Plain words for the jargon

A licensed appraiser’s written opinion of a home’s value, built by comparing it to recent local sales. A lender orders one before financing a purchase, and will only lend against the appraised value.

The fees beyond the price that come due at closing. For a buyer these include loan fees, title, and prepaids; for a seller they include title, escrow, and any transfer tax. Commonly a few percent of the price.

A five-page form that lays out the final terms and costs of a mortgage. The lender must give it to a buyer at least three business days before closing, so there is time to compare it to the Loan Estimate.

Recent sales of similar homes near yours, used to estimate value. The closer the match in location, size, condition, and timing, the better the comp. Sold prices only, never asking prices.

A condition in a purchase contract that lets a buyer back out and keep their deposit if it is not met. The common ones cover the inspection, the appraisal, and the buyer’s financing.

The legal document that transfers ownership of the property from seller to buyer. It is signed at closing and recorded with the county, which is the step that makes the transfer public and official.

A good-faith deposit a buyer puts down when signing a contract, held by a neutral third party. It is applied to the down payment or closing costs at closing, and can be forfeited if the buyer walks for a reason the contract does not allow.

A neutral arrangement where a third party holds money and documents until the deal’s conditions are met. In much of the country an escrow or title company runs the closing; in some states an attorney does.

A service that lists your home on the local MLS for a one-time fee instead of a commission, commonly $100 to $500. It is the usual way an owner selling on their own gets into the MLS.

Selling your home yourself, without hiring a listing agent. You handle pricing, marketing, showings, negotiation, and the paperwork, and you keep the commission a listing agent would have charged.

A standardized three-page form a lender must give you within three business days of your application, showing the rate, monthly payment, and closing costs. Every lender uses the same form so you can compare offers.

The shared regional database real estate agents use to list homes. It is the source that feeds the major portals like Zillow and Redfin, which is why getting onto it matters even when you sell on your own.

A lender’s written commitment, after reviewing your income, credit, and assets, to lend up to a stated amount. It carries far more weight with a seller than a quick pre-qualification estimate.

A written statement, required in most states, where the seller reports the home’s known condition and defects. Hiding a known problem is the most common way a for-sale-by-owner seller gets sued after closing.

Money the seller agrees to put toward the buyer’s costs, such as closing costs. Since 2024 a seller can offer concessions on the MLS even though buyer-agent compensation can no longer be posted there.

A policy that protects against problems in the home’s ownership history, like an undisclosed lien or a defective past transfer. There is an owner’s policy and a lender’s policy, and local custom decides who pays for which.

A tax some states, counties, or cities charge when a property changes hands, usually based on the sale price. A few states have none. Who pays it is set by state law or local custom.

The state of a sale once a buyer and seller have signed a purchase agreement but before closing. The home is committed, the contingency clocks are running, and escrow is open.