Plain-English definitions of common home buying and selling terms, with links to the full guides.
- Appraisal
- An opinion of a home's value, ordered by the buyer's lender, used to confirm the home supports the loan amount. Read the guide
- Closing costs
- Fees paid at the end of a sale, such as escrow, title and lender fees, split between buyer and seller by contract and custom. Read the guide
- Contingency
- A condition in the contract, such as inspection or loan approval, that lets a party cancel or renegotiate within a set time. Read the guide
- DSCR loan
- A loan for investment property qualified mainly on the property's rental income rather than the buyer's W-2 income. Read the guide
- Earnest money
- A deposit the buyer puts down after the offer is accepted, held in escrow and credited toward the purchase. Read the guide
- Escrow
- The neutral process in which a third party holds funds and documents until the sale's conditions are met and the deal closes. Read the guide
- HOA
- A homeowners association, which sets rules and collects dues for a community or building. Read the guide
- Pre-approval
- A lender's written statement, based on verified income and assets, of a loan amount you likely qualify for. Read the guide
- Property tax
- An annual tax on real property, with the base rate set by California law, plus local assessments. Read the guide
- Title insurance
- Insurance against certain defects in a property's ownership record, typically paid once at closing. Read the guide
- VA loan
- A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible service members and veterans. Read the guide
- 1031 exchange
- A tax-deferral strategy for investment property sellers who reinvest in like-kind property within strict deadlines. Read the guide
- ADU
- An accessory dwelling unit: a second, smaller living unit on the same lot as a primary home. Read the guide
General information, not legal, tax or financial advice.