Real estate glossary
Real estate terms, explained in plain English
Selling a home comes with its own vocabulary. Here is what the words in your listing agreement, offer, disclosures and escrow paperwork actually mean — and why they matter to you as the seller.
Listing, offers & contracts
- AcceptanceThe moment an offer or counteroffer is signed and delivered back to the other side, creating a binding contract and starting the clock.
- As-is saleA sale where the home is sold in its current condition and the seller does not promise to make repairs — but still has to disclose what they know.
- Backup offerAn offer you accept in second place, which only moves into first place if the current deal falls through.
- CounterofferA response to an offer that changes some of its terms; it rejects the original offer and proposes new terms instead.
- Listing agreementThe contract between you and your listing broker that sets the list price, how long the listing lasts and how the broker gets paid.
- MLS (Multiple Listing Service)A shared database of homes for sale that brokers use to market listings to each other and feed listing websites.
- Purchase agreementThe written contract a buyer uses to make an offer; once both sides sign it, it sets the price, deadlines and terms of the sale.
- Real estate commissionThe fee paid to real estate brokers for a sale, usually a percentage of the price, agreed in writing and always negotiable.
Contingencies & deadlines
- Appraisal contingencyLets the buyer cancel or renegotiate if the home appraises for less than the agreed price.
- ContingencyA condition in the contract that must be met — or removed — by a deadline, letting the buyer cancel if it is not satisfied.
- Contingency removalThe buyer's written confirmation that they are giving up a contingency, which usually puts their deposit more at risk if they later back out.
- Inspection contingencyThe buyer's right to inspect the home within a set period and cancel or ask for repairs if they are not satisfied with what they find.
- Loan contingencyLets the buyer cancel if they cannot get the mortgage described in the contract by the deadline.
- Notice to Buyer to PerformA formal notice a seller sends when a buyer misses a contract deadline, giving them a short time to act before the seller may cancel.
Disclosures & inspections
- Home warrantyA service contract that covers repair or replacement of certain home systems and appliances, usually for a year after closing.
- Natural Hazard Disclosure (NHD)A California disclosure that tells the buyer whether the property is in certain officially mapped hazard zones, like flood or fire zones.
- Request for repairThe buyer's written list of repairs or credits they want after inspections, which the seller can accept, refuse or counter.
- Seller disclosuresThe forms where a seller tells the buyer what they know about the home's condition and history, such as leaks, repairs or known defects.
Escrow & title
- Earnest money depositThe buyer's good-faith deposit, held by escrow and credited toward the price at closing.
- EscrowA neutral third party that holds the money and documents for a home sale and releases them only when every condition is met.
- Grant deedThe document that transfers ownership of the home from seller to buyer; it is recorded with the county at closing.
- LienA legal claim against a property for an unpaid debt, such as a mortgage, tax bill or unpaid contractor, usually paid off at closing.
- Liquidated damagesA clause that sets in advance what the seller can keep — usually the deposit — if the buyer defaults on the purchase.
- Preliminary title reportAn early report from the title company showing who owns the property and any liens, easements or other items affecting it.
- Title insuranceInsurance that protects the buyer (and their lender) against covered problems with ownership that existed before the sale.
Closing & money
- Close of escrowThe day the sale is complete: the deed is recorded, the buyer becomes the owner and the seller is paid.
- Payoff statementThe lender's statement of exactly how much it takes to pay off a loan in full on a given date.
- ProrationsSplitting ongoing costs like property taxes or HOA dues between buyer and seller based on the closing date.
- RecordingFiling the deed and other documents with the county recorder so the change of ownership becomes part of the public record.
- Seller closing costsThe fees and charges a seller pays at closing, such as commissions, escrow and title fees, transfer taxes and prorated bills.
- Seller creditMoney the seller agrees to give the buyer at closing, usually toward their closing costs or instead of making repairs.
- Settlement statementThe final itemized accounting of every charge and credit in the sale, showing how much the seller receives.
Taxes
Not legal or tax advice. These explanations are general information to help you follow your own transaction. Laws, forms and customs vary by state and county, and the terms of your own contract always control. For advice about your situation, talk to your real estate agent, a real estate attorney or a tax professional. Last updated .