The world of real estate may seem confusing and complicated, but in order to purchase a home, you'll have to be aware of the basics. Here are answers to some frequently asked real estate questions: What is real estate? The dictionary definition of real estate is "land and all things permanently attached." That includes buildings, plumbing, light fixtures and other improvements. As far as we are concerned, it means your house and the land surrounding it. What is a real estate agent? A real estate agent is a licensed professional that represents either the buyer or the seller of a property. They are typically paid by commission, which is calculated from the value of the home. What is a realtor? A realtor is an agent who is a member of the National Association of Realtors. What is a real estate broker? Becoming a real estate broker requires more training and a different type of license than that of a real estate agent. For our purposes, either a real estate agent, realtor or real estate broker is sufficient. What is a mortgage loan? A mortgage loan is a fixed amount of money given to a borrower from a bank or other lending institution in order to purchase real estate. The real estate itself serves as collateral for the loan. What is a fixed rate mortgage? A fixed rate mortgage locks in the interest rate at the time the loan is given and stays the same for the length of the mortgage. What is an adjustable rate mortgage (ARM)? ARMs initially have a low interest rate for the first few years but can be adjusted up or down depending on the index to which it is tied. What is a mortgage broker? A mortgage broker helps you secure financing for a home, though they are not the lender themselves. Rather, they serve as an intermediary and, ideally, will help you find the best deal. What is home equity? Equity is how much of your home you actually own. To calculate equity, subtract the amount still owed to the lender on your mortgage from the market value of the real estate. What is a home equity loan? You can borrow against the equity in your home much like you originally borrowed against the value of your home with the original mortgage. Home equity loans are usually taken out in one lump sum and are repaid over a fixed amount of time. What is a home equity line of credit? A home equity line of credit is more like a credit card in that it is revolving credit secured by the equity in your home. What is escrow? An escrow account is held by a neutral third party prior to the closing of a real estate transaction. The escrow contains "earnest money" that is paid up when an offer is made. It is is usually applied to closing costs at closing. After the, sale your lender will typically hold part of your monthly payment in escrow in order to pay taxes, insurance and other property fees when they become due. What is real estate investment? Investing in real estate entails purchasing properties and renting them out or improving or renovating them ("house flipping") to sell at a profit.