There is a lot of technical terminology in Real Estate. It can be very confusing and overwhelming, especially if you are new to buying or selling a home.
🏘️ Below is a list of some of the most used real estate terms that you may want or need to know along your trek to real estate happiness.
But don’t worry, there won’t be a quiz. 😅
Frequently Asked Real Estate Questions:
What is a BPO? 🤔
A Broker Price Opinion (BPO) in real estate is a professional estimation of a property’s value.
It’s an essential tool used by real estate brokers like me, providing an in-depth analysis of market trends and comparable sales data in a specific area.
This quick and cost-effective report greatly helps financial institutions, investors or property owners make informed decisions regarding potential sales, purchases, or refinancing.
Essentially, a BPO in real estate is a comprehensive snapshot of a property’s worth in the current market.
Banks and lenders who hold REO properties often hire a Realtor to perform a BPO on those properties. It usually is the first step in managing and selling the bank owned home.
A canceled status on a multiple listing service (MLS) means that the listing agreement between the seller and the listing agent has been cancelled:
- The property is no longer available for showings 🏡
- The relationship between the seller and the listing agent ends 🙅🏼♀️
- The listing will not show up as expired in the future 👍🏼
- Also, the seller is free to relist the property with another broker 🏠
📜 To relist the property, the seller will need to get a new listing agreement with the broker.
A canceled listing differs from a withdrawn listing, so the listing contract is still in effect, but the property is not being marketed. A withdrawn listing can be for many reasons, including:
- The seller changed their mind 🤷🏼♂️
- The seller wants to make improvements to the home 🔨🔦
- Also, the seller may want a break from showing the home 😪
More About a Cancelled Listing
❎ When a real estate listing is cancelled, it means that the property which was previously available for sale is no longer on the market.
This could be because of a variety of reasons – the owner may have decided not to sell, the agreement with the real estate agent may have ended, or the property may have been taken off the market for improvements or repairs.
🚫 The cancellation implies that the property is no longer actively seeking potential buyers.
👩🏼Libby Says…
In my experience, the home seller may have unrealistic expectations about selling their home. They may expect more money than the home is worth. They may think the property will sell quickly without doing any repairs, staging or preparing the home for the market.
Having an agent that is honest with the seller is paramount to a fast sale for the most amount of money. I help sellers manage their expectations and have realistic goals for the sale of their property.
If you want honest advice about selling your home, give me a call right away. 🤙🏼
~ Libby
📲 865-364-0200
📧 Libby@guthriegrouphomes.com
Libby Guthrie, REALTOR
Keller Williams 865-966-5005
Guthrie Group Homes, Knoxville TN Real Estate
https://gghknoxville.com/
Capitalization Rate aka Cap Rate
An equation to estimate the potential return on an investment in the real estate market. Calculated by dividing net annual income by property market value.
Interested in investing in real estate? 
You’ll need to understand cap rates.
A property’s cap rate (or capitalization rate) is an estimate of its rate of return. To find a property’s cap rate, divide the net annual income you expect it to generate by its current market value.
Cap rates are a great tool for comparing properties, but they don’t tell the whole story! You also need to account for financing costs, management expenses, and more.
Are you searching for an investment property that will pay off? We can help! Contact us today for a free consultation.
What are Comparable Sales? 🤔
Known in real estate as “comps,” comparable sales are the sales prices of similar homes and are based on the following:
☑️ Lot size
☑️ Condition
☑️ Age & Construction
☑️ Square footage
☑️ Close proximity
☑️ Time frame of the sale
When it comes to buying or selling, both place high importance on comps to determine a home’s value.
Contact our team for a ✨ free consultation ✨ to learn more about what homes are selling for in your area.
A condominium (condo) is a type of housing where several people own separate units in larger building or complex. Each unit is owned by an individual.
A real estate contract is a legally binding agreement between two parties for the sale and purchase of a property.
It outlines the price, terms, and conditions of the sale.
