Real Estate Terms

The MLS is a local or regional service that compiles available real estate for sale by member brokers along with detailed information brokers and agents can access online. Local MLS organizations have their own rules and systems for providing listing information. Over half of the MLSs in the United States are affiliated with the National Association of Realtors(NAR); in other cases, MLSs operate as private businesses but with oversight from major local brokers. Some MLSs publish their own websites for consumers to access listing data directly from the MLS, but mostly MLSs share data by offering a data feed for member brokerages to build their own websites. The most common feed for an MLS to share data with a brokerage website is an Internet Data Exchange (IDX) feed, designed to publish a limited set of information that all consumers can see without registration.

The activity or business of negotiating an agreement or contract; a "coming to terms" between the parties of an eventual written contractual document. In a real estate transaction, buyers and sellers are usually represented and assisted in a negotiation by their agent or Realtor. Common negotiation points are sales price, repairs, closing date, contingencies and provisions for the inclusion of personal property with a sale.

The listing Realtor sets up a time-usually a two or three hour period-for prospective buyers to look at the house. These are not clients brought in by other realtors; they are strangers who are attracted by an ad in the newspaper or a sign in the yard. Potential buyers brought in by other real estate agents usually make an appointment with the listing agent and have a chance to give the house a full review. Prior to the open house, sellers are advised to make the house spic and span, put personal items and jewelry away and then leave the premises. Potential buyers are given a tour of the property after properly registering with the listing agent. Listing agent often have a loan originator present at the open house to answer questions and pre-qualify prospective buyers.

Prudential C. Dan Joyner Co., Realtors. A member of the Prudential Real Estate network (www.prudentialrealestate.com).

Also known as PMI, mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent. This is applicable with conventional loans and once the value of the property had exceeded 80% of its' original appraised/contract value, the loan can be adjusted to drop the PMI portion of the payment. This is not automatic, however. Some lenders require a new appraisal or a broker-price-opinion that can be provided by a Realtor.

A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender. Contrast with pre-qualification.

This usually refers to the loan officer's written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

This usually refers to the loan officer's written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

Also known as PMI, mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent. This is applicable with conventional loans and once the value of the property had exceeded 80% of its' original appraised/contract value, the loan can be adjusted to drop the PMI portion of the payment. This is not automatic, however. Some lenders require a new appraisal or a broker-price-opinion that can be provided by a Realtor.

A written promise to repay a specified amount over a specified period of time.

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general. Housing includes single family homes, multi-family homes, home-sites, condominiums, townhomes, commercial property and investment property, to name a few.

REOs are foreclosed homes owned by banks and lenders. Banks either withhold from releasing these properties on the market because they don't want to take a loss or list them in the Multiple Listing Service (MLS) represented by an agent. REOs are often priced below market value to create bidding wars among buyers. REO properties can still be a great deal, but buyers should know that REOs may need repairs and banks will rarely cover these costs. When looking at purchasing an REO, buyers should get pre-approved with the bank that owns the property and try to put together the "cleanest" offer possible. Clean means few contingencies, a high earnest money deposit and no requests to the bank to pay for closing costs. Banks are dealing with huge numbers of these homes and prefer offers that involve the least hassle.

A professional real estate agent, broker or an associate who is appropriately licensed under the rules of compliance in their state of licensure and who holds active membership in a local real estate board that is affiliated with the National Association of Realtors. Realtors are held to a high ethical standard and abide by a strict code-of-ethics. All real estate licensees are not Realtors (a trademarked designation). Realtors typically have higher levels of continuing education than their state laws require and tend to be higher sales producers than non-Realtors.

Short for "real estate owned" (home), REOs are foreclosed homes owned by banks and lenders. Banks either withhold from releasing these properties on the market because they don't want to take a loss or list them in the Multiple Listing Service (MLS) represented by an agent. REOs are often priced below market value to create bidding wars among buyers. REO properties can still be a great deal, but buyers should know that REOs may need repairs and banks will rarely cover these costs. When looking at purchasing an REO, buyers should get pre-approved with the bank that owns the property and try to put together the "cleanest" offer possible. Clean means few contingencies, a high earnest money deposit and no requests to the bank to pay for closing costs. Banks are dealing with huge numbers of these homes and prefer offers that involve the least hassle.

A home that is listed for sale at a price lower than the amount owed on the mortgage. Homeowners hope to sell their home as a short sale to avoid penalties associated with going into foreclosure. What can make it difficult to buy a short is that there are often two mortgages on the home and both lenders must approve the sale. The ownership of the mortgages on a short sale home usually belong to more than one party, so you'll likely have to convince multiple banks and lenders to take a loss on their original loan. This is why it often takes so long to approve a short sale offer. If the short sale fails and the homeowner can't afford to pay his mortgage, then the bank forecloses on the home.