Stop Pretending You Understand

Last updated: February 2026

Real estate professionals throw around terms like "DTI," "earnest money," "PMI," and "escrow" like everyone knows what they mean. You're not supposed to know. They've been doing this for years. You haven't. This is your decoder ring.

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Understand financing terms like APR, PMI, and DTI
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Showing all 108 terms
108 Terms Defined
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A

APR (Annual Percentage Rate)

Financing
Financing
▼
The total cost of your loan expressed as a yearly interest rate, including the interest rate PLUS all fees (origination, points, etc.).
In Plain English: Your mortgage has an interest rate (say, 7%) and fees (origination, points, etc.). The APR combines both into one number so you can compare loans fairly. A 7% rate with $5,000 in fees might have a 7.2% APR. Lower APR = better deal overall.
Example: "Lender A offers 6.5% rate with 7.1% APR. Lender B offers 6.75% rate with 6.9% APR. Lender B is actually cheaper because of lower fees—even though the rate is higher."
En Español: Tasa Anual Porcentual (TAP) - El costo total de su préstamo expresado como una tasa de interés anual, incluyendo la tasa de interés MÁS todas las tarifas.
Related Terms: Interest Rate Points Origination Fee
A

Amortization

Financing
Financing
▼
The schedule showing how your mortgage payment is split between principal (loan balance) and interest over time.
In Plain English: Early in your mortgage, most of your payment goes to interest. Very little goes to the principal (actual loan). As years pass, this flips—more goes to principal, less to interest. By year 20, you're mostly paying down the loan itself. This is why paying extra toward principal early saves you so much.
Example: "On a $370K loan at 7%, your first payment of $2,461 might be $2,158 interest and only $303 principal. By year 15, it's $1,500 interest and $961 principal. Same payment, different split."
En Español: Amortización - El calendario que muestra cómo se divide su pago hipotecario entre el capital (saldo del préstamo) y los intereses a lo largo del tiempo.
D

DTI (Debt-to-Income Ratio)

Financing
Financing
▼
Your total monthly debt payments divided by your gross monthly income, expressed as a percentage. Lenders use this to determine if you can afford the mortgage.
In Plain English: Add up all your monthly debt payments: mortgage (including taxes/insurance), car loans, student loans, credit card minimums. Divide by your monthly income before taxes. Most lenders want this under 43%. Example: $3,000 in debts ÷ $7,000 income = 43% DTI.
Example: "You make $6,000/month. Your car payment is $400, student loans $250, and credit cards $150. That's $800 existing debt. The lender will approve you for a mortgage payment up to about $1,780 (total DTI of 43% = $2,580, minus $800 existing = $1,780 available)."
En Español: Relación Deuda-Ingresos - Sus pagos totales de deuda mensuales divididos por su ingreso mensual bruto, expresado como un porcentaje.
D

Debt-to-Income Front-End

Financing
Financing
▼
The percentage of your gross monthly income that goes toward housing costs only (mortgage principal, interest, taxes, insurance).
In Plain English: This is different from your overall DTI. Front-end ratio looks ONLY at housing costs. Lenders typically want this under 28%. If you make $7,000/month, they want your PITI payment under $1,960/month. This is calculated separately from back-end DTI (which includes all debts).
Example: "You make $6,500/month. Your PITI payment will be $1,750. Front-end DTI: $1,750 ÷ $6,500 = 26.9%. You're under the 28% threshold—good to go."
En Español: Relación Deuda-Ingresos Frontal - El porcentaje de su ingreso mensual bruto que va hacia los costos de vivienda solamente.
Related Terms: DTI PITI
D

Deed

Closing
Closing
▼
The legal document that transfers ownership of a property from seller to buyer.
In Plain English: This is THE document that proves you own the home. At closing, the seller signs the deed transferring ownership to you. It gets recorded with the county, making your ownership official and public record. Keep a copy in a safe place—it's one of your most important documents.
Example: "At closing, seller signs the warranty deed. Closing agent records it with Tarrant County. You're now the official owner. Your name is on public record."
En Español: Escritura - El documento legal que transfiere la propiedad de una propiedad del vendedor al comprador.
Related Terms: Warranty Deed Deed of Trust
D

Deed of Trust

Closing
Closing
▼
The document that gives your lender a legal claim (lien) on your property until the mortgage is paid off. Used in Texas instead of a traditional mortgage.
In Plain English: In Texas, this is what secures your loan. It says: "If you don't pay your mortgage, the lender can foreclose and take the house." Three parties involved: you (trustor), lender (beneficiary), and trustee (neutral third party who can foreclose if needed). When you pay off the mortgage, the deed of trust is released.
Example: "You sign a deed of trust at closing giving your lender a lien on the property. 30 years later, you make your final payment. Lender releases the deed of trust. You own the home free and clear."
En Español: Escritura de Fideicomiso - El documento que le da a su prestamista un reclamo legal sobre su propiedad hasta que se pague la hipoteca.
Related Terms: Deed Lien
D

DFW HOA Culture

DFW-Specific
DFW Property
▼
The unique HOA landscape in Dallas-Fort Worth, where most newer neighborhoods (especially suburbs) have mandatory HOAs with varying levels of strictness.
In Plain English: In DFW, HOAs are everywhere—especially in Frisco, McKinney, Plano, and newer developments. Fees range from $30/month (basic) to $400+/month (gated with amenities). Some are chill, some are strict about lawn height and paint colors. ALWAYS read HOA docs before buying. Non-HOA homes exist but are harder to find in suburbs.
Example: "You're comparing two homes. One in older Garland neighborhood: no HOA, total freedom, but no pool or common areas. One in new Frisco subdivision: $85/month HOA, community pool, playground, but strict rules on garage doors and Christmas decorations. Pick your tradeoff."
En Español: Cultura HOA de DFW - El panorama único de HOA en Dallas-Fort Worth.
Related Terms: HOA
D

DFW Median Home Price

DFW-Specific
DFW Property
▼
The middle point of home sale prices in the Dallas-Fort Worth metro area, currently around $380,000 (as of early 2026).
In Plain English: Half of homes sell for more, half sell for less. This number fluctuates by area—Fort Worth tends cheaper (~$340K median), Plano/Frisco higher (~$450K+), Dallas varies wildly by neighborhood. Use this as a benchmark, not a ceiling. Your actual budget depends on location, size, and condition.
Example: "You're pre-approved for $400K. DFW median is $380K, so you're slightly above median. You can afford most areas except ultra-premium suburbs like Southlake or Prosper."
En Español: Precio Mediano de Vivienda DFW - El punto medio de los precios de venta de viviendas en el área metropolitana de Dallas-Fort Worth.
D

