Real estate is packed with jargon, acronyms, buzzwords, and industry terms that agents, lenders, and title companies toss around like everyone should already know what they mean. Most buyers and sellers nod politely while silently thinking, “Wait… what’s a comp again?”
Here’s your no-BS guide to the most common real estate terms you’ll hear, broken down in plain language so you can move through your transaction with confidence. And remember: it’s always okay to ask questions. A great agent, lender, or closer will take the time to explain anything until it makes sense.
Terms You’ll Hear from Agents
MLS (Multiple Listing Service): The private database that agents use to list homes and search available inventory. It’s far more accurate and up-to-date than third-party sites like Zillow or Redfin.
Comp (Comparable Sale): A recently sold home that’s similar in size, style, location, and condition to yours. Comps help determine what a home is worth.
CMA (Comparative Market Analysis): A report your agent prepares to help price your home (or guide your offer). It’s based on comps and shows current market trends.
Earnest Money: A deposit (usually 1–3% of the purchase price) that you put down after your offer is accepted. It goes into escrow and counts toward your purchase at closing.
Escrow: Has two meanings: during the purchase, it’s where earnest money is held; after closing, it’s the lender-managed account that pays your taxes and insurance.
Appraisal: An independent valuation ordered by the lender to make sure the home is worth the agreed price. If it comes in low, the deal may need to be renegotiated.
Terms You’ll Hear from Lenders
Pre-Qualification vs. Pre-Approval:
Pre-qual is an estimate based on what you tell the lender.
Pre-approval is based on verified documents and gives sellers confidence in your offer.
Underwriting / Underwriter: The step where the lender’s team reviews all your documents, credit, income, debt, and property to decide if the loan is fully approved.
DTI (Debt-to-Income Ratio): A calculation that compares your monthly debts to your gross income. A major factor in determining how much you can borrow.
PMI (Private Mortgage Insurance): A fee on conventional loans when you put down less than 20%. It protects the lender, not you.
Funding Fee (VA Loan): A one-time charge on VA loans, usually rolled into the loan amount. Some veterans are exempt.
Rate Lock: A commitment from your lender to hold your quoted interest rate for a set number of days, typically 30-60 while you complete the purchase.
Terms You’ll Hear in the Contract and at Closing
Title: The legal right to own the home.
Title Company / Closer: The title company (or closing attorney) ensures the property has clean ownership history, manages the escrow account, and oversees the closing paperwork.
Title Insurance: A one-time purchase at closing that protects you from past ownership disputes, liens, or record errors for as long as you own the home.
Closing Costs: The fees due at closing, separate from your down payment. These cover lender charges, title fees, prorated taxes, and more.
Recording: When the deed is officially filed with the county in your name. Until it’s recorded, you’re not the legal owner.
Objection Deadline: The date by which the buyer must raise formal concerns about inspections, title issues, HOA documents, or the appraisal.
Resolution Deadline: The cutoff for resolving those concerns. If no agreement is reached by this date, either party may cancel the contract. A great agent keeps track of these deadlines so you don’t miss your window to negotiate or protect your rights.
The No-BS Takeaway
Real estate jargon can feel like a foreign language but every term has a clear, simple meaning once someone breaks it down. If a word doesn’t make sense, stop and ask. This is your home and your money, you deserve to understand every step.
