Washington Real Estate Glossary

A

Acceptance

The grantee's act of taking a delivered deed as their own, the final step that completes a transfer of real property.

Addendum

An attachment added to a contract that spells out extra terms or provisions the main form does not cover. Included when the contract is written, it becomes part of the binding a…

Adjustment

A dollar correction applied to a comparable's sale price for features it has more or less of than the property being valued. Superior features in the comparable are deducted; mi…

Advertising

Under Washington licensing law, any attempt to induce someone to use a firm's or licensee's services — websites, social posts, email, signs, video included. Every piece must sho…

Affiliated licensee

A broker or managing broker who is licensed to represent a real estate firm and works under its supervision. Washington uses this term rather than "salesperson," a license the s…

Agency

The legal relationship in which one person, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Agency disclosure

Making clear in writing whom a broker represents in a transaction. Under Washington's 2024 rules, a broker owes no representation duties to a buyer or seller until that party si…

Agency relationship

The professional connection between a real estate firm and a principal — buyer, seller, landlord, or tenant — created in Washington through a written services agreement or by pr…

Agent

Before 2010, one of Washington's two real estate license levels. An agent could provide brokerage services to clients but could not manage other licensees inside a firm. The sta…

Amortization

The gradual payoff of a loan through regular payments over its term, with each payment covering the interest due and reducing the principal until the balance reaches zero.

Antitrust laws

Federal and state laws that protect competition by prohibiting agreements that restrain trade, such as price fixing, market allocation, and group boycotts.

Appraisal

A professional, supported opinion of a property's value as of a specific date, prepared by a licensed or certified appraiser using recognized valuation methods.

Appraiser

A trained professional who estimates the market value of real property. The written opinion of value they produce, called an appraisal, is commonly ordered when property is boug…

Appreciation

An increase in a property's value over time, from market forces, improvements, or inflation. It builds the owner's equity without any payment toward the loan.

Assessment

The official valuation a county assessor places on property to calculate property tax. In Washington, property must be valued at 100% of its true and fair market value (RCW 84.4…

Assumption

An arrangement in which a buyer takes over the seller's existing loan and becomes primarily liable for the remaining payments, keeping the loan's original terms instead of getti…

B

Basis

For tax purposes, the amount invested in a property: its purchase price plus settlement and closing costs. It is the starting figure subtracted from the sale price to measure ta…

Benchmark

A permanent, marked reference point of known elevation, often a brass disk set in concrete, that surveyors use as a starting point for measuring heights tied to a datum.

Beneficiary

Under a deed of trust, the lender: the party entitled to repayment and, if the borrower defaults, to direct the trustee to sell the pledged property to satisfy the debt.

Branch manager

The person a firm puts in charge of a satellite office and the brokers who work out of it. In Washington that person is a managing broker, a license level authorized to supervis…

Breach

The failure to fulfill a promise or obligation in a contract without a legal excuse. It gives the injured party the right to remedies such as damages or specific performance.

Broker

A person licensed to help clients buy, sell, rent, exchange, or manage property on behalf of a real estate firm, working under the supervision of the firm's designated or managi…

Brokerage

The business of facilitating the sale, purchase, rental, or exchange of real estate for others in return for compensation. The word also names the company that provides these se…

Brokerage services

The licensed real estate activities performed for another person for compensation, such as listing, selling, buying, exchanging, leasing, or managing property, and negotiating t…

Brokerage services agreement

A written contract between a real estate firm and a client that sets the terms of representation. In Washington, one is required before, or as soon as reasonably practical after…

Bundle of rights

The separate legal powers that come with owning real property: to possess, use, lease, mortgage, sell, will, and subdivide it. Each of these can be split off and transferred on …

Buyer agency

The relationship in which a broker represents only the buyer in a transaction and owes that buyer a broker's statutory duties. In Washington this broker is called the selling br…

C

Capacity

A borrower's financial ability to repay a loan, which lenders judge from income, employment history, and existing debt. It is one of the core factors weighed in underwriting a m…

Capital gain

The profit made when an asset sells for more than its adjusted basis, roughly the sale price minus what was paid to acquire and improve it, less certain allowed costs. It is gen…

Cash to close

The total amount of money a buyer must bring to the settlement table to finish the purchase — the down payment plus closing costs and prepaid items, minus the earnest money and …

Chain of title

The unbroken sequence of recorded owners of a property, from the earliest records to the present, with each transfer linked to the next.