Disclosure

Contracts
Contract
▼
Information the seller is legally required to share about the property's condition, known defects, and history.
In Plain English: Sellers must tell you about major issues they know about: foundation problems, flooding history, structural damage, etc. In Texas, they fill out a "Seller's Disclosure Notice." Read it carefully. If they lie or hide known issues, you can sue them later. "As-is" doesn't mean they can hide defects—they still must disclose.
Example: "Seller's disclosure says 'no foundation issues.' Your inspection finds major cracks. Seller says they didn't know. You find emails proving they got foundation quotes last year. That's fraud—you have legal recourse."
En Español: Divulgación - Información que el vendedor está legalmente obligado a compartir sobre la condición de la propiedad.
Related Terms: Seller's Disclosure Notice
D

Down Payment

Financing
Financing
▼
The upfront cash you pay toward the purchase price, typically 3-20% of the home's price.
In Plain English: This is your skin in the game. 20% down avoids PMI, but most first-time buyers put down 3-5%. The more you put down, the lower your monthly payment and total interest paid. Your down payment comes from savings, gifts, grants, or sale of previous home.
Example: "You're buying a $370K home. With 5% down ($18,500), you finance $351,500. With 20% down ($74,000), you finance $296,000—saving $235/month in payment and no PMI."
En Español: Pago Inicial - El dinero en efectivo por adelantado que paga hacia el precio de compra.
Related Terms: PMI Closing Costs
D

Dry Closing

Closing
Closing
▼
A closing where you sign all documents but don't receive keys immediately because funding hasn't been disbursed yet.
In Plain English: Sometimes lenders don't wire funds until hours (or a day) after you sign closing docs. You sign everything, but can't move in until the seller receives their money. Frustrating but normal. Ask your lender in advance if you'll have a dry closing so you can plan accordingly.
Example: "You sign closing docs at 10am. Lender doesn't wire funds until 3pm. Seller won't release keys until money hits their account. You get keys at 4pm instead of 10am. Movers are waiting—costly delay."
En Español: Cierre en Seco - Un cierre donde firma todos los documentos pero no recibe las llaves inmediatamente.
D

Dual Agency

Contracts
Contract
▼
When one agent (or brokerage) represents both the buyer and seller in the same transaction.
In Plain English: This creates a conflict of interest. How can one agent negotiate the best price for you AND the seller? Texas allows it with written consent, but be cautious. The agent can't fully advocate for either side. Consider getting your own representation to ensure your interests are protected.
Example: "You love a listing. Your agent says, 'I actually represent the seller too—I'll do dual agency.' You agree. During negotiations, agent can't tell you the seller's bottom line or you the buyer's max—they're neutral, which helps no one fully."
En Español: Agencia Dual - Cuando un agente representa tanto al comprador como al vendedor en la misma transacción.
D

Due Diligence

Contracts
Contract
▼
The process of thoroughly researching and investigating a property before finalizing the purchase.
In Plain English: This is your homework period. Inspections, title search, reviewing HOA docs, checking school ratings, researching the neighborhood, verifying permits, etc. In Texas, this happens during option period. Don't skip it—this is when you uncover deal-breakers before you're locked in.
Example: "During your 10-day option period, you: hire inspector, get quotes for needed repairs, research sex offender registry, drive through neighborhood at night, review HOA financials. You find HOA is broke and levying $5K special assessment. You terminate the contract."
En Español: Diligencia Debida - El proceso de investigar a fondo una propiedad antes de finalizar la compra.
Related Terms: Option Period
E

Earnest Money

Contracts
Contract
▼
A deposit you make when your offer is accepted, showing the seller you're serious about buying. Usually 1-2% of purchase price.
In Plain English: This is "good faith money" that says "I'm for real." You typically write this check within 24-48 hours of offer acceptance. It's held in escrow and CREDITED toward your down payment at closing—it's not an extra cost. If you back out for a valid reason during option period, you get it back. If you back out for no reason after option period, the seller might keep it.
Example: "On a $380K home, you might put down $3,800 earnest money (1%). At closing, if your down payment is $13,300, you only bring $9,500 more because the earnest money already counts toward it."
Also Known As: Good Faith Deposit, Escrow Deposit
En Español: Depósito de Garantía - Un depósito que hace cuando se acepta su oferta, mostrando al vendedor que está serio acerca de comprar.
E

Easement

Property
Property
▼
A legal right for someone else to use part of your property for a specific purpose (utility lines, shared driveway, etc.).
In Plain English: You own the land, but others have legal permission to use it. Common examples: utility company has easement to run power lines through your backyard, neighbor has easement to use your driveway to access their landlocked property. Easements stay with the property forever—even when you sell. Check the survey for existing easements before buying.
Example: "You buy a home. Survey shows utility easement across back 10 feet of yard. You can't build a fence or shed there—power company needs access to lines. It's on the deed forever."
En Español: Servidumbre - Un derecho legal para que alguien más use parte de su propiedad para un propósito específico.
Related Terms: Survey Plat
E

Encroachment

Property
Property
▼
When a structure (fence, shed, driveway) extends onto a neighbor's property or vice versa.
In Plain English: This is trespassing in physical form. Your survey might reveal the neighbor's fence is 2 feet onto your property. Or your shed extends 3 feet onto theirs. This needs to be resolved before closing—either move the structure, get a legal agreement, or adjust the property line. Unresolved encroachments kill deals.
Example: "Survey shows seller's detached garage encroaches 18 inches onto neighbor's lot. Neighbor won't sign agreement. Seller must move garage or you walk. Seller moves it. Deal proceeds."
En Español: Invasión - Cuando una estructura se extiende sobre la propiedad de un vecino.
Related Terms: Survey Easement
E

Escalation Clause

Contracts
Contract
▼
A clause in your offer that automatically increases your bid by a set amount if competing offers come in, up to a maximum price.
In Plain English: In competitive markets, this helps you win without grossly overpaying. You offer $375K with escalation clause: 'I'll beat any other offer by $2K, up to $390K max.' If highest competing offer is $382K, yours automatically becomes $384K. Risky—you might pay more than necessary. Use carefully.
Example: "You offer $370K with escalation to $385K, beating others by $2K. Three offers come in: $368K, $372K, $378K. Yours escalates to $380K ($378K + $2K). You win at $380K instead of your $385K max."
En Español: Cláusula de Escalación - Una cláusula que aumenta automáticamente su oferta si entran ofertas competidoras.
Related Terms: Multiple Offer Counter Offer
E

Escrow

Closing
Closing
▼
A neutral third party that holds money and documents during the homebuying process. Also refers to the account your lender uses to pay property taxes and insurance.
In Plain English: Two meanings: (1) The company that holds your earnest money and handles the closing paperwork. They're the neutral middleman making sure everything happens correctly. (2) Your mortgage payment includes extra money each month that goes into an "escrow account." Your lender uses this to pay your property taxes and homeowners insurance when they're due. You don't have to remember to pay them—your lender does it for you.
Example: "Your mortgage payment is $2,440 for principal and interest, plus $728 for taxes and $175 for insurance that go into escrow. Total payment: $3,343. When your property tax bill arrives, your lender pays it from your escrow account."
Also Known As: Impound Account (for the account), Settlement Company (for the third party)
En Español: Depósito en Garantía - Un tercero neutral que mantiene el dinero y los documentos durante el proceso de compra de la vivienda.
F

