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100 Real Estate Terms and Expressions You Should Know

Whether you're ready to buy your first home or just need an acronym refresher, keep this glossary handy.

real estate terms
May Ortega
Written by|March 12, 2025

You don't need a real estate license to find your dream home, but it does help to become familiar with real estate jargon you might encounter during the process. When searching for a home or applying for a mortgage, you may hear your real estate agent or lender use any of the terms or acronyms below.

Keep this guide handy — you'll be fluent in the language of home buying before you know it.

Term glossary, by category:

Mortgage & Finance

Property & Market

Legal & Contracts

Buyer & Seller

General & Other

1. 2-1 Buydown

A 2-1 buydown is a concession or incentive negotiated with a seller or builder that temporarily reduces a buyer’s mortgage interest rate by 2 percentage points the first year and 1 percentage point the second year of your mortgage.  In the third year, the interest rate goes back to the fixed rate obtained from the lender.

2. Adjustable-rate mortgage (ARM)

An adjustable-rate mortgage, or ARM, has an introductory interest rate that lasts a set period of time and adjusts every six months thereafter for the remaining loan term. After the set time period your interest rate will change and so will your monthly payment. Learn more about adjustable-rate mortgages.

3. Affordability

Affordability or home affordability refers to the amount of money you can comfortably afford to spend on a home. Experts say a home is considered affordable if the mortgage consumes no more than 30% of a household’s income. Home affordability assessments primarily take into account your income, down payment, and monthly debts. Try our affordability calculator to see how much house you might be able to afford.

4. American Society of Home Inspectors (ASHI)

A not-for-profit professional association that sets and promotes standards for property inspections. Look for this accreditation or something similar when shopping for a home inspector.

5. Amortization

Repayment of a mortgage over the loan term through regular monthly installments of principal and interest, based on an amortization schedule. If you have made your required monthly payments, at the end of the loan term (e.g., 15 or 30 year mortgage), you will own your home. Try our amortization calculator to learn more.

6. Annual Percentage Rate (APR)

The total cost to borrow money from a bank or lender expressed as a percentage of the loan amount. Learn more about APR.

7. Appraised value

A home appraisal is an evaluation of the home’s condition to determine its fair market value. This is determined by a professional appraiser, usually for the purposes of getting a mortgage, refinancing a mortgage, or determining replacement value on a homeowners’ insurance policies. 

8. As-is

Selling your home as-is means that you aren’t going to be spending time making any repairs — what the buyer sees is what the buyer gets. Learn how selling as-is can affect your selling price.

9. Assessed value

Not to be confused with a home’s appraised value. A home’s assessed value is the dollar amount a local government assigns to a property for tax purposes. It's also known as a property's tax value. Assessed value differs from market value, which is what a property could sell for if it was listed for sale. Both are important for determining a property's worth, but they serve different purposes and are calculated differently. Read more about their differences. 

10. Assumable mortgage

A home loan that can be assigned from an existing borrower to another person.

11. Back-end ratio

One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares the borrower’s monthly debt payments to gross income.

12. Backup offer

A backup offer is one made on a home where the seller has already accepted an offer. The backup puts the buyer in line to buy the home if the accepted offer falls through.

13. Basis point

Also known as a BPS. A basis point is a unit of measurement lenders use to communicate mortgage rate changes and quoting interest rates, equal to a percent of a percent. Minor changes in basis points can affect the  total interest paid over the loan’s lifetime. 

14. Blind offer

This means someone has put an offer on a home without first seeing it in person.

15. Broker

A mortgage broker works as an intermediary between homebuyers and mortgage lenders. They provide knowledgeable advice to help buyers find competitive rates based on their financial situation and information.

16. Bumpable buyer

A bumpable buyer is one whose purchase agreement includes a contingency that allows the seller to continue to market the home to other prospective buyers. For instance, a buyer may agree to buy the home only if they can sell their own home first. That buyer can be bumped if a better offer comes along. BMP is an acronym for a bumpable buyer, and the term is used primarily in the Regional Multiple Listing Service (RMLS) covering southwestern Washington and the Portland, Oregon metro area.

17. Buydown

A financing technique used by buyers to obtain a lower interest rate for at least the first few years of the mortgage.

18. Buyer's agency fee

The fee or commission paid to a buyer’s agent or brokerage for finding and managing a home purchase for a buyer.

19. Buy-rent breakeven horizon

A concrete point at which buying a home makes more financial sense than renting one. Read more about the Buy-Rent Breakeven Horizon.

