Zebaida Group Real Estate Dictionary

1031 exchange or Starker exchange: The delayed exchange of properties that qualifies for tax purposes as a tax-deferred exchange.

1099: The statement of income reported to the IRS for an independent contractor.

24-hour notice: Allowed by law, tenants must be informed of showing 24 hours before you arrive.

A/I: A contract that is pending with attorney and inspection contingencies.

Acceleration clause: A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.

Accompanied showings: Those showings where the listing agent must accompany an agent and his or her clients when viewing a listing.

Addendum: An addition to; a document.

Adjustable rate mortgage (ARM): A type of mortgage loan whose interest rate is tied to an economic index, which fluctuates with the market. Typical ARM periods are one, three, five, and seven years.

Adjustment date: The date the interest rate changes on an adjustable-rate mortgage.

Agent: The licensed real estate salesperson or broker who represents buyers or sellers.

Amended value: The actual sale price after the seller successfully markets and sells his or her home through the broker of his or her choice. The sale is turned over to a third-party relocation company for closing, and the guaranteed offer is amended or changed.

Amortization: The loan payment consists of a portion which will be applied to pay the accruing interest on a loan, with the remainder being applied to the principal. Over time, the interest portion decreases as the loan balance decreases, and the amount applied to principal increases so that the loan is paid off (amortized) in the specified time.

Annual percentage rate (APR): The total costs (interest rate, closing costs, fees, and so on) that are part of a borrower’s loan, expressed as a percentage rate of interest. The total costs are amortized over the term of the loan.

Application: The form used to apply for a mortgage loan, containing information about a borrower’s income, savings, assets, debts, and more.

Application fees: Fees that mortgage companies charge buyers at the time of written application for a loan; for example, fees for running credit reports of borrowers, property appraisal fees, and lender-specific fees.

Appointments: Those times or time periods an agent shows properties to clients.

Appraisal: A document of opinion of property value at a specific point in time.

Appraiser: An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.

Appraised price (AP): The price the third-party relocation company offers (under most contracts) the seller for his or her property. Generally, the average of two or more independent appraisals.

Appraised value: An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.

Appreciation: The increase in the value of a property due to changes in market conditions, inflation, or other causes.

Assessed value: The valuation placed on property by a public tax assessor for purposes of taxation.

Assessment: The placing of a value on property for the purpose of taxation.

Assessor: A public official who establishes the value of a property for taxation purposes.

Asset: Items of value owned by an individual. Assets that can be quickly converted into cash are considered “liquid assets.” These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.

Assignment: When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.

“As-is”: A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.

Assumable mortgage: One in which the buyer agrees to fulfill the obligations of the existing loan agreement that the seller made with the lender. When assuming a mortgage, a buyer becomes personally liable for the payment of principal and interest. The original mortgagor should receive a written release from the liability when the buyer assumes the original mortgage.

Attorney Review: Both buyers and sellers will have attorneys look over the sales contract and make modifications during the attorney review period.

Back on market (BOM): When a property or listing is placed back on the market after being removed from the market recently.

Back-up agent: A licensed agent who works with clients when their agent is unavailable.

Balloon mortgage: A type of mortgage that is generally paid over a short period of time, but is amortized over a longer period of time. The borrower typically pays a combination of principal and interest. At the end of the loan term, the entire unpaid balance must be repaid.

Balloon payment: The final lump sum payment that is due at the termination of a balloon mortgage.

Back-up offer: When an offer is accepted contingent on the fall through or voiding of an accepted first offer on a property.

Bankruptcy: By filing in federal bankruptcy court, an individual or individuals can restructure or relieve themselves of debts and liabilities. Bankruptcies are of various types, but the most common for an individual seem to be a “Chapter 7 No Asset” bankruptcy which relieves the borrower of most types of debts. A borrower cannot usually qualify for an “A” paper loan for a period of two years after the bankruptcy has been discharged and requires the re-establishment of an ability to repay debt.

Bill of sale: Transfers title to personal property in a transaction.

Biweekly mortgage: A mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making twelve monthly payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty year mortgage. Note:there are independent companies that encourage you to set up bi-weekly payment schedules with them on your thirty year mortgage. They charge a set-up fee and a transfer fee for every payment. Your funds are deposited into a trust account from which your monthly payment is then made, and the excess funds then remain in the trust account until enough has accrued to make the additional payment which will then be paid to reduce your principle. You could save money by doing the same thing yourself, plus you have to have faith that once you transfer money to them that they will actually transfer your funds to your lender.

Board of REALTORS® (local): An association of REALTORS® in a specific geographic area.

Bond market: Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.