Fair Market Value

Property
Property
▼
The price a willing buyer would pay and a willing seller would accept in an open market.
In Plain English: This is what something is 'actually worth'—not what you hope it's worth or what Zillow says. Determined by recent comps, condition, location, and current market dynamics. Appraisers use this concept. Emotional value doesn't count—only market reality.
Example: "You think the home is worth $400K because of memories. Comps show similar homes selling for $370K-$380K. Fair market value: ~$375K. Your feelings don't change the number."
En Español: Valor Justo de Mercado - El precio que un comprador dispuesto pagaría y un vendedor dispuesto aceptaría.
Related Terms: Appraisal Comparable Sales
F

Financing Contingency

Financing · Contract
Financing Contract
▼
A contract clause that allows the buyer to cancel the purchase and receive their earnest money back if they cannot secure financing within a specified timeframe.
In Plain English: This is your escape hatch if the bank says no. You have a specific number of days (usually 21-30) to get final loan approval. If your lender denies you or changes the terms significantly, you can walk away and get your earnest money back. Without this contingency, you'd lose your earnest money if financing falls through.
Example: "You go under contract with a 25-day financing contingency. On day 20, your lender says you don't qualify because of an issue with your employment verification. You invoke the financing contingency, cancel the contract, and receive your $5,000 earnest money back."
En Español: Contingencia de Financiamiento — una cláusula del contrato que le permite cancelar la compra y recuperar su depósito de garantía si no puede obtener un préstamo.
Related Terms: Contingency , Pre-Approval , Earnest Money
F

Fixed Rate Mortgage

Financing
Financing
▼
A mortgage with an interest rate that remains constant throughout the entire loan term, resulting in predictable monthly payments.
In Plain English: Your payment never changes. Lock in 6.5% today, that's your rate for 30 years—even if rates jump to 10%. Most common are 30-year and 15-year fixed mortgages. The 30-year has lower monthly payments but you pay more interest over time. The 15-year has higher monthly payments but you build equity faster and pay less total interest.
Example: "You lock in a 30-year fixed rate at 6.75% on a $350K loan. Your principal and interest payment is $2,270/month. In year 15, even if rates are at 9%, your payment is still $2,270. Total predictability."
En Español: Hipoteca de Tasa Fija — un préstamo hipotecario con una tasa de interés que permanece constante durante todo el plazo del préstamo.
Related Terms: Adjustable Rate Mortgage , Interest Rate , PITI
F

Flood Zone

Property
Property
▼
A geographic area that FEMA has defined according to varying levels of flood risk, determining whether flood insurance is required for properties in that zone.
In Plain English: FEMA maps show which properties are at risk of flooding. If you're in a high-risk zone (Zone A or V), your lender will require flood insurance—which can cost $400-2,000+ annually. In DFW, properties near creeks, the Trinity River, or in older neighborhoods with drainage issues are most likely to be in flood zones. Always check the flood zone before buying.
Example: "You find a great home near White Rock Lake in East Dallas for $340K. During due diligence, you discover it's in Flood Zone AE. Lender requires flood insurance at $1,200/year. That's an extra $100/month you didn't budget for."
En Español: Zona de Inundación — un área geográfica que FEMA ha definido según los niveles de riesgo de inundación, lo que determina si se requiere seguro contra inundaciones.
Related Terms: Survey , Due Diligence
F

Foundation

Property · Inspection
Property Inspection
▼
The structural base upon which a house is built, typically either slab-on-grade (concrete poured directly on soil) or pier-and-beam (elevated on supports).
In Plain English: The foundation is what keeps your house from sinking or shifting. In DFW's expansive clay soil, foundation issues are common—especially during drought or heavy rain cycles. Look for cracks in walls, uneven floors, doors that stick, or gaps around windows. Foundation repairs can cost $3,000-30,000+ depending on severity. Always get a foundation inspection if you see warning signs.
Example: "During your home inspection in Arlington, the inspector notes hairline cracks near windows and a slight slope in the living room floor. You hire a foundation specialist who finds the northwest corner has settled 2 inches. Repair quote: $8,500. You negotiate a $7,000 seller credit before closing."
En Español: Cimentación — la base estructural sobre la que se construye una casa, generalmente de losa o pilotes y vigas.
Related Terms: Slab Foundation , Pier and Beam , Home Inspection
F

FHA Loan

Financing
Financing
▼
A mortgage insured by the Federal Housing Administration, allowing lower credit scores (580+) and smaller down payments (3.5%).
In Plain English: FHA doesn't lend you money—banks do. But FHA insures the loan, so banks are willing to approve buyers with lower credit scores and smaller down payments. The catch? You pay mortgage insurance (MIP) for the life of the loan. Still, for many first-time buyers with 580-700 credit scores, FHA is the easiest path to homeownership.
Example: "You have a 650 credit score and $15,000 saved. Conventional loans want 680+ credit. FHA lets you buy a $380K home with just $13,300 down (3.5%) at your current credit score."
En Español: Préstamo FHA - Una hipoteca asegurada por la Administración Federal de Vivienda, permitiendo puntajes de crédito más bajos y pagos iniciales más pequeños.
Related Terms: MIP Conventional Loan
H

HELOC (Home Equity Line of Credit)

Financing
Financing
▼
A revolving line of credit secured by your home equity, allowing you to borrow against the value of your home as needed.
In Plain English: It's like a credit card backed by your house. You can borrow up to a certain limit, pay it back, and borrow again. Only available after you have equity (usually 15-20%). Interest rates are variable and typically lower than credit cards but higher than your first mortgage. Use for renovations, debt consolidation, or emergencies—not vacations.
Example: "You bought your Plano home 5 years ago for $350K. It's now worth $430K and you owe $280K. You have $150K in equity. The bank offers a HELOC for up to $85K (80% of equity). You use $30K for a kitchen remodel, pay it down over 3 years, then tap it again for $15K when you need a new roof."
En Español: Línea de Crédito con Garantía Hipotecaria — una línea de crédito renovable garantizada por el valor líquido de su vivienda.
Related Terms: Home Equity , Refinance
H

