Glossary
Real estate & financial terms
Adjustment Date: The date when property taxes, utilities, condo fees, or other prepaid expenses are financially balanced between buyer and seller.
Appraisal: A professional assessment of a property's market value required by most lenders before approving a mortgage.
Bridge Loan: Short-term financing that helps a homeowner access equity in their current home to fund the purchase of a new one before their existing home sells.
Closing Costs: Expenses associated with completing a real estate transaction, including legal fees, lender fees, taxes, and adjustments.
Conditional Offer: An offer that includes specific contingencies that must be satisfied before the contract becomes firm.
Contingency: A condition written into a contract that must be met for the deal to proceed, such as financing, inspection, or sale of another home.
Debt to Income Ratio: Total monthly debt payments divided by gross monthly income.
Deposit (Earnest Money): A sum of money submitted with an offer to demonstrate serious intent to purchase, held in trust until closing.
Equity: The difference between your home's market value and the amount you still owe on your mortgage.
Firm Offer: An offer with no outstanding contingencies, meaning the buyer is legally obligated to complete the purchase.
Home Owner's Association (HOA): A group of owners living in the complex or community who determine maintenance fees and establish the conditions and rules for living there.
Home Equity Line of Credit (HELOC): A revolving line of credit secured against your home's equity that allows you to borrow, repay, and borrow again up to an approved limit, typically with a variable interest rate.
Home Inspection: A professional examination of a property's condition to identify potential issues before finalizing the purchase.
Home Sale Contingency: A clause allowing a buyer to proceed with a purchase only if their current home successfully sells.
Net Proceeds: The amount of money a seller receives after paying off their mortgage and all selling expenses.
Possession Date: The date the buyer legally takes ownership and can move into the property, which may differ from the closing date if a rent-back is involved.
Pre-Approval: A formal letter from a lender confirming you qualify for a specific loan amount, subject to final conditions like appraisal and underwriting.
Pre-Commitment (Loan Commitment): A stronger lender approval indicating your financing is approved pending only specific remaining conditions.
Pre-Qualification: An informal estimate from a lender of how much you may be able to borrow based on basic financial information.
Rent-Back (Use in Occupancy): An agreement where the buyer allows the seller to remain in the home temporarily after closing, paying rent for the agreed period.
Simultaneous Closing: When the sale of your current home and the purchase of your new home close on the same day.
Subject to Suitable Housing: A seller condition stating the sale of their home is dependent on them securing a new property to purchase or lease.