What is Curb Appeal? 🤔
Curb appeal is the attractiveness of a property viewed from the street, the exterior allure that grabs the attention of prospective buyers or tenants. It’s a crucial factor in real estate as it creates the first impression, invests the onlooker with a sense of expectation, and sets the tone for what’s to come. Curb appeal often lays the emotional groundwork that can significantly influence a potential buyer or tenant’s decision.
The concept of curb appeal goes beyond just a clean facade; it’s about a harmonious mix of multiple elements that together create a compelling and inviting outdoor space. This includes aspects like landscaping, exterior design, front entrance, lighting, driveway, and walkways, each carrying its own weight and contributing to the overall allure.
To create excellent curb appeal, focus on the following suggestions:
1. Landscaping: This is often the most noticeable aspect of curb appeal. A well-maintained lawn, fresh greenery, and vibrant flowers can drastically enhance your home’s appearance. Choose low-maintenance, native plants for sustainability and attractiveness.
2. Exterior Design and Maintenance: Ensure your home’s exterior is in good repair. Fresh paint, clean windows, and a well-maintained roof are essential. Opt for colors and design elements that complement the home’s style and surroundings.
3. Front Entrance: Make your front door inviting. Consider it as a focal point that grabs attention, from its color to its hardware to any surrounding elements like plants or decorations.
4. Lighting: Good outdoor lighting can provide a warm, welcoming ambiance while highlighting the home’s best features. Investing in professionally designed lighting not only attracts potential buyers or tenants at night but also amplifies security.
5. Driveway and Walkways: A clean, well-maintained driveway and walkways go a long way in boosting curb appeal. Opt for materials that complement your home and landscape.
6. Outdoor Elements: Details like a mailbox, house numbers or a creatively designed welcome mat can add additional charm to your home’s exterior.
7. Seasonal Decor: Occasional touches in sync with seasons or holidays can make the house appear cared for and loved, adding significantly to its allure.
Remember, curb appeal is about creating a sense of harmony and coherence, where every element is integrated seamlessly, leading to a compelling and inviting visual narrative that convinces the potential buyer or tenant about the value and potential of the property.
In real estate, a deed is a document that shows who owns a piece of property. When someone buys a house, they get a deed that shows they are the owners.
This is not the same as a Deed of Trust.
An escalation clause is a clause in a real estate contract that allows the purchase price of a property to increase if a certain condition is met.
For example, if the buyer’s offer is accepted but the seller receives a higher offer, the buyer can choose to increase their offer by a specified amount.
What is a Final Walkthrough?
A final walkthrough in real estate is when a buyer goes through the property one last time before the closing.
The walk-through is one of the last steps in the homebuying process, but you shouldn’t rush it! Here are a few things to check during your final walk-through:
💡 Are all items included in the sale (e.g. light fixtures and appliances) in place and operational?
🚿 Are all major systems working properly?
⚒️ Have all requested repairs been completed?
🗑️ Has the seller removed all personal items and debris?
🚪 Was any significant damage done during the seller’s move out?
Want more expert guidance on the homebuying process? Reach out for a free consultation.
📲 865-364-0200
📧 libby@guthriegrouphomes.com
What is a Foreclosure?
When the lender takes ownership of a property due to failed payments by the buyer.
A foreclosure is when the lender takes ownership of a property due to failed payments by the buyer. It’s a legal process that can be complex and time-consuming. If you’re facing foreclosure, it’s important to understand your rights and options.
What is a HELOC?
A HELOC (Home Equity Line of Credit) is a type of loan that allows a homeowner to borrow against the equity in their home.
What is a Homeowners Association (HOA)?
A homeowners association (HOA) is an organization that makes and enforces rules and guidelines for a subdivision, planned community, or condominium building.
Like many relationships, it’s complicated.
A homeowners association (HOA) is a non-profit organization that takes care of the common areas in a planned community.
HOA fees pay for things like landscaping, snow removal, and repairs to common areas.
A Homeowners Association is an organization made up of homeowners who live in a specific neighborhood or development. The HOA is responsible for maintaining common areas and enforcing rules and regulations.
