real estate agent:
Real estate agents are the worker bees of real estate sales. Also called "salespeople," agents are supervised by a real estate broker. Agents are licensed by the state; their pay is typically based totally on commissions generated by selling property.

real estate investment trust (REIT):
Real estate investment trusts are like a mutual fund of real estate investments. Such trusts invest in a collection of properties (from shopping centers to apartment buildings). REITs trade on the major stock exchanges. If you want to invest in real estate while avoiding the hassles inherent in owning property, real estate investment trusts may be the right choice for you.

Realtor:
A Realtor is a real estate broker or agent who belongs to the National Association of Realtors, a trade association whose members agree to its ways of doing business and code of ethics. The National Association of Realtors offers its members seminars and courses that deal with real estate topics.

refinance:
Refinance, or "re-fi," is a fancy word for taking out a new mortgage loan (usually at a lower interest rate) to pay off an existing mortgage (generally at a higher interest rate). Refinancing is not automatic, nor is refinancing guaranteed. Refinancing can also be a hassle and expensive. Carefully weigh the costs and benefits of refinancing.

return on investment:
The return on investment is the percentage of profit that you make on an investment. If you put $1,000 into an investment, and one year later your account is worth $1,100, you have made a profit of $100. Your return is the profit ($100) divided by the initial investment ($1,000) - 10 percent. See also leverage.

reverse mortgage:
A reverse mortgage enables elderly homeowners, typically who are low on cash, to tap into their home's equity without selling their home or moving from it. Specifically, a lending institution makes a check out to you each month, and you can use the check as you want. This money is really a loan against the value of your home; because the money that you receive is a loan, the money is tax-free when you receive it. The downside of these loans is that they deplete your equity in your estate, the fees and interest rates tend to be on the high side, and some require repayment within a certain number of years.

second mortgage:
See home-equity loan. A second mortgage is a mortgage that ranks after a first mortgage in priority of recording. In the event of a foreclosure, the proceeds from the sale of the home are used to pay off the loans in the order in which they were recorded. You can have a third (or even a fourth) mortgage, but the further down the line the mortgage is, the higher the risk of default on the mortgage - hence, the higher interest rate that you'll pay on the mortgage.

The 72-hour clause:
The 72-hour clause is commonly inserted into real estate purchase offers when the purchase of a home is contingent upon the sale of the buyer's current house. The seller accepts the buyer's offer, but reserves the right to accept a better offer if one should happen to come along. However, the seller cannot do this arbitrarily. If the seller receives an offer that he wants to accept, he must notify the buyer of that fact in writing. The buyer then usually has 72 hours (though the alloted amount of time can vary) from the seller's notification to remove the contingency-of-sale clause and move on with the purchase; otherwise, the buyer's offer is wiped out.

shared-equity transaction:
In a shared-equity transaction, a private investor contributes money toward the purchase of a house and subsequently shares equity as a co-owner. When the house is sold, the investor takes a share of the profit or loss. These shared-equity transactions can become fairly complicated because the investor co-owner and the resident co-owner may have conflicts of interest. For example, the investor co-owner may want to sell the property to make a profit, but the resident co-owner may want to stay put. If you intend to participate in an equity-sharing transaction, have a lawyer who works with residential real estate partnerships prepare a written partnership agreement for all parties to sign prior to purchasing the property.

tax deductible:
Tax deductible refers to payments that you may deduct against your federal and state taxable income. The interest portion of your mortgage payments, loan points, and property taxes are tax deductible; your employment income is not!

teaser rate:
Otherwise known as the initial interest rate, the teaser rate is the attractively low interest rate that most adjustable-rate mortgages start with. Don't be sucked into a mortgage because it has a low teaser rate. Look at the mortgage's formula (index + margin 3D interest rate) for a more reliable method of estimating the loan's future interest rate - the interest rate that will apply after the loan is "fully indexed."

tenancy-in-common:
Tenancy-in-common is probably the best way for unmarried co-owners to take title to a home (except for those unmarried co-owners who are involved in close, long-term relationships - see joint tenancy). Co-owners do not need to own equal shares of the property that is held as a tenancy-in-common. A tenancy-in-common also does not provide for the right of survivorship that automatically passes the deceased partner's ownership to the survivor without probate. The deceased's share of the property involved in a tenancy-in-common passes to the person named to receive that share of the property in the deceased's will or living trust.

title insurance:
Title insurance covers the legal fees and expenses necessary to defend your title against claims that may be made against your ownership of the property. The extent of your coverage depends upon whether you have an owner's standard coverage or extended-coverage title insurance policy. To get a mortgage, you also have to buy a lender's title insurance policy to protect your lender against title risks.

top producers:
People remark that 20 percent of all real estate agents account for 80 percent of all real estate sales. Be cautious. Why is that agent a top producer? Some agents get to the top by being pushy and selling a great deal of property without patiently educating buyers - not the kind of agent that you want! If, however, the agent is a top producer because she works hard to meet the needs of her clients, then being a top producer is a good thing.

townhouses:
Townhouse is the decorative name for a row (or attached) home. Townhouses are cheaper than single-family homes because they use common walls and roofs and save land. In terms of investment appreciation potential, townhouses lie somewhere between single-family homes and condominiums.

Veterans Administration loans:
Veterans Administration loans are fixed-rate mortgages for veterans of the American military services. The rules to obtain these mortgages are less stringent in certain respects than are the rules for conventional mortgages. Veterans Administration loans require no down payment as long as the appraised value of the house is below a certain threshold level, and the interest rate on Veterans Administration loans typically falls 0.5 to 1 percent below the rate that is currently being charged on conventional loans.

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