Client

A buyer or seller who has entered an agency relationship with a broker and is therefore owed the broker's full representation and duties, unlike a customer.

Closing

The final step of a real estate sale, when funds and signed documents are exchanged and title passes to the buyer. The neutral third party handling it — the escrow or settlement…

Closing costs

The fees and charges a buyer and seller owe at settlement beyond the property's purchase price, such as loan fees, title and escrow charges, prepaid taxes, and insurance.

Closing date

The day set in the purchase and sale agreement for the sale to be finalized — when documents are signed and recorded and title passes from seller to buyer. Missing it without an…

Closing Disclosure

A five-page federal form itemizing the final loan terms, costs, and credits in a mortgage transaction, which the lender must deliver to the borrower at least three business days…

Collateral

Property a borrower pledges to secure a loan. If the borrower defaults, the lender can take the pledged asset and sell it to recover what it is owed.

Commission split

An arrangement in which the earnings from a closed sale are divided between the licensee and the firm by an agreed percentage, such as the office keeping 60% and the licensee ke…

Common law

A body of law built up over time from court decisions and long-standing custom rather than from written statutes, with roots in early English, French, and Spanish rulings.

Community property

A form of marital ownership used in Washington in which most assets either spouse earns or acquires during the marriage belong equally to both, each holding a one-half interest.

Comparables

Recently sold properties similar to the one being valued, in location, size, age, and features, whose sale prices are adjusted to estimate the subject property's value.

Comparative market analysis

A broker's estimate of a home's value built by comparing it to similar nearby properties — sold, pending, active, and expired — and adjusting the comparables for differences. Le…

Comprehensive plan

A local government's long-range policy document setting a community's goals for growth, land use, housing, and public services over many years. Zoning and development rules are …

Condemnation

The legal proceeding a government uses to carry out eminent domain, taking private property for public use and setting the just compensation the owner must be paid.

Condominium

A form of ownership in which a person holds outright title to an individual unit, defined largely by its airspace, plus a shared interest in the common elements of the larger pr…

Confidential information

Client information a Washington broker may not disclose, defined by five statutory tests: acquired during the agency, reasonably expected to stay private, not already disclosed,…

Consideration

Something of value that each party gives or promises in a contract, such as money, services, property, or a transfer of rights. It is one of the essential elements of a valid co…

Constructive notice

Legal notice a person is presumed to have because information is available in the public record or through visible possession, whether or not they actually read or saw it.

Consumer Financial Protection Bureau

The federal agency, operating since July 21, 2011 under the Dodd-Frank Act, that writes and enforces the consumer mortgage rules — TILA and Regulation Z, RESPA and Regulation X,…

Consumer Protection Act

Washington's law (RCW 19.86) banning unfair or deceptive business practices. The Attorney General can enforce it, and a private party can sue for up to three times their actual …

Consummation

Under federal lending rules, the moment a borrower becomes contractually obligated on the loan, generally when the note is signed. Required disclosures are timed from this point…

Contingency

A condition written into a purchase and sale agreement that must be met before the deal is binding — a satisfactory inspection or loan approval, for example. If the condition fa…

Conversion

Wrongfully taking or using someone else's money or property as if it were your own. For a licensee, using a client's or the firm's trust funds for personal purposes is conversio…

Conveyance

The legal transfer of ownership in real property from one party to another, usually carried out through a deed.

Corporation

A business owned by shareholders who hold stock in it. The law treats it as a separate 'artificial person,' so it can own property and shields its owners from personal liability…

Counteroffer

A response to an offer that changes one or more of its terms. It legally rejects and ends the original offer and puts a new offer on the table for the other party to accept or r…

Covenant

A binding promise written into a deed or other agreement, such as a grantor's assurance about the condition of the title being transferred.

