Real estate glossary

Appraisal

A licensed appraiser's opinion of a property's value, ordered by the lender. If it comes in below the contract price, the financing gap has to be resolved by the parties.

BINSR

Buyer's Inspection Notice and Seller's Response — the Arizona form a buyer uses to accept the property, request corrections or disapprove items after inspections, and the seller uses to respond.

Close of escrow

The point at which documents are signed and recorded, funds are disbursed and ownership transfers.

Closing costs

Fees and prepaid items due at closing — lender charges, title and escrow fees, recording, prorated taxes, insurance and, where applicable, HOA transfer fees.

Comparable sales (comps)

Recent sales of similar properties used to support a pricing recommendation or an appraisal.

Contingency

A condition in the contract that must be satisfied before the parties are obligated to close — commonly inspection, appraisal and loan contingencies.

Due diligence

The investigation a buyer performs during the contract period: inspections, document review, association materials, permits and use verification.

Earnest money

A good-faith deposit held by escrow after contract acceptance. It is credited toward the purchase at closing and can be at risk if the buyer cancels outside contract terms.

Escrow

A neutral third party that holds funds and documents and carries out the instructions in the contract until closing.

Final walkthrough

The buyer's opportunity shortly before closing to confirm the property's condition and that agreed repairs were completed.

HOA

Homeowners association. Governs common areas and rules for a community and charges assessments. Documents should always be reviewed during the inspection period.

Inspection period

The negotiated window in which the buyer investigates the property and delivers the BINSR. Deadlines are calendar-driven and consequential.

Lot rent

The monthly amount paid to a manufactured home community for the leased site the home occupies. What it includes varies by community.

MLS

Multiple Listing Service — the cooperative database licensed REALTORS® use to share listing data and offers of compensation.

Personal representative

The person appointed to administer an estate. Authority to sell estate property is determined by an attorney or the court, not by a real estate agent.

Preapproval

A lender's conditional commitment based on reviewed documentation. Stronger than a prequalification and expected with most offers.

Prorations

The division of ongoing costs such as taxes and HOA dues between buyer and seller as of the closing date.

Septic and well

Private wastewater and water systems common outside city service areas. Both warrant specific inspections and, in some cases, transfer-related requirements.

Title insurance

Coverage protecting against certain defects in the ownership record. Lenders require their own policy; an owner's policy is separate.

Under contract

Status indicating an accepted purchase contract is in place, with contingencies still potentially outstanding.

Information on this site is general in nature and is not legal, tax, financial or lending advice. Melissa Smets is a licensed REALTOR® and is not an attorney. Consult an appropriate professional regarding your specific situation.