Adjustable rate mortgage A type of mortgage rate loan that allows the interest rate to change periodically up or down, usually once or twice a year.

Agent A person who acts, or has the power to act for another. A real estate agent acts on behalf of the principal (the buyer or seller) and has fiduciary responsibilities towards the principal. See Buyer's agent or Seller's agent below.

Agreement of sale A written agreement or contract in which the seller agrees to sell and the buyer agrees to buy under specific terms and conditions

Amenities Features that enhance and add to the value or desirability of real estate. Common amenities include a swimming pool, clubhouse and a good view.

Amortization The reduction of a debt over time by making periodic payments (usually monthly) a portion of which is interest and a portion of which reduces the outstanding amount of the debt. The monthly mortgage payments remain the same over the life of the loan, even though the proportion of principal to interest changes over time. In the early part of the loan, principal repayment is very small and interest repayment very high; at the end of the loan, that relationship is reversed.

Appraisal The act or process of estimating value; an estimate of value.

Appraiser Someone who practices appraisal. Appraisers' work involves appraisal (see above), review (the process of critically studying a report prepared by another), or consulting (the process of providing information, analysis of real estate data, and recommendations on diversified problems in real estate, other than estimating value).
Balloon mortgage A mortgage for a fixed term shorter than necessary to fully repay the debt. As a result, the remaining amount of principal is due at the maturity of the loan.

Bridge loan A loan, usually short term, that finances the portion of the purchase price not provided by the mortgage loan and the down payment. A bridge loan is commonly used when a purchaser has not sold his existing home before he closes on his purchase of a new home. The bridge loan is paid off when the old home is sold, out of the proceeds of that sale.

Broker, as in real estate broker A real estate professional who has acquired a higher level of training and/or experience than a sales agent. Generally, the legal representative or proprietor of the office.

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

Capital gain Income that results from sale of a capital (tangible) asset.

Closing The end of the transaction; when the seller hands over the title to the buyer in exchange for payment.

Closing costs Costs the buyer must pay at the time of the closing in addition to the down payment which may include points, title charges, mortgage insurance premium, prepayments for property taxes, and homeowners insurance. Closing costs can be as much as three to four percent of the loan amount.

Condominium or condo A condominium, literally, is a home in a shared building or development. The buyer owns title to his or her unit, shares the common areas with other unit owners, and pays a maintenance fee to the condominium association to pay for needed maintenance, repairs and improvements to the property.

Contingency A condition that must be met before a contract is binding.

Conventional loan A fixed-rate, fixed-term loan that is made without government insurance.

Co-operative or co-op In a residential co-operative, the buyer purchases shares in the co-op corporation, made up of the residents in the co-op property. The buyer owns the shares rather than owning real property. In exchange, he has the right to lease and occupy a co-op unit.
Deed A legal document by which property title is transferred from one owner to another.

Down payment The down payment is the percentage of the purchase price that the buyer must pay in cash and may not borrow from the lender. The downpayment amount, in addition to the mortgage, equals the purchase price of a property.