Bridge loan: Not used much anymore, bridge loans are obtained by those who have not yet sold their previous property, but must close on a purchase property. The bridge loan becomes the source of their funds for the down payment. One reason for their fall from favor is that there are more and more second mortgage lenders now that will lend at a high loan to value. In addition, sellers often prefer to accept offers from buyers who have already sold their property.

Broker: A state licensed individual who acts as the agent for the seller or buyer.

Broker of record: The person registered with his or her state licensing authority as the managing broker of a specific real estate sales office.

Broker’s market analysis (BMA): The real estate broker’s opinion of the expected final net sale price, determined after acquisition of the property by the third-party company.

Broker’s price opinion (BPO): The real estate broker’s opinion of the expected final net sale price, determined prior to the acquisition of the property.

Broker’s tour: A preset time and day when real estate sales agents can view listings by multiple brokerages in the market.

Buydown: Usually refers to a fixed rate mortgage where the interest rate is “bought down” for a temporary period, usually one to three years. After that time and for the remainder of the term, the borrower’s payment is calculated at the note rate. In order to buy down the initial rate for the temporary payment, a lump sum is paid and held in an account used to supplement the borrower’s monthly payment. These funds usually come from the seller (or some other source) as a financial incentive to induce someone to buy their property. A “lender funded buydown” is when the lender pays the initial lump sum. They can accomplish this because the note rate on the loan (after the buydown adjustments) will be higher than the current market rate. One reason for doing this is because the borrower may get to “qualify” at the start rate and can qualify for a higher loan amount. Another reason is that a borrower may expect his earnings to go up substantially in the near future, but wants a lower payment right now.

Buyer: The purchaser of a property.

Buyer agency: A real estate broker retained by the buyer who has a fiduciary duty to the buyer.

Buyer agent: The agent who shows the buyer’s property, negotiates the contract or offer for the buyer, and works with the buyer to close the transaction.

Call option: Similar to the acceleration clause.

Cap: Adjustable Rate Mortgages have fluctuating interest rates, but those fluctuations are usually limited to a certain amount. Those limitations may apply to how much the loan may adjust over a six month period, an annual period, and over the life of the loan, and are referred to as “caps.” Some ARMs, although they may have a life cap, allow the interest rate to fluctuate freely, but require a certain minimum payment which can change once a year. There is a limit on how much that payment can change each year, and that limit is also referred to as a cap.

Carrying costs: Cost incurred to maintain a property (taxes, interest, insurance, utilities, and so on).

Cash-out refinance:When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a “cash out refinance.”

Certificate of deposit: A time deposit held in a bank which pays a certain amount of interest to the depositor.

Certificate of deposit index: One of the indexes used for determining interest rate changes on some adjustable rate mortgages. It is an average of what banks are paying on certificates of deposit.

Certificate of Eligibility:A document issued by the Veterans Administration that certifies a veteran’s eligibility for a VA loan.

Certificate of Reasonable Value (CRV): Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.

Chain of title: An analysis of the transfers of title to a piece of property over the years.

Clear title: A title that is free of liens or legal questions as to ownership of the property.

Closing: The end of a transaction process where the deed is delivered, documents are signed, and funds are dispersed.

Closing statement: See Settlement Statement.

Cloud on title: Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by deed, release, or court action.

CLUE: CLUE (Comprehensive Loss Underwriting Exchange) is the insurance industry’s national database that assigns individuals a risk score. CLUE also has an electronic file of a properties insurance history. These files are accessible by insurance companies nationally. These files could impact the ability to sell property as they might contain information that a prospective buyer might find objectionable, and in some cases not even insurable.

Co-borrower: IAn additional individual who is both obligated on the loan and is on title to the property.

Collateral: In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.

Collection: When a borrower falls behind, the lender contacts them in an effort to bring the loan current. The loan goes to “collection.” As part of the collection effort, the lender must mail and record certain documents in case they are eventually required to foreclose on the property.

Commission: The compensation paid to the listing brokerage by the seller for selling the property. A buyer agency agreement may require the buyer to pay a commission to his or her agent.

Commission split: The percentage split of commission compensation between the real estate sales brokerage and the real estate sales agent or broker.

Common area assessments: In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas.

Common areas: Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project’s homeowners’ association (or a cooperative project’s cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

Common law: An unwritten body of law based on general custom in England and used to an extent in some states.

Community property: In some states, especially the southwest, property acquired by a married couple during their marriage is considered to be owned jointly, except under special circumstances. This is an outgrowth of the Spanish and Mexican heritage of the area.

Comparable sales: Recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as “comps.”

Comparative market analysis: A study done by real estate sales agents and brokers using active, pending, and sold comparable properties to estimate a listing price for a property.

