Whether you’re buying your first home or getting ready to sell, navigating the real estate world can feel overwhelming—especially with all the unfamiliar jargon. Understanding key terms can help you feel more confident and make smarter decisions throughout your real estate journey.
Here’s a breakdown of some common real estate terms you’re likely to encounter—and what they actually mean.
🏡 1. Appraisal
An appraisal is a professional assessment of a home’s market value, usually conducted by a licensed appraiser. Lenders require appraisals to ensure the home is worth the amount being loaned. It helps protect both the buyer and the lender.
💰 2. Down Payment
A down payment is the upfront amount of money a buyer pays toward the purchase of a home. It’s typically expressed as a percentage of the total purchase price. While 20% is traditional, many loans offer lower down payment options.
✅ 3. Pre-Approval
A mortgage pre-approval is a written estimate from a lender stating how much you’re likely qualified to borrow. It shows sellers that you’re a serious buyer and can give you an edge in a competitive market.
📑 4. Contingency
A contingency is a condition that must be met for a real estate deal to go through. Common contingencies include:
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Home inspection: The buyer can cancel if major issues are discovered.
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Appraisal: The home must appraise for the agreed-upon price.
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Financing: The buyer must secure a loan to proceed.
📝 5. Closing Costs
Closing costs are fees associated with finalizing a real estate transaction. They typically include loan origination fees, title insurance, escrow fees, and more. Buyers and sellers may both be responsible for certain costs.
🔐 6. Escrow
Escrow is a neutral third-party service that holds funds and documents until all conditions of the sale are met. It ensures everyone involved is protected and that the transaction is completed fairly.
📉 7. Equity
Home equity is the difference between the market value of your home and what you still owe on your mortgage. As you pay down your mortgage and your home’s value increases, your equity grows.
🧾 8. MLS (Multiple Listing Service)
The MLS is a database used by real estate agents to list and find homes for sale. It provides detailed information on properties and is one of the most reliable sources of real estate listings.
🗓️ 9. Days on Market (DOM)
DOM refers to the number of days a home has been listed for sale on the MLS. A high DOM can signal to buyers that a property might be overpriced or may need work.
🔁 10. Seller’s Market vs. Buyer’s Market
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In a seller’s market, demand exceeds supply, and homes sell quickly—often at or above asking price.
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In a buyer’s market, inventory is higher and buyers have more negotiating power.
🎯 Why It Matters
Understanding real estate terminology empowers you to make informed decisions, ask the right questions, and feel more confident throughout the process. Whether you’re looking to buy, sell, or invest, having a solid grasp of these terms is a key first step.
🗣 Ready To Talk Real Estate?
If you have questions about any of these terms—or others not on this list—I’m here to help. Let’s chat about your real estate goals and how we can make them a reality.
Providing guidance and assisting motivated buyers, sellers, tenants, landlords, and investors in marketing and purchasing property for the right price under the best terms. Determining clients’ needs and financial ability to purchase the best home for them. Call me today and let me help you find a home that can change your life!