Real Estate Glossary: Top Need-to-Know Terms when Buying/Selling a Home

Why this glossary matters

Whether you are selling your current home, buying a new one, or doing both at once, you’re going to see a lot of terms tossed around in contracts, emails, and conversations. Understanding what those words actually mean can:

• Help you make smarter, faster decisions.
• Give you more confidence when you’re signing important documents.
• Reduce stress, because you’re not constantly Googling terms mid-call.
• Make it easier to compare options, offers, and services (including Offerpad).

How to use this glossary

Think of this glossary as your real estate cheat sheet. Here’s how to get the most out of it:

1. Before a meeting or call: Skim terms related to the step you’re in (offers, inspection, closing).
2. During the process: If a term pops up that you’re not sure about, come back here for a quick, clear definition.
3. After reading: Ask your agent, lender, or Offerpad HomePro: “How does this apply to my specific situation?”

And remember: you don’t need to memorize everything. You just need to know where to look when you see a term you don’t recognize.

People and roles in a real estate transaction

Agent / Real Estate Agent

A licensed professional who helps you buy or sell a home. Agents must follow state laws and ethical rules when representing you.

Broker

A real estate professional who has completed additional training and licensing. Brokers can manage other agents and oversee transactions.

Listing Agent

The agent who represents the seller and markets the home. They help with pricing, listing strategy, showings, and offers.

Buyer’s Agent

The agent who represents the buyer. They help you find homes, write offers, negotiate terms, and navigate inspection and closing.

Dual Agency

When one agent or brokerage represents both the buyer and the seller in the same transaction. Rules vary by state and it may require special consent.

Home Inspector

A licensed or certified professional who evaluates a home’s condition, including major systems and safety issues, and provides a written report.

Appraiser

A licensed professional hired (usually by the lender) to give an independent opinion of the home’s value.

Title Company / Escrow Company

A neutral third party that handles the transfer of funds and documents, verifies ownership history, and often issues title insurance.

Money, mortgage, and financing terms

Pre-qualification

An early estimate from a lender of how much you might be able to borrow, based on self-reported information. It is helpful for getting a rough idea, but it is not a guarantee.

Pre-approval

A stronger step than pre-qualification. The lender reviews your income, debts, and credit to issue a letter saying how much they are willing to lend, assuming nothing major changes. Sellers often take pre-approved buyers more seriously.

Down Payment

The cash you pay up front toward the purchase price. The rest is typically financed through a mortgage. Common down payments range from 3% to 20% or more.

Mortgage

A home loan used to finance the purchase of real estate. You repay it over time, usually 15 or 30 years, with interest.

Fixed-Rate Mortgage (FRM)

A mortgage with an interest rate that stays the same for the entire life of the loan. Your principal and interest payment remains predictable.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that can change after an initial fixed period. Your payment can go up or down over time depending on market rates.

Interest Rate

The cost of borrowing money, expressed as a percentage of the loan amount. Higher rates mean higher monthly payments for the same loan amount.

Annual Percentage Rate (APR)

A broader measure of the cost of borrowing that includes the interest rate plus certain fees and costs, expressed as a yearly rate.

Points / Discount Points

Optional upfront fees paid to the lender at closing in exchange for a lower interest rate. One discount point typically equals 1% of the loan amount.

Loan-to-Value Ratio (LTV)

The ratio of the loan amount compared to the home’s value or purchase price. A higher LTV often means more risk for the lender and may require mortgage insurance.

Private Mortgage Insurance (PMI)

Insurance that protects the lender if you stop making payments. It is often required when your down payment is less than 20%.

Escrow Account (for taxes and insurance)

An account managed by your lender to collect a portion of your property taxes and homeowners insurance with each monthly mortgage payment, then pay those bills when due.

Home value, pricing, and market terms

List Price / Asking Price

The price a seller sets when putting the home on the market. It is not always the same as the final sale price.

Sale Price

The final price the buyer and seller agree to in the purchase contract. This is typically what appears in public records and is used as a “comp” for future appraisals.

Market Value

The price a willing buyer and willing seller agree on in an open, competitive market. Appraisals aim to estimate this number.

Appraisal

A licensed appraiser’s professional opinion of what the property is worth, usually required by a lender before approving a loan.

Assessed Value

The value placed on a property by the local tax authority, used to calculate property taxes. It may be higher or lower than market value.

Equity

The portion of the home you truly “own.” It is the difference between your home’s market value and what you still owe on your mortgage.

Comparables (“Comps”)

Recent sales of similar homes in your area used to help estimate a property’s value and guide pricing decisions.