Competitive market analysis (CMA): The analysis used to provide market information to the seller and assist the real estate broker in securing the listing.

Condominium: A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.

Condominium association: An association of all owners in a condominium.

Condominium budget: A financial forecast and report of a condominium association’s expenses and savings.

Condominium by-laws: Rules passed by the condominium association used in administration of the condominium property.

Condominium conversion: Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

Condominium declarations: A document that legally establishes a condominium.

Condominium hotel: A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. These are often found in resort areas like Hawaii.

Condominium right of first refusal: A person or an association that has the first opportunity to purchase condominium real estate when it becomes available or the right to meet any other offer.

Condominium rules and regulation: Rules of a condominium association by which owners agree to abide.

Construction loan: A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.

Contingency: A provision in a contract requiring certain acts to be completed before the contract is binding.

Continue to show: When a property is under contract with contingencies, but the seller requests that the property continue to be shown to prospective buyers until contingencies are released.

Contract: An oral or written agreement to do or not to do a certain thing.

Contract for deed: A sales contract in which the buyer takes possession of the property but the seller holds title until the loan is paid. Also known as an installment sale contract.

Contract of sale: An agreement between the third-party relocation company and the seller (transferee) whereby the third-party company purchases property owned by the seller.

Conventional mortgage: A type of mortgage that has certain limitations placed on it to meet secondary market guidelines. Mortgage companies, banks, and savings and loans underwrite conventional mortgages.

Convertible ARM: An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.

Cooperating commission: A commission offered to the buyer’s agent brokerage for bringing a buyer to the selling brokerage’s listing.

Cooperative (Co-op): Where the shareholders of the corporation are the inhabitants of the building. Each shareholder has the right to lease a specific unit. The difference between a co-op and a condo is in a co-op, one owns shares in a corporation; in a condo one owns the unit fee simple.

Corporate client: The company with whom the third-party relocation company has an agreement to handle the relocating employees.

Cost of funds index (COFI): One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.

Counteroffer: The response to an offer or a bid by the seller or buyer after the original offer or bid.

Credit: An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.

Credit history: A record of an individual’s repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.

Creditor: A person to whom money is owed.

Credit report: Includes all of the history for a borrower’s credit accounts, outstanding debts, and payment timelines on past or current debts.

Credit repository: An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

Credit score: A score assigned to a borrower’s credit report based on information contained therein.

Curb appeal: The visual impact a property projects from the street.

Days on market: The number of days a property has been on the market.

Decree: A judgment of the court that sets out the agreements and rights of the parties.

Debt: An amount owed to another.

Deed: The legal document conveying title to a property.

Deed-in-lieu: Short for “deed in lieu of foreclosure,” this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and become a matter of public record.

Deed of trust: Some states, like California, do not record mortgages. Instead, they record a deed of trust which is essentially the same thing.

Default: Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default.

Delinquency: Failure to make mortgage payments when mortgage payments are due. For most mortgages, payments are due on the first day of the month. Even though they may not charge a “late fee” for a number of days, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more credit bureaus.

Deposit: A sum of money given in advance of a larger amount being expected in the future. Often called in real estate as an “earnest money deposit.”

Depreciation: A decline in the value of property; the opposite of appreciation. Depreciation is also an accounting term which shows the declining monetary value of an asset and is used as an expense to reduce taxable income. Since this is not a true expense where money is actually paid, lenders will add back depreciation expense for self-employed borrowers and count it as income.

Desk fees: A fee charged by the real estate company or brokerage for the real estate agent to use a desk.

Destination services: Services provided to the transferee at the new location. They can include familiarization tours, temporary housing, school searches, and so on.

Direct home-selling costs (DHSC): Carrying costs, loss on sale, repairs and improvements, commission, closing costs, principal, interest, taxes and insurance, interest on equity loans, and utilities.

Disclosures: Federal, state, county, and local requirements of disclosure that the seller provides and the buyer acknowledges.

Discount points: In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any “points” paid in addition to the one percent loan origination fee. A “point” is one percent of the loan amount.

Divorce: The legal separation of a husband and wife effected by a court decree that totally dissolves the marriage relationship.

DOM: Days on market.

Down payment: The amount of cash put toward a purchase by the borrower.

Drive-by: When a buyer or seller agent or broker drives by a property listing or potential listing.

Dual agent: A state-licensed individual who represents the seller and the buyer in a single transaction.

Due-on-sale provision: A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.

Earnest money deposit: The money given to the seller at the time the offer is made as a sign of the buyer’s good faith.

Easement: A right of way giving persons other than the owner access to or over a property.

