I have defined some real estate terms to know when buying and selling a home in Northern VA that may help when reading my articles or understanding a sales contract in Fairfax, Prince William, Arlington, Alexandria or anywhere in Northern Virginia.

Comparative Market Analysis (CMA) — Research preformed on a specific subject home to create a report including comparable homes that are currently listed, under contract, expired, and sold to determine a market value range of the subject property. The comparable properties need to have been on the market within 6 months of the report and in close proximity to the subject property. Click here to contact me and request a Comparative Market Analysis for the value of your home.

Purchase offer (offer) — A proposal, which should be in writing, to buy property at specified terms and price. (Many call this a contract but it is not a contract until all parties agree to the terms)

Sales Contract

(contract) – Once all terms of the purchase offer have been agreed upon by the buyer and seller, signed by all parties, the written offer then becomes the sales contract.

Contingency

– A provision that is dependent on something else occurring, which again should be in writing. For example a home sale contingency usually means the buyers will buy the subject home if their current home sells. Some other kinds of contingencies include home inspection contingency, radon contingency, lead paint contingency, appraisal contingency, financing contingency, and many others.

Ratification — Acceptance of an offer. i.e When a buyer makes a purchase offer and the seller accepts, then the deal has reached ratification. (This is very important term in the Regional Sales Contract used by Realtors in Northern VA, since many contingency deadlines have a time frame that starts on the date of ratification)

Ernest Money Deposit (Deposit) — This is the money a buyer offers with a purchase offer as consideration and to be held in an escrow account until settlement as a credit towards the purchase price. This money can also be at risk to be disbursed to seller should the buyer default on the contract. The amount of the deposit is negotiable in the Northern Va Market but I would recommend a minimum starting point of 1% of the offer price.

Settlement Date (Closing)– Transfer of ownership day, which will include the transfer of money and signing of all loan documents for the buyer if the home is financed. This is generally held at a title company or attorneys office.

Short Sale– Selling a property for less then what is owed on the current loan. Here is an article with an in depth look at short sales in Northern Virginia.

REO– Acronym for Real Estate Owned. A home or property that has been repossessed through the foreclosure process by the lender or investor who owns the loan. REO is the correct term for a home on the market owned by a bank or lender. Many people call these homes foreclosures which is incorrect, see definition of foreclosure below. You can find more information on REO’s in Northern Virginia in my article What Are REO’s.

Foreclosure – A legal means by which a mortgagee can take interest and all legal rights of a property from the owner due to default on paying a mortgage lien or property taxes.

Radon — An invisible, oderless, tastless, radioactive gas that is naturally occurring in Northern VA soil and does cause lung cancer when trapped in homes with prolonged exposure. If found in a home, it can be remediated, here is a detailed article Radon Gas in Northern VA.

Broker (as related to real estate) – A person who is licensed by the state to perform real estate activities and may collect compensation. (Only a Licensed Broker can collect money for the sale of another persons property in Northern VA, not an agent)

Agent (as related to real estate in Va.) – A person who is licensed by the state to perform real estate activities for a Broker in Northern VA. The state of Virginia only allows licensed Brokers to transact real estate and the agents are allowed to perform real estate duties but only if supervised by a managing broker and/or principle broker. Here is an article to help how to choose the best listing agent in Northern VA.

REALTOR® — A federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics. ( A person or firm licensed as a broker or agent does not have to be a REALTOR)

These terms were defined by me in regards to their real estate meanings in Northern Virginia.