Commonly Used Terms:

A quick guide on real estate vocabulary that will allow you to feel in the know when thinking about buying, selling, or renting.

Appreciation- the amount that a home or item increases in value over time. A home/ item can also depreciate, or decrease, in value.

Assessed Value- Used to determine taxes that a property owner will pay. This value is determined by an assessor who compares your home to others in the area and performs an inspection.

Appraisal- the estimated current market value of a piece of real estate. An appraisal is conducted by a licensed appraiser who compares the home to other recent sales in the area. Required by mortgage lenders to ensure that buyers are not overpaying for the property.

As-Is- when a home is being sold in its current condition- any issues or problems with the home will not be addressed or fixed by the seller.

Backup Offer- when a property has an accepted offer but another buyer is able to submit an offer in case the first transaction falls apart.

Buyer’s Agent- a real estate agent that represents the buyer and helps them navigate the home buying process. When the home is sold, the buyer’s agent is referred to as the selling agent- successfully selling their clients a home.

Closing- the final step in the home buying process- money and documents are transferred in order to give the buyer ownership.

Comparative Market Analysis (CMA)- an estimate of a home’s value based on similar properties in the immediate area that have sold or been unable to sell. Agents use this tool to determine listing prices for sellers and to help buyers make appropriate offers.

Contingency- when an offer has been accepted but certain things (such as acquiring a mortgage) must happen before the contract can move forward. If certain contingencies are not met, the contract is void. Types of contingencies include appraisal contingencies, home sale contingencies, and mortgage contingencies. Once the contingency has been met, the home moves to “pending”.

Contingent- when an offer has been accepted by the seller but certain criteria need to be met before the listing can move forward. Common contingencies include appraisal, home inspection, mortgage approval, and home sale.

Down Payment- the amount of cash a home buyer pays at the time of closing. The higher the down payment amount, the stronger an offer will be. Loan types can dictate how much of a down payment is necessary.

Deed- the legal document that transfers a title from the seller to the buyer.

Depreciation- the amount that a home or item decreases in value over time. The home/ item can also appreciate, or increase, in value.

Dual Agent- when an agent works with both the buyer and seller in a transaction or when the same brokerage represents both parties. Both the buyer and seller must agree to work with a dual agent.

Earnest Money Deposit- a deposit made by the home buyer at the time they enter into contract with the seller. This deposit demonstrates the buyer’s interest in the property.

Escrow- when a third party holds the buyer’s earnest money check during a transaction. When the transaction is complete, typically at closing, the third party will release the funds to the seller.

Expired- used to describe a listing that is no longer active on the market, typically because it did not sell in the time frame agreed upon or for a price that the owner was willing to accept. If a listing has expired, the owner may still be interested in selling.

Foreclosure- the legal process where a homeowner forfeits all property rights if they do not make mortgage payments for a certain period of time (typically ~90+ days).

Inspection- when a licensed professional comes to inspect a house and prepares a report of any needed repairs or issues. Inspections are completed after an offer has been accepted and gives the buyers a chance to further assess the condition of the home and see if they would like to move forward or ask for compensation or repairs if any issues are found.

Listing Agent- the agent that represents the sellers and the listed property/ home. Can also be referred to as the seller’s agent.

Home Sale Contingency- a type of contingency that indicates to the seller that their offer will only move forward if the buyer is able to sell their current home. This contingency can make an offer less desirable.

Mortgage- an agreement between a borrower (buyer) and a lender (bank) that gives the lender the right to the borrower’s property if the borrower is unable to make loan payments within the agreed-upon time. This begins the process of foreclosure.

Multiple Listing Service (MLS)- the database that real estate professionals use to access and gather information on properties in the area.

Offer- the buyer’s submission of what they would give to the seller to buy the house. Offers are submitted by the agent and outline everything the buyer is willing to do to buy the home. An offer can then be negotiated with the seller until it is accepted.

Pending- an offer that has been accepted by the seller and paperwork is being processed.

Pocket Listing- properties that are for sale but are not found on the multiple listing service/ online. The agent sells the house using their network and word of mouth. Also known as an “off-market listing”.

Pre- Approval- when you provide your proof of financial stability/ history to a lender, who verifies your income, assets, debts, and credit. You will be provided with a pre-approval letter, which states the amount and type of mortgage the lender is willing to offer, including terms. An important part of your offer that shows sellers you are a serious buyer and can secure a mortgage.

Pre- Qualification- an early step in the home buying process where a lender will give you an estimate of how much you may be able to borrow based on your finances. This process will introduce you to different mortgage options that suit your needs.

Title- represents the rights and ownership of a property. During the sale process, the title is transferred from the seller to the buyer, thus giving the buyer legal rights to the property.

Title Search- examines public records for the history of the home, including sales, purchases, taxes and liens. This process verifies the owner of the property and can uncover any liens or encumbrances on the property.

Under Contract- when a seller has accepted an offer from a buyer but the transaction has not yet closed. More specifically, under contract is when an offer is contingent or pending.

Zestime- A home valuation tool used by Zillow. Many websites have their own home valuation tools, which can be highly inaccurate. It is best to trust a real estate agent that knows the local market and your specific house and can price it appropriately.

*Wondering about a term that is not on the list above?