Effective age: An appraiser’s estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

E-mail: Electronic or Internet-based communication.

Eminent domain: The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.

Encroachment: An improvement that intrudes illegally on another’s property.

Encumbrance: Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

Equal Credit Opportunity Act (ECOA): A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Equity: A homeowner’s financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens.

Escrow: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.

Escrow account for real estate taxes and insurance: An account into which borrowers pay monthly prorations for real estate taxes and property insurance.

Escrow analysis: Once each year your lender will perform an “escrow analysis” to make sure they are collecting the correct amount of money for the anticipated expenditures.

Escrow disbursements: The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Estate: The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

Eviction: The lawful expulsion of an occupant from real property.

Examination of title: The report on the title of a property from the public records or an abstract of the title.

Exchange/service account: A brokerage expense account that accrues charges for marketing.

Exclusions: Fixtures or personal property that are excluded from the contract or offer to purchase.

Exclusive listing: A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.

Executor: A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. “Executrix” is the feminine form.

Expired (listing): A property listing that has expired per the terms of the listing agreement.

Fair Credit Reporting Act: A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record.

Fair market value: The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

Fannie Mae (FNMA): The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the nation’s largest supplier of home mortgage funds.

Fannie Mae’s Community Home Buyer’s Program: An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family’s buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.

Fax rider: A document that treats facsimile transmission as the same legal effect as the original document.

Federal Housing Administration (FHA): An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

Feedback: The real estate sales agent and/or his or her client’s reaction to a listing or property. Requested by the listing agent.

Fee simple: A form of property ownership where the owner has the right to use and dispose of property at will.

Fee simple estate: An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.

FHA (Federal Housing Administration) Loan Guarantee: A guarantee by the FHA that a percentage of a loan will be underwritten by a mortgage company or banker.

FHA mortgage: A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan.

Firm commitment: A lender’s agreement to make a loan to a specific borrower on a specific property.

First mortgage: The mortgage that is in first place among any loans recorded against a property. Usually refers to the date in which loans are recorded, but there are exceptions.

Fixed-rate mortgage: A mortgage in which the interest rate does not change during the entire term of the loan.

Fixture: Personal property that has become part of the property through permanent attachment.

Flat fee: A predetermined amount of compensation received or paid for a specific service in a real estate transaction.

Flood insurance: Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

Floor duty or time: That a time, usually assigned, when a real estate sales agent answers telephones, e-mails, or walk-in requests for information on property.

Foreclosure: The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

401(k)/403(b): An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.

401(k)/403(b) loan: Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans. Loans against 401K plans are an acceptable source of down payment for most types of loans.

For sale by owner (FSBO): A property that is for sale by the owner of the property.

Gift letter: A letter to a lender stating that a gift of cash has been made to the buyer(s) and that the person gifting the cash to the buyer is not expecting the gift to be repaid. The exact wording of the gift letter should be requested of the lender.

Good faith estimate: Under the Real Estate Settlement Procedures Act, within three days of an application submission, lenders are required to provide in writing to potential borrowers a good faith estimate of closing costs.

Government loan (mortgage): A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Rural Housing Service (RHS). Mortgages that are not government loans are classified as conventional loans.

Government National Mortgage Association (Ginnie Mae): A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Created by Congress on September 1, 1968, GNMA performs the same role as Fannie Mae and Freddie Mac in providing funds to lenders for making home loans. The difference is that Ginnie Mae provides funds for government loans (FHA and VA)

Grantee: The person to whom an interest in real property is conveyed.

Grantor: The person conveying an interest in real property.

Gross closed commission income: The total amount of commission income a real estate sales agent or broker receives from closed transactions.

Gross sale price: The sale price before any concessions.

Guaranteed offer: The amount, after appraisals, the employer offers the transferring employee for his or her property.

Hazard insurance: Insurance that covers losses to real estate from damages that might affect its value.

Home Equity Conversion Mortgage (HECM): Usually referred to as a reverse annuity mortgage, what makes this type of mortgage unique is that instead of making payments to a lender, the lender makes payments to you. It enables older home owners to convert the equity they have in their homes into cash, usually in the form of monthly payments. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property.

Home equity line of credit: A mortgage loan, usually in second position, that allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined amount.

Home-finding assistance: Additional assistance provided by a third-party relocation company that can include information about the destination community.

Home inspection: A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.

homeowners’ association: A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.

Homeowner’s insurance: Coverage that includes personal liability and theft insurance in addition to hazard insurance.

Homeowner’s warranty: A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.

HUD: U.S. Department of Housing and Urban Development.

