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Glossary of Real Estate Terms

Balloon Payment

Definition A balloon payment is a large lump-sum payment due at the end of a loan term, often used in mortgages, commercial loans, and seller financing agreements. These payments are significantly larger than the regular monthly installm...

Breach of Contract in Real Estate

Definition A breach of contract in real estate occurs when one party fails to fulfill their obligations under a legally binding agreement. This can include a buyer backing out of a purchase without cause, a seller refusing to transfer owner...

Bridge Loan

Definition A bridge loan is a short-term loan that helps a borrower "bridge the gap" between buying a new home and selling their current one. It provides temporary financing to cover the down payment or purchase price of a new property until t...

Buyer’s Agent

Definition: A real estate professional who represents the buyer’s interests in a real estate transaction. Explanation: A buyer’s agent helps clients find homes, negotiate offers, and guide them through inspections, financing, and closing. ...

Cap Rate (Capitalization Rate)

Definition The Capitalization Rate (Cap Rate) is a real estate investment metric that measures the potential return on an income-producing property. It is calculated by dividing the property’s Net Operating Income (NOI) by its purcha...

Capital Gains Tax

Definition Capital Gains Tax is a tax imposed on the profit made from the sale of an asset, including real estate. In real estate, capital gains tax applies when a property is sold for more than its original purchase price, with the gain...

Cash-Out Refinance

Definition A cash-out refinance is a type of mortgage refinancing where a homeowner replaces their existing mortgage with a new loan for a higher amount than they currently owe, receiving the difference in cash. Homeowners typically use th...

Certificate of Occupancy

Definition A Certificate of Occupancy (CO) is a legal document issued by a local government or building department that certifies a property is safe for occupancy and complies with zoning and building codes. It is typically required before...

Clear Title

Definition A clear title (also called a marketable title) is a property title free from any legal disputes, liens, or ownership claims. A home with a clear title can be sold or transferred without any legal issues or challenges to owners...

Closing

Definition: The final step in a real estate transaction where ownership is legally transferred from the seller to the buyer. Explanation: Closing is the point at which the property officially changes hands. During this process, all financial...

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