Key Terms

Key Terms

Designations and Certifications

All real estate licensees in Maryland have met legally required continuing education requirements and passed the state real estate examination. However, to be called a REALTOR®, licensees become members of the National Association of REALTORS® and subscribe to its strict Code of Ethics.

Sometimes, you will see a few – or maybe many – letters after your REALTOR’S® name. Those refer to designations or certifications that the REALTOR® has obtained, which denote special training or knowledge in certain areas.

Below, you will see some of the common credentials that REALTOR® may advertise, or that you may look for based upon your buying and selling needs.

Maryland REALTORS® Housing Opportunity Certification

Housing Opportunity Certified (HOC) REALTORS® are specially trained to receive customer inquiries on workforce and affordable housing finance programs for selected jurisdictions. Certificate holders have knowledge in federal, state and local housing programs, the Maryland Mortgage Program and homebuyer education resources. See a full list of Maryland HOC REALTORS® here.

Nationwide Real Estate Designations and Certifications

Designations and certifications acknowledging experience and expertise in various real estate sectors are awarded by NAR and each affiliated group upon completion of required courses. You can search for a REALTOR® Member by location or designation here: https://directories.apps.realtor/directories/index.html?type=member

  • The Accredited Buyer’s Representative (ABR®) designation is designed for real estate buyer agents who focus on working directly with buyer-clients at every stage of the home buying process.
  • Accredited Land Consultants (ALCs) are trusted, knowledgeable, and experienced experts in all segments of land sales.
  • At Home With Diversity® (AHWD) designees work successfully with and within a rapidly changing multicultural real estate market.
  • A Certified Commercial Investment Member (CCIM) is a recognized expert in the commercial and investment real estate industry.
  • The Certified International Property Specialist (CIPS) designation is for REALTORS® from the United States and abroad wish to develop or grow their international real estate business.
  • Certified Property Manager (CPM®) designees are recognized as experts in real estate management.
  • The Certified Real Estate Brokerage Manager (CRB) is for experienced owners, brokers, managers, and supervisors who have expertise in brokerage management.
  • The Certified Real Estate Team Specialist (C-RETS) certification provides the tools, strategies, and knowledge that are required real estate professionals who o perate as a team.
  • Certified Residential Specialist (CRS) designation is the highest credential awarded by the Residential Real Estate Council to residential sales agents, managers, and brokers.
  • Commitment to Excellence (C2EX) empowers REALTORS® to evaluate, enhance and showcase their highest levels of professionalism.
  • The Counselors of Real Estate® (CRE®) is an organization of commercial property experts worldwide who provide seasoned, objective advice on real property and land-related matters.
  • NAR's e-PRO® certification program helps REALTORS® master the advanced digital marketing techniques of today.
  • Graduate, REALTOR® Institute (GRI) designees have in-depth training in legal and regulatory issues, technology, professional standards, and the sales process.
  • The Green Designation (GREEN) is awarded to real estate practitioners who find, understand, and market properties with green features.
  • Luxury Homes Certification (LHC) is for agents who have knowledge of pricing and negotiation strategies in the ever-growing luxury home market.
  • The Military Relocation Professional (MRP) REALTORS® work with U.S. service members and their families and veterans to find the housing solutions that best suit their needs and to take full advantage of available benefits and support.
  • Performance Management Network (PMN) REALTORS® have practical skills in business leadership, negotiation, networking, and planning.
  • The Pricing Strategy Advisor (PSA) certification designates skills in pricing properties, working with appraisers, and helping clients determine home values.
  • The Real Estate Investing (REI) certification program is for REALTORS® who work with investors and provide insight into 1031 exchanges and REITS.
  • The Real Estate Negotiation Expert (RENE) certification is for real estate professionals with developed negotiation and client advocacy skills.
  • The Resort and Second-Home Property Specialist (RSPS) certification is for REALTORS® who specialize in buying, selling, or management of properties for investment, development, retirement, or second homes in resort, recreational, and/or vacation destinations.
  • The RRC Digital Marketing: Social Media certification is for real estate professionals who have developed expertise with social media resources.
  • The Seller Representative Specialist (SRS) designation is awarded to real estate professionals who demonstrate the knowledge and skills essential for seller advocacy.
  • The Seniors Real Estate Specialist® (SRES®) designation is for REALTORS® who meet the special needs of maturing Americans when selling, buying, relocating, or refinancing residential or investment properties.
  • The Short Sales and Foreclosure Resource (SFR®) certification is for REALTORS® who help buyers and sellers of distressed properties.
  • The Smart Home certification is for real estate professionals who have expertise in the technology, privacy issues, and best transition tactics involved in selling smart homes.
  • Society of Industrial and Office REALTORS® (SIOR) designees are commercial specialists in industrial and office markets.