HUD median income: Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 settlement statement: A document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow (impound) amounts. Each type of expense goes on a specific numbered line on the sheet. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. It is called a HUD1 because the form is printed by the Department of Housing and Urban Development (HUD). The HUD1 statement is also known as the “closing statement” or “settlement sheet.”

HUD/RESPA (Housing and Urban Development/Real Estate Settlement Procedures Act): A document and statement that details all of the monies paid out and received at a real estate property closing.

Hybrid adjustable rate: Offers a fixed rate the first 5 years and then adjusts annually for the next 25 years.

IDX: (Internet Data Exchange) Allows real estate brokers to advertise each other’s listings posted to listing databases such as the multiple listing service.

Inclusions: Fixtures or personal property that are included in a contract or offer to purchase.

Independent contractor: A real estate sales agent who conducts real estate business through a broker. This agent does not receive salary or benefits from the broker.

Inputting: The process of entering new listings or changes to a current listing in the multiple listing services.

Inspection rider: Rider to purchase agreement between third-party relocation company and buyer of transferee’s property stating that property is being sold “as is”. All inspection reports conducted by the third party company are disclosed to the buyer and it is the buyer’s duty to do his/her own inspections and tests.

Installment land contract: A contract in which the buyer takes possession of the property while the seller retains the title to the property until the loan is paid.

Interest rate float: The borrower decides to delay locking their interest rate on their loan. They can float their rate in expectation of the rate moving down. At the end of the float period they must lock a rate.

Interest rate lock: When the borrower and lender agree to lock a rate on loan. Can have terms and conditions attached to the lock.

Inventory: A transferee’s property the third party relocation company has acquired.

Joint tenancy: A form of ownership or taking title to property which means each party owns the whole property and that ownership is not separate. In the event of the death of one party, the survivor owns the property in its entirety.

Judgment: A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor’s real property as collateral for the judgment’s creditor.

Judicial foreclosure: A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court. Other states use non-judicial foreclosure.

Jumbo loan: A loan that exceeds Fannie Mae’s and Freddie Mac’s loan limits, currently at $227,150. Also called a nonconforming loan. Freddie Mac and Fannie Mae loans are referred to as conforming loans.

Late charge: The penalty a borrower must pay when a payment is made a stated number of days. On a first trust deed or mortgage, this is usually fifteen days.

Lease: A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.

Leasehold estate: A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it. [Top]

Lease option: An alternative financing option that allows home buyers to lease a home with an option to buy. Each month’s rent payment may consist of not only the rent, but an additional amount which can be applied toward the down payment on an already specified price.

Legal description: A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Lender: A term which can refer to the institution making the loan or to the individual representing the firm. For example, loan officers are often referred to as “lenders.”

Liabilities: A person’s financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.

Liability insurance: Insurance coverage that offers protection against claims alleging that a property owner’s negligence or inappropriate action resulted in bodily injury or property damage to another party. It is usually part of a homeowner’s insurance policy.

Lien: A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.

Life cap: For an adjustable-rate mortgage (ARM), a limit on the amount that the enterest rate can increase or decrease over the life of the mortgage.

Line of credit: An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

Liquid asset: A cash asset or an asset that is easily converted into cash.

List date: Actual date the property was listed with the current broker.

List price: The price of a property through a listing agreement.

Listing: Brokers written agreement to represent a seller and their property. Agents refer to their inventory of agreements with sellers as listings.

Listing agent: The real estate sales agent that is representing the sellers and their property, through a listing agreement.

Listing agreement: A document that establishes the real estate agent’s agreement with the sellers to represent their property in the market.

Listing appointment: The time when a real estate sales agent meets with potential clients selling a property to secure a listing agreement.

Listing exclusion: A clause included in the listing agreement when the seller (transferee) lists his or her property with a broker.

Loan: An amount of money that is lent to a borrower who agrees to repay the amount plus interest.

Loan application: A document that buyers who are requesting a loan fill out and submit to their lender.

Loan closing costs: The costs a lender charges to close a borrower’s loan. These costs vary from lender to lender and from market to market.

Loan commitment: A written document telling the borrowers that the mortgage company has agreed to lend them a specific amount of money at a specific interest rate for a specific period of time. The loan commitment may also contain conditions upon which the loan commitment is based.

loan officer: Also referred to by a variety of other terms, such as lender, loan representative, loan “rep,” account executive, and others. The loan officer serves several functions and has various responsibilities: they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institution.

loan origination: How a lender refers to the process of obtaining new loans.

Loan package: The group of mortgage documents that the borrower’s lender sends to the closing or escrow.

Loan processor: An administrative individual who is assigned to check, verify, and assemble all of the documents and the buyer’s funds and the borrower’s loan for closing.