Home Equity

Financing · Property
Financing Property
▼
The difference between your home's current market value and the amount you owe on your mortgage, representing your actual ownership stake in the property.
In Plain English: This is the part of the house you actually own. Home worth $380K, you owe $300K = $80K equity. You build equity two ways: paying down your mortgage and home appreciation. In DFW's market, homes have been appreciating 4-6% annually, so equity builds faster than in flat markets. Your equity is an asset you can borrow against or cash out when you sell.
Example: "You bought a Fort Worth home in 2020 for $310K with 5% down ($15,500). You owed $294,500. In 2026, the home is worth $390K and you owe $270K. Your equity: $120K. That's $104,500 from appreciation + $24,500 from paying down principal - $15,500 original down payment = $104,500 gain."
En Español: Valor Líquido de la Vivienda — la diferencia entre el valor de mercado actual de su casa y lo que debe en su hipoteca.
Related Terms: HELOC , Refinance , Principal
H

Home Inspection

Inspection
Inspection
▼
A professional visual examination of a home's structure, systems, and components to identify defects, safety issues, and necessary repairs.
In Plain English: This is your safety net. A licensed inspector spends 2-4 hours examining everything: foundation, roof, plumbing, electrical, HVAC, windows, doors, attic, etc. You get a detailed report (often 40-60 pages) with photos showing every issue. Cost: $350-550 in DFW. Never skip this. The inspection often saves you thousands by uncovering hidden problems before you're locked in.
Example: "You're buying a 1995 home in Richardson for $365K. Inspector finds: worn roof (5 years left, $12K replacement), outdated electrical panel ($2K), minor foundation settling, and HVAC unit on its last legs ($6K). You use the report to negotiate a $15K seller credit before closing."
En Español: Inspección de Vivienda — un examen profesional de la estructura, sistemas y componentes de una casa para identificar defectos y reparaciones necesarias.
Related Terms: Inspection Contingency , HVAC Inspection , Foundation , Re-Inspection
H

HOA (Homeowners Association)

Property
Property
▼
An organization in a planned community that makes and enforces rules for properties and residents, funded by member dues.
In Plain English: The HOA maintains common areas (pools, parks, entry gates) and enforces neighborhood standards (lawn care, paint colors, fence styles). You pay monthly or annual dues—typically $30-300/month in DFW suburbs, higher in condos. HOAs can fine you for violations and even place liens on your property. Read the rules (CCRs) before buying. Some HOAs are reasonable, others are nightmares.
Example: "You buy in a Frisco neighborhood with $85/month HOA dues. Benefits: maintained pool, landscaped entry, trash service. Rules: no trucks in driveways overnight, grass can't exceed 4 inches, fences must be cedar. You get a $50 fine for leaving your boat trailer visible from the street."
En Español: Asociación de Propietarios — una organización en una comunidad planificada que establece y hace cumplir reglas para las propiedades, financiada por cuotas de los miembros.
Related Terms: DFW HOA Culture , HOA Resale Certificate
H

HOA Resale Certificate

Texas · Property
Texas Property
▼
A document required in Texas that provides information about the HOA's financial health, rules, restrictions, and any pending litigation or special assessments.
In Plain English: Before buying a property with an HOA, Texas law requires the seller to provide this certificate. It shows: current dues, any unpaid fees, upcoming special assessments, HOA rules (CCRs), financial reserves, and legal issues. You have 3 days after receiving it to cancel the contract if you don't like what you see. Cost: $200-400, usually paid by seller.
Example: "You're under contract in McKinney. The resale certificate arrives showing the HOA has $120K in reserves, no lawsuits, but a $2,500 special assessment coming next year for new roofs on the clubhouse. You decide to proceed but budget for the assessment."
En Español: Certificado de Reventa de HOA — un documento requerido en Texas que proporciona información sobre la salud financiera, reglas y restricciones de la asociación de propietarios.
Related Terms: HOA , Seller's Disclosure Notice
H

HVAC Inspection

Inspection
Inspection
▼
A specialized inspection of the heating, ventilation, and air conditioning systems to assess condition, efficiency, and remaining lifespan.
In Plain English: In Texas, HVAC is critical—we run AC 8-9 months a year. A specialized HVAC tech checks refrigerant levels, ductwork, airflow, thermostat calibration, and estimates remaining life. Cost: $150-250. Average HVAC system lasts 12-15 years in DFW's climate. Replacement costs $5,000-8,000+. If the system is 10+ years old, get this inspection—it's cheap insurance against a $7K surprise.
Example: "You're buying a 2008 home in Grand Prairie. General inspector says HVAC 'appears functional.' You hire an HVAC specialist for $200. They find low refrigerant (slow leak), capacitor failing, and estimate 2-3 years of life left. You negotiate a $4,000 credit to replace it after closing."
En Español: Inspección de HVAC — una inspección especializada de los sistemas de calefacción, ventilación y aire acondicionado para evaluar su condición y vida útil.
Related Terms: Home Inspection , Re-Inspection
I

Inspection Contingency

Inspection · Contract
Inspection Contract
▼
A contract clause allowing the buyer to have the property professionally inspected and negotiate repairs or cancel the contract based on inspection findings.
In Plain English: In Texas, this is called the Option Period. You pay $100-500 for a specific number of days (usually 7-10) to inspect the property and walk away for any reason—or no reason—and get your earnest money back. This is your chance to uncover deal-breakers: foundation issues, mold, electrical problems, etc. It's non-negotiable. Always include an option period.
Example: "You offer $380K on a Carrollton home with a 10-day option period for $300. Day 7, inspection reveals $18K in foundation repairs needed. You negotiate with seller—they agree to $12K credit. You accept. Without the option period, you'd have no leverage."
En Español: Contingencia de Inspección — una cláusula del contrato que permite al comprador inspeccionar la propiedad profesionalmente y negociar reparaciones o cancelar según los hallazgos.
Related Terms: Option Period , Home Inspection , Due Diligence
I

Interest Rate

Financing
Financing
▼
The percentage charged on the loan principal as the cost of borrowing money, not including fees or other charges.
In Plain English: This is the price you pay to borrow money. A 6.5% interest rate on a $350K loan means you pay $22,750 in interest the first year alone. Over 30 years, you'll pay ~$450K total ($350K principal + $100K+ interest). Small rate differences matter: 6.5% vs 7% on $350K = $115/month difference, or $41,400 over 30 years. Your credit score heavily influences your rate.
Example: "You lock in 6.75% on a $360K loan. Monthly payment: $2,335 (principal + interest). If you'd gotten 6.25%, your payment would be $2,216—$119/month less, $42,840 saved over 30 years."
En Español: Tasa de Interés — el porcentaje cobrado sobre el principal del préstamo como costo de pedir dinero prestado.
Related Terms: APR , Rate Lock , Points
J

