HOMEOWNER RESOURCES
A little less jargon. A lot more clarity.
A plain-language glossary of common home buying and selling terms, with links to the next useful conversation.
Ask whenever a word is unclear.
You should not need to know the vocabulary before asking a question. This glossary gives you a starting point for terms you may hear during a transaction. A term’s exact effect depends on the document and circumstances.
I will help connect the language to the decision in front of you. For financing definitions, the Consumer Financial Protection Bureau also provides a useful mortgage glossary.
- Appraisal
- An opinion of a property’s value prepared by an appraiser. A lender may require one as part of a mortgage. It serves a different purpose from an inspection.
- Assessment
- A property value established for tax purposes by the responsible public office. It may differ from a current market analysis or sale price.
- Closing
- The process of completing a property transaction, including the required documents and transfer of funds. Possession follows the agreement’s terms.
- Closing costs
- The fees and expenses associated with a transaction in addition to the purchase price. Your lender and closing professional can explain the estimates that apply to you.
- Comparative market analysis
- An agent’s review of relevant sales and competing homes to inform a discussion about pricing. It is not the same as a formal appraisal.
- Contingency
- A condition in a contract that must be satisfied or addressed according to the agreement. Financing and inspection provisions are common examples.
- Deed
- A legal instrument used to convey an interest in real property. The type of deed and the interest conveyed should be reviewed by the appropriate closing or legal professional.
- Down payment
- The part of the purchase price paid from your funds rather than financed by the mortgage. It is separate from other cash needed for closing.
- Earnest money
- A deposit connected to a purchase agreement. How it is held, credited, or released depends on the agreement and applicable requirements.
- Equity
- The difference between the value of a property and the debt secured by it. Actual sale proceeds also depend on transaction costs and other obligations.
- Escrow
- An arrangement for holding funds or documents for a specified purpose. A mortgage escrow account commonly holds money for property taxes and insurance.
- Fixed-rate mortgage
- A mortgage whose interest rate stays the same over the loan term. Taxes, insurance, and other ownership costs can still change.
- Home inspection
- An evaluation of a home’s condition within the inspector’s scope. Further evaluation by specialists may be appropriate for particular findings.
- Homeowners association
- An organization that administers a community’s rules or shared responsibilities. Review the actual documents, dues, restrictions, and financial information for the property.
- Loan Estimate
- A standardized disclosure of important loan terms and estimated costs that helps borrowers understand and compare mortgage offers.
- MLS
- A multiple listing service used by participating real estate professionals to share listing information. Public search access depends on the provider and permissions.
- Mortgage insurance
- Insurance that protects the lender in specified circumstances. Whether it is required, its cost, and how it can end depend on the loan.
- Preapproval
- A lender’s preliminary assessment of your ability to qualify for a loan based on the information reviewed. Final approval still depends on the lender’s requirements.
- Principal and interest
- The part of a loan payment that repays the amount borrowed and the charge for borrowing it. It does not include every cost of homeownership.
- Resolution period
- A period provided by some purchase agreements for the buyer and seller to work toward an agreement on inspection-related requests. Its start, length, required notices, and outcome depend on the signed contract.
- Survey
- A professional determination and depiction of property boundaries and other relevant features. A county parcel map is not a substitute for a survey.
- Title
- The legal rights or interest in a property. A title search and the closing process help identify matters that need to be addressed for a transfer.
- Under contract
- A buyer and seller have reached an agreement, but the sale has not necessarily closed. Remaining conditions and timing depend on the contract.
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