Loan servicing: After you obtain a loan, the company you make the payments to is “servicing” your loan. They process payments, send statements, manage the escrow/impound account, provide collection efforts on delinquent loans, ensure that insurance and property taxes are made on the property, handle pay-offs and assumptions, and provide a variety of other services.

Loan-to-value (LTV): The percentage relationship between the amount of the loan and the appraised value or sales price (whichever is lower).

Loan underwriter: One who underwrites a loan for another. Some lenders have investors underwrite a buyer’s loan.

Lockbox: A tool that allows secure storage of property keys on the premises for agent use. A combo uses a rotating dial to gain access with a combination; a Supra® (electronic lockbox or ELB) features a keypad.

Lock-in: An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

Lock-in period: The time period during which the lender has guaranteed an interest rate to a borrower.

Managing broker: A person licensed by the state as a broker who is also the broker of record for a real estate sales office. This person manages the daily operations of a real estate sales office.

Margin: The difference between the interest rate and the index on an adjustable rate mortgage. The margin remains stable over the life of the loan. It is the index which moves up and down.

Market familiarization trip: A visit by the transferee to the new location to view housing market options and location highlights.

Marketing period: The period of time in which the transferee may market his or her property (typically 45, 60, or 90 days), as directed by the third-party company’s contract with the employer.

Maturity: The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.

Merged credit report: A credit report which reports the raw data pulled from two or more of the major credit repositories. Contrast with a Residential Mortgage Credit Report (RMCR) or a standard factual credit report.

Modification: Occasionally, a lender will agree to modify the terms of your mortgage without requiring you t refinance. If any changes are made, it is called a modification.

Mortgage: A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust Deeds.

Mortgage banker: One who lends the bank’s funds to borrowers and brings lenders and borrowers together.

Mortgage broker: A business that or an individual who unites lenders and borrowers and processes mortgage applications.

Mortgage Commitment: A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.

Mortgagee: The lender in a mortgage agreement.

Mortgage insurance (MI): Insurance that covers the lender against some of the losses incurred as a result of a default on a home loan. Often mistakenly referred to as PMI, which is actually the name of one of the larger mortgage insurers. Mortgage insurance is usually required in one form or another on all loans that have a loan-to-value higher than eighty percent. Mortgages above 80% LTV that call themselves “No MI” are usually a made at a higher interest rate. Instead of the borrower paying the mortgage insurance premiums directly, they pay a higher interest rate to the lender, which then pays the mortgage insurance themselves. Also, FHA loans and certain first-time homebuyer programs require mortgage insurance regardless of the loan-to-value.

Mortgage insurance premium (MIP): The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Mortgage life and disability insurance: A type of term life insurance often bought by borrowers. The amount of coverage decreases as the principal balance declines. Some policies also cover the borrower in the event of disability. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds. In the case of disability insurance, the insurance will make the mortgage payment for a specified amount of time during the disability. Be careful to read the terms of coverage, however, because often the coverage does not start immediately upon the disability, but after a specified period, sometime forty-five days.

Mortgage loan servicing company: A company that collects monthly mortgage payments from borrowers

Mortgagor: The borrower in a mortgage agreement.

Multidwelling units: Properties that provide separate housing units for more than one family, although they secure only a single mortgage.

Multiple listing service (MLS): A service that compiles available properties for sale by member brokers.

Multiple Offers: More than one buyers broker present an offer on one property where the offers are negotiated at the same time.

NATIONAL ASSOCIATION OF REALTORS® (NAR): A national association comprised of real estate professionals.

Negative amortization: Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rate. In essence, the borrower is deferring the interest payment, which is why this is called “deferred interest.” The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.

Net sales price: Gross sales price, less concessions, to the buyers.

Niche: A special area or interest.

No cash-out refinance: A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is calculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a “rate and term refinance.”

No-cost loan: Many lenders offer loans that you can obtain at “no cost.” You should inquire whether this means there are no “lender” costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a “no-point” loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

Note: A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

Note rate: The interest rate stated on a mortgage note.

Notice of default: A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Off market: A property listing that has been removed from the sale inventory in a market. A property can be temporarily or permanently off market.

Offer to purchase: When a buyer proposes certain terms and presents these terms to the seller.

Office tour/caravan: A walking or driving tour by a real estate sales office of listings represented by agents in the office. Usually held on a set day and time.

Open house (public): When a listing that is on market is available to the public for viewings and showings.

Original principal balance: The total amount of principal owed on a mortgage before any payments are made.

