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Real estate has its own language, and whether you’re buying your first home or selling your fifth, the terminology can feel confusing, overwhelming, or even contradictory. Many terms sound similar but mean very different things—and misunderstanding them can lead to stress, delays, or costly mistakes.
This comprehensive real estate glossary breaks down the most common real estate terms buyers and sellers encounter, organized by category and explained in plain English.
📝 Contract & Listing Status Terms
Active
A home that is currently listed for sale and available to receive offers.
Coming Soon
A listing that will be available soon but may not yet be fully active or available for showings.
Under Contract
The seller has accepted an offer, but the sale has not yet closed and contingencies may still apply.
Pending
All contingencies have been satisfied and the transaction is moving toward closing.
Contingent
The sale depends on specific conditions being met, such as inspections or financing approval.
Backup Offer
An offer submitted in case the primary contract falls through.
Days on Market (DOM)
The number of days a property has been listed before going under contract.
Kick-Out Clause
A clause allowing sellers to continue marketing the property while under contract and “kick out” the buyer if certain conditions aren’t met.
💰 Financing & Loan Terms
Pre-Qualification
An informal estimate of how much a buyer may be able to borrow based on self-reported information.
Pre-Approval
A lender’s written confirmation of how much a buyer is approved to borrow after reviewing financial documents and running credit.
Debt-to-Income Ratio (DTI)
The percentage of a buyer’s monthly income that goes toward debt payments.
Loan Estimate
A document outlining estimated loan terms, interest rate, and closing costs.
Fixed-Rate Mortgage
A loan with an interest rate that remains the same for the entire loan term.
Adjustable-Rate Mortgage (ARM)
A loan with an interest rate that can change after an initial fixed period.
Points
Fees paid upfront to reduce the interest rate on a mortgage.
PMI / MIP
Mortgage insurance required for certain loan types when a buyer puts less money down.
Rate Lock
A lender’s guarantee of a specific interest rate for a set period of time.
🏡 Ownership, Legal & Property Terms
Title
Legal ownership of a property.
Deed
The legal document transferring ownership from seller to buyer.
Lien
A legal claim against a property for unpaid debts.
Easement
The right for someone else to use part of a property for a specific purpose.
Survey
A drawing showing property boundaries and improvements.
Encroachment
When a structure extends onto a neighboring property.
🔍 Inspections, Appraisals & Value
Home Inspection
A professional evaluation of a home’s condition and major systems.
Appraisal
An independent assessment of a home’s value required by the lender.
Comparative Market Analysis (CMA)
An estimate of value based on similar recently sold homes.
As-Is
The seller is not agreeing to make repairs, though inspections may still occur.
Inspection Repair Addendum
A written agreement outlining repairs to be completed before closing.
Due Diligence
The period when buyers investigate the property before finalizing the purchase.
📦 Money, Escrow & Closing Terms
Earnest Money Deposit (EMD)
A good-faith deposit showing the buyer’s intent to purchase.
Escrow
A neutral account holding funds and documents until closing conditions are met.
Closing
The final step where ownership officially transfers.
Closing Costs
Fees paid at closing, including lender, title, and government costs.
Prorations
Adjustments for expenses like taxes and HOA dues split between buyer and seller.
Wire Fraud
A common real estate scam involving fraudulent wiring instructions—always verify before sending funds.
🏘 HOA & Community Living Terms
HOA (Homeowners Association)
An organization managing shared community rules and maintenance.
CC&Rs
Covenants, Conditions & Restrictions governing a community.
Special Assessment
An additional fee charged to HOA members for unexpected expenses.
Resale Package
HOA documents provided to buyers detailing rules, finances, and fees.
📄 Offer & Negotiation Terms
Offer
A written proposal to purchase a property under specific terms.
Counteroffer
A seller’s response changing some or all terms of the original offer.
Concessions/Subsidy
Costs a seller agrees to cover on behalf of the buyer.
Addendum
An addition or modification to the original contract.
Final Thoughts
Real estate doesn’t have to feel confusing. Understanding the terminology helps buyers and sellers make confident decisions, avoid surprises, and navigate transactions more smoothly.
Having a knowledgeable Realtor who explains these terms clearly—and advocates for you every step of the way—makes all the difference.
