1
- 1031 exchange
- A like-kind exchange letting an investor defer capital-gains tax by rolling proceeds into another investment property, on a 45-day identification and 180-day closing clock.
A
- Absorption rate
- The pace at which available inventory sells in a market, usually stated as units per month - the input to months of inventory.
- Appraisal gap
- The shortfall when a lender's appraisal comes in under contract price, and the clause stating how much cash the buyer will bring to cover it.
B
- Buyer-broker agreement
- The written contract defining a buyer agent's duties and pay. Since August 2024 an MLS-participating agent must have one signed before touring a home.
C
- CAM
- Common Area Maintenance - the shared operating costs a commercial tenant reimburses, billed monthly against an estimate and reconciled annually.
- Cap rate
- Net operating income divided by price - the yardstick for income property and the fastest way to compare two deals.
- Cash-on-cash return
- Annual pre-tax cash flow divided by the actual cash invested - what the leveraged investor is really buying, as opposed to the unleveraged cap rate.
- Clear Cooperation Policy
- The NAR rule requiring a listing be entered in the MLS within one business day of public marketing - the constraint on pocket and office-exclusive listings.
- CMA
- Comparative Market Analysis - an agent's priced opinion of value built from recent comparable sales, adjusted for condition, lot and time.
- Coming Soon
- An MLS status advertising a listing before showings begin - a legitimate pre-marketing window with its own timing and cooperation rules.
D
- Days on Market (DOM)
- How long a listing has been active; the single number buyers use to judge negotiating room and sellers use to judge their price.
- Decoupled buyer compensation
- Buyer-side pay negotiated directly between buyer and their agent rather than set by the listing side - the core structural change from the NAR settlement.
- DSCR
- Debt Service Coverage Ratio - NOI divided by annual debt service. Also names the loan product underwritten on the property's income rather than the borrower's.
- Dual agency vs intermediary (Texas)
- Dual agency is prohibited in Texas. A broker representing both sides acts as an intermediary, optionally with separate appointed license holders for each party.
E
- Earnest money
- Buyer's good-faith deposit held by the title company and credited at closing; whether it is refundable depends on which contract deadline has passed.
- Escalation clause
- An offer term that automatically raises the buyer's price over competing offers up to a stated cap - common in multiple-offer markets, disallowed by some listing agents.
- Escrow
- The neutral holding of funds and documents between contract and closing, and after closing the lender's account for taxes and insurance.
G
- Geographic farming
- An agent systematically working one neighborhood or niche with mail, events and content until they own the mindshare in it.
- GRM
- Gross Rent Multiplier - price divided by annual gross rent. A rough screening tool that ignores expenses, useful for a first pass on small residential income property.
- Gross vs net lease
- In a gross (full-service) lease the landlord covers operating costs inside the rent; in a net lease the tenant pays some or all of them separately.
H
- HOA resale certificate
- The association's disclosure package - dues, assessments, violations, reserves and restrictions - required before a Texas buyer's HOA review period runs out.
I
- IABS
- Information About Brokerage Services - the TREC form a Texas license holder must give at first substantive communication, explaining who represents whom.
- iBuyer
- An instant-offer buyer such as Opendoor that purchases directly for cash at a service fee - the alternative a seller weighs against listing on the open market.
- IDX
- Internet Data Exchange - the feed and display rules that let a brokerage show other brokers' MLS listings on its own site.
- ISA
- Inside Sales Agent - a dedicated caller who qualifies and sets appointments from raw leads so the listing agent only meets vetted prospects.
L
- Lead routing
- The CRM rules deciding which agent gets an inbound inquiry and how fast - round robin, shark tank or first-to-claim. Speed to lead usually beats agent quality.
- List-to-sale ratio
- Sale price divided by list price across a market or agent's book - the cleanest read on whether homes are selling over, at or under ask.
- LOI
- Letter of Intent - the non-binding term sheet that precedes a commercial purchase or lease and sets price, term and major conditions before legal drafting.
M
- MLS
- Multiple Listing Service - the broker-run, association-governed database that feeds nearly every listing portal and IDX site.
- MLS syndication
- The outbound distribution of listings from the MLS to portals and aggregators, governed by broker opt-in and increasingly contested.
- Months of inventory
- Active listings divided by monthly sales pace. Under about four months reads as a seller's market, over about six as a buyer's.
N
- NOI
- Net Operating Income - gross rental income less vacancy and operating expenses, before debt service, capital expenditure, depreciation and income tax.
O
- Offers of compensation off the MLS
- Buyer-agent compensation can no longer be advertised in the MLS; it moves to seller concessions, listing-site disclosure or direct negotiation.
- Option period (Texas)
- A Texas-specific paid, negotiated window in which the buyer may terminate for any reason. The option fee is separate from earnest money and is usually non-refundable.
P
- Pending vs under contract
- MLS statuses that are not interchangeable: 'active under contract' or 'option pending' usually still invites backup offers; 'pending' generally does not.
- Pocket listing
- A property marketed privately rather than through the MLS. Sharply constrained by Clear Cooperation, and still the subject of the loudest fight in brokerage.
S
- Seller concessions
- Seller-paid credits toward the buyer's closing costs, rate buydown or buyer-agent fee - the main workaround now that compensation is off the MLS.
- Sphere of influence (SOI)
- The agent's own network of past clients, friends and referral sources - still the cheapest and highest-converting lead source in the business.
- STR
- Short-term rental - nightly-let property whose value depends on local permitting and occupancy caps as much as on the building.
- Survey and T-47
- The existing survey plus the seller's sworn T-47 residual affidavit that it is unchanged - what lets a Texas buyer avoid paying for a new survey.
T
- Team split and cap
- How commission divides between agent, team and brokerage, and the annual cap after which the agent keeps effectively all of it - the core of every recruiting pitch.
- Tenant improvement allowance
- Landlord money, usually stated per square foot, toward building out a commercial tenant's space - a negotiated concession that moves effective rent.
- Title commitment
- The title company's pre-closing report of what it will insure and the exceptions it will not - liens, easements, restrictions and mineral reservations.
- Triple net (NNN)
- A lease in which the tenant pays taxes, insurance and maintenance on top of base rent - the structure behind most single-tenant net-lease investment.
Z
- Zillow Flex
- Zillow's referral model in which agents pay nothing up front and give a share of commission on closed referrals - the pay-per-close alternative to Premier Agent.
What people actually ask us
These are not answered here, deliberately. A short answer to any of them would be wrong more often than it was right, because the honest answer depends on your situation.
- Who pays the buyer's agent now?
- What changed for buyers after the NAR settlement?
- Are real estate commissions negotiable now?
- Does this mean buyer's agents work for free now?
- Will I actually save money because of the commission changes?
- What is a buyer representation agreement?
- What is the option period in Texas?
- What is an IABS form?
- What does intermediary mean in a Texas real estate deal?
- What is earnest money and is it refundable?