MN Real Estate Glossary
24-hour noticeAllowed by law, tenants must be informed of showing 24 hours before you arrive. This may also be requested where sellers have home businesses.
Acceptance (of a contract)
Acceptance of a contract (sometimes called ratification), is the formal term for the agreement of both buyer and seller on a final version of a homebuying contract. Other key dates and contingencies in the contract will generally refer to a number of days from acceptance of the contract.
An addition to; a document. Sometimes called a 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.
In real estate, the licensed real estate salesperson or broker who represents buyers or sellers. Not always a REALTOR
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.
Those times or time periods an agent meets with clients.
An appraisal is an independent assessment/opinion of the value of a property. Appraisals are used by a lender to verify a borrower isn’t paying more than the current market justifies (and thus owning less equity than required for the lender’s underwriting guidelines).
In recent years, the appraisal process has changed considerably as a result of the housing crisis of 2008/2009. Today, an appraisal is ordered by the lender or mortgage broker via a central directory of appraisers (often called an Appraisal Management Company or AMC). Choosing a specific appraiser is not possible, but a mortgage broker can reject an appraiser and ask for a new one.
Most FHA and VA purchase agreements addendums have clauses that the property must appraise for the sale price.
A document showing opinion of property value at a specific point in time and the supporting information used to determine the value opinion.
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.
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.
Back-up offer: When an offer is accepted contingent on the fall through or voiding of an accepted first offer on a property.
Bill of sale: Transfers title to personal property in a transaction.
Board of REALTORS® (local): An association of REALTORS® in a specific geographic area.
Broker: A state licensed individual who acts as the agent for the seller or buyer and often holds the licenses of non-broker agents.
Broker’s tour: A preset time and day when real estate sales agents can view listings by multiple brokerages in the market.
Business Days: A business day is considered every official working day of the week. Typically, these are the days between and including Monday to Friday and do not include public holidays and weekends. (See your contract details.) Online calculator: http://www.timeanddate.com/date/workdays.html
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 property, negotiates the contract or offer for the buyer, and works with the buyer to close the transaction.
Buried Oil Tank (heating)
Calendar Days: A calendar day is any day of the week, including weekends. Also, a calendar day always runs 24 hours (except for Daylight Savings Time changes) from 00:00 through 24:00
Carrying costs: Cost incurred to maintain a property (taxes, interest, insurance, utilities, and so on).
Certificate of Occupancy: A Certificate of Occupancy is required before any new building can be occupied.
Certifications (Real Estate): Agent complete training and prove sales to earn these. Examples of Certifications and Designations
cfpb: The CFPB (The Consumer Financial Protection Bureau) is a government agency built to protect consumers. Our free resources help you have the information you need to make informed financial decisions.
Closing: The end of a transaction process where the deed is delivered, documents are signed, and funds are dispersed.
Closing Costs: For buyers closing costs may include appraisal fees, credit report fees, loan origination fees, loan discount points, title search, title insurance fees, lender insurance fees, PMI insurance, Pre-paid interest, escrow accounts, mortgage recording fees, transaction related expenses that are POC and a real estate retainer fee. For sellers closing costs may include mortgage payoff, real estate commissions/retainers, title transfer, recording fees, association fees, unpaid taxes, liens, and utilities.
Closing Date: When the loan is funded by lender (or cash) and recorded by Title company. In MN, this is usually when the seller allows the buyer to take possession of the home.
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.
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.
Competitive/Comparative market analysis (CMA): 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.The analysis used to provide market information to the seller and assist the real estate broker in securing the listing.
Condominium association: An association of all owners in a condominium. (Condo Docs usually include: 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 declarations: A document that legally establishes a condominium. 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.)
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 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.
Cooperating commission: A commission offered to the buyer’s agent brokerage for bringing a buyer to the selling brokerage’s listing.
Counteroffer: The response to an offer or a bid by the seller or buyer after the original offer or bid.
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. (DOM: Days on market.)
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. Read about Material Facts Disclosure
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.
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.
E-mail: Electronic or Internet-based communication.
Escrow account for real estate taxes and insurance: An account into which borrowers pay monthly prorations for real estate taxes and property insurance.
Easement – a right to cross or otherwise use someone else’s land for a specified purpose.
Effective Date – see Executed date
Escalation clause: Typically utilized in a potential multiple-offer situation. It is used to try to squeeze out all competition in a competitive bidding process. Basically, it says that a buyer will pay X amount, which could be any number ranging from $100 to hundreds of thousands, above and beyond the highest offer received by the seller, and it generally contains a ceiling cap.
Escrow Agent: Not a common term in MN. An escrow agent is a person or entity that holds property in trust for third parties while a transaction is finalized or a disagreement is resolved.
