The Ultimate Real Estate Glossary: Letter Cs

2021-03-22

The Ultimate Real Estate Glossary: Letter Cs

 

Have you ever paused reading a real estate article just to search the meaning of the terms and jargon they use? If you’re a landlord who’s just starting out, all the terminology can seem overwhelming at first. 

That’s why we’ve put together this comprehensive list of jargon and terms in our Ultimate Real Estate Glossary Series. With this guide, you’ll learn all the terms of the trade by heart, allowing you to face your clients and peers with confidence, even if it’s your first time landlording.

For this edition, we’ll go through the terms that start with the letter C. 

Real estate Glossary: The letter C

Carrying costs: In real estate, carrying costs are the recurring costs required to maintain and own a property. This includes taxes, interests, insurance, utilities, etc., and should be included in your computations when you buy a property. Carrying costs for short-term projects (flipping houses) will be different from long-term investments (like rental property). 

Cash reserves: These are the liquid assets (e.g. checking and savings accounts, investments, and retirement accounts) that remain after the buyer makes a downpayment and pays for the closing costs on a property. 

Closing: This refers to the date when the buyers and sellers sign the final property transfer documents. It indicates the end of the transaction and signals that the sale has been finalized. 

Closing costs: Closing costs are the additional expenses that a buyer incurs when purchasing a property, including processing fees, title insurance, and excise tax. Note that closing costs exclude the final house price and downpayment. Closing costs are typically 2-5% of the purchase price. 

CLUE: Short for Comprehensive Loss Underwriting Exchange, CLUE is the national database of the insurance industry, accessible by insurance companies. The insurance history of a property is included in the database and contains information that can greatly affect the sellability of the property, like details of any damages and repairs, and whether the property can be insured. 

Commission: This is the amount paid to real estate agents or brokers for the services rendered in selling or buying a property. Commissions can either be included in the property’s selling price or be given as a flat fee and paid directly to the broker or agent.

Commission split: This is the agreed-upon percentages that each of the involved parties (brokerage, broker, agent) will receive from the commission on a property transaction.

Comparative Market Analysis (CMA): To accurately price a property, the real estate agent or broker conducts a comparative market analysis by evaluating similar properties in the area that have been recently sold, are in the process of being sold or are on the market. This analysis is then given to the seller and used by the broker to determine a listing price.

Condominium by-laws: By-laws are the rules and regulations regarding the governance of a condominium’s homeowner’s association. 

Condominium declarations: Consisting of the covenants, conditions, and restrictions (CC&Rs), condominium by-laws, and other rules and regulations, the condominium declaration is a legal document filed with the Recorder of Deeds. This is required to establish a condominium complex. 

Condominium right of first refusal: Occurs when an interested buyer or association has the right to purchase a condominium or decline the offer before anyone in the market. 

Condominium rules and regulations: The set of rules and regulations established by the condominium association that needs to be followed by the owners and renters.

Contingency: A set of provisions that need to be fulfilled before finalizing the sale of a property. An example is requiring a buyer to secure an approved loan or mortgage before purchasing the property.

Continue to show: This occurs when the seller has already accepted an offer, but requests to continue to show the property on the market, in the event that the buyer is not able to fulfill all the contingencies stipulated in the contract.

Contract clauses: Refers to specific sections in the contract. There are several kinds of contract clauses, but the most common one is the Due-On-Sale, a clause which states that the loan balance of the sold property needs to be paid by the borrower.

A contract for deed: Also known as an installment sales contract, or land contract, the contract for deed is a contract in which the seller finances the purchase of a property instead of a third party (such as a bank or mortgage lender). The seller also holds the deed of the property until the buyer finishes paying the amount owed.

Contract of sale: This is a legal agreement between the buyer and seller that stipulates the terms of sale. This includes, but is not limited to: the payment scheme, the timeline, and the details of the property transfer.

Conforming/Conventional mortgage: A mortgage that meets the guidelines of FNMA, FHLMC, FHA, or VA.

Cooperating commission: This is the fee paid to an agent who brings in and represents the buyer. This commission is usually paid by the seller, with the terms of payment agreed upon beforehand.

Cooperative (Co-op): This term refers to when inhabitants of a building are also its shareholders, as opposed to condominium owners, who only own the unit and not the shares of the entire building. Part of the shareholder’s rights is the ability to lease a particular unit.

Corporate client: This generally refers to a customer who is a large company or business. This can also mean a company that takes charge of relocating the employees of another company. 

Counteroffer: This happens when a buyer or seller proposes an offer for a property, and then another buyer responds with a different (usually higher) offer.

Credit report: A report that reflects the current credit situation and credit activity of a borrower. Some of the items included in the report include the history of credit accounts, outstanding debts, and payment timelines on past or current debts.

Credit score: This is a score based on the borrower’s credit report and is issued by the CLUE. 

Curb appeal: The outward appearance of a property, meaning everything that can be seen from the street, which is a strong indicator of its level of attractiveness to potential buyers.

Conclusion

With our third installation, we hope that you are now getting to know real estate terms and jargon a little bit better. Our goal is to help you become more real estate savvy, one term at a time!

Be on the lookout for our next real estate glossary, where we’ll continue covering the next letters in sequence until we reach the letter Z.

Any other terms you want to know about? Just comment below and we’ll make sure to cover them!

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