Here are the terms you will run into most, in alphabetical order.
A to C
- Appraisal. A licensed appraiser's opinion of a home's value, usually ordered by the buyer's lender.
- Assessed value. The value the county uses to calculate property tax.
- Backup offer. An offer accepted to be next in line if the first sale falls through.
- Buyer representation agreement. The written agreement between a buyer and their agent.
- Closing costs. Fees to complete a purchase, beyond the down payment.
- Close of escrow. The day the deed is recorded and ownership transfers.
- Comparable sales (comps). Recent sales of similar nearby homes, used to set price.
- Contingency. A condition in the contract, such as an inspection, that must be satisfied.
- Counteroffer. A response that changes the terms of an offer.
- CC&Rs. The rules of a homeowners association.
D to H
- Days on market (DOM). How long a home has been listed.
- Debt-to-income ratio (DTI). Monthly debt payments divided by monthly income, used by lenders.
- Disclosure. Information the seller must provide about the property.
- Earnest money. A good-faith deposit made when your offer is accepted.
- Equity. The part of your home you own: value minus what you owe.
- Escrow. A neutral company that holds funds and documents until the sale closes.
- FHA loan. A loan insured by the Federal Housing Administration.
- HOA. Homeowners association.
I to M
- Inspection contingency. Your right to inspect and decide whether to proceed.
- Jumbo loan. A loan above the conforming loan limit.
- Lien. A legal claim against a property for a debt.
- List price. The asking price.
- Loan estimate. The standard form your lender gives you showing loan terms and costs.
- Lock. A lender's promise to hold your interest rate for a set time.
- Mello-Roos. A special tax in some communities that funds local improvements.
- MLS. The Multiple Listing Service where agents share listings.
- Months of supply. How long it would take to sell current inventory at the current pace of sales.
N to R
- Natural Hazard Disclosure (NHD). A report showing mapped zones and special taxes for a property.
- Origination fee. A lender's charge for processing a loan.
- Pending. A home under contract that has not yet closed.
- PITI. Principal, interest, taxes and insurance: the parts of a monthly payment.
- Points. Upfront fees paid to lower your interest rate (one point is 1% of the loan).
- Pre-approval. A lender's written commitment for how much you can borrow.
- Preliminary title report. A report on a property's ownership history and any claims.
- Private mortgage insurance (PMI). Insurance paid with less than 20% down.
- Proposition 13. The California law limiting property tax rates and annual increases.
- Rent-back. A seller renting their home from the buyer briefly after closing.
S to Z
- Seller credit. Money the seller gives the buyer at closing.
- Staging. Arranging furniture and decor to show a home at its best.
- Supplemental tax bill. A bill adjusting property tax after a change of ownership.
- Title insurance. Insurance that protects ownership against certain claims.
- Transfer tax. A tax on the transfer of property, charged by counties and some cities.
- Underwriting. The lender's review of your finances and the property.
- VA loan. A loan guaranteed by the Department of Veterans Affairs for eligible borrowers.
- Walk-through. A final visit before closing to confirm the home's condition.
More in Resources
- How to Read a Home Listing — Every part of a listing decoded, so you can spot the good stuff fast.
- Fair Housing: Equal Access for Everyone — What fair housing means, the protections you have in California, and how Rudy works.
General information only, not legal, tax or financial advice. Programs, rules and limits change, so confirm details with your lender, escrow officer, attorney or tax professional.