Credit union

A not-for-profit financial cooperative owned by its members rather than outside investors. Because it need not earn a profit for shareholders, it can often offer better loan and…

Customer

A buyer or seller a broker assists without representing them; the broker owes honesty and fair dealing but not the full duties owed to a client.

D

Debt-to-income ratio

A qualifying measure that compares what a borrower owes each month to what they earn, shown as a percentage. Lenders use it to gauge whether someone can afford a new loan paymen…

Deed

A signed written document that transfers ownership of real estate from one party to another.

Deed of trust

A security instrument for a loan in which the borrower conveys legal title to a neutral third-party trustee, who holds it until the debt is repaid. Washington uses deeds of trus…

Default

Failure to keep the promises made in a contract — also called a breach. When a buyer or seller does not perform, the other party may pursue remedies such as keeping the earnest …

Delivery

The grantor's act of handing over a signed deed to the grantee with intent to transfer ownership; it must happen during the grantor's lifetime to be valid.

Department of Licensing

The Washington state agency (DOL) that regulates real estate licensees, sets and enforces licensing standards, issues and renews licenses, and investigates complaints. Its direc…

Depreciation

In appraisal, the loss of a property's value from any cause, such as physical wear, outdated design, or negative outside factors, measured against its cost when new.

Designated agency

An arrangement in which two brokers at the same firm each represent opposite parties—one the buyer, one the seller—in one transaction. In Washington the supervising and designat…

Designated broker

The person the state holds ultimately accountable for a real estate firm, typically its owner or someone with a controlling interest in the business. In Washington this must be …

Desk fee

A flat charge, usually paid monthly, that a licensee pays the firm for office space and support instead of giving up a share of each commission.

Director of Licensing

The governor-appointed official who heads Washington's Department of Licensing and holds final authority to license, supervise, and discipline the state's real estate brokers, c…

Down payment

Money the borrower puts toward the purchase price from their own funds rather than borrowing it. A larger one lowers the loan-to-value ratio, shifting risk away from the lender …

Dual agency

One broker or firm representing both buyer and seller in the same sale. Washington calls it limited dual agency and permits it only with both parties' written, separately initia…

E

Earnest money

A deposit a buyer puts down to show a serious commitment to purchasing a property. It is usually held in a trust account and applied toward the purchase price at closing.

Easement

A legal right to use part of another person's land for a specific purpose, such as a driveway or utility line, without owning it. The owner keeps title but gives up that limited…

Eminent domain

The constitutional power of government to take private property for public use, even over the owner's objection, as long as it pays just compensation. The taking is carried out …

Encumbrance

A claim, right, or liability that another party holds against a property, such as a lien, easement, or deed restriction. It limits the owner's use or lowers value but does not b…

Equitable title

A buyer's financial interest in property before legal ownership transfers, giving the buyer the benefit of any rise in value. Under a land contract the buyer holds it until the …

Equity

The share of a property's value the owner actually holds, found by subtracting the loan balance from the current market value. It grows as the loan is paid down or the property …

Escheat

The reversion of a person's real estate to the state government when they die without a will and without any heirs to inherit it.

Escrow

A process in which a neutral third party holds money and documents and releases them only when both sides of a contract have met the agreed terms.

Escrow officer

The licensed individual who conducts a real estate closing: collecting and reviewing lender and title documents, handling the signing, disbursing funds, and making sure the deed…

Estate

The nature and extent of a person's ownership or possessory interest in land, deciding who may control or occupy it, now or in the future.

F

Fair Housing Act

The 1968 federal law that bans discrimination in the sale, rental, financing, and advertising of housing based on race, color, religion, national origin, sex, disability, or fam…

Familial status

A protected class covering households with one or more children under 18, plus pregnant people and those securing custody of a child. Fair-housing law bars treating families wit…

Fannie Mae

The Federal National Mortgage Association, a government-sponsored enterprise that buys mortgages from lenders and packages them for investors. Its purchase standards help define…

Fee simple

The highest and most complete form of property ownership, holding the entire bundle of rights indefinitely and freely passing to the owner's heirs.