Industry Lingo

Actual Cash Value: An amount equal to the replacement value of a property minus any depreciation.

Addendum: A document that makes an amendment to an existing or standardized contract. A jurisdictional addendum outlines required notices and disclosures based on a property’s location.

Active Listing: A home that is currently available for sale.

Adjustable-Rate Mortgage: A variable-rate mortgage which often features a lower interest rate for a fixed term, followed by an interest rate that changes based upon financial market conditions.

Amortization: Paying off a loan over the period and at the interest rate specified in the loan document. The amortization of the loan includes the interest and a portion of the amount borrowed in each mortgage payment.

Annual Percentage Rate (APR): How much a borrowed amount costs you in interest, points and other fees over one year. The APR tells you a mortgage’s true cost.

Application Fee: A fee charged by a mortgage lender to cover the costs of processing a mortgage application.

Appraisal: A professional analysis used to estimate the value of a property. It includes comparisons to sales of similar properties in the area.

Appreciation: An increase in the value of a home due to market conditions and/or home improvements.

Assessed Value: An estimate of the fair market value of a property that is used to determine the amount of property taxed owed. In Maryland, properties are assessed on a three-year cycle.

Assumption: A mortgage that can be transferred from the seller to the buyer where the buyer retains the current interest rate, balance, and repayment schedule of the loan.

Back-Up Offer: An offer that is made on a property that is under contract to another buyer, to be activated if something happens to the current contract to purchase.

Balloon Payment: Home loans that have low initial payments, but have a final, large payment due at the end of the mortgage term.

Buyer’s Agent: A real estate agent who exclusively represents a buyer in the purchase of real estate.

Buyer Brokerage Agreement: An exclusive agreement between a buyer and their brokerage which outlines the services to be provided and the compensation owed to their agent.

Buyer’s Market: A market characterized by higher levels of inventory and less competition among buyers for available homes.

Cash-Out Refinance: Also known as a cash-out refi, this allows a homeowner to refinance their loan at an amount higher than the current balance and withdraw the difference in cash. This loan option often requires an owner to have at least 20% equity in the home.

Closing: Also known as settlement. This is the final step in the home sale process where the property changes hands from the seller to the buyer.

Closing Costs: The costs to complete the real estate transaction. These costs are in addition to the price of the home and include taxes, financing costs, insurance, inspections, and items that must be pre-paid or escrowed.

Comparable Sale: “Comps” are similar homes in the area that have recently sold. They are used by appraisers to determine the fair market value of a property.

Comparative Market Analysis (CMA): A report prepared by a real estate professional to help determine a home’s value in the current marketplace.

Concession: Something that is given or agreed to when negotiating a home sale. For example, the sellers may agree to assist with closing costs as a concession to the buyer.

Contingency: A condition that must be met for a real estate contract to become binding. Contingency clauses give buyers the ability to cancel a contract if the conditions are not met.

Conventional Loan: A loan offered by a private lender, like a bank or credit union, instead of a government agency.

Days on Market: The length of time that a property has been actively listed for sale.

Debt-to-Income Ratio (DTI):  A comparison of a buyer’s gross income compared to their expenses.

Deed: A legal document that confirms ownership of a property or used to transfer the ownership of a property to another party.

Default: When a borrower misses, delays, or stops making ongoing payments on their mortgage loan. If not addressed, default can lead to foreclosure.

Delinquency: When a borrower does not make their mortgage payment on time or as scheduled. These borrowers can be subject to late fees and additional interest.

Downpayment: An amount of money paid upfront when purchasing a home. Different mortgage types require different downpayment amounts.

Downpayment Assistance: Loans or grants offered to certain categories of buyers to help them make a down payment on a home purchase.

Dual Agency: An agent who represents both the seller and buyer in the same transaction.

Earnest Money Deposit (EMD): An amount of money offered to the seller to show the seriousness of a buyer’s offer to purchase their home. The EMD is

Equity: The difference between your outstanding mortgage debt and the home’s current value.

Escalation Clause: Option in a real estate contract that allows a buyer’s offer to increase up to a certain amount if the seller receives a competing offer.

Escrow: The period between contract acceptance and closing, when inspections, contingencies and paperwork for the transaction are completed.

