A

Appraisal – A professional opinion of a home’s value, usually ordered by your lender to make sure the home is worth what you’re offering to pay.

Appraisal Gap – If the appraisal comes in lower than your offer, the bank won’t cover the full price. When a buyer agrees to cover part of that difference, it can make the offer more competitive. Example: “Buyer agrees to cover up to $10,000 above appraised value if needed.”

Assessment – The value placed on a property by the local town or city for tax purposes. It may be different from market value.

Assumable Mortgage – A home loan that can be transferred from the seller to the buyer, keeping the original loan’s interest rate and terms. Not all loans qualify for this.

B

Buyer’s Market – A real estate market where there are more homes for sale than buyers looking—meaning more options and potential negotiating power for you.

Buyer Needs to Sell Home First – This is a contingency in your offer that says you need to sell your current home before buying a new one. It helps protect you from being stuck owning two homes at once. Example: “Offer is contingent on the sale of buyer’s current home.”

C

Closing – The final step where everything is signed, money is transferred, and the home officially becomes yours.

Closing Costs – The additional fees you’ll pay at closing, like lender fees, title insurance, and taxes. Typically 2–5% of the purchase price.

Comparative Market Analysis (CMA)t – A report prepared by us showing similar homes that have sold recently to help determine a fair price for the one you want.

Contingency – A condition written into the offer that must be met for the sale to go through — like a home inspection or getting a mortgage.

Conventional Loan – A common type of mortgage that isn’t backed by the government. Often used by buyerswith strong credit and a solid down payment.

Credit Score – A number (usually between 300–850) that lenders use to evaluate how likely you are to repay your loan.

D

Debt-to-Income Ratio (DTI) – A way lenders measure how much of your monthly income goes toward debt. The lower the ratio, the better.

Deed – A legal document that transfers property ownership from the seller to the buyer.

Down Payment – The amount of money you put upfront toward the purchase of the home. It’s usually 3–20% of the home price.

Down Payment Assistance Program – A financial assistance program that helps buyers cover the cost of a down payment, often available for first-time homebuyers.

E

Earnest Money – A deposit you make when your offer is accepted to show you’re serious about buying. It’s usually applied toward your closing costs or down payment later.

Escalation Clause – This is a way to automatically increase your offer if there’s competition—up to a limit. Example: “I’ll beat the highest offer by $3,000, not to exceed $640,000.”

Escrow – A neutral third party that holds funds or documents during a real estate transaction until all conditions are met.

Escrow Account– A separate account where lenders hold funds for property taxes and homeowners insurance, ensuring they are paid on time.

F

FHA Loan– A government-backed loan insured by the Federal Housing Administration, often allowing lower down payments and credit score requirements.

Fixed vs. Adjustable-Rate Mortgage (ARM) – A fixed-rate mortgage has the same interest rate for the entire term, while an ARM has a rate that can change periodically based on market conditions.

Foreclosure – A legal process in which a lender takes ownership of a home when a borrower fails to make mortgage payments.

H

Home Equity – The portion of your property that you own outright, calculated as the home’s market value minus any mortgage balance.

Home Inspection – A professional assessment of a home’s condition, identifying potential repairs before purchase.

Home Owners Association (HOA) – An organization managing a residential community, often requiring fees and adherence to regulations.

Home Owners Insurance – A policy protecting a homeowner from property damage, liability, and other risks.

Home Warranty – A policy protecting a homeowner from property damage, liability, and other risks.

I

Interest Rate – The percentage charged by a lender for borrowing money to purchase a home.

Investment Property– A property purchased with the intention of generating rental income or resale profit.

L

Lien – A legal claim against a property, often due to unpaid debts, which must be cleared before selling or refinancing.

Loan Estimate – A document provided by a lender outlining the terms, fees, and estimated costs of a mortgage.

Loan-to-Value Ratio (LTV) – A percentage comparing the mortgage amount to the appraised home value, used to assess loan risk. A lower LTV often means better loan terms.

M

Mortgage – A loan used to purchase a home, repaid over time with interest.

Mortgage Pre-Approval – A lender’s official estimate of how much they’re willing to lend you. It’s based on verified income, credit, and debts — and shows sellers you’re serious.

Multiple Listing Service (MLS) – A database of available real estate listings used by licensed agents.

P

Prepayment Penalty – A fee some lenders charge if a borrower pays off a mortgage early.

Pre-Qualification vs. Pre-Approval – Pre-qualification is an estimate of how much you can borrow based on self-reported information, while pre-approval is a more in-depth process involving verification of financial documents.

Principal – The original loan amount borrowed, excluding interest.

Private Mortgage Insurance (PMI) – A type of insurance required for loans with less than a 20% down payment, protecting the lender if the borrower defaults.

R

Real Estate Agent – A licensed professional (like Ashley!) who helps guide you through buying or selling a home. We represent your interests every step of the way.

Real Estate Broker – A real estate professional who has additional training and can supervise other agents or run a brokerage (like Kamil).

Refinancing– Replacing an existing mortgage with a new loan, often to obtain a lower interest rate or better terms.

S

Seller’s Market– A market where demand for homes exceeds supply, often leading to higher prices and faster sales.

Seller Paid Commission – A request for the seller to cover the buyer’s agent commission instead of the buyer. Example: The seller agrees to pay the buyer’s agent a commission of 2% of the gross sale price at closing.

Survey – A professional drawing of the property lines, structures, and land features — often used to confirm boundaries and avoid disputes.

Settlement Statement – A document detailing all costs associated with a real estate closing.

T

Title – A legal document proving homeownership.

Title Insurance – A policy protecting against legal claims on the property due to past ownership disputes or errors.

Transfer Tax– A tax imposed by the state or local government when a property changes ownership.

V

VA Loan – A loan backed by the Department of Veterans Affairs, available to eligible service members and veterans — often with no down payment required.