Fixed-rate mortgage

A home loan whose interest rate stays the same for the entire term, so the principal-and-interest payment never changes. It shields the borrower from rising rates but will not f…

Fixture

An item once personal property that has been permanently attached to land or a building, so it is now treated as part of the real estate and normally stays when the property sells.

Foreclosure

The legal process a lender uses to take and sell a property when the borrower defaults on the loan, applying the sale proceeds to the unpaid debt.

Form 17

Washington's mandatory Seller Disclosure Statement, which the seller of most residential property must complete and deliver to the buyer, listing known conditions and defects (R…

Freddie Mac

The Federal Home Loan Mortgage Corporation, a government-sponsored enterprise. Like Fannie Mae, it buys loans from lenders to keep money flowing, adding liquidity and size to th…

Freehold estate

An ownership interest in land that lasts for an indefinite period, giving the holder the exclusive right to use and enjoy the property without a set end date.

G

Good faith estimate

A now-retired disclosure form that estimated a borrower's settlement costs and listed the required service providers. TRID replaced it with the Loan Estimate for applications ta…

Government survey

A method of describing land by a grid of numbered townships, ranges, and sections tied to principal meridians and baselines. Also called the rectangular survey system.

Grantee

The party who receives the property in a deed — the buyer in a sale. The deed transfers the seller's interest to this person, whose name is listed as the one taking title.

Grantor

The party who transfers or conveys the property in a deed — typically the seller. This person signs the deed and gives up whatever interest they held to the buyer.

H

Highest and best use

The legally permitted, physically possible, financially feasible, and most profitable way a property can be developed, the assumption an appraiser makes when estimating market v…

Home equity loan

A loan for a fixed lump sum, secured by the value an owner holds in their house and repaid on a set schedule. Unlike a revolving credit line, the full amount is advanced all at …

HUD

The U.S. Department of Housing and Urban Development, the federal agency that administers housing programs and enforces the Fair Housing Act, investigating complaints of housing…

I

Implied agency

An agency relationship that arises from the parties' conduct rather than any spoken or written agreement, when they act as though the broker represents the principal.

Independent contractor

A worker who provides services under the terms of a written agreement rather than as an employee, controlling how the work gets done and handling their own taxes. Most real esta…

Index

A published market interest rate that rises and falls with general economic conditions. An adjustable-rate loan ties its rate to one, and the lender adds a set margin to it to s…

Intestate

Describes a person who dies without leaving a valid will, so state law decides how their property is distributed to heirs.

J

Judgment

A court's final decision that resolves a lawsuit and fixes the rights and obligations of the parties, including any money one party must pay another.

Just compensation

The payment a government must give a property owner when it takes private property through eminent domain, usually equal to the property's fair market value, as required by the …

L

Lease agreement

A contract in which a property owner, the landlord or lessor, lets a tenant, the lessee, use property for a set period in exchange for rent.

Legal description

A precise written identification of a parcel's boundaries, using a recognized survey method, exact enough to transfer the land in a deed. It is not the same as a street address.

Legal title

Ownership of property that is enforceable in court and shown in the public record. Under a land contract it stays with the seller until the buyer completes payment.

Lessee

The party who holds the right to use and occupy a property under a lease; the tenant. This person pays rent to the property owner in exchange for possession.

Lessor

The property owner who grants the right to use and occupy the property under a lease; the landlord. This party receives rent in exchange for giving up possession.

Leverage

The use of borrowed money, rather than one's own cash, to fund an investment. It magnifies both gains and losses: a small down payment can multiply returns, but also multiply th…

License

Permission to use another person's land for a specific purpose while the owner keeps control. It can be given orally, is revocable at any time, and is not an interest in the land.

Lien

A monetary claim recorded against property to secure payment of a debt, letting the creditor force a sale if the debt goes unpaid. It is a type of financial encumbrance.