Escrow Account: An account held by your mortgage lender used for paying property taxes and homeowners insurance. You contribute funds into the escrow account through your mortgage payment.

Excise Taxes: A tax on the transfer of real estate. The amount owed is based upon the value of the property being transferred and is paid at closing.

Fair Market Value: The price where a property changes hands between an informed buyer and seller on the open market. It is based upon the condition of the property, what similar properties have sold for and current market conditions.

FHA loan: A loan issued by the Federal Housing Administration, which can feature lower down payment and credit score requirements than conventional loans.

FICO Score: An evaluation of a person’s credit history, indicated as a number between 300 and 850. It is used by lenders to determine whether they should lend money to a buyer or buyers and at what interest rate.

Finance Charge: The amount of interest and fees you will pay over the length of the mortgage loan.

Financing: The type of funding, such as a mortgage loan, that you have secured for your property purchase.

Fixed-Rate Mortgage: A home loan that maintains the same interest rate throughout the entire term of the loan, even if market conditions change during that time.

Flood Insurance: A type of property insurance that protects your home from damage due to flooding. Without a separate flood insurance policy, these events are typically not covered by standard homeowner’s insurance.

Forbearance: An agreement between the borrower and their lender to temporarily pause the mortgage payments owed due to a financial hardship.

Foreclosure: A legal process where the lender repossesses the property from the borrower when mortgage payments are not made as agreed.

Good Faith Estimate: Document which estimates the taxes, fees and other costs associated with your mortgage.

Ground Rent: A form of property ownership where the buyer owns the dwelling while another party owns the land. The dwelling owner pays a fee to secure continued right to use the land.

Government Sponsored Enterprises (GSEs): Entities established by Congress to increase credit availability. Freddie Mac and Fannie Mae are GSEs that offer mortgage loans.

Hazard Insurance: Policy that protects a homeowner’s dwelling against damage caused by natural events like fires and storms.

Homeowner’s Insurance: Policy that protects the structure and its contents from a variety of damages and losses. It also protects against personal injuries that occur on the property.

Home Equity Loan: A loan that allows a homeowner to borrow against the equity in their home. These loans have fixed rates and are often called a second mortgage.

Home Equity Line of Credit (HELOC): A way to borrow against the equity in your home on an as-needed basis and at a variable interest rate.

Home Inspection: An examination of a property’s condition and safety that is often conducted during a home sale.

Home Warranty: A product that can provide discounted repair and replacement of home systems for a certain amount of time following the home sale.

HUD -1: Also known as a settlement statement, this document lists all charges and credits charged to the buyer and seller on a mortgage loan.

Interest Rate: The cost to finance a mortgage loan, expressed as either a fixed or variable percentage of the amount borrowed.

Lead-Based Paint: Paint that contains lead as an ingredient. Buildings constructed before 1978 are likely to have lead-based paint and require a disclosure to buyers.

Lien: A property lien is a claim against your property for money owed by the property owner.

Listing: An agreement between a property owner and a real estate broker to market the property for sale.

Listing Agent: Also known as the selling agent, this is the real estate professional who represents the property seller in a real estate transaction.

Listing Price: The listing or list price is the suggested price of a property for sale. The final sale price may be higher or lower than the listing price.

Loan Origination Fee: The fee that lenders charge for creating, processing and completing a mortgage loan. They are typically a percentage of the loan value.

Loan-to-Value Ratio: A comparison between the value of the property and the amount of the loan borrowed against it.

Months of Supply: A measure of how long it would take to sell the houses that are currently on the market. It can also indicate whether the market currently favors buyers or sellers.

Mortgage: A loan used to purchase real estate. The purchaser pays both principal and interest on the loan over a set period of time.

Mortgage Banker: A lender who works for a single bank or institution to offer mortgage loans.

Mortgage Broker: An independent financing professional who works with several lenders to offer mortgage loans.

Mortgage Insurance: A policy that protects the lender if the buyer defaults on the loan. The payments are made by the buyer.

Multiple Listing Service (MLS): A platform where real estate brokers share information on properties for sale to facilitate transactions between buyers and sellers.

Negative Amortization: A type of loan product where the payments made by the buyer to not cover the interest owed on the loan. This means that the amount owed goes up over time instead of down.

Occupancy Date: The date that a buyer can move into the property as outlined in the contract. It is also known as the possession date.

Offer: A proposal from a buyer to a seller to purchase their property that becomes binding if accepted by the parties.

Off Market: A property that is not currently offered for sale to the public.

