Dual agency Representing both parties in a transaction. In virtually all states, it is unethical and illegal for a broker to represent both buyer and seller in a real estate transaction without written consent of both.

Earnest money The deposit money given to the seller by the potential buyer as evidence of good faith in purchasing real estate. The broker places the money in an escrow/trust account until closing, when it becomes part of the down payment .

Equity The value of the property, less the amount of unpaid mortgages and any outstanding liens.

Escrow Money or other valuables given to a third party with directions to deliver them to another party upon the fulfillment of a specific act or condition.

Exclusive agency listing A written agreement giving the broker the right to market an owner's property for a certain period of time, but also allowing the owner to sell the property during that period without paying a commission.

Exclusive right-to-sell A written agreement between the agent and the owner, whereby the owner promises to pay a fee or commission to the broker if his property is sold during the listing period, regardless of whether the broker is responsible for the sale.

Fannie Mae Nickname for the Federal National Mortgage Association, FNMA is a public corporation originally established by the federal government. Fannie Mae purchases mortgage loans from lenders, and thus, is a major source of funds for mortgage companies.
FHA or Federal Housing Administration Part of the US Department of Housing and Urban Development (HUD) -- established in 1934 to encourage improvement in housing standards and communities. The FHA insures mortgage loans. See HUD listing ahead.

FHA mortgage A mortgage loan insured by the Federal Housing Administration.

Home inspection An examination of the physical structure, systems and condition of a home

Homeowners insurance Insurance that protects the homeowner from "casualty" (losses or damage to the home or personal property) and from "liability" (damages to other people or property). Homeowners insurance is required by the lender and is usually included in the monthly mortgage payment.

HUD or the US Department of Housing and Urban Development Department of Housing and Urban Development, a government agency created to make the American dream of home ownership a real possibility for everyone. HUD has many programs involving homeownership assistance for low- and moderate-income families, community planning and development, fair housing and equal opportunity, and home improvement loans. The Housing and Urban Development home page is a rich resource of information.
Lien A hold or a claim on the property of another to satisfy an unpaid debt.

Listing contract An agreement between a homeowner and a licensed real estate broker that authorizes the broker to market the property for sale during a given time period.

Loan origination fee A fee charged by the lender for evaluating, preparing and submitting a proposed mortgage loan.

Loan-to-value ratio The ratio of a mortgage loan principal to the property's appraised value or its sales price, whichever is lower. Loan-to-value ratios vary depending upon the individual lender's policy.

Lock-in rate A commitment made by a lender to make a mortgage loan at a specified rate, pending loan approval, on or prior to a specified date.

Market value The highest price a buyer will pay for a property and the lowest price the seller will accept.

Mortgage A lien on real estate given by the buyer to secure repayent of money borrowed to purchase the real estate.

Mortgage broker An individual or company that obtains mortgages for others by finding lending institutions, insurance companies, or private sources to lend the money; may also handle collections and disbursements.