20 Important Real Estate Terms (And Their Definitions)


Ever tried reading over a contract or document only to find you don’t understand major sections? Yeah...it happens! The real estate industry is well-known for its confusing jargon but don’t let it get you down. Before you get frustrated and tear up those important documents, let us help! We’re here to be your real estate resource, whether you’re buying, selling, or just doing research.

We’ve compiled a list of important real estate terms and their definitions to help you out:

Amortization - repayment of a loan’s principal using equal payments over a period of time consisting of both principal and interest.

Annual Percentage Rate (APR) - The annual rate that is charged for borrowing, expressed as a single percentage that represents the yearly cost of funds over the term of a loan.

Closing Costs - These costs are the standard fees associated with processing your loan and title company services.

Commercial Real Estate - Any multifamily residential, office, industrial, or retail property that can be sold/bought.

Compound Interest - Interest calculated on both the principal and the accrued interest.

Depreciation - A reduction in value of an asset over time.

Fixed Lease - A lease where the lessee pays a fixed amount over the extent of the agreement.

General Market Factors - Factors influenced by demographic, economic, and location characteristics of a market.

Index Lease - A lease in which the rental amount adjusts accordingly to changes or  movements in a price index.

Inventory - The supply of properties available within a market.

Lease - A contract by which one party conveys property to another for a specified time, usually in return for a specific payment.

Liquidity - The ability to convert an asset to cash quickly without affecting principal.

Marketability - The likelihood of selling or leasing a property within a specific market.

Market Analysis -  Researching and comparing properties within a given market to aid in the purchasing/selling of a property.

Mortgage - The payment for property charged to a purchaser by a lender for debt.

Real Estate - Land and anything permanently fixed to it. Can be categorized by residential, commercial, and industrial.

Subdivision - A plot of land divided by the owner into blocks and lots.

Title - The right or proof of right to own land.

Vendee - A buyer, often of real estate.

Vendor - A seller, often of real estate.

Are there any terms out there you’ve heard of but don’t quite understand? Share them in the comments below and we’ll get back to you with a definition!