Jumbo Loan

Financing
Financing
▼
A mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac, typically requiring higher credit scores and larger down payments.
In Plain English: In 2026, conforming loan limits are $806,500 in most of DFW. Anything above that is a jumbo loan. Jumbos have stricter requirements: typically 700+ credit score, 10-20% down, 6+ months reserves, and rates 0.25-0.75% higher than conforming loans. In high-end DFW suburbs (Southlake, Colleyville, parts of Plano/Frisco), jumbo loans are common.
Example: "You're buying a $950K home in Southlake. Conventional loans max out at $806,500, so you need a jumbo loan for the full amount. Lender requires: 15% down ($142,500), 720+ credit score, proof of $65K in reserves, and debt-to-income under 43%. Your rate: 7.125% vs 6.75% for conforming."
En Español: Préstamo Jumbo — una hipoteca que excede los límites de préstamos conformes, típicamente requiriendo puntajes de crédito más altos.
Related Terms: Conventional Loan , DTI
L

Lead Paint

Inspection
Inspection
▼
Lead-based paint used in homes built before 1978, which poses health risks especially to children and pregnant women if the paint deteriorates or is disturbed.
In Plain English: Federal law banned lead paint in 1978. If you're buying a pre-1978 home, sellers must disclose known lead paint and give you 10 days to test for it (you can waive this). Lead testing costs $300-500. If found, encapsulation costs $4,000-10,000+, full removal $8,000-15,000+. Many buyers in older DFW neighborhoods (Oak Cliff, M Streets, Lakewood) encounter this.
Example: "You're buying a charming 1965 bungalow in East Dallas for $385K. Seller discloses possible lead paint. You order testing: positive for lead on exterior trim and interior window frames. You negotiate a $6,000 credit for professional encapsulation before move-in."
En Español: Pintura con Plomo — pintura a base de plomo utilizada en casas construidas antes de 1978, que representa riesgos para la salud.
Related Terms: Home Inspection , Disclosure
L

Lien

Closing · Property
Closing Property
▼
A legal claim against a property by a creditor, which must be satisfied before the property can be sold with clear title.
In Plain English: If someone is owed money related to the property, they can file a lien. Common types: tax liens (unpaid property taxes), mechanic's liens (unpaid contractors), HOA liens (unpaid HOA dues), judgment liens (lawsuit debt). Liens must be paid off at closing or the title company won't insure it. The title search uncovers these before closing so they can be resolved.
Example: "During title search, a $12,000 mechanic's lien appears—the seller hired a roofer 2 years ago and never paid. Lien must be satisfied before closing. Seller pays it from sale proceeds at the closing table. Problem solved."
En Español: Gravamen — un reclamo legal contra una propiedad por parte de un acreedor.
Related Terms: Clear Title , Title Insurance
L

Listing Agreement

Contract
Contract
▼
A contract between a home seller and a real estate agent/broker authorizing the agent to represent the seller in marketing and selling their property.
In Plain English: This is the contract you sign when you hire an agent to sell your home. It specifies: listing price, commission rate (typically 5-6% in DFW), duration (usually 6 months), agent's responsibilities, and termination conditions. Most are "exclusive right to sell"—meaning even if you find the buyer yourself, you still owe the commission.
Example: "You list your Fort Worth home for $395K with a 6% commission, 6-month term. Agent markets it, holds open houses, and fields offers. After 4 months, it sells for $388K. Agent earns $23,280 (6%), split between listing and buyer's agents."
En Español: Acuerdo de Listado — un contrato entre un vendedor de vivienda y un agente de bienes raíces.
Related Terms: Commission , MLS
L

Loan Estimate

Financing
Financing
▼
A standardized three-page form that provides key information about a mortgage loan, including estimated interest rate, monthly payment, and closing costs.
In Plain English: Within 3 business days of applying for a mortgage, lenders must provide this. It shows: loan amount, interest rate, monthly payment, estimated closing costs (broken down by category), and total you'll pay over the loan life. Use this to compare lenders side-by-side. Numbers can change, but major fees can't increase more than 10% without re-disclosure.
Example: "You apply with 3 lenders for a $360K loan. Loan Estimates show: Lender A: 6.75%, $12,200 closing costs. Lender B: 6.625%, $13,800 costs (more points). Lender C: 6.875%, $11,400 costs. You choose Lender B—lower rate, worth the extra $1,600 upfront."
En Español: Estimación del Préstamo — un formulario estandarizado que proporciona información clave sobre un préstamo hipotecario.
Related Terms: Closing Disclosure , Closing Costs , Points
L

Lot

Property
Property
▼
A parcel of land with defined boundaries, typically designated for a single property or building.
In Plain English: This is the land your house sits on. Lot size is measured in square feet or acres (43,560 sq ft = 1 acre). DFW suburban lots are typically 6,000-10,000 sq ft in newer developments, larger in older neighborhoods or rural areas. Lot size affects: taxes, maintenance costs, privacy, potential additions, and resale value. Corner lots often cost more but have more street frontage.
Example: "You're comparing two $375K homes in Allen. House A: 2,200 sq ft on a 7,500 sq ft lot (small backyard). House B: 2,100 sq ft on a 9,500 sq ft lot (big backyard, room for pool). You choose B—the extra 2,000 sq ft of land is worth more to you than 100 sq ft of house."
En Español: Lote — una parcela de tierra con límites definidos.
Related Terms: Survey , Plat , Setback
M

Market Value

Property
Property
▼
The estimated amount for which a property would sell in the current market under normal conditions between a willing buyer and willing seller.
In Plain English: This is what buyers are actually paying right now, based on recent sales of similar homes (comps). Market value changes constantly with supply, demand, interest rates, and local conditions. In a hot market, market value rises fast. In a slow market, it stagnates or falls. List price is what the seller asks; market value is what buyers will pay.
Example: "Seller lists their Denton home at $410K based on peak 2024 pricing. But market cooled—recent comps show $385-395K. Appraiser determines market value: $390K. Buyer's lender won't loan more than appraised value. Seller must drop price or lose the deal."
En Español: Valor de Mercado — la cantidad estimada por la que una propiedad se vendería en el mercado actual.
Related Terms: Fair Market Value , Appraisal , Comparable Sales
M

MIP (Mortgage Insurance Premium)

Financing
Financing
▼
Insurance required on FHA loans, consisting of an upfront premium (1.75% of loan amount) and annual premium (0.55-0.85% of loan), protecting the lender if you default.
In Plain English: This is FHA's version of PMI. You pay 1.75% upfront (rolled into the loan) plus monthly payments for the life of the loan. Unlike PMI, MIP never drops off—it's permanent unless you refinance to conventional once you hit 20% equity. On a $350K FHA loan: $6,125 upfront + ~$230/month ongoing. This is the tradeoff for FHA's lower down payment (3.5%).
Example: "You get an FHA loan for $365K. Upfront MIP: $6,388 (added to loan balance). Monthly MIP: $245. After 4 years, your home appreciates and you have 25% equity. You refinance to conventional, MIP drops off, saving $245/month ($11,760 over 48 months)."
En Español: Prima de Seguro Hipotecario — seguro requerido en préstamos FHA.
Related Terms: FHA Loan , PMI , Refinance
M

