California Real Estate Glossary

California Real Estate Glossary

Welcome to the ListLean Help Center's comprehensive California Real Estate Glossary. This guide defines essential real estate terms specific to California, helping buyers, sellers, and professionals navigate the market with confidence.

A

Abstract of Title – A summary of all recorded documents affecting a property's title.
Acceleration Clause – A mortgage provision requiring full repayment upon default.
Adjustable-Rate Mortgage (ARM) – A loan with an interest rate that changes periodically based on an index.
Ad Valorem Tax – A tax based on the assessed value of real estate.
Affidavit of Title – A legal document stating property ownership and confirming no encumbrances exist.
Agency – A legal relationship in which a real estate agent represents a buyer or seller.

B

Balloon Payment – A large, lump-sum mortgage payment due at the end of a loan term.
Broker – A licensed professional who facilitates real estate transactions and may oversee agents.
Buyer's Agent – A real estate professional representing the buyer’s interests in a transaction.
Bill of Sale – A document transferring ownership of personal property in a real estate sale.

C

California Bureau of Real Estate (CalBRE) – The former name of the California Department of Real Estate (DRE).
California Department of Real Estate (DRE) – The state agency regulating real estate licensing and transactions.
CC&Rs (Covenants, Conditions & Restrictions) – Rules governing a homeowner’s association (HOA) community.
Closing Costs – Fees associated with completing a real estate transaction.
Comparative Market Analysis (CMA) – A report comparing similar properties to estimate a home's value.

D

Deed – A legal document transferring property ownership.
Disclosure – Mandatory information a seller must provide to a buyer about the property’s condition.
Dual Agency – When one real estate agent or broker represents both the buyer and seller in a transaction.
Due Diligence – The process of investigating a property before completing a transaction.

E

Earnest Money Deposit (EMD) – A buyer’s deposit demonstrating good faith in a purchase.
Easement – A right to use another’s property for a specific purpose (e.g., utility access).
Encumbrance – A claim or restriction on a property, such as a mortgage or lien.
Equity – The value of ownership in a property after deducting any loans or liens.

F

Fair Market Value (FMV) – The price a property would sell for in an open market.
Fee Simple – The highest level of property ownership with full rights.
FHA Loan – A government-backed loan insured by the Federal Housing Administration.
Foreclosure – A legal process where a lender takes ownership of a property due to non-payment.

G

Grant Deed – A type of deed used in California to transfer property ownership with warranties.
Gross Rent Multiplier (GRM) – A method of valuing rental properties based on annual income.

H

Homeowners Association (HOA) – An organization that manages a planned community or condominium complex.
Home Inspection – A professional evaluation of a property's condition before purchase.
Homestead Exemption – A legal provision protecting a portion of a home’s value from creditors.

I

Interest Rate – The cost of borrowing money expressed as a percentage.
Inspection Contingency – A contract clause allowing buyers to back out if a home inspection reveals issues.

J

Joint Tenancy – A type of property co-ownership where all owners have equal shares and survivorship rights.

L

Lien – A legal claim against a property as collateral for debt.
Listing Agreement – A contract between a seller and a real estate agent authorizing the agent to sell the home.
Loan-to-Value Ratio (LTV) – A ratio comparing a mortgage loan amount to a property’s value.

M

Market Value – The estimated price a property would sell for under normal conditions.
MLS (Multiple Listing Service) – A database used by real estate professionals to list and find properties.
Mortgage – A loan used to purchase property, secured by the real estate itself.

N

Notary Public – An official who verifies signatures on legal documents.
Notice of Default (NOD) – A formal notice indicating a borrower has missed mortgage payments.

O

Offer – A buyer’s proposal to purchase a property under specific terms.
Open House – A scheduled event where a home is available for public viewing.

P

Pre-Approval – A lender’s conditional approval for a mortgage based on financial review.
Principal – The original amount borrowed on a mortgage before interest.
Property Taxes – Taxes assessed by the government based on property value.

Q

Quitclaim Deed – A document transferring property ownership without warranties.

R

Real Estate Owned (REO) – A property owned by a lender after foreclosure.
Recording – Officially documenting a property transaction with the county.

S

Seller's Agent – A real estate professional representing the seller.
Short Sale – Selling a home for less than the remaining mortgage balance with lender approval.
Survey – A map detailing property boundaries and features.

T

Title – Legal ownership of a property.
Title Insurance – Insurance protecting against title defects or ownership disputes.
Trust Deed – A California-specific mortgage alternative where a third party holds the title until the loan is repaid.

U

Underwriting – The mortgage approval process evaluating a borrower's risk.

V

VA Loan – A mortgage option for veterans backed by the Department of Veterans Affairs.
Variable Rate Mortgage – A home loan with an interest rate that fluctuates over time.

W

Warranty Deed – A deed guaranteeing the seller holds a clear title to the property.
Wire Fraud – A real estate scam involving fraudulent fund transfers.

Z

Zoning – Local government regulations defining property use.
Zoning Variance – Special permission to use land in a way not typically allowed by zoning laws.

This glossary is regularly updated to reflect the latest real estate regulations and practices in California. If you have any questions, contact our support team at ListLean for more details.

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