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.

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.

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

As-is:  The existing condition of real estate, prior to any improvements contemplated.

Broker:  Broker means different services in different situations.  Most Realtors are “agents” who work under a “broker.”  Some agents are brokers as well, either working for themselves or under another broker.  In the mortgage industry, broker usually refers to a company or individual that brokers loans to larger lenders or investors rather than actually lending the money for the loans.  As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.

Certificate of Occupancy:  Presented by a city building department after satisfactory inspections by city building department inspectors and allowing occupancy of a building. Closings generally cannot be transacted until the C.O is issued.

Closing:  This has different meanings in different states.  In some states a real estate transaction is not considered “closed” until the documents record at the local recorders office.  In others, the “closing” is a meeting where all of the documents are signed and money changes hands.

Closing costs:  Closing costs are separated into what are called “non-recurring closing costs” and “pre-paid items”.  Non-recurring closing costs are items that are paid just once as a result of buying a property or obtaining a loan.  “Pre-paid” items refer to costs that recur over time, such as property taxes and homeowners insurance. 

Closing Statement: A statement of receipts and disbursements in a real estate property transaction. The listing broker furnishes a closing statement to the seller. The selling broker furnishes a closing statement to the buyer. 

Commission:  Usually based upon a percentage of a sale, the fee paid to a real estate broker as procuring cause and /or for his or her services rendered in a real estate transaction. May be paid by either party in a transaction; it is usually governed by a prior written agreement.

Common area assessments:  In some areas, called Homeowners Association Fees, they are charges paid to the Homeowners Association by the owners of the individual units in a condominium 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 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.

Condominium: Often mistakenly referred to as a type of construction or development, the term actually refers to the type of ownership in real property. Under the condominium arrangement, the individual owner purchases the exclusive right to occupy the space where the unit is located.  The owner also receives an undivided interest in the land and common areas, such as hallways, elevators, structure of the building, and as a rule, the recreation facilities.  A board of directors or a condominium association elected by unit owners administers the common area.

Condo: One of the dwelling units in a condominium type or ownership.

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

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

Contingency:  A condition that must be met before a contract is legally binding.  For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

Contract: An agreement between two or more people that is legally binding; an oral or written agreement to do or not to do a certain thing.

Deed:  The legal document conveying title to a property.

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.”

Developer:  Someone who develops real estate, especially someone who prepares a site for residential or commercial use.

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.

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

Fixture:  Personal property that becomes real property when attached in a permanent manner to real estate.

Force Majeure:  (An uncontrollable force) an event outside the reasonable control of the parties to a contract such as an “Act of God”, war, riots or strikes which would prevent the parties from complying with the provisions of an agreement.

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

Grantor:  The person conveying an interest in real property.

Gross Square Feet:  Usually refers to gross area of a building by measuring from the outside of its exterior walls and including all vertical penetrations, such as elevator shafts.  Also includes basement space.

Homeowner’s Association (HOA):  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:  An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

HVAC:  Acronym for heating, ventilation and air conditioning

Lead Paint Disclosure:  This form is required to comply with the sale or lease of any pre-1978 residential dwellings.  This was enacted into law by Congress to disclose lead paint hazards.

Listing Agreement:  A contract between a seller of real property and a broker.  The broker is employed to sell real estate on the owner’s terms within a given time, for which service the seller agrees to pay a commission.

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.

New Construction: Term for a property that is newly built or will be built.

Oceanfront Specialist: All of The Hoffman Group sales associates specialize in selling property on the Oceanfront.

Planned Unit Development (PUD):  A type of ownership where individuals actually own the building or unit they live in, but common areas are owned jointly with the other members of the development or association.  Contrast with condominium, where an individual actually owns the airspace of his unit, but the buildings and common areas are owned jointly with the others in the development or association.

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.

PRE-SALES: The term used when a purchaser enters into a Purchase Agreement for a specific unit(s) at a specific price for a unit(s) that will be available for closing at a date in the future. Usually, the entire inventory of a resort is “released” simultaneously.

Pre-Sales – New Construction: The sales category for a new resort a developer plans to build. Generally, construction takes 18 to 24 months before unit closings will begin.

Pre-Sales – Redevelopment/Conversion:  The sales category used when a developer plans to redevelop an existing resort property through a conversion to a horizontal property regime. The closings generally take place within a time frame of “immediately” to up to six months later. Purchasers usually take possession of the unit “as is” with renovations scheduled to occur at a later date as specified in the Purchase Agreement.

Punch list:  A list of incomplete or unacceptable items that, upon remedy and completion, will usually complete the obligations of the developer/contractor.

Purchase Agreement: A contract for the purchase and sale of real property in which the buyer agrees to purchase for a certain price and the seller agrees to convey title.  To be enforceable, it must be in writing and signed by both parties.

Real Estate Agent:  A person licensed to negotiate and transact the sale of real estate.

Real estate broker:  A person licensed to act as an agent for another person or business to negotiate a lease or purchase of a leasehold or property, respectively, for a fee.

Realtor: A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.

Real Estate Relationships Disclosure:  a form that specifically sets forth agency and brokerage relationships.  At the first substantive contact with a seller or buyer who has not entered into a written agreement with a broker, the licensee discloses in writing to that person the types of agency and brokerage relationships available.  The licensee also provides a written copy of the disclosure to the seller or buyer. 

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.

RE-SALES:   The sales term used when an individual owner, through a listing agreement, offers a specific existing unit to the market. Seller and prospective buyer negotiate to establish an agreed upon selling price and closing date.

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.

Seller’s Property Condition Disclosure:  This form describes the condition of residential real property as known by the seller.  Sellers of residential real property are required to furnish a completed copy of this form to a buyer before the buyer makes a written offer.

Setback:  Zoning requirement that requires a building or an improvement to be set back a certain number of feet from the property line.

Settlement statement:  See HUD1 Settlement Statement

Special assessment: Any special charge levied against real property for public improvements that benefit the assessed property.

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.

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.

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