Origination fee: On a government loan the loan origination fee is one percent of the loan amount, but additional points may be charged which are called “discount points.” One point equals one percent of the loan amount. On a conventional loan, the loan origination fee refers to the total number of points a borrower pays.

Owner financing: A property purchase transaction in which the property seller provides all or part of the financing.

Parcel identification number (PIN): A taxing authority’s tracking number for a property.

Partial payment: A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment, but in times of hardship you can make this request of the loan servicing collection department.

Payment change date: The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.

Payoff letter: A written document from a seller’s mortgage company stating the amount of money needed to pay the loan in full.

Pending: A real estate contract that has been accepted on a property but the transaction has not closed.

Periodic payment cap: For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.

Periodic rate cap: For an adjustable-rate mortgage, a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.

Personal assistant: A real estate sales agent administrative assistant.

Personal property: Any property that is not real property.

PITI: This stands for principal, interest, taxes and insurance. If you have an “impounded” loan, then your monthly payment to the lender includes all of these and probably includes mortgage insurance as well. If you do not have an impounded account, then the lender still calculates this amount and uses it as part of determining your debt-to-income ratio.

PITI reserves: A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

Planned unit development (PUD): Mixed-use development that sets aside areas for residential use, commercial use, and public areas such as schools, parks, and so on.

Point: A point is 1 percent of the amount of the mortgage.

Power of attorney: A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Preapproval: A higher level of buyer/borrower prequalification required by a mortgage lender. Some preapprovals have conditions the borrower must meet.

Prepaid interest: Funds paid by the borrower at closing based on the number of days left in the month of closing.

Prepayment: Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner’s decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.

Prepayment penalty: A fine imposed on the borrower by the lender when the loan is paid off before it comes due.

Prequalification: The mortgage company tells a buyer in advance of the formal mortgage application, how much money the borrower can afford to borrow. Some pre-qualifications have conditions that the borrower must meet.

Preview appointment: When a buyer’s agent views a property alone to see if it meets his or her buyer’s needs.

Pricing: When the potential seller’s agent goes to the potential listing property to view it for marketing and pricing purposes.

Prime rate: The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.

Principal: The amount of money a buyer borrows.

Principal balance: The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

Principal, interest, taxes, and insurance (PITI): The four parts that make up a borrower’s monthly mortgage payment.

Private mortgage insurance (PMI): A special insurance paid by a borrower in monthly installments, typically of loans of more than 80 percent of the value of the property.

Professional designation: Additional nonlicensed real estate education completed by a real estate professional.

Professional regulation: A state licensing authority that oversees and disciplines licensees.

Promissory note: A promise-to-pay document used with a contract or an offer to purchase.

Property or home-finding assistance status reports: Reports filed weekly or monthly by the listing or buying agent representing the transferee.

Public auction: A meeting in an announced public location to sell property to repay a mortgage that is in default.

Planned Unit Development (PUD): A project or subdivision that includes common property that is owned and maintained by a homeowners’ association for the benefit and use of the individual PUD unit owners.

Purchase agreement: A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Purchase money transaction: The acquisition of property through the payment of money or its equivalent.

Qualifying ratios: Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The “top” or “front” ratio is a calculation of the borrower’s monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a percentage of monthly income. The “back” or “bottom” ratio includes housing costs as will as all other monthly debt.

Quitclaim deed: A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

R & I: Estimated and actual repair and improvement costs.

Real estate agent: An individual who is licensed by the state and who acts on behalf of his or her client, the buyer or seller. The real estate agent who does not have a broker’s license must work for a licensed broker.

Real estate contract: A binding agreement between buyer and seller. It consists of an offer and an acceptance as well as consideration (i.e., money)

Real Estate Settlement Procedures Act (RESPA): A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Real property: Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.

REALTOR®: A registered trademark of the NATIONAL ASSOCIATION OF REALTORS that can be used only by its members.

Recorder: The public official who keeps records of transactions that affect real property in the area. Sometimes known as a “Registrar of Deeds” or “County Clerk.”

Recording: The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.

refinance transaction: The process of paying off one loan with the proceeds from a new loan using the same property as security.

Release deed: A written document stating that a seller or buyer has satisfied his or her obligation on a debt. This document is usually recorded.

Relist: Property that was listed with another broker but relisted with a current broker.

Remaining balance: The amount of principal that has not yet been repaid. See principal balance.

Remaining term: The original amortization term minus the number of payments that have been applied.

Rent loss insurance: Insurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.

Repayment plan: An arrangement made to repay delinquent installments or advances.

Replacement reserve fund: A fund set aside for replacement of common property in a condominium, PUD, or cooperative project — particularly that which has a short life expectancy, such as carpeting, furniture, etc.

