Real Estate Jargon Demystified: Essential Glossary

Earnest Money: A deposit made with an offer showing serious intent to purchase. Held in escrow and applied to your down payment or closing costs at closing. Contingency: A condition in the contract that must be satisfied for the sale to proceed. Common contingencies: financing, inspection, and appraisal. Comps (Comparables): Recently sold homes similar to the subject property used to estimate value. MLS: Multiple Listing Service, the database where agents enter and search listings. ARMLS is Arizona's regional MLS.

Pending / Under Contract: The seller has accepted an offer and the transaction is in progress. The home is still technically under contract, not yet sold. Purchase Price vs. Appraised Value: Two different numbers -- what buyer and seller agreed to pay vs. what an independent appraiser determined the home is worth.

BINSR (Buyer's Inspection Notice and Seller's Response): Arizona's standard form used to request repairs, credits, or cancellation after a home inspection. SPDS (Seller Property Disclosure Statement): Arizona's seller disclosure form, where the seller lists known material facts about the property. Due Diligence Period: The window (negotiated in the contract) during which buyers can inspect the property and review documents without penalty.

WDO Inspection (Wood-Destroying Organism): A termite and pest inspection performed by a licensed pest control company. Common on Arizona transactions, required by some loan programs. Sewer Scope: A camera inspection of the main sewer line, separate from the general inspection. Useful for older homes.

Escrow: The neutral arrangement where the title company holds funds and documents until all transaction conditions are met and closing can occur. Closing Disclosure (CD): A standardized document from your lender showing all final costs, credits, and cash-to-close figures. Provided at least three business days before closing. Prorations: The mathematical allocation of property taxes, HOA dues, and other periodic costs between buyer and seller based on the closing date.

Recording: The act of the county officially entering the deed and deed of trust into the public record. Recording triggers the official transfer of ownership. Cash to Close: The total funds you need to bring to closing -- down payment plus closing costs minus any credits. Not the same as down payment.

Title: Legal ownership of the property. Clear title means no outstanding claims against it. Deed of Trust: In Arizona, the document that gives the lender a security interest in the property until the mortgage is paid off (Arizona uses deed of trust rather than a traditional mortgage). Lien: A legal claim against a property by a creditor. Liens must be cleared before clean title can be conveyed.

HOA (Homeowner Association): An organization governing a community of homes, enforcing rules and managing common areas. CC&Rs (Covenants, Conditions, and Restrictions): The governing document that outlines rules within an HOA community. Title Insurance: A policy protecting against ownership defects, undisclosed liens, or title fraud discovered after closing.