material aspects of a real estate project.

Ready, Willing and Able Buyer: One who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the transaction.

REALTORS®: A registered trademark term reserved for the sole use of active members of local REALTOR® boards affiliated with the National Association of REALTORS®.

REALTOR® Code of Ethics: The standards that Realtors must uphold regarding their dealings with clients and customers, the public, and other Realtors.

Reasonable Care: A broker’s duty to perform duties properly.

Right of First Refusal: A provision that a condominium or a cooperative association has the first right to purchase if a member wishes to sell his or her unit.

Sale-Leaseback: A transaction in which an owner sells his or her improved property and as part of the same transaction, signs a long-term lease to remain in possession of the premises.

Sales Contract: A contract containing the complete terms of the agreement between buyer and seller for the sale of a particular parcel of real estate.

Security Deposit: A payment by a tenant, held by the landlord during the lease term and kept (wholly or partially) on default or destruction of the premises by the tenant.

Selling Broker:  The broker who successfully finds a ready, willing and able buyer for a property (may or may not be the listing broker)

Subject Property:  the property being appraised.

Survey:  The process by which a parcel of land is measured and its area ascertained; also, the map showing the measurements, boundaries and area.

Title:  Evidence that the owner of land is in lawful possession thereof; evidence of ownership.

Title Insurance Policy:  A policy insuring the mortgagee against loss by reason of defects in the title to a parcel of real estate, other than the encumbrances, defects, and matters specifically excluded by the policy.

Title Search:  An examination of the public records to determine the ownership and encumbrances affecting real property.

Walk-Through Inspection:  Final inspection of a property's condition by the buyer, usually to ensure that all conditions noted in the contract have been met.