Understanding Real Estate Jargon: A Plain-English Guide

Buying or selling a home is one of the biggest financial decisions most people ever make. It's emotional, it can be scary, and you may find yourself thinking, “What the heck does all this mean?!” Words like escrow, contingencies, and appraisal can leave even the most excited buyers feeling overwhelmed. Let’s break it down!

1. Buyer’s Deposit

After a buyer writes an offer and the seller accepts, the buyer is “under contract” and their deposit is due within 3 days. This deposit is usually around 3% of the purchase price.
Example: If the home is under contract at $3,000,000, then the buyer’s deposit would be $90,000.

2. Escrow

Speaking of the deposit - it goes into escrow. Escrow is a neutral third-party company that holds the buyer’s money and makes sure funds are distributed properly once the transaction closes.

3. Contingency Period

The contingency period is the time when the buyer does their due diligence to confirm they really want the house. During this period, buyers can back out without losing their deposit—say if they discover the home needs a new roof or if their financing falls through.
You and your agent decide how long the contingency period will be—10 days, 17 days, or whatever feels right to complete inspections and paperwork.

4. Appraisal

Every loan requires an appraisal, which is a professional estimate of the home’s fair market value. The appraiser is essentially telling the bank, “Yes, this home is worth the price.”
If the appraisal comes in lower than the agreed purchase price, it can affect your loan approval— and sometimes your ability to close.

5. Closing Costs

These are the fees and expenses—beyond the price of the property—that buyers and sellers must pay to finalize the deal. Closing costs include things like title searches, attorney fees, and taxes.
They usually range from 2–5% of the purchase price, so it’s important to budget for them.

6. Title Insurance

Title insurance protects you from future legal claims on the property, like an unknown heir or unpaid liens. Buyers often ask sellers to pay for this in their offer. It’s important to double-check this box because it ensures your ownership rights are protected once you’ve bought the home.

...Overall…

Real estate doesn’t have to feel like a foreign language. When you understand the key terms, the process becomes far less intimidating—and a lot more empowering. Whether you’re buying your first home, selling your fifth, or just curious about the market, having a solid grasp of the basics helps you ask smarter questions and make confident decisions.

And of course—I’m always here to answer any questions!