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All about Real Estate Terms

Training Objectives/Goals

At the end of this session, you will learn the standard real estate terminology you may encounter when working with a client.

Real Estate In the US

Real estate in the United States is a broad industry encompassing buying, selling, and renting properties, including residential, commercial, and industrial spaces. It plays a crucial role in the economy and provides opportunities for homeownership, investment, and business operations.

Residential Real Estate – Includes single-family homes, condominiums, townhouses, and multi-family properties. Most people buy homes using mortgages, typically involving real estate agents.
Commercial Real Estate – Properties used for business purposes, such as office buildings, retail spaces, hotels, and shopping centers.
Industrial Real Estate – Includes warehouses, manufacturing plants, and distribution centers.
Land and Farm Real Estate – This category includes undeveloped land, agricultural properties, and ranches. These properties can be used for farming, livestock, recreational purposes, or future development.
Real Estate Investment – Investors purchase properties to generate rental income or resell for profit. This can include rental properties, house flipping, or participation in real estate investment trusts (REITs).
Government Regulations – Real estate transactions are subject to local, state, and federal laws, including zoning regulations, property taxes, and fair housing laws.
National Association of Realtors (NAR) – The largest trade association in the U.S. representing real estate professionals. NAR establishes ethical guidelines, provides market data, and advocates for industry-related policies.
Broker Reciprocity – An agreement among real estate brokers to share property listings with each other, increasing market exposure for properties.
MLS – The Multiple Listing Service (MLS) is a private database real estate professionals use to share and access property listings.
Internet Data Exchange (IDX) – allows brokers and agents to display MLS listings on their websites for public access, increasing visibility for home buyers.
Off-Market Listings – Properties that are for sale but not publicly listed on the MLS and are often used for privacy or exclusive sales.

Real Estate Terms Simplified

Understanding real estate terminology is essential for you to be more effective in your role. Here’s a simple breakdown of key terms:

Appraisal – An expert’s estimate of a property’s value.
Broker – A licensed professional who helps buyers and sellers in real estate transactions and may oversee agents.
Buyer’s Agent – A real estate agent who represents the buyer in a transaction.
Closing Costs – Fees paid at the end of a real estate transaction, including lender fees, title insurance, and taxes.
Commission – The fee paid to real estate agents for their services, usually a percentage of the property’s sale price.
Contingency – A condition that must be met before a deal can proceed, like a home inspection or loan approval.
Down Payment – The upfront amount a buyer pays when purchasing a home, usually a percentage of the total price.
Equity – The difference between a home’s market value and the amount still owed on the mortgage.
Escrow – A neutral third party that holds money or documents until all conditions are met in a transaction.
Fixed-Rate Mortgage – A home loan with the same interest rate for the entire term.
Home Inspection – A professional evaluation of a home’s condition before purchase.
Listing Agent – A real estate agent who represents the seller in a transaction.
Loan Pre-Approval – When a lender reviews a buyer’s finances and confirms how much they can borrow.
MLS (Multiple Listing Service) – A database that real estate agents use to list and find properties for sale.
Mortgage – A loan specifically for purchasing a property, with the home as collateral.
Offer – A formal proposal by a buyer to buy a home at a specific price.
Real Estate Agent – A licensed professional who assists buyers and sellers in property transactions.
Realtor – A real estate professional member of the National Association of Realtors (NAR) and abides by its Code of Ethics.
Title – A legal document proving property ownership.
Zoning – Local government rules on how land can be used (residential, commercial, etc.).

Aren’t Brokers, Real Estate Agents, and Realtors the Same?

While these terms are related and often used interchangeably, they refer to different roles in real estate:

Real Estate Agent – A licensed professional who helps people buy and sell real estate and is paid a commission when a deal is completed. The agent may represent either the buyer or the seller.

Broker – A real estate agent who has pursued additional education and obtained a state broker’s license. Does the same job as an agent but is licensed to work independently and may employ agents. Brokers are paid on commission but also get a cut of the commissions of agents who work for them.

Realtor – A real estate professional (either an agent or a broker) member of the National Association of Realtors (NAR) and follows its strict Code of Ethics.

Good to know!

Understanding what type of agents your clients are will enable you to assist them better.

Real estate agents organize transactions between buyers, sellers, owners, and renters. They handle offers, counteroffers, and any queries between each party. When an offer is accepted, an agent will work with another agent to guide clients through filling out paperwork. They also make sure their clients are fully aware of any requirements to complete the sale, including home inspections, moving, and important dates such as the closing.

Listing agents represent sellers. They help set listing prices, suggest home updates that will increase the home’s value (and the chance of a successful sale), help with home staging, and market the house via the local Multiple Listing Service (MLS) and other channels. They also negotiate sales prices, closing costs, and other fees and help prepare, submit, and file documents.

Buyer’s agents represent buyers. These agents find properties that match the buyer’s requirements and price range and help arrange home appraisals and inspections. Like listing agents, buyer’s agents negotiate terms and help prepare, submit, and file the necessary documents.

In case you are curious…

When a house is sold, the commission paid by the seller is usually split between the buyer’s and seller’s agents (with their cuts potentially split with their respective agencies).

I still have questions. I still need more information about this.

Research online. Talk to your managers. We are here to help!

Did you know?

We have Buyers , Sellers and Financing roadmaps. These are free to use for clients who purchase an Agent Image website.