Knowing the language makes the whole process easier
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Real estate has its own language and nobody hands you a dictionary when you start the process. Here's everything you need to know broken down in plain English — no fluff, no confusion.
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Pre-Approval
A letter from your lender confirming how much they'll loan you. This is required before you make an offer.
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Earnest Money
A deposit you put down when your offer is accepted. Shows the seller you're serious. Typically 1% of the purchase price.
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Contingency
A condition that must be met for the sale to go through. Common ones are inspection, appraisal, and financing contingencies.
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Under Contract
The seller accepted an offer and both parties are working toward closing. The home is technically still for sale until it closes.
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Closing Costs
Fees paid at closing by both buyer and seller. For buyers typically 2-5% of the loan amount.
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Appraisal
An independent assessment of the home's value ordered by the lender. The home must appraise at or above the purchase price.
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Title
Legal documentation proving who owns the property.
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Escrow
A neutral third party that holds funds and documents during the transaction until closing.
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MLS
Multiple Listing Service. The database agents use to list and search for homes.
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Commission
The fee paid to real estate agents at closing. Typically paid by the seller.
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Clear to Close
Your lender has approved everything and you're ready to sign and close.
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Equity
The difference between what your home is worth and what you still owe on it.
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