A professional assessment of a property's market value, typically required by lenders before approving a mortgage. An appraiser evaluates the home's condition, features, and comparable recent sales.

A lender's conditional commitment to loan you a specific amount based on a review of your credit, income, and financial history. Stronger than pre-qualification and signals serious buying intent.

An informal estimate from a lender of how much you may be able to borrow based on self-reported financial information. Less rigorous than pre-approval.

A good-faith deposit made by the buyer when an offer is accepted, showing commitment to the transaction. In Texas, this is typically 1% of the purchase price and is deposited within 72 hours of execution.

A negotiated timeframe (commonly 7–10 days in Texas) during which the buyer can terminate the contract for any reason. The buyer pays a non-refundable option fee to the seller for this right.

A non-refundable payment from buyer to seller that grants the buyer an unrestricted right to terminate the contract during the option period. Typically a few hundred dollars in Texas.

The final step of a real estate transaction where ownership officially transfers from seller to buyer. Documents are signed, funds are disbursed, and the buyer receives the keys.

Fees and expenses beyond the purchase price paid at closing. For buyers, these typically include lender fees, title insurance, escrow deposits, and prepaid taxes/insurance — usually 2–5% of the loan amount.

The legal right to own, use, and dispose of property. A title search is conducted before closing to ensure there are no liens, disputes, or claims against the property.

A policy that protects the buyer and/or lender against financial loss from defects in the title — such as undiscovered liens, forgery, or errors in public records.

A legal document that transfers ownership of real property from one party to another. The most common types in Texas are general warranty deeds and special warranty deeds.

A neutral third-party account where funds and documents are held during a transaction. Also refers to the account where a lender holds money for property taxes and insurance after closing.

The portion of the purchase price the buyer pays upfront in cash. Conventional loans typically require 3–20%, while FHA loans can go as low as 3.5%.

A loan used to purchase real estate, where the property itself serves as collateral. Common types include conventional, FHA, VA, and USDA loans.

The percentage a lender charges on the principal loan amount. Can be fixed (stays the same) or adjustable (changes after an initial period).

Private Mortgage Insurance — required when a buyer puts less than 20% down on a conventional loan. Protects the lender in case of default. Can be removed once equity reaches 20%.

A condition written into a contract that must be met for the transaction to proceed. Common contingencies include financing, appraisal, and inspection.

A professional examination of a property's condition — structure, roof, plumbing, electrical, HVAC, and more. Helps buyers identify potential issues before closing.

The period during which a buyer investigates all aspects of a property before finalizing the purchase — including inspections, title review, survey, and HOA document review.

Multiple Listing Service — a database used by real estate professionals to share and access property listings. In Austin, the primary MLS is operated by ABOR.

Comparative Market Analysis — a report prepared by a Realtor® that estimates a home's value by comparing it to similar recently sold, active, and pending properties in the area.

The price at which a property is advertised for sale. Set strategically based on market conditions, comparable sales, and the seller's goals.

A formal written proposal from a buyer to a seller to purchase a property at a specified price and terms. In Texas, offers are typically made using the TREC residential contract.

A response to an offer in which the seller or buyer proposes different terms — such as a higher price, different closing date, or modified contingencies.

A licensed real estate agent who represents the buyer's interests in a transaction. In Texas, a Buyer Representation Agreement establishes the agent as the buyer's fiduciary.

The real estate agent who represents the seller and markets their property for sale. Responsible for pricing strategy, listing on MLS, and negotiating offers.

The difference between a property's current market value and the outstanding mortgage balance. Equity builds over time through mortgage payments and property appreciation.

Homeowners Association — an organization that enforces community rules and collects dues for shared amenities and maintenance. Review HOA docs carefully during due diligence.

A detailed map of a property's boundaries, structures, easements, and encroachments. In Texas, an existing survey can sometimes be reused if the title company accepts it.

A legal right to use another person's land for a specific purpose — such as utility access, drainage, or a shared driveway. Easements transfer with ownership.

A legal claim against a property, usually as security for a debt. Common types include mortgage liens, tax liens, and mechanic's liens. Must be resolved before sale.

The process of spreading loan payments over time so each payment covers both principal and interest. Early payments are mostly interest; over time, more goes toward principal.

The process of preparing and furnishing a home to appeal to the broadest range of buyers. Effective staging highlights a home's best features.

The number of days a property has been listed for sale on the MLS. Lower DOM suggests high demand; higher DOM may indicate overpricing.

The status of a property after a seller has accepted a buyer's offer but before closing. The property is no longer actively marketed.

A listing status indicating the sale is moving toward closing with all contingencies met or waived. The property is typically no longer shown.

A mortgage not insured by a government agency. Typically requires a higher credit score and down payment than FHA loans but offers more favorable terms.

A mortgage insured by the Federal Housing Administration for lower-income or first-time buyers. Requires as little as 3.5% down with mandatory mortgage insurance.

A mortgage guaranteed by the Department of Veterans Affairs for eligible veterans and active-duty members. Often requires no down payment and no PMI.

The Texas Real Estate Commission — the state agency that regulates brokers, agents, and inspectors. TREC publishes the standard contract forms used in most Texas transactions.