Life estate

An ownership interest that lasts only for the lifetime of a named person. When that measuring life ends, the property passes to someone else, either back to the grantor or on to…

Limited dual agency

One broker representing both the buyer and the seller in the same transaction, allowed in Washington only with both parties' written consent. The broker stays neutral and may no…

Liquidated damages

An amount both parties agree to in advance as the payment owed if one side breaches the contract. In Washington, a residential purchase agreement may forfeit earnest money as li…

Listing agreement

A contract between a seller and a real estate firm authorizing the firm to market a property and find a buyer. It works much like an employment contract for the firm's services.

Listing broker

In Washington, the broker who represents the seller in a transaction, also called the listing agent. This broker markets the property and owes the seller the statutory duties of…

Loan Estimate

A three-page federal form a lender must give a mortgage applicant within three business days of application, laying out the loan's key terms, projected costs, and risks.

Loan-to-value ratio

How big a mortgage is compared with the price or worth of the property securing it, shown as a percentage (LTV). A $180,000 loan on a $200,000 home is 90%; a higher figure means…

M

Managing broker

A senior real estate license level in Washington that permits both serving clients directly and supervising other licensees within a firm. A managing broker answers to the firm'…

Margin

The fixed percentage a lender adds on top of the index to set the rate on an adjustable loan. It stays the same for the life of the loan and represents the lender's markup. Inde…

Market value

The most probable price a property should bring in a competitive, open sale when both a willing buyer and a willing seller act knowledgeably and free of undue pressure.

Material fact

Information important enough that it could affect a reasonable buyer's decision or the property's value, such as a structural problem or a lien; brokers must disclose known mate…

Mortgage broker

A financing intermediary who does not lend money directly but shops a borrower's loan request among many lenders, banks, investors, and others, to find the best available terms.

Multiple listing service

A shared database, run by cooperating firms, where members post properties for sale so other brokers and the public can see them — the central marketplace that matches buyers' b…

Mutual acceptance

The point at which a buyer and seller have agreed to all terms of an offer, forming a binding contract. Many purchase timelines are counted from this date.

Mutual agreement

The shared consent of all parties to a contract and its terms, with each acknowledging that a deal has been made. It is one of the essential elements of a valid contract.

N

NAR Settlement

A 2024 legal agreement resolving antitrust claims against the National Association of Realtors. Effective August 17, 2024, it barred offers of buyer-broker pay in the MLS and re…

Negative amortization

A situation where a loan's monthly payment is too small to cover the interest owed, so the unpaid interest is added to the principal and the balance grows instead of shrinking.

Net listing

An arrangement where the seller sets a minimum amount to pocket and the broker keeps the rest as commission. Washington doesn't expressly ban it, but the broker's statutory duti…

Non-agency

A working relationship in which a broker helps a buyer or seller without representing either one, treating that person as a customer rather than a client. The broker still owes …

O

Open house

A scheduled period, usually on a weekend, when the public may walk through a listed property without an appointment — maximizing exposure and giving the hosting licensee a chanc…

Origination charges

The amount a lender or mortgage broker collects to process and create a new loan, often expressed as points and listed first among the loan costs on a Loan Estimate or Closing D…

P

Personal property

Movable belongings that are not permanently attached to land, which the owner may take along when the real estate is sold. Also called chattels or personalty.

Point

A fee equal to one percent of the loan amount, paid to the lender at closing. On a $700,000 loan, one point costs $7,000; borrowers may pay points to lower the interest rate.

Police power

Government's authority to make and enforce laws protecting public health, safety, and welfare. It is the constitutional basis for zoning, building codes, and other land-use regu…

Possession

Physical occupancy and control of a property. The date the buyer actually takes it can differ from the closing date, so a purchase agreement states when the seller must move out…

Power of attorney

A signed legal document that authorizes one person (the agent, or attorney-in-fact) to act on another's behalf — for example, to sign a deed or closing papers when the owner can…

Prepayment penalty

A fee charged when a borrower pays off a loan earlier than the schedule allows. A hard version applies to any early payoff, while a soft version applies only to a refinance, not…

Primary market

Where lenders originate real estate loans directly with borrowers, the place a mortgage is first created before it may be sold to investors in the secondary market.

Principal

The person who authorizes an agent to act on their behalf; in real estate, the buyer or seller who has engaged a broker to represent them.