Exclusions: Fixtures or personal property that are excluded from the contract or offer to purchase.
Federally-mandated documents include: The Loan Estimate, The Closing Disclosure, The Notice of the Right to Rescind, The Initial Escrow Statement
Executed date is the final date that all parties have signed the contract.
Expired (listing): A property listing that has expired per the terms of the listing agreement.
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.
FHA: Federal Housing Administration. Check out this FHA handbook
Finalized (referring to a contract)
Final Walkthrough Walk-through: A showing before closing or escrow that permits the buyers one final tour of the property they are purchasing.
Fixture: Personal property that has become part of the property through permanent attachment.
For sale by owner (FSBO): A property that is for sale by the owner of the property.
Gross sale price: The sale price before any concessions.
HERS Index: What is a HERS rating?
Highest & Best: When a property has multiple offers, the listing agent will often send out a notice that each buyer’s highest & best offer is due by a certain deadline for the seller to review. Your highest price and best terms should be well thought out and discussed with your agent so that you don’t have regrets.
HUD: U.S. Department of Housing and Urban Development.
HUD Guidelines 24 CFR 206.125
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. Most real estate agents are independent contractors.
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.
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.
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.
Multiple listing service (MLS): A service that compiles available properties for sale by member brokers.
Multiple Offers: More than one buyer present offers 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.
Net sales price: Gross sales price, less concessions, to the buyers.
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. Offer Terms
Open house (public): When a listing that is on market is available to the public for viewings and showings. The agent holding the open house often represents the seller.
Parcel identification number (PIN): A taxing authority’s tracking number for a property.
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.
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.
Preapproval: A higher level of buyer/borrower prequalification required by a mortgage lender. Some preapprovals have conditions the borrower must meet.
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. Many sellers request to only allow showing by prequalified buyers.
Preview appointment: When a buyer’s agent views a property alone to see if it meets his or her buyer’s needs.
Professional designation: Additional non-licensing real estate education completed by a real estate professional.
R & I: Estimated and actual repair and improvement costs.
Ratification (of a contract)
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).
REALTOR®: A registered trademark of the NATIONAL ASSOCIATION OF REALTORS® that can be used only by its members.
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.
Retainer fee: A predetermined amount of compensation paid to an agent or broker to receive representation or service in a real estate transaction.
Real Estate Attorney
Resale Disclosures: http://www.callsarahfirst.com/mn-resale-disclosure-package/
Residential Service Contract
Sale price: The price paid for a listing or property.
Seller (owner): The owner of a property who has signed a listing agreement or a potential listing agreement.
Sewer Inspection/Sewer Scope
Sheriff Sale – The Sheriff’s Office conducts the mortgage foreclosure sales as a statutory requirement in Minnesota. These are not auctions. The mortgage foreclosure sale starts the owner’s redemption time. Redemption periods can be 6 months or even one year. The owner of the property still has many rights in place. We encourage you to seek legal counsel before attempting to bid at a foreclosure sale. You must have funds in the full amount owed at the time of the sale in the form of a bank cashier’s check or cash.
Showing: When a listing is shown to prospective buyers or the buyer’s agent (preview). Showings
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.
Supra®: An electronic lockbox (ELB) that holds keys to a property. The user must have a Supra keypad to use the lockbox.
Temporarily Not Available for Showing (TNAS): A listed property that is taken off the market due to illness, travel, repairs, and so on.
Transaction: The real estate process from offer to closing or escrow.
Under contract: A property that has an accepted real estate contract between seller and buyer.
Virtual tour: An Internet web/cd-rom-based video presentation of a property.
VM (Voice mail): A telephone message system where voice messages can be retrieved directly or from a remote location.
This list is not comprehensive. Please consult your attorney, title closer, tax account or other related professionals for advice.
OTHER REAL ESTATE AGENT LINGO:
Destination services: Services provided to the transferee at the new location. They can include familiarization tours, temporary housing, school searches, and so on.
Flat fee: A predetermined amount of compensation received or paid for a specific service in a real estate transaction.
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.
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 during which a property is being marketed by the listing broker based on the listing agreement.
Niche: A special area or interest.
Pricing: When the potential seller’s agent goes to the potential listing property to view it for marketing and pricing purposes.
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.
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.
Secondary market: An institutional investment market that purchases mortgages from mortgage lenders.
Temporary housing: Housing a transferee occupies until permanent housing is selected or becomes available.
Third-party company: A relocation company hired by an employee’s employer to coordinate the employee’s move to a new location.
Trailing spouse: The spouse or partner of the employee being moved to a new location by an employer.
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.
VA: 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.
Virtual assistant: A real estate sales agent administrative assistant that works remotely.
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.
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