Glossary of Terms

Balanced Market
A market where the number of salable homes approximately equals the number of qualified buyers. Home prices in this type of market should be considered normal with no abnormal price appreciation or discounting. Marketing times for salable houses will be in the 30 to 90 day range.

Buyer's Market
A market where the number of salable homes is substantially larger than the number of qualified buyers. This type of market could mean that buyers will benefit from lower prices for their new homes. Marketing times for salable houses could be a much longer than in a balanced market.

Exclusive Agency
A listing contract under which an owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell a property, on the owner's stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission if he or she sells to a prospect who has not been introduced or claimed by the broker.

Exclusive Right to Sell
A listing contract under which an owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell a property on the owner's stated terms and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner, or another broker.

Fair Housing Act of 1968
A sweeping update of the federal laws to prevent discrimination in housing because of race, color, religion, or national origin, in the selling or renting of homes or apartments and in other specified transactions; amended in 1974 to include sex and in 1988 to include handicap and familial status in the categories covered by the act.

Net Listing
A listing based on the net price the sell will receive if the property is sold. Under a net listing, the broker is free to offer the property for sale at the highest price he or she can get in order to increase the commission. This type of listing is outlawed in many states. It is not recommended in Texas.

Residential Buyer Closing Costs
Loan Fees including loan origination, discount, buy-down, and commitment fees; Appraisal fees;loan application fees; credit reports; preparation of loan documents; interest on the notes from date of disbursement to one month prior to dates of first monthly payments; recording fees; copies of easements and restrictions; mortgagee title policy with endorsements required by lender; loan-related inspection fees; photos; amortization schedules; one-half of escrow fee; all prepaid items, including required premiums for flood and hazard insurance, reserve deposits for insurance, ad valorum taxes, and special government assessments; final compliance inspection; courier fee; repair inspection; underwriting fee; wire transfer fee; expenses incident to any loan; Private Mortgage Insurance Premium (PMI), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the lender; and other expenses payable by the Buyer under the contract, i.e. cost of a new property survey if after negotiation the Buyer elects to pay it.

Residential Seller Closing Costs
Releases of existing liens, including prepayment penalties and recording fees; release of Seller's loan liability; tax statements or certificates; preparation of deed; one-half of escrow fee; the amount of the Buyer's closing costs that the Seller agrees to pay per the contract; and other expenses payable by the Seller under the contract, i.e. title policy if after negotiation the Seller elects to pay it.

Open Listing
A listing contract under which the broker's commission is contingent on the broker's producing a ready, willing, and able buyer before the property is sold by the seller or another broker.

Seller's Market
A market where the number of salable homes is substantially smaller than the number of qualified buyers. This type of market could mean that buyers will be forced to pay higher prices for their homes. Marketing times for salable houses could be a few days or weeks.