Procuring cause

The broker whose actions set in motion the unbroken chain of events leading to a completed sale, making that broker the one entitled to the commission. It is the usual test for …

Promissory note

A signed written pledge by which one person (the maker) agrees to pay a set sum to another, at a future date or in installments, often with interest. It can even serve as a form…

Property management agreement

A contract between a rental owner and a manager that spells out the manager's duties, authority, and pay, along with the owner's responsibilities, for running the rental day to …

Proration

Dividing an expense between buyer and seller by days of ownership at closing — property taxes, insurance, interest. Calculated on a 360- or 365-day year; in Washington teaching …

Protected class

A group the law shields from discrimination based on a shared trait. Washington protects more traits than federal law — adding creed, marital status, sexual orientation and gend…

Purchase and sale agreement

The written contract in which a buyer and seller set the price, closing date, contingencies, and other terms for transferring a piece of real estate.

Q

Qualified Mortgage

A loan meeting CFPB criteria — no negative amortization, interest-only, or balloon features; term of 30 years or less; capped points and fees — that gives the lender a presumpti…

Quiet enjoyment

The right of an owner or tenant to use and possess a property in peace, free from interference by the seller, landlord, or anyone claiming a superior title. A core promise backi…

Quitclaim deed

A conveyance that transfers only whatever interest the grantor happens to hold, with no promise that the title is good or even that the grantor owns anything. Common between spo…

R

Ready, willing, and able buyer

A prospect who is prepared to buy on the seller's terms and has the financial means to close. Producing one whose offer the seller accepts in writing is generally what earns the…

Real Estate Settlement Procedures Act

The 1974 federal law protecting consumers in federally related mortgage closings: it requires settlement-cost and servicing disclosures and prohibits kickbacks, referral fees, a…

Real property

Land plus everything permanently attached to it, buildings, fixtures, and growing things, along with the legal rights and privileges that come with owning the land.

Reconciliation

The final step of an appraisal, in which the appraiser weighs the value indications from the different approaches and judgment to arrive at a single supported estimate of value.

Recording

The act of entering a deed, mortgage, or other document into the county's public land records. In Washington, recording gives public notice and, under the state's recording act,…

Redlining

The illegal practice of denying or pricing loans, insurance, or other services worse for properties in a neighborhood because of the racial or ethnic makeup of the people who li…

Regulation Z

The federal rule that carries out the Truth in Lending Act, requiring lenders to disclose credit terms and costs. It also grants the right of rescission on certain loans secured…

Rescission

The canceling of a contract that returns both parties to the positions they held before it was made, as if the agreement never existed.

Reverse mortgage

A loan for homeowners age 62 or older that converts home equity into cash, with the lender paying the borrower instead of the reverse. The balance grows over time and is repaid …

S

Secondary mortgage market

Where existing loans are bought and sold by investors and institutions that did not originate them. Selling loans here frees up lenders' funds to make new loans.

Section

In the government survey system, a block of land one mile square and containing 640 acres. Thirty-six of them make up a township.

Security deposit

Money a tenant pays at move-in that the landlord may keep to cover unpaid rent or damage beyond normal wear. In Washington, the landlord must hold it in a trust account and may …

Seller agency

The relationship in which a broker represents only the seller in a transaction and owes that seller a broker's statutory duties. In Washington this broker is called the listing …

Seller concession

Money the property's owner agrees to credit the buyer at closing — for closing costs, repairs, or, since the 2024 NAR changes, the buyer's broker fee — paid out of the sale proc…

Short sale

A sale in which the lender agrees to accept less than the balance owed on the mortgage; the seller may still owe the shortfall afterward unless the lender forgives it.

Site

In a market analysis, the property being evaluated — the home the comparables are measured against. Adjustments for differences are always made to the comparables, never to this…

Special assessment taxes

Charges levied only on the properties that directly benefit from a local public improvement, such as new sidewalks, sewers, or streetlights, to help pay for that specific project.

