Glossary — Beginner Real Estate Terms Made Simple

Appraisal

A professional estimate of a property’s market value, usually required by lenders before approving a loan.

Closing Costs

The fees and expenses you pay at the end of a real estate transaction—things like title insurance, recording fees, and escrow charges.

Comparables (“Comps”)

Recently sold properties in the area that are similar in size, condition, and location, used to help estimate value.

Contingency

A condition that must be met before a real estate contract becomes binding. For example, a home inspection contingency lets the buyer walk away if major problems are found.

Equity

The portion of a property you truly own—the difference between its market value and what you owe on any mortgage.

Escrow

A neutral third party that holds funds and documents until all parts of the deal are completed.

Foreclosure

The legal process where a lender takes back a property because the owner failed to make mortgage payments.

Inspection

A professional review of a property’s condition, checking systems like plumbing, electrical, and roofing.

Lien

A legal claim on a property due to unpaid debts, like taxes or contractor bills. Must usually be cleared before selling.

Offer

A formal proposal to buy a property, usually with details on price, closing date, and conditions.

Title

Legal ownership of a property. A “clear title” means no one else has legal claims to it.

Under Contract

The property is in the process of being sold, but the deal hasn’t closed yet.

Tip: If you’re new to real estate, knowing these basics makes the whole process feel less overwhelming and helps you spot opportunities faster.