Your Handy Guidebook to Real Estate Jargon

A Plain-English Guide for Buyers, Sellers & Homeowners

Buying or selling a home can feel overwhelming especially when real estate professionals start throwing around industry terms that sound like another language. If you’re not in the business, many of these words may be completely unfamiliar.

This guide breaks down the most common real estate terms you’ll hear during a transaction, explained in clear, simple language, so you can feel confident, informed, and in control throughout the process.

Whether you’re a first-time buyer, seasoned homeowner, or preparing to sell, this guide will help you navigate the real estate journey with clarity.

Common Real Estate Terms Explained (A–Z)

Agreement of Sale (AOS)
The legal contract that outlines the terms and conditions of the purchase between a buyer and seller.

Appraisal
An independent evaluation ordered by the lender to determine the property’s value and ensure it supports the loan amount.

Asbestos
A mineral once used in building materials and insulation. It can pose health risks if disturbed and is more common in older homes.

Attorney Review
A short time period (varies by state) after contract signing when attorneys may review and request changes to the agreement.

Bidding War
Occurs when multiple buyers submit offers on the same property. Sellers often request “highest and best” offers, considering not just price but terms, timelines, and contingencies.

Certificate of Occupancy (CO)
A document issued by the local municipality confirming the home meets building codes and is safe for occupancy. Required prior to closing.

Closing (Settlement)
The final step of the transaction where funds are transferred, documents are signed, and ownership officially changes hands.

Closing Costs
Expenses beyond the purchase price, including lender fees, title insurance, escrow fees, and more. Your Realtor can provide an estimate before you make an offer.

Comparative Market Analysis (CMA)
A report comparing recently sold homes to help determine a property’s fair market value.

Contingency
A condition that must be met for the sale to move forward, such as inspections, financing approval, appraisal, or the sale of another home.

Deed
The legal document transferring ownership. It is recorded with the county and mailed to the new owner after closing.

Dual Agency
When one brokerage represents both the buyer and seller in a transaction. This must be disclosed in writing.

Due Diligence
The buyer’s opportunity to research and inspect the property to fully understand its condition and suitability.

Escalation Clause
An addendum that allows a buyer’s offer to automatically increase over competing offers up to a maximum amount.

Escrow Money Deposit (EMD)
A good-faith deposit submitted shortly after contract acceptance. It is applied toward the purchase and refundable if contract terms are met.

Foreclosure
A legal process where a lender sells a property after the borrower defaults on mortgage payments.

Fully Executed
A contract signed by all parties, making it legally binding.

Home Sale Contingency
A condition stating the buyer must sell their current home before purchasing the new one.

Inspection
A professional evaluation of the property’s condition, including structure, systems, and safety items.

Inspection Contingency
The timeframe in which the buyer may conduct inspections and negotiate repairs or credits.

Inspection Repair Request
A post-inspection negotiation where buyers may request repairs or financial concessions.

Market Value
What a buyer is willing and able to pay, based on comparable sales, location, condition, and demand.

Meeting of the Minds
A mutual agreement between buyer and seller on all contract terms.

Multiple Listing Service (MLS)
The database Realtors use to share up-to-date property listings and market data.

Mortgage
A loan used to purchase real estate, repaid over time with interest.

Mortgage Application
The formal loan application submitted after a contract is accepted.

Mortgage Contingency
Protects the buyer if financing cannot be secured within the agreed timeframe.

Mortgagee
The lender.

Mortgage Payoff
The remaining loan balance paid off at closing when a property is sold.

Mortgage Satisfaction
Official confirmation that the mortgage has been fully paid.

Mortgagor
The borrower or homeowner.

Multiple Offers
When more than one buyer submits an offer on a property, often leading to competitive negotiations.

Offer
A written proposal outlining price, terms, contingencies, and proof of financing.

Pre-Approval
A lender’s verification of a buyer’s financial ability to purchase, strengthening their offer.

Proof of Funds
Documentation showing available cash for a purchase or down payment.

Radon
A naturally occurring gas found in soil. Levels above 4.0 require mitigation, which is common and manageable.

Right of First Refusal
Gives an existing buyer the opportunity to match a better offer before the seller proceeds with another buyer.

Short Sale
A sale where the lender agrees to accept less than the amount owed on the mortgage. Requires lender approval and can take time.

Survey
A report showing property boundaries and improvements.

Termites
Wood-destroying insects that can cause structural damage if untreated.

Title
Legal ownership of the property.

Title Insurance
Protects buyers and lenders from defects or liens on the title that could surface after purchase.

Under Agreement
A property with a fully signed contract pending closing.

Final Thoughts

Real estate doesn’t have to be confusing you just need the right guide. Understanding these terms empowers you to make smarter decisions and feel confident every step of the way.

If you’re buying, selling, or simply have questions about the process, I’m always happy to help.