20. Buyer’s market

Market conditions that exist when homes for sale outnumber buyers. Homes can sit on the market for a long time, and prices tend to drop.

21. Cash-value policy

A homeowners insurance policy that pays the replacement cost of a home, minus depreciation, should damage occur.

22. Closing

The final step in a real estate transaction, where all legal documents are signed and ownership is legally transferred to the buyer. Read more about closing as a seller, and closing as a buyer.

23. Closing costs

Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 2% to 5% of the home’s purchase price. Read more about closing costs.

24. Closing disclosure

This is a statement a borrower will receive from their lender at least three days before closing on a home. The line items should look similar to what a borrower sees on their loan estimate when first applying — there are limits to how much any fees can change in the time period between application and closing day, so borrowers should review their closing disclosure closely and ask their lender about any changes.

25. Comparative market analysis (CMA)

An in-depth analysis, prepared by a real estate agent, that determines the estimated value of a home based on recently sold homes of similar condition, size, features and age that are located in the same area.

26. Comps 

Or comparable sales, are homes in a given area that have sold within the past several months that a real estate agent uses to determine a home’s value.

27. Contingencies

Conditions written into a home purchase contract that protect the buyer should issues arise with financing, the home inspection, or something out. Read about nine types of real estate contingencies for buyers.

28. Conventional loan 

A home loan not guaranteed by a government agency, such as the FHA or the VA. Read more about conventional loans.

29. Days on market (DOM) 

The number of days a property listing is considered active.

30. Deed

A deed is the legal document that establishes ownership of real property, and is also used to transfer the ownership of real property to another person or entity.

31. Debt-to-income ratio (DTI)

A ratio that compares a home buyer’s expenses to gross income. Try our debt-to-income calculator to learn more. 

32. Depository institutions

Banks, savings and loans, and credit unions. These institutions underwrite as well as set home loan pricing in-house.

33. Down payment 

The portion of a home’s purchase price that a buyer must pay upfront. A minimum requirement is often dictated by the loan type. Learn more about down payments.

34. Due diligence 

An in depth investigation of a property that helps ensure you know as much about a property as you can before buying it. Due diligence officially starts once an offer has been accepted, and typically involves a home inspection, review of property records to ensure improvements received the necessary permits, etc. within a period of time agreed to by the buyer and seller. Buyers can renegotiate their offer if they uncover problems, or they can cancel the offer without paying a penalty.

35. Earnest money

A security deposit made by the buyer to assure the seller of his or her intent to purchase.

36. Equity

A percentage of the home’s value owned by the homeowner.

37. Escalation clause

A clause or addendum to a real estate contract or offer that states a buyer is willing to raise his or her offer price to a predetermined amount if the seller receives a higher competing offer for the property. Read more about escalation clauses and making an offer on a home.

38. Escrow state

A state in which an escrow agent is responsible for closing.

39. Fair Housing Act

A federal law that makes discrimination based  on a person’s race, color, religion, sex (including gender identity and sexual orientation), national origin, disability, or familial status illegal within the housing context, including buying a home or getting a mortgage. Learn more about the Fair Housing Act.

40. Fannie Mae® 

A government-sponsored enterprise chartered in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country.

41. Federal Housing Administration (FHA) 

A government agency created by the National Housing Act of 1934 that insures loans made by private lenders. The Federal Housing Administration is part of the U.S. Department of Housing and Urban Development. 

42. FHA 203(k) 

A rehabilitation loan backed by the federal government that permits home buyers to finance money into a mortgage to repair, improve or upgrade a home.

43. FHA loan

Loans from private lenders that are regulated and insured by the Federal Housing Administration (FHA). FHA loans are different from conventional loans because they can be approved for borrowers with lower credit scores and may allow for down payments as low as 3.5% of the total loan amount. Maximum loan amounts can vary by county. Read more about FHA loans.

44. FICO Score

A FICO score is a measure of creditworthiness that lenders use to determine whether they will lend you money to buy a home. The score, reported as a single number, is based on data compiled by the three major credit reporting bureaus (Experian, Equifax and TransUnion). Scores range from 300-850. 

45. Fixed-Rate Mortgage

A mortgage with principal and interest payments that remain the same throughout the life of the loan because the interest rate does not change.

46.  Forbearance

Forbearance is an agreement with a lender that allows a homeowner to catch up on payments if they fall behind on their mortgage. The agreement allows the borrower to catch up either by the lender reducing the amount owed or suspending loan payments for a certain period.

47. Foreclosure

A property repossessed by a bank when the owner fails to make mortgage payments. Learn more about foreclosure.