Revolving debt: A credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.

Rider: A separate document that is attached to a document in some way. This is done so that an entire document does not need to be rewritten.

Right of first refusal: A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

Right of ingress or egress: The right to enter or leave designated premises.

Right of survivorship: In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.

Salaried agent: A real estate sales agent or broker who receives all or part of his or her compensation in real estate sales in the form of a salary.

Sale-leaseback: A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.

Sale price: The price paid for a listing or property.

Sales meetings: An informational meeting conducted by the managing broker held in the real estate sales office.

Sales volume: The total amount of all sales prices for all transactions completed by a real estate agent, broker, or real estate sales office.

Second mortgage: A mortgage that has a lien position subordinate to the first mortgage.

Secondary market: An institutional investment market that purchases mortgages from mortgage lenders.

Secured loan: A loan that is backed by collateral.

Security: The property that will be pledged as collateral for a loan.

Seller (owner): The owner of a property who has signed a listing agreement or a potential listing agreement.

Seller carry-back: An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.

Servicer: An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.

Servicing: The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Settlement statement: See HUD1 Settlement Statement

Showing: When a listing is shown to prospective buyers or the buyer’s agent (preview).

Sign rider: An additional sign placed on a brokerage yard sign; it may include the agent’s name, “open Sunday,” “contract pending,” “sold,” the new price, and so on.

Special assessment: A special and additional charge to a unit in a condominium or cooperative. Also a special real estate tax for improvements that benefit a property.

State Association of REALTORS®: An association of Realtors® in a specific state.

Subdivision: A housing development that is created by dividing a tract of land into individual lots for sale or lease.

Subordinate financing: Any mortgage or other lien that has a priority that is lower than that of the first mortgage.

Supra®: An electronic lockbox (ELB) that holds keys to a property. The user must have a Supra keypad to use the lockbox.

Survey: A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Sweat equity: Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.

Temporarily off market (TOM): A listed property that is taken off the market due to illness, travel, repairs, and so on.

Temporary housing: Housing a transferee occupies until permanent housing is selected or becomes available.

Tenancy in common: As opposed to joint tenancy, when there are two or more individuals on title to a piece of property, this type of ownership does not pass ownership to the others in the event of death.

Third-party company: A relocation company hired by an employee’s employer to coordinate the employee’s move to a new location.

Third-party origination: A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.

Title: A legal document evidencing a person’s right to or ownership of a property.

Title company: A company that specializes in examining and insuring titles to real estate.

Title insurance: Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.

Title search: A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

Trailing spouse: The spouse or partner of the employee being moved to a new location by an employer.

Transaction: The real estate process from offer to closing or escrow.

Transaction fee: A fixed amount in addition to commission charged to sellers.

Transaction management fee (TMF): A fee charged by listing brokers to the seller as part of the listing agreement.

Transaction sides: The two sides of a transaction, sellers and buyers. The term used to record the number of transactions in which a real estate sales agent or broker was involved during a specific period.

Transfer of ownership: Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property “subject to” the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.

Transfer tax: State or local tax payable when title passes from one owner to another.

Treasury index: An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or is derived from the U.S. Treasury’s daily yield curve, which is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market.

Truth-in-Lending: A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges.

Two-step mortgage: An adjustable-rate mortgage (ARM) that has one interest rate for the first five or seven years of its mortgage term and a different interest rate for the remainder of the amortization term.

Two- to four-family property: A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.

Trustee: A fiduciary who holds or controls property for the benefit of another.

Under contract: A property that has an accepted real estate contract between seller and buyer.

VA: U.S. Department of Veterans Affairs.

VA Loan Guarantee: A guarantee on a mortgage amount backed by the U.S. Department of Veterans Affairs.

Vacate date: The date on which the seller (transferee) vacates the property (generally the date when responsibility for property expense by the transferee ends) and the third-party company assumes ownership for the property through a buyout.

Vested: Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.

Veterans Administration (VA): An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.

Virtual tour: An Internet web/cd-rom-based video presentation of a property.

Voice mail: A telephone message system where voice messages can be retrieved directly or from a remote location.

VOWs (Virtual Office Web sites): are an Internet based real estate brokerage business model that works with real estate consumers in same way as a brick and mortar real estate brokerage.

W-2: The Internal Revenue form issued by employer to employee to reflect compensation and deductions to compensation.

W-9: The Internal Revenue form requesting taxpayer identification number and certification.

Walk-through: A showing before closing or escrow that permits the buyers one final tour of the property they are purchasing.

Will: A document by which a person disposes of his or her property after death.

Work sheet (transaction): The real estate sales company form that records all information relevant to a transaction.