Real Estate Terms and Expressions You Should Know

Whether you’re selling FSBO or buying your first home, real estate has its own language. Here’s a plain-English guide to the most common terms and expressions you’ll encounter in contracts, listings, and closings.

📖 Key Real Estate Terms Explained

Appraisal
Independent estimate of a property’s market value, usually ordered by a lender before approving a loan.
Broker
A licensed professional who can manage agents and represent buyers or sellers in real estate transactions.
Buyer’s Agent
An agent who represents the buyer’s interests in a real estate transaction.
Closing
The final step in a real estate transaction where documents are signed, funds are transferred, and ownership changes hands.
Closing Costs
Expenses due at closing such as title fees, recording fees, lender charges, and transfer taxes.
Comparative Market Analysis (CMA)
A report estimating a home’s value by comparing it to recently sold properties nearby.
Contingency
A condition in a purchase agreement that must be met (e.g., financing, inspection) for the deal to move forward.
Deed
The legal document that transfers ownership of real property from seller to buyer.
Down Payment
The portion of the purchase price the buyer pays upfront; the rest is financed through a mortgage.
Earnest Money
A deposit showing a buyer’s good faith when making an offer, applied toward the purchase price at closing.
Escrow
A neutral third party that holds funds and documents until all terms of the sale are met.
Equity
The difference between the property’s market value and what is owed on the mortgage.
Foreclosure
The legal process by which a lender takes possession of a property when the borrower fails to make payments.
FSBO (For Sale By Owner)
When a homeowner sells their property without hiring a traditional listing agent.
Home Inspection
An evaluation of a property’s condition, usually performed before closing by a licensed inspector.
HOA (Homeowners Association)
A governing body for certain neighborhoods or condos that collects fees and enforces community rules.
Listing Agreement
A contract between a seller and a real estate broker authorizing the broker to market and sell the property.
MLS (Multiple Listing Service)
A database where licensed agents post homes for sale, ensuring exposure to buyer agents. Flat fee MLS gives FSBO sellers access without hiring a full-service agent.
Offer
A buyer’s proposal to purchase a property, usually with price, contingencies, and timelines.
Pre-Approval
A lender’s written commitment to provide financing up to a certain amount, based on the buyer’s financial qualifications.
Realtor®
A licensed real estate professional who is a member of the National Association of REALTORS® (NAR).
Short Sale
A sale where the home is sold for less than the balance owed on the mortgage, requiring lender approval.
Title
Legal ownership of property, documented through a deed and verified by a title company before closing.
Title Insurance
Insurance protecting buyers and lenders against ownership disputes or liens.
Underwriting
The lender’s process of evaluating a buyer’s financial risk before issuing final loan approval.

🏆 Why Knowing Real Estate Terms Matters

Understanding these terms helps you make better decisions, avoid surprises, and stay in control of your transaction—especially if you’re selling FSBO. Knowledge reduces stress, saves money, and keeps your closing on track.