When you buy a home in a development that has an HOA, you agree to the terms and conditions (rules) of the HOA. CC&Rs.
A homeowners association (HOA) is a private organization that manages and governs a residential community, such as a planned neighborhood, condominium building, or townhouse complex. HOAs are responsible for:
Creating and enforcing rules
HOAs establish rules and guidelines to maintain uniformity and protect property values. These rules can include requirements for yard items, door colors, and car storage.
Collecting fees
HOAs collect monthly or annual dues from residents to pay for common area maintenance and services.
Providing amenities
HOAs can offer amenities like swimming pools, gyms, snow removal, and security.
Running the community
HOAs are typically run by a board of directors made up of elected volunteers.
HOAs can be beneficial because they help maintain the neighborhood and preserve property values. However, some people find the rules to be overly restrictive. HOAs can impose fines on homeowners who don’t comply with the rules, and in extreme cases, they can even force foreclosure.
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Cornell Law
Many HOAs have very particular guidelines like preventing any items being in the yard, requiring doors to be a specific color, requiring cars to always be in the garage, or even requiring flower beds to have specific flower colors. As such, it is very important that homeowners look at the CC&Rs for the property they potentially buy.
When homeowners break a restriction or do not pay fees, the HOA will have specific remedies set in the CC&Rs such as fines or even forcing the home to be foreclosed on in extreme circumstances, ranging widely among different HOAs. Some laws limit how HOAs can punish homeowners such as limiting foreclosure actions to when the homeowner acts unruly, but these laws vary greatly from state to state and city to city. Further, some federal and state laws may prevent the enforcement of restrictions by HOAs that become unconscionable or against public policy. For example, federal laws prohibit HOAs from banning homeowners from having a service animal. https://www.law.cornell.edu/wex/homeowners%27_associations_%28hoas%29#:~:text=Many%20HOAs%20have%20very%20particular,unconscionable%20or%20against%20public%20policy.
Investopedia
Bankrate
https://www.bankrate.com/real-estate/what-is-an-hoa/
Rocket Mortgage
What does “Months of Supply” tell us about the market?
To break it down simply:
A Balanced Market = 6 to 7 months of supply
There are a relatively even number of buyers and sellers.
A Seller’s Market = Fewer than 6 months of supply
There are more buyers than homes for sale, thus sellers hold the upper hand.
A Buyer’s Market = More than 7 months of supply
There are more homes for sale than willing and able buyers, thus buyers have more negotiating power.
Have a question about current market trends? Reach out at any time! We’re here to help you decode the lingo and make the most of today’s market 
What is a Natural Hazards Disclosure Report? 🤔
📃 A natural hazards disclosure report is a document that describes the risks associated with natural hazards for a particular property.
🔥It may include information about earthquake faults, flooding, fires, and other hazards that could affect the property.
📃 In some areas, including California, it is required by law to have a natural hazards disclosure report before a property can be sold.
📄 The report can be 43–60 pages long and covers a range of hazards, including:
Earthquakes, Floods, Landslides, Wildfires, Tornadoes, Hurricanes, Tsunamis, Radon gas, Airports, and Industrial hazards.
✋🏼Whoa! That looks overhwelming! Don’t worry, your Realtor will explain everthing to you. 🙆🏼♀️
🌊 And FYI, you probably don’t have to worry about Tsunamis in Knoxville. 😏
What is an Open House? 🤔
During an open house, a seller’s real estate agent or broker holds open hours during which the home is available for the public to view.
Did you know that some properties are never listed publicly?
Known as pocket listings, these properties are sold “off-market.” The broker chooses who to share the listing with—usually an exclusive list of clients and agents.
Typically, pocket listings are used to enhance the seller’s privacy. They are especially popular for ultra-luxury listings or when the seller is a public figure.
However, not everyone supports the practice. In fact, the U.S.-based National Association of Realtors (NAR) requires its members to post listings on the MLS, in most cases—although the legality of NAR’s policy is currently being challenged in the U.S. judicial system.
