Buying Your First Home

When you are buying or selling a home, you will be exposed to some brand new vocabulary. This glossary will help you understand the meaning behind some of the most commonly used words in real estate.


A written estimate of the property's current value.

Closing Costs

Fees associated with buying a house that your lender charges and/or you rack up from various third parties.


A status in which a house has accepted an offer but relies on meeting certain criteria, such as passing a home inspection or appraisal.

Conventional Mortgage

A mortgage loan not insured by the government or guaranteed by the Veterans' Administration. It is subect to conditions established by the lending institution and State statutes.


A percentage of the sale that is paid to the real estate professional. In most situations, commissions are paid by the seller of the property.

Comparables (comps)

Recently sold properties in nearby areas used to determine market value of a property.

Comparative Market Analysis (CMA)

An analysis used to provide market information to the seller based on comparable sales and listings, market trends and condition of the home.

Down Payment

The amount of your home's purchase price you pay upfront.

FHA Mortgage

A mortgage that is insured by the Federal Housing Administration (FHA). FHA loans are designed to make housing more affordable.


Personal property that becomes real property when it is attached to a permanent structure.


A property seized by the mortgage lender due to the homeowner failing to make full payments on their mortgage. In hopes to recover the balance of the home loan, the lender will sell the house.


A.K.A. For Sale by Owner. A FSBO is a property that is being sold by the current homeowner without the aid of a real estate agent.

Hand Money (Earnest Money)

A deposit made by the potential home buyer to show that he/she is serious about buying the house.

Home Inspection

An evaluation of the home in which a professional inspector determines the current condition of the home and its systems.

Home Owner's Association (HOA)

An organization that manages the common areas of a planned development or condominium building at a monthly fee paid by the homeowner.


A list of information about a home that is currently on the market.


A.K.A. Multiple Listing Service. The MLS is a database that includes all available homes for sale in a particular area.

PMI (Private Mortgage Insurance)

The monthly insurance payment a lender must pay if the down payment is less than 20% of the sale price.


An evaluation by a lender that determines if the potential buyer qualifies for a loan and, if so, the maximum amount the lender would be willing to lend.


A real estate agent or broker who is an active member of the National Association of Realtors.


An acronym for "Real Estate Owned." A REO property is owned by the bank due to a foreclosure. REO properties can be purchased from the bank; however, they are often sold "as is".

Seller Assist

Money given from the seller to the buyer at settlement to pay for part of the closing costs. The amount varies depending what the mortgage company allows.

VA Loan/Mortgage

A mortgage that is guaranteed by the Department of Veteran's Affairs (VA)