Origination: Includes all the steps between taking a loan application to approving and distributing the funds of the mortgage.

PITI: An abbreviation that refers to the parts of a typical mortgage payment: Principal, Interest, Taxes and Insurance.

Points: A fee that a borrower can pay to a mortgage lender to obtain a lower interest rate. One point equals one percent of the mortgage amount.

Post-Occupancy Agreement: Also known as a “rent-back”, this agreement allows a seller to stay on the property after the sale is completed, subject to the terms of the agreement with the buyer.

Pre-Approval: An official communication from a lender that they will lend an amount of money to a buyer based upon a review of the buyer’s financial documentation.

Pre-Qualification: A rough estimate of what a particular buyer may be able to borrow for their home purchase. Because the buyer self-reports the information, it is not considered an official mortgage pre-approval.

Prepaids: Upfront cash payments made at settlement to cover certain costs of homeownership. These are placed in the mortgage escrow account, and often include homeowners’ insurance, property taxes and mortgage interest.

Prepayment Penalty: A fee charged on some mortgage products when the loan balance is paid off ahead of schedule. Not all loans have prepayment penalties.

Principal: The initial size of a mortgage loan, or the amount you must repay before adding any interest charges.

Property Taxes: Taxes charged by a government entity based upon a certain percentage of a property’s assessed value.

Radon: A naturally occurring gas that left untreated can create health problems for a building’s occupants. Radon is commonly tested for in home transactions and can be mitigated through proper ventilation.

Rate-Lock: A lender guarantee to give a borrower certain loan terms, like interest rates, for a set period of time.

REALTOR®: An agent or broker who is a member of the National Association of REALTORS® and abides by  the NAR Code of Ethics.

Real Estate Owned (REO): A property that did not sell at a foreclosure sale and is now owned by the bank or lender.

Rescission: A contract that is cancelled and no longer legally binding. Buyers have certain rights of rescission for loans under consumer protection laws.

Recording Fees: A fee charged by a government entity to note the change of property ownership by recording the deed in land records.

Recordation Tax: A tax on the transfer of real estate. The amount owed is based upon the value of the property being transferred and is paid at closing.

Refinance: The ability of a buyer to replace their current mortgage loan to another with more favorable terms without selling their property.

RESPA: Refers to the Real Estate Settlement Procedures Act, which provides transparency on settlement fees and protections for consumers.

Sales Contract: Also known as the purchase agreement, this is a binding agreement between a buyer and seller to transfer property.

Seller’s Market: A market characterized by low inventory, fierce competition for homes and escalating home prices.

Septic System: A system that treats the waste from a property that is not connected to a public sewer system.

Setback: Restrictions on a property’s distance from the street, property lines or other structures that are imposed through regulation.

Shared Appreciation Mortgage: A type of loan where the buyer agrees to grant the lender a share of the future property appreciation in exchange for more favorable loan terms.

Short Sale: A transaction where a property is sold for less than the amount owed to the mortgage lender.

Survey: A drawing of a property which confirms the location of its boundaries and structures.

Tax Sale: The sale of a property by a government entity to recover unpaid tax debts by the property owner.

Title: The document that lists the legal owner of a piece of real property.

Title Insurance: A policy that protects a buyer from any claims against the property that were not discovered during the real estate transaction.

Title Search: A legal review completed during a real estate transaction confirming that the seller is the rightful owner and there are no other claims against a property. Once a clear title is established, the property can be sold to the buyer.

Transfer Taxes: A tax on the transfer of real estate. The amount owed is based upon the value of the property being transferred and is paid at closing.

Truth in Lending Act (TILA): A federal law designed to protect consumers in financial transactions by providing clear disclosures of loan terms and costs.

USDA Loan: A mortgage loan available in certain rural and suburban areas that features lower interest rates and no downpayment for qualified borrowers. They are offered by the U.S. Department of Agriculture.

Under Contract: The status of a real estate transaction where the buyer has made an offer and the seller has accepted, but the sale is not yet final.

Underwater: A situation where a borrower owes more on a mortgage loan than the property is worth.

Underwriting: The process a lender uses to review a loan application and determine the creditworthiness of the borrower and the risk to the lender of making a mortgage loan.

VA Loan: A mortgage loan offered by the U.S. Department of Veterans Affairs to help veterans and service members purchase a home.

Walkthrough Inspection: The final inspection of the property that a buyer conducts before closing on the sale. It ensures that any repairs have been made and the property condition has not changed while under contract.

Zoning: Regulations enacted by local governments which dictate a property’s use.