Specific performance

A court order requiring a breaching party to carry out a contract as promised instead of simply paying damages. It is common in real estate because each property is considered u…

Statute of Frauds

A rule requiring certain contracts, including those for the sale of real estate, to be in a signed writing to be enforceable. An oral real estate contract generally cannot be en…

Steering

The illegal practice of guiding home seekers toward or away from particular neighborhoods based on a protected trait such as race or familial status, rather than letting them ch…

Subdivision

The division of a parcel of land into smaller lots for sale or development. In Washington, splitting land into five or more lots is a subdivision; four or fewer is a short subdi…

Subject to

A transfer in which the buyer takes over the seller's existing loan payments but does not assume personal liability for the debt. The original borrower stays legally responsible…

Survey

A measurement of a parcel that locates and maps its exact boundaries and features. A licensed surveyor performs it, often driving stakes to mark the property lines on the ground.

T

Term of the loan

The length of time a borrower has to repay the full debt, such as 15 or 30 years. Also called the repayment period, it affects both the monthly payment and the total interest paid.

Title

The bundle of legal rights that establishes who owns a piece of property and may sell or use it. It shows the extent of a person's ownership or other interest in the real estate.

Title company

An insurance company that examines whether the ownership rights being transferred are actually transferable and then protects the buyer against later claims or defects in those …

Title insurance

A one-time-premium policy that reimburses the holder for losses caused by defects in a property's ownership history — forged signatures, unknown heirs, recording errors, or lien…

Transaction fee

A set amount a licensee pays the firm to process each closed deal, charged on top of any commission split to cover administrative paperwork.

Transaction file

The complete record a Washington firm must keep for each transaction — agreements, receipts, closing statements, disclosures, and material correspondence — retained at least thr…

TRID

The disclosure regime, effective October 3, 2015, that merged the old TILA and RESPA mortgage forms into the Loan Estimate — due within three business days of application — and …

Trust account

A separate, DOL-regulated fund a firm keeps to hold money belonging to others — earnest money and deposits — apart from its own operating cash. Washington requires deposit by th…

Trustee

A neutral third party who holds or manages property or assets for someone else's benefit — for example, holding the deed under a deed of trust, or administering a debtor's asset…

U

Unauthorized practice of law

Doing work reserved for licensed attorneys — drafting contract clauses or advising on legal rights — without a law license. A Washington broker may fill in blanks on approved st…

Unilateral contract

A contract in which only one party makes an enforceable promise, becoming binding only when the other party actually performs the requested act. A reward offer is a common example.

Unlicensed assistant

A support worker who helps a broker with tasks that do not require a license, such as clerical work or scheduling. In Washington, this person may not perform activities the law …

V

Vacancy rate

The percentage of a property's units or space sitting empty at a given time; unlike the vacancy factor, it does not include losses from unpaid rent.

Valid contract

An agreement that contains every required element—offer, acceptance, consideration, legal capacity, and a lawful purpose—and is therefore fully enforceable in court.

Vicarious liability

Responsibility one party bears for another's wrongful acts due to their relationship, such as a principal for an agent. In Washington, RCW 18.86.090 limits this: a principal is …

W

Washington Law Against Discrimination

The state civil-rights statute, codified at RCW 49.60, that bars bias in housing and real estate. Its protected classes exceed federal law — adding marital status, sexual orient…

Washington State Human Rights Commission

The Washington state agency (WSHRC) that enforces the state's anti-discrimination laws and handles most fair-housing complaints filed in Washington, investigating and resolving …

Water rights

The legal rules that decide how a property owner may draw on and use the lakes, streams, or underground sources tied to their land. Each state runs its own system, so what a par…

Wetland

Ground that is saturated with water either seasonally or year-round, such as a marsh, swamp, or bog. It is the most common type of protected environmentally sensitive area.

Will

A written, witnessed document that directs how a person's property and assets are to be distributed after death and names who should carry out those instructions.

Written services agreement

The contract Washington law requires between a real estate firm and its principal before the firm can receive compensation. It must state the term, appointed broker, exclusivity…

Y

Yield

The rate of return an investor requires on the money put into a property, expressed as a percentage; it is used to convert future income into present value.

Z

Zoning

Local government rules that divide land into districts and control what may be built and how each parcel may be used, such as for residential, commercial, or industrial purposes.