Glossary
Real estate buyer terminology — defined plainly
Plain-English definitions of every term that shows up in a property report, an offer contract, or a US home-buying conversation. Each entry explains the concept, the math (where there is math), and the right time to care about it.
Appraisal Contingency
The appraisal contingency lets a buyer back out (or renegotiate) if the lender's appraisal comes in below the purchase price. Here's how it works, why waiving it is risky, and what an appraisal-gap clause actually does.
Automated Valuation Model (AVM)
An AVM is a statistical model that estimates a home's value from public-records data in seconds. Here's how it works and where it falls short.
Buyer's Agent
After the March 2024 NAR settlement, buyer's agent commissions are negotiated in writing, not bundled into list price. Here's what they do now, and when an unrepresented buyer wins.
Closing Costs
Closing costs are the fees buyers and sellers pay at settlement — typically 2–5% of the loan amount for buyers. Here's the line-item breakdown, the by-state variance, and what's negotiable.
Comparable Sale (Comp)
A comparable sale — a comp — is a recently sold similar property used to value a target home. Here's what qualifies and what makes a good comp in 2026.
Days on Market (DOM)
Days on market is the count of days a home has been actively listed. It signals pricing accuracy, demand, and hidden problems — here's how to read it before making an offer.
Earnest Money Deposit (EMD)
Earnest money is the good-faith deposit a buyer wires when the offer is accepted. Here's the standard %, who holds it, and when it's forfeited.
Escrow
Escrow has two meanings in US real estate: the neutral third-party account holding earnest money during a sale, and the lender-managed impound account holding monthly tax and insurance reserves. Both matter. Here's the difference.
Hedonic Regression
Hedonic regression prices each home attribute — sqft, beds, baths, lot — as an independent coefficient. Here's the math, why it differs from sales-comparison, and where it breaks.
HOA (Homeowners Association)
An HOA charges $200–$700/mo to maintain shared property and enforce rules. Here's what fees cover, the resale-disclosure rules, and the documents to read before you buy.
Loan Estimate
The Loan Estimate is a CFPB-mandated 3-page form a lender must give you within 3 business days of application. Here's how to read each page, what to compare across lenders, and the tolerance rules.
Median Absolute Error (MdAE)
MdAE is the standard accuracy metric for AVMs. Here's why it's the median, not the mean — and what counts as good for a buyer reading a home valuation report.
MLS (Multiple Listing Service)
The MLS is the regional database where US listings originate, with 48-hour-better data than public sites. Here's who has access, what changed post-NAR-settlement, and why public sites lag.
Title Insurance
Title insurance protects the buyer and lender from defects in property ownership history. Here's how owner's and lender's policies differ, what they cost, and when you actually need them.
USPAP (Uniform Standards of Professional Appraisal Practice)
USPAP is the methodology rulebook every licensed US appraiser must follow. Here's what it requires, the three approaches to value, and why your lender cares.