Buyer Terms
Buying a home comes with a learning curve, especially if it has been a while. Understanding these buyer-focused terms can help the process feel clearer and more manageable.
Pre-Approval
A pre-approval confirms how much a lender is willing to loan based on income, credit, and assets. It helps buyers shop confidently and strengthens their offers.
Down Payment
The portion of the purchase price paid upfront at closing. Different loan programs require different down payment amounts.
Earnest Money
A deposit showing serious intent to purchase. It is typically credited toward closing costs or the down payment.
Inspection
A professional evaluation of the home’s condition. Inspections help buyers understand what they are purchasing and identify potential issues early.
Contingency
A condition that must be satisfied before the sale becomes final, such as inspections or financing approval.
Appraisal
An independent estimate of the home’s value, ordered by the lender to ensure the loan amount is supported.
Seller Terms
For sellers, understanding pricing, timing, and market signals can make the process feel far less overwhelming.
Market Value
What buyers are realistically willing to pay based on recent sales and current demand, not what an online estimate suggests.
Equity
The portion of the home’s value you own outright. Many sellers use equity to downsize, relocate, or reduce monthly expenses.
CMA (Comparative Market Analysis)
A report that analyzes similar recent sales to determine a realistic price range for your home.
List Price
The price a home is marketed at when it goes on the market. Pricing is a strategy designed to attract the right buyers.
Days on Market (DOM)
How long a home is listed before going under contract. This helps sellers understand buyer activity and market pace.
Pending
The home is under contract and progressing toward closing, but ownership has not yet transferred.
Financing Terms
Financing plays a major role in any real estate transaction. These terms help explain how loans and payments work.
Mortgage
A loan used to purchase a home, repaid over time through monthly payments.
Interest Rate
The cost of borrowing money, expressed as a percentage. Even small changes in interest rates can affect monthly payments.
Rate Lock
An agreement that locks in an interest rate for a set period so it does not change before closing.
PMI (Private Mortgage Insurance)
Insurance required on some loans when the down payment is less than 20%. PMI protects the lender, not the buyer.
Closing Costs
Fees required to finalize a transaction, including lender fees, title services, and taxes.
Escrow
A neutral account that holds money and documents safely until all terms of the transaction are completed.
Real estate does not have to feel complicated. Understanding the language helps homeowners and buyers feel more confident and prepared, no matter where they are in the process.
If you are ever curious how these terms apply to your own situation, exploring your home’s value or options can be a helpful place to start.
Curious how these terms apply to your own home?
Explore your home’s current value here.
JOCELYN SIRIVONGXAY | REALTOR®
Keller Williams Kansas City Metro
Mobile: 913.280.0205
Email: Jocelyn.Sirivongxay@kw.com