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ACCEPTANCE - Voluntary agreement to an offer.

ADDENDUM – Something added. A list or other material added to a document, letter, contractual agreement, escrow instructions, etc.

AMENDMENT – A change, either to correct an error or to alter a part of an agreement without changing the principal idea or essence.

APPRAISAL – An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications.

APPRECIATION – An increase in value to real property due to positive changes or the elimination of negative elements in the surrounding area.

ASSESSMENT - (1) The estimating of value of property for tax purposes. (2) A levy against property in addition to general taxes. Usually for improvements such as streets, sewers, etc.
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CERTIFICATE OF OCCUPANCY – A certificate issued by a local building department t a builder or renovator, stating that the building is in proper condition to be occupied.

CLOSING – (1) In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale is complete. (2) A selling term meaning the point at which the client or customer is asked to agree to the sale or purchase and sign the contract.

CLOSING COSTS – Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc.

CLOSING STATEMENT – The statement which lists the financial settlement between buyer and seller, and also the costs each must pay. A separate statement for buyer and seller is sometimes prepared.

CLOUD ON TITLE – An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. For example: A sells lot 1, tract 1, to B. The deed is mistakenly drawn to read lot 2, tract 1. A cloud is created on lot 2 by the recording of the erroneous deed. The cloud may be removed by quitclaim deed, or, if necessary, by court action.

CONCESSION – A granting of a right, by government or privately, usually for use of land or area in a building to carry on a business.

CONTINGENCY – Commonly, the dependence upon a stated event which must occur before a contract is binding. For example: The sale of a house, contingent upon the buyer obtaining financing.
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COUNTER OFFER – An offer (instead of acceptance) in response to an offer. For example: A offers to buy B’s house for X dollars. B, in response, offers to sell to A at a higher price. B’s offer to A is a counter offer.

CMA – Competitive Market Analysis. Appraising the value of a property by comparing the price of similar properties recently sold.

DEED – Actually, any one of many conveyance or financing instruments, but generally a conveyance instrument, given to pass fee title to property upon sale.

DEPRECIATION – (1) Decrease in value to real property improvements caused by deterioration or obsolescence. (2) A loss in value as an accounting procedure to use as a deduction for income tax purposes.

DRAR – Downriver Association of Realtors. An organization of people engaged in the real estate business. It is dedicated to the betterment of the real estate industry through education, legislation, and high ethical standards for its members.

EARNEST MONEY DEPOSIT – (1) Money given by the buyer with an offer to purchase. Shows good faith. (2) A natural accumulation of resources which may be commercially recovered and marketed.

EQUITY – (1) A legal doctrine based on fairness, rather than strict interpretation of the letter of the law. (2) The market value of real property, less the amount of existing liens. (3) Any ownership investments as opposed to investing as a lender.
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ESCROW – Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event. Modernly, in some states, all instruments necessary to the sale are delivered to a third party, with instructions as to their use.

FORECLOSURE – A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of property in order to sell the property to satisfy a lien against it.

HEIR – One who by law, rather than by will, receives that estate of a deceased person.

LAND CONTRACT – An installment contract for the sale of land. The seller has legal title until paid in full. The buyer has equitable title during the contract term.
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LIEN – An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all encumbrances are not liens.

LISTING – An agreement an owner of real property and a real estate agent, whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee or commission.

LOCK BOX – A device, provided by a real estate agent, holding a key to the premises in a secure manner, allowing only authorized persons to enter.

MARKET VALUE – The highest price a willing buyer would pay and a willing seller accept, both being fully informed, and the property exposed for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time.

MAR – Michigan Association of Realtors. An organization of people engaged in the real estate business. It is dedicated to the betterment of the real estate industry through education, legislation, and high ethical standards for its members.
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MILL – Equal to one tenth of a cent. Used in expressing tax rate. Ten mills would be the same as ten dollars per thousand.

MLS – Multiple Listing Service. Local real estate organization that provides detailed information to member brokers and agents, in book format and by online data base.

NAR – National Association of Realtors. An organization of people engaged in the real estate business. It is dedicated to the betterment of the real estate industry through education, legislation, and high ethical standards for its members.

NOTE – A unilateral agreement containing an express and absolute promise of the signer to pay a named person, or order, or bearer, a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust deed.

OPEN HOUSE – A house which is open without an appointment to prospective buyers for inspection, during certain hours and days of the week.
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PURCHASE AGREEMENT – An agreement between a buyer and seller of real property, setting forth the price and terms of the sale.

REALTOR – A designation given to real estate broker or sales associate who is a member of a board associated with the National Association of Realtors or with the National Association of Real Estate Boards.

REFERRAL – In the real estate business, generally the act of a past client recommending a real estate broker or agent to one currently a buyer or seller. Also, any recommendation by one real estate agent of another for a referral fee.
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SETTLEMENT STATEMENT – A statement prepared by broker, escrow, or lender, giving a complete breakdown of costs involved in a real estate sale. A separate statement is prepared for the seller and buyer.

SHORT SALE – A sale of property which includes some forgiveness of debt by the lender under a mortgage or trust deed. The amount of debt forgiven may be considered income to the seller and taxable.

TITLE – The evidence one has of right to possession of land.

WARRANTY DEED – A deed used in many states to convey fee title to real property. Until the widespread use of title insurance, the warranties by the grantor were very important to the grantee. When title insurance is purchased, the warranties become less important as a practical means of recovery by the grantee for defective title.

ZONING – The division of a city or county by legislative regulations into areas (zones), specifying the uses allowable for the real property in these areas.

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