48. Freddie Mac®

A government agency chartered by Congress in 1970 to provide a constant source of mortgage funding for the nation’s housing markets.

49. Home inspection

A visual evaluation performed by a licensed home inspector to look for any potential defects or items of note related to the property, building(s), and the systems in a home. Inspection occurs when the home is under contract or in escrow.

50. Homeowners Association (HOA)

A group — usually made up of residents in the HOA’s community — that manages the safety and cleanliness of its community. The HOA has set rules and fees you’ll have to pay if you own a home under their purview. There are often penalties for not following the HOA’s rules. Learn more about HOAs in relation to single-family homes.

51. Homeowners insurance

A policy that protects the structure of the home, its contents, injury to others and living expenses should damage occur. Learn more about homeowners insurance.

52. Housing ratio

One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to gross income.

53. iBuyer

A company that makes an almost instant market-based cash offer on a home using online technology, sight unseen, giving a homeowner a quick sale that skips a lot of the steps in a traditional home sale.

54. In escrow

A period of time (typically 30 days or more) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title searched for liens, etc.

55. Inspection

A professional analysis of the condition of a home. It’s completed by a licensed home inspector, who will both visually inspect and test the home’s major components and systems over the course of a few hours to produce a comprehensive report; home inspection requirements do vary by state, but in general, will cover major structural deficiencies. Read about home inspections and why they matter.

56. Jumbo loan

 A jumbo loan is a mortgage that exceeds the conforming loan limits for a given area as set by two federally backed home mortgage companies. In 2023, a jumbo loan for most of the United State is one over the conforming limit of $726,000.  Areas with especially high home prices have higher limits. Learn more about jumbo loans.

57. Lender

A bank or financial institution that loans money that must be repaid with interest. Learn how to choose a lender or contact a lender at Zillow Home Loans* to learn what loan options you may qualify for with us.

58. Lien

A lien is any legal claim upon a property for a debt or a non-monetary interest in the property. A lien is a security interest that can give a creditor the right to take possession of a property secured by a loan, such as a mortgage, when the borrower defaults on the loan obligations. Most lenders will require title insurance to protect their interests should there be outstanding liens on the property securing their security interest.

59. Listing price

The price of a home, as set by the seller.

60. Loan estimate

A three-page document sent to an applicant three days after they apply for a home loan. The document includes loan terms, monthly payment and closing costs. A loan estimate can help borrowers shop and compare costs of loans with lenders. You are not obligated to accept the loan just because you received a loan estimate. Smart mortgage shoppers apply for at least two loans and use the loan estimates to determine which lender they want to use.

61. Loan-to-value ratio (LTV) 

The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios.

62. Mortgage banker

One who originates, sells, and services mortgage loans and resells them to secondary mortgage lenders such as Fannie Mae or Freddie Mac.

63. Mortgage broker

A licensed professional who works on behalf of the buyer to secure financing through a bank or other lending institution.

64. Mortgage escrow account

An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes. A portion of your monthly payment goes into the escrow account to cover taxes and insurance. If your mortgage doesn’t have an escrow account, you may pay the property-related expenses directly.

65. Mortgage Insurance Premium

A mortgage insurance premium (MIP), is a monthly mortgage insurance premium paid by a borrower for a mortgage insurance policy with an FHA loan. Mortgage insurance protects the lender if the borrower defaults on the mortgage loan. Unlike private mortgage insurance (PMI), MIP is managed internally by the government and lasts for the life of the loan — meaning it won’t roll off when you reach a certain LTV ratio like it does when you have PMI. Read more about mortgage insurance.

66. Mortgage points

When you buy mortgage points, you pre-pay the interest rate by making an upfront payment to the lender at closing  in exchange for a lower interest rate. Pre-paying interest is also known as buying down your interest rate. The points or prepaid interest is usually paid during closing. Learn more about mortgage discount points.

67. Mortgage interest rate

The price of borrowing money. The base rate is set by the Federal Reserve and then customized per borrower, based on credit score, down payment, property type and points the buyer pays to lower the rate.

68. Multiple listing service (MLS) 

A database where real estate agents list properties for sale.

69. Offer

A formal indication of a buyer's interest in purchasing a property that outlines their requirements for going through with the sale to the seller. Here are steps on how to make an offer on a home.

70. Origination fee

A fee, charged by a broker or lender, to underwrite and process a home loan application. An origination fee is not a single fee. It’s a set of lender-specific fees that are part of your costs when closing a mortgage loan. Read more about origination fees.