Mold Inspection

Inspection
Inspection
▼
A specialized inspection to identify the presence, type, and extent of mold growth, typically including air quality testing and surface sampling.
In Plain English: Texas humidity makes mold common, especially after leaks or flooding. If you see visible mold, smell musty odors, or know of past water damage, get a mold inspection ($300-600). Inspector tests air and surfaces, identifies mold type (some are toxic), and recommends remediation. Remediation costs $500-6,000+ depending on extent. Many DFW homes have minor mold that's easily fixed.
Example: "You're buying a Garland home and notice a musty smell in the master closet. Mold inspection finds elevated spore counts and black mold behind drywall from a slow roof leak. Remediation quote: $3,200. You negotiate a $3,000 seller credit, hire a licensed remediator, and problem is resolved before move-in."
En Español: Inspección de Moho — una inspección especializada para identificar la presencia, tipo y extensión del crecimiento de moho.
Related Terms: Home Inspection , Disclosure
M

MLS (Multiple Listing Service)

Contract
Contract
▼
A database used by real estate professionals to share information about properties for sale, facilitating cooperation between agents.
In Plain English: This is the private database where real estate agents list homes for sale. Only licensed agents can access the full MLS. Sites like Zillow and Realtor.com pull from MLS data but may be 24-48 hours behind. The MLS shows: listing price, days on market, agent notes, showing instructions, past price changes, and commission offered to buyer's agents.
Example: "You see a Frisco home on Zillow listed 3 days ago at $425K. Your agent pulls the MLS listing and sees: it's actually been on market 42 days with 2 price drops from original $459K. MLS notes say 'seller motivated, submit all offers.' You offer $410K and it's accepted."
En Español: Servicio de Listados Múltiples — una base de datos utilizada por profesionales de bienes raíces.
Related Terms: Listing Agreement , CMA
M

Multiple Offer

Contract
Contract
▼
A situation where a seller receives more than one offer to purchase their property simultaneously, creating competition among buyers.
In Plain English: This is a bidding war. When demand is high, desirable homes get multiple offers within days. Sellers review all offers and choose based on: price, down payment size, contingencies, closing timeline, and escalation clauses. Cash offers often win even at lower prices. In hot DFW markets (Frisco, Prosper, parts of Fort Worth), multiple offers are common on well-priced homes.
Example: "A McKinney home lists Friday at $389K. By Monday, 7 offers: $389K (yours, 10% down), $395K (5% down, FHA), $392K (20% down, waived inspection), $386K cash. Seller accepts the $392K offer—higher price, strong buyer, fewer contingencies."
En Español: Oferta Múltiple — una situación donde un vendedor recibe más de una oferta simultáneamente.
Related Terms: Escalation Clause , Counter Offer
M

MUD Tax

Texas-Specific
Texas Property
▼
Municipal Utility District tax—an additional property tax in some Texas neighborhoods to pay for water, sewer, and drainage infrastructure that wasn't built by the city.
In Plain English: Many newer subdivisions in Texas (especially in suburbs) are in MUDs. The developer borrowed money to install water/sewer lines, and you pay it back through higher property taxes—usually 0.5-1.5% extra annually. This can add $200-500/month to your payment. ALWAYS ask "Is this property in a MUD?" before buying. It significantly affects affordability.
Example: "You find a $350K home in Frisco. Property tax is 2.5% ($729/month). But it's in a MUD with an extra 1% tax rate. That's another $291/month—total property tax of $1,020/month instead of $729. Big difference."
Also Known As: MUD District, Utility District Tax
En Español: Impuesto MUD - Un impuesto a la propiedad adicional en algunos vecindarios de Texas para pagar por la infraestructura de agua, alcantarillado y drenaje.
N

North Texas Weather Impact

DFW
DFW
▼
The unique weather patterns in North Texas that significantly affect home buying decisions, insurance costs, and property maintenance.
In Plain English: DFW sits in "Hail Alley"—we get severe storms, hail damage, occasional tornadoes, and hard freezes that burst pipes. This impacts: roof lifespan (15-20 years vs 30+ elsewhere), insurance premiums ($2,000-3,500/year), foundation issues from clay soil expansion/contraction, and HVAC strain from 100°+ summers. Always check roof age, hail damage history, and foundation condition when buying in DFW.
Example: "You're buying a 2015 home in Prosper. Inspector notes roof shingles were replaced in 2022 after a major hailstorm. Foundation shows minor settling—common due to 2022-2023 drought followed by heavy 2024 rains. Budget for regular foundation watering and expect roof replacement in 12-15 years."
En Español: Impacto Climático del Norte de Texas — los patrones climáticos únicos que afectan significativamente las decisiones de compra de vivienda.
Related Terms: Foundation , Roof Inspection
O

Origination Fee

Financing · Closing
Financing Closing
▼
A fee charged by the lender for processing a new loan application, typically expressed as a percentage of the loan amount (usually 0.5-1%).
In Plain English: This is what the lender charges to process your loan—underwriting, credit checks, document prep, etc. On a $360K loan, 1% origination = $3,600. This is negotiable. Some lenders charge 0% origination but higher interest rates (they make it back over time). Compare total costs across lenders, not just one fee. Origination fees are part of your closing costs.
Example: "Lender A offers: 6.75% rate, 1% origination ($3,650 on $365K loan). Lender B offers: 7.00% rate, 0% origination. Over 5 years, Lender A costs less even with the upfront fee. Over 30 years, Lender B costs less. You're staying 7 years—you choose Lender A."
En Español: Tarifa de Originación — una tarifa cobrada por el prestamista por procesar una nueva solicitud de préstamo.
Related Terms: Points , Closing Costs , Loan Estimate
O

Option Period

Texas-Specific
Texas Contract
▼
In Texas, a specific period (typically 7-10 days) after your offer is accepted where you can back out of the contract for ANY reason and get your earnest money back. You pay a small non-refundable fee ($100-500) for this right.
In Plain English: This is your "get out of jail free" period. You pay $100-500 for unrestricted termination rights. During these 7-10 days, you do your inspections. If you find foundation issues, terrible schools, noisy neighbors, or just get cold feet—you can walk away and get your earnest money back. After option period ends, backing out means losing earnest money unless you have a specific contingency (like appraisal or financing).
Example: "Offer accepted Monday. You pay $500 option fee for 10 days. Home inspection Friday reveals $15,000 foundation repair needed. You terminate the contract on day 9, get your $3,800 earnest money back (but lose the $500 option fee). That $500 bought you the right to walk away."
Also Known As: Due Diligence Period, Inspection Period (in other states)
En Español: Período de Opción - Un período específico donde puede retirarse del contrato por CUALQUIER razón y recuperar su dinero de garantía.
P