Curious to find out what strategy we would recommend to sell your home in today’s market? Reach out for a free consultation.
A property survey (sometimes called a land survey) is a professional assessment of a property’s boundaries and characteristics.
A property survey can help you protect your real estate investment.
Professional surveyors are often called upon when:
Buying or selling property
Settling boundary disputes
Building or making improvements
Applying for zoning permits
Subdividing land
Identifying easements and hazard areas
Are you in need of a property survey? Reach out for a list of our recommended surveyors!
The written contract between the buyer and seller that outlines the terms of the sale.
What is a Real Estate Agent? 🤔
A licensed professional who represents a buyer or seller in a real estate transaction. The agent may or may not be a Realtor.
What is a Real Estate Broker (or just Broker)? 🤔
A real estate broker is a licensed professional who helps people buy or sell property. They are more experienced than real estate agents and have a broker’s license.
REALTOR® is a registered trademark of the NATIONAL ASSOCIATION OF REALTORS – used only by its members. Not every real estate agent is a Realtor.
A Realtor is a licensed real estate agent who is also a member of the NAR (National Association of Realtors).
Pronounced real-tor. There’s no “I”.
What is Realtor Speak? 🤔
The faux language that Realtors use to describe their listings, real estate terms, and to buy and sell homes.
What does REO stand for in real estate and what does it mean? 🤔
REO stands for Real Estate Owned. Apparently banks are not very creative. 😁
An REO, known in full as Real Estate Owned, is a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction.
This situation occurs when a homeowner defaults (can’t or won’t pay) on their mortgage payments, leading the lender to initiate a foreclosure, which is a legal process that allows them to sell the home and recover as much of the outstanding loan balance as possible.
Upon default, the bank or lender will attempt to sell the property at a foreclosure auction, if the auction does not result in a sale—usually because the minimum bid is not met— the property is tagged as REO.
The lender now takes full control of the property. Post-foreclosure, the lender is responsible for the maintenance of the property and any necessary repairs. The lender will also cover any tax liens, evicting occupants if necessary, and settle homeowner’s association dues.
As the property is now actually costing the lender, they will often list the property for sale in an effort to recoup their investment.
The bank or lender often hires a Real Estate Agent that specializes in dealing with and selling REO properties.
REOs typically present opportunities for investors or home buyers who are in search of discounted homes and are not averse to repairs or renovations, as these properties are often sold “as is”.
What is a Settlement Statement (aka HUD-1)? 🤔
A settlement statement, also known as a HUD-1, is a document that lists all the costs associated with buying or selling a home.
What is a short sale?
The sale of a home sold for less than what’s owed on the mortgage to prevent foreclosure.
A “short sale” is a home sold at a discounted price. But why would someone want to sell their home for less than it’s worth? 🤔
Homeowners struggling to make payments on their mortgage are faced with the option to foreclose on their property, which can severely damage their credit.
But a short sale can leave less of a negative impact, and some sellers can qualify for other home loans once the short sale closes.
If you’d like to learn more about short sales in our area (how they work, if they’re in your best interest, or how to take advantage of them if you’re a buyer), send us a message 📲
Title, also known as a title deed, is a document that shows who owns a piece of property. When someone buys a house, they get a title deed that shows they are the owners.
What is a Title Search?
A property title search examines public records on the property to confirm the property’s rightful legal owner.
A townhouse is a type of housing where several people own separate units in a larger building or complex. Each unit is owned by an individual.
A townhouse is a type of residential dwelling, typically multistoried, characterized by its shared walls with adjacent homes in the series. This form of housing offers a blend of the features found in detached single-family homes and condominiums. Like a single-family home, a townhouse owner typically owns the land the house stands on, whereas, like a condo, it offers close community living often with shared amenities such as swimming pools or gyms. It appeals to those desiring a home with less maintenance, enhanced security, and a sense of community, while still providing the ownership perks of land and building. The architectural design of townhouses often leans toward urban aesthetics, making them common choices in densely-populated areas.
