đź—‚ Real Estate Market Glossary
- Absorption Rate
- The rate at which homes are sold in a specific market during a given time frame. Indicates the pace of sales.
- Active Listings
- Homes currently listed for sale that have not yet gone under contract.
- Appraisal
- An unbiased estimate of a home’s value conducted by a licensed appraiser, often required by lenders.
- Appreciation
- The increase in a property’s value over time due to market conditions or improvements.
- Average Sale Price
- The total value of all closed sales divided by the number of homes sold. Can be skewed by outliers.
- Backup Offer
- An offer accepted as a backup in case the primary contract falls through.
- Balanced Market
- When supply and demand are roughly equal. Typically indicated by 4–6 months of inventory.
- Buyer’s Market
- When there are more homes for sale than buyers. Often leads to lower prices and longer days on market.
- Closed Sales
- The number of homes that have completed the sale and transfer of ownership in a specific period.
- Comparative Market Analysis (CMA)
- A report prepared by a REALTOR® to estimate a home’s market value based on recent similar sales.
- Contingent
- A property that is under contract with conditions (e.g., financing, inspection) that must be met before closing.
- Days on Market (DOM)
- The number of days a property remains listed before going under contract.
- Depreciation
- The decrease in a property’s value over time due to wear, market decline, or other factors.
- Down Payment
- The portion of the purchase price a buyer pays upfront, not financed by a mortgage.
- Escrow
- A neutral third party holds funds or documents during the transaction until all conditions are met.
- Expired Listing
- A property listing that did not sell during the listing agreement period and is no longer active.
- Fair Market Value
- The price a willing buyer and seller would agree upon in an open and competitive market.
- For Sale by Owner (FSBO)
- A property being sold directly by the owner, without a listing agent.
- Home Equity
- The current market value of a home minus the amount still owed on the mortgage.
- Inspection
- A professional review of the home’s condition, often done during the due diligence period.
- Interest Rate
- The cost of borrowing money, expressed as a percentage of the loan amount, typically charged annually.
- Inventory
- The total number of homes for sale at any given time in a specific area.
- List Price
- The price at which a home is listed for sale by the seller and their agent.
- List-to-Sale Price Ratio
- The percentage of the asking price that a home ultimately sells for. Over 100% = above asking.
- Median Sale Price
- The midpoint of all home sale prices—half sold for more, half sold for less.
- Mortgage
- A loan used to finance the purchase of real estate, secured by the property itself.
- Multiple Offers
- When a property receives more than one purchase offer, often leading to bidding wars.
- New Listings
- Homes that have recently been put on the market within a given time frame.
- Offer
- A formal proposal from a buyer to purchase a property, which may include terms and contingencies.
- Pending Sales
- Homes that are under contract but have not yet closed. Indicates buyer activity.
- Price per Square Foot
- The sale price of a home divided by its square footage. Useful for comparing properties of different sizes.
- Principal
- The base amount borrowed for a loan, not including interest or fees.
- Seller’s Market
- A market condition where there are more buyers than available homes, leading to faster sales and higher prices.
- Showing
- An appointment for a prospective buyer to view a property in person.
- Staging
- The process of furnishing and decorating a home to make it more appealing to potential buyers.
- Under Contract
- A property with an accepted offer that is in the process of closing but not yet finalized.