71. Pending

Pending means the seller has accepted an offer, a purchase contract has been signed, and contingencies between the buyer and seller have been addressed.

72. Piggyback loan

A combination of loans bundled to avoid private mortgage insurance. One loan covers 80% of the home’s value, another loan covers 10% to 15% of the home’s value, and the buyer contributes the remainder.

73. PITI (Principal, Interest, Taxes and Insurance)

An acronym (pronounced "pity") that represents the collective amount a borrower pays when buying a home with a mortgage loan.

74. Points

Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment.

75. Pre-approval 

A thorough assessment of a borrower’s income, assets and other data to determine a loan amount they would qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home. Learn more about pre-approval.

76. Pre-qualification 

A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home. Read more about pre-qualification.

77. Prepayment penalty

A prepayment penalty is a fee some lenders may charge if you pay off some or all of your mortgage early. Not all mortgages carry a prepayment penalty. Be sure to read the fine print carefully.

78. Prime rate

Also known as the prime lending rate. This is the favorable interest rate financial institutions reserve for borrowers with strong credit. Lenders use the prime rate as a financial benchmark when setting interest rates for consumer products, such as mortgages. Each lending institution sets its own prime rate. Typically, most consumers’ mortgage interest rates are going to be higher than the prime rate.

79. Principal, interest, property taxes and homeowners insurance (PITI)

The components of a monthly mortgage payment.

80. Private mortgage insurance (PMI)

A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity. Read more about PMI.

81. Property tax exemption

A reduction in taxes based on specific criteria, such as installation of a renewable energy system or rehabilitation of a historic home.

82. Real Estate Owned (REO)

A residential property (sometimes called bank-owned property) that a lender takes possession of after completing a foreclosure.

83. Refinancing

The act of paying off one loan by obtaining another. Refinancing is generally done to secure better loan terms, such as a lower interest rate. Learn more about refinancing.

84. Rent-to-own

A rent-to-own agreement with a landlord or seller allows the renter to buy the home before the rental lease expires. The renter pays a bit more in rent, and that extra money goes toward a down payment on the home.

85. Reverse mortgage

A mortgage that allows a homeowner to borrow against the equity in their home and receive regular monthly tax-free payments from the lender. Get answers to the most common questions about a reverse mortgage.

86. Seller concessions

The costs that a seller agrees to pay at closing on behalf of the buyer during the sale of a home. Read more about what seller concessions can be used for when negotiating a home purchase.

87. Seller disclosure

A legal document that is received when buying a home that requires the seller to provide certain details about the property's condition. Learn about the basics of seller disclosure laws.

88. Seller’s market

Market conditions that exist when buyers outnumber homes for sale. Bidding wars are common. Prices are often higher than average.

89. Short sale

The sale of a home by an owner who owes more on the home than it’s worth. The owner’s bank must approve a lower listing price before the home can be sold. Learn more about short sales. 

90. Subprime mortgage

A home loan with higher interest rates that is available to individuals with low credit scores (typically under 600) or those who do not meet other conditions required to obtain a traditional mortgage.

91. Tax lien

The government’s legal claim against property when the homeowner neglects or fails to pay a tax debt.

92. Title insurance

Insurance that protects the buyer and lender should an individual or entity step forward with a claim that was attached to the property before the seller transferred legal ownership of the property or “title” to the buyer.

93. Transfer taxes

Fees imposed by the state, county or municipality on transfer of title.

94. Under contract 

A period of time (typically 30 days or more) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens, etc.

95. Underwater or upside down

When a homeowner owes more on their mortgage than their home is worth. 

96. Underwriting 

A process a lender follows to assess a home loan applicant’s income, assets and credit, and the risk involved in offering the applicant a mortgage.

97. USDA loan

A special type of zero down payment mortgage that eligible home buyers in rural and suburban areas can get through the United States Department of Agriculture (USDA). Learn more about USDA loans.

98. VA loan

A mortgage backed by the U.S. Department of Veterans Affairs that is available to those who have served or are presently serving in the U.S. military and some surviving spouses. Learn about VA loans here.

99. Walkthrough

A buyer’s final inspection of a home before closing.

100. Zoning

A designation, assigned by local government, to a parcel of land that dictates how it can be used. Common designations include residential, commercial, industrial and agricultural.

Find out what else you can do to prepare for buying a home.

*An equal housing lender. NMLS #10287

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A local agent can help you stay competitive on a budget.

They’ll help you get an edge without stretching your finances.

Talk with a local agent