Days on Market (DOM)

The number of days a home has been listed for sale. A high DOM can signal overpricing or low demand, while a very low DOM can indicate a hot market.

Buyer’s Market

A market where there are more homes for sale than buyers. Buyers may have more negotiating power and see more price reductions.

Seller’s Market

A market where there are more buyers than homes for sale. Sellers may receive multiple offers and strong pricing.

Balanced Market

A market where supply and demand are roughly equal. Neither buyers nor sellers have a strong advantage.

Offers, negotiations, and contract terms

Offer

A buyer’s formal proposal to purchase a property, including price, timing, contingencies, and other terms.

Counteroffer

A response to an offer where the seller (or buyer) proposes changes to the terms instead of accepting as-is.

Earnest Money Deposit (EMD)

A good-faith deposit from the buyer that shows they are serious about the purchase. It is usually applied to closing costs or the down payment at closing.

Contingency

A condition that must be met for the contract to move forward. Common contingencies include inspection, appraisal, financing, and the sale of another home.

Inspection Contingency

A contract clause giving the buyer time to inspect the home and either request repairs, negotiate, or cancel if serious issues are found.

Appraisal Contingency

A condition that allows the buyer to renegotiate or cancel the contract if the home appraises for less than the agreed-upon price.

Financing Contingency

A clause that allows the buyer to cancel the contract if they are unable to secure financing within the agreed timeframe.

“As-Is” Sale

A sale where the seller does not plan to make repairs or upgrades. Buyers can still inspect the property and may negotiate, but the starting point is that the home is sold in its current condition.

Backup Offer

An offer that becomes active only if the primary contract falls through. This can be helpful in competitive markets.

Short Sale

A sale where the homeowner owes more on the mortgage than the home is worth, and the lender agrees to accept less than the full payoff. Short sales typically need lender approval and can take longer.

Inspection, title, and closing terms

Home Inspection

A detailed review of a property’s condition by a qualified inspector. They check major systems, structure, roof, electrical, plumbing, and more.

Inspection Report

The written summary of the inspector’s findings, including any safety concerns, defects, or recommended repairs.

Repairs / Repair Requests

Items the buyer asks the seller to fix or address after reviewing the inspection report. These can be negotiated before closing.

Title

Legal ownership of the property. Clear title means there are no unresolved claims, liens, or legal issues that would prevent you from owning the home outright.

Title Search

A review of public records to confirm the seller’s ownership and identify any liens, easements, or other issues affecting the property.

Title Insurance

An insurance policy that protects against certain problems with the title that may not have been found during the title search. There are usually separate policies for the lender and, optionally, for the buyer.

Deed

The legal document that transfers property ownership from the seller to the buyer at closing.

Closing

The final step of the sale, where documents are signed, funds are transferred, and the buyer becomes the new legal owner of the home.

Closing Costs

The fees and expenses paid at closing, which may include lender fees, title charges, government recording fees, and more. Both buyers and sellers may have closing costs.

Escrow (Closing Escrow)

A neutral third party that holds funds and documents until all conditions of the sale are met and it is time to close.

Property condition and disclosures

Seller’s Disclosures

Forms where the seller shares what they know about the property’s condition, past issues, and certain required items (like known leaks, roof age, or previous damage), based on local laws.

Material Defect

A significant issue with the property that could affect its value or a buyer’s decision to move forward with the purchase.

Homeowners Association (HOA)

An organization that manages shared areas and enforces rules in certain communities, such as condos or planned neighborhoods. Owners usually pay monthly or annual dues.

HOA Documents

The rules, regulations, bylaws, and financial statements that govern the community. Buyers should review these documents carefully before closing.

Fair Housing Laws

Federal and state laws that prohibit discrimination in housing based on protected characteristics, such as race, color, religion, sex, disability, and other categories defined by law.

Where Offerpad fits into all this

Knowing the language of real estate is powerful, but you still shouldn’t have to do everything the hard way. That is where Offerpad comes in. We are here to give you:

• Options: Get a competitive cash offer, list your home the easy way, or explore a hybrid approach.
• Clarity: Our team helps you understand your choices, timing, and what each term really means for your situation.
• Flexibility: Choose your closing date and move on your schedule with less stress.

Curious what your current home might sell for? You can start by requesting a competitive cash offer from Offerpad and see your options side by side.

Ready to find your next home? Explore homes for sale and learn how to buy with Offerpad using local expertise and modern tools.

Provide your best home buying and selling experience. Period.