PMI (Private Mortgage Insurance)

Financing
Financing
▼
Insurance you pay on conventional loans when you put down less than 20%. It protects the lender (not you) if you default on the loan.
In Plain English: You're paying to insure the LENDER against you not paying. Feels unfair, but it's why they'll loan you money with only 5% down. Cost is usually 0.5-1% of loan annually ($150-300/month on a $370K loan). Good news: PMI goes away automatically when you reach 20% equity—either through paying down the loan or home appreciation. FHA's version (MIP) is permanent and only goes away if you refinance.
Example: "You buy a $380K home with 5% down ($19K). Your loan is $361K. PMI costs about $250/month. After 5 years, you've paid down to $320K and the home is worth $420K. You now have 24% equity ($100K). PMI drops off automatically. You save $250/month for the rest of the loan."
Also Known As: Mortgage Insurance (generic term)
En Español: Seguro Hipotecario Privado - Seguro que paga en préstamos convencionales cuando pone menos del 20% de enganche.
Related Terms: MIP Conventional Loan
P

Pier and Beam

Property
Property
▼
A type of foundation where the house is elevated on concrete piers or wooden posts, creating a crawl space underneath.
In Plain English: Common in older DFW homes (pre-1960s). Benefits: easier access to plumbing, better airflow, adjustable if settling occurs. Drawbacks: can be drafty, potential for moisture/pest issues in crawl space, wooden beams can rot. Maintenance costs more than slab but repairs are often easier. Typical in historic neighborhoods like Oak Cliff, Lakewood, and East Dallas.
Example: "You're buying a 1955 bungalow in the M Streets with pier-and-beam foundation. Inspector finds minor settling and one rotted beam under the bathroom. Repair cost: $1,800. Seller agrees to fix before closing. Long-term, you'll need to keep the crawl space dry and inspect beams every 3-5 years."
En Español: Pilotes y Vigas — un tipo de cimentación donde la casa está elevada sobre pilares de concreto, creando un espacio de acceso debajo.
Related Terms: Foundation, Slab Foundation
P

PITI

Financing
Financing
▼
Acronym for Principal, Interest, Taxes, and Insurance—the four components of a monthly mortgage payment.
In Plain English: Your full housing payment. On a $360K loan at 6.75% in DFW: Principal & Interest ~$2,335, Property Taxes ~$750 (2.5%), Homeowners Insurance ~$210, PMI ~$190 (if under 20% down) = $3,485/month total PITI. Lenders qualify you based on PITI, not just P&I. In Texas, high property taxes make PITI significantly higher than in many states.
Example: "You see a listing ad: 'Payment only $2,270/month!' That's P&I only. Add taxes ($750), insurance ($220), PMI ($185) = actual payment $3,425/month. Always calculate full PITI when budgeting."
En Español: PITI — acrónimo de Principal, Interés, Impuestos y Seguro, los cuatro componentes del pago mensual de la hipoteca.
Related Terms: Principal, Interest Rate, PMI
P

Plat

Property
Property
▼
A detailed map showing property boundaries, lot dimensions, easements, and other features of a subdivision or parcel of land.
In Plain English: This is the official map that shows where your lot begins and ends, plus easements (utility access areas), setbacks (how far from property line you can build), and lot numbers. Filed with the county. Useful when planning fences, pools, additions, or resolving boundary disputes. Your survey will reference the plat.
Example: "You want to build a fence on your Frisco property. The plat shows a 10-foot utility easement along the back—you can't build there. It also shows your lot is 8,500 sq ft (not the 9,000 sq ft the listing claimed). Setbacks require 5 feet from side property lines."
En Español: Plano — un mapa detallado que muestra los límites de la propiedad, dimensiones del lote, servidumbres y otras características.
Related Terms: Survey, Easement, Setback
P

Points

Financing
Financing
▼
Upfront fees paid to the lender at closing to reduce the interest rate, where one point equals 1% of the loan amount.
In Plain English: You pay money upfront to "buy down" your interest rate. On a $360K loan, 1 point = $3,600. Paying 1 point might lower your rate from 6.75% to 6.50%, saving you ~$60/month. Break-even: 60 months (5 years). Worth it if you're staying long-term. Not worth it if you're selling/refinancing within 3-5 years.
Example: "Base rate: 6.875%. Pay 1.5 points ($5,475) to get 6.50%. Monthly savings: $95. Break-even: 58 months. You're staying 10+ years—you pay the points and save $11,400 over the life of the loan."
En Español: Puntos — tarifas pagadas por adelantado al prestamista para reducir la tasa de interés, donde un punto equivale al 1% del monto del préstamo.
Related Terms: Interest Rate, Origination Fee, Rate Lock
P

Possession Date

Contract
Contract
▼
The date and time when the buyer officially takes control of the property and can move in.
In Plain English: Usually possession happens at closing or a few hours after (seller gets time to move out). Sometimes sellers negotiate a rent-back—they pay you rent to stay a few days/weeks after closing. Get it in writing. If seller doesn't vacate on time, you have legal remedies but it's a hassle. Always do final walkthrough right before possession.
Example: "Closing is June 15 at 10am. Contract states possession at 6pm same day. Seller needs extra time—negotiates 5-day rent-back at $150/day ($750 total). You close June 15, seller moves out June 20, you take possession 6pm June 20."
En Español: Fecha de Posesión — la fecha en que el comprador toma oficialmente el control de la propiedad y puede mudarse.
Related Terms: Closing Date, Final Walkthrough
P

Pre-Qualification

Financing
Financing
▼
An informal estimate of how much you might be able to borrow, based on self-reported financial information without verification.
In Plain English: This is a rough guess from a lender based on what you tell them—no hard credit pull, no document verification. It's worth almost nothing in a competitive market. Sellers want pre-APPROVAL, not pre-qualification. Pre-qual is useful for your own budgeting early on, but get pre-approved before making offers.
Example: "You call a lender, tell them your income ($95K), debts ($450/month), and credit score (710). They pre-qualify you for $375K in 10 minutes. But when you apply for pre-approval, they verify everything and you only qualify for $340K due to income inconsistencies."
En Español: Precalificación — una estimación informal de cuánto podría pedir prestado, basada en información financiera autoinformada sin verificación.
Related Terms: Pre-Approval, Underwriting
P

Principal

Financing
Financing
▼
The original amount borrowed on a loan, or the remaining balance owed, not including interest.
In Plain English: This is the actual debt. Borrow $350K = $350K principal. Each payment splits between principal and interest. Early payments are mostly interest—later payments are mostly principal. Paying extra toward principal reduces total interest paid and shortens the loan. Every $100 extra toward principal on a 6.75% loan saves you $150+ in interest over 30 years.
Example: "Month 1 of a $360K loan at 6.75%: payment is $2,335. Only $310 goes to principal, $2,025 goes to interest. Month 180: same $2,335 payment, but now $975 goes to principal, $1,360 to interest. By year 15, you're building equity much faster."
En Español: Principal — la cantidad original prestada, o el saldo restante adeudado, sin incluir intereses.
Related Terms: Interest Rate, Amortization, PITI
P

Property Tax Protest

Texas · Property
Texas Property
▼
The formal process in Texas of challenging your property's appraised value with the county appraisal district to potentially lower your property taxes.
In Plain English: Every spring, the appraisal district mails you their assessed value. If it's too high, you can protest—online or in person. Bring recent comps showing lower values. Successful protests can save $500-2,000+/year in taxes. Many DFW homeowners hire protest companies that charge 25-35% of your first-year savings. Deadline is usually May 15 or 30 days after notice.
Example: "Your Collin County appraisal: $410K (up from $385K last year). Recent comps show $390-395K. You file a protest with evidence. Appraisal district settles at $395K. Tax savings: $15K reduction × 2.5% rate = $375/year saved."
En Español: Protesta de Impuestos a la Propiedad — el proceso formal en Texas de desafiar el valor tasado de su propiedad para potencialmente reducir sus impuestos.
Related Terms: Assessed Value, Texas Homestead Exemption
P

Proration

Closing
Closing
▼
The proportional division of property-related costs (taxes, HOA dues, utilities) between buyer and seller based on the closing date.
In Plain English: Costs are split based on who owned the property when. Seller pays property taxes through closing day, buyer pays from closing forward. If seller prepaid annual taxes, buyer reimburses them for the unused portion. If HOA dues are quarterly and seller paid through June but closing is May 15, buyer credits seller for May 16-June 30. All handled at closing.
Example: "Closing June 15. Seller prepaid full-year property taxes ($9,000 = $24.66/day). Buyer owes seller for June 16-Dec 31 (199 days × $24.66 = $4,907). This appears as a credit to seller on the settlement statement."
En Español: Prorrateo — la división proporcional de costos relacionados con la propiedad entre comprador y vendedor según la fecha de cierre.
Related Terms: Closing Disclosure, Settlement Statement
P

Pre-Approval

Financing
Financing
▼
A lender has reviewed your credit, income, assets, and employment, and officially says they will loan you up to a specific amount.
In Plain English: This is NOT the same as pre-qualification (which is just an estimate). Pre-approval means a lender pulled your credit, verified your income with pay stubs and tax returns, confirmed your down payment with bank statements, and gave you an official letter. Sellers take you seriously. Without this, you're just window shopping. In competitive markets, sellers won't even consider offers without pre-approval letters.
Example: "You submit pay stubs, W-2s, bank statements, and authorize credit pull. Lender says: 'You're approved for up to $400K at 7% rate.' You get a letter. Now when you make an offer, sellers know you can actually close."
Also Known As: Pre-Approved, Loan Pre-Approval
En Español: Pre-Aprobación - Un prestamista ha revisado su crédito, ingresos, activos y empleo, y oficialmente dice que le prestará hasta una cantidad específica.
Related Terms: Pre-Qualification DTI
R

Radon Test

Inspection
Inspection
▼
A test to measure levels of radon gas, a naturally occurring radioactive gas that can accumulate in homes and cause lung cancer.
In Plain English: Radon is colorless, odorless, and comes from soil. It's rare to find dangerous levels in Texas (more common in basements up north), but testing costs only $150-250 and takes 48 hours. If elevated levels are found, mitigation costs $800-1,500. Most DFW homes test low, but if the home has a basement or you're risk-averse, test it.
Example: "You're buying a home in North Dallas with a finished basement (rare for Texas). You order a radon test: 2.8 pCi/L (EPA action level is 4.0). Safe—no mitigation needed."
En Español: Prueba de Radón — una prueba para medir los niveles de gas radón, un gas radiactivo natural que puede causar cáncer de pulmón.
Related Terms: Home Inspection
R

Rate Lock

Financing
Financing
▼
An agreement with your lender to guarantee a specific interest rate for a set period (typically 30-60 days) while your loan is processed.
In Plain English: Rates change daily. Once you lock, you're protected from increases (but also can't benefit from decreases). Standard lock period: 30-45 days. If closing delays, you may need an extension ($200-500) or the lock expires and you get current rates. Lock when rates are favorable and you're close to closing.
Example: "You go under contract with 30-day lock at 6.625%. Two weeks later, rates jump to 7.00%. You're protected—still getting 6.625%. But if closing delays to day 35, your lock expires unless you pay $300 for 15-day extension."
En Español: Fijación de Tasa — un acuerdo con su prestamista para garantizar una tasa de interés específica durante un período determinado.
Related Terms: Interest Rate, Points
R

Recording Fee

Closing
Closing
▼
A fee charged by the county clerk to officially record the deed and mortgage documents in public records.
In Plain English: This makes your ownership official and public. Typical cost in DFW counties: $50-150. Paid by buyer at closing. Once recorded, anyone can look up who owns the property. This protects you from future ownership disputes and ensures your lender's lien is properly documented.
Example: "At closing, you pay $85 recording fee to Denton County. Within 2-3 weeks, your warranty deed is recorded. You now officially own the property according to public records."
En Español: Tarifa de Registro — una tarifa cobrada por el secretario del condado para registrar oficialmente la escritura en registros públicos.
Related Terms: Warranty Deed, Closing Costs
R

Refinance

Financing
Financing
▼
Replacing your existing mortgage with a new one, typically to get a lower interest rate, change loan terms, or access equity.
In Plain English: Common reasons: lower rate (rate-and-term refi), pull cash out (cash-out refi), eliminate PMI/MIP, switch from ARM to fixed. Costs 2-5% of loan amount ($7,000-18,000 on $360K). Only worth it if you'll recoup costs before selling. Rule of thumb: 0.75%+ rate drop makes it worthwhile.
Example: "You bought in 2023 at 7.25%. Rates drop to 6.00% in 2026. You refinance your $340K balance—costs $8,500, saves $270/month. Break-even: 32 months. You're staying 10+ years—total savings $24,000."
En Español: Refinanciamiento — reemplazar su hipoteca existente con una nueva, típicamente para obtener una tasa de interés más baja.
Related Terms: HELOC, Interest Rate, Home Equity
R

Re-Inspection

Inspection
Inspection
▼
A follow-up inspection to verify that negotiated repairs have been completed properly before closing.
In Plain English: Seller agrees to fix the roof, HVAC, and electrical issues. Before closing, you pay for a re-inspection ($150-300) to confirm repairs were done correctly. If not done or done poorly, you have leverage to renegotiate, delay closing, or walk away. Always re-inspect major repairs.
Example: "Seller agreed to replace the HVAC condenser ($3,800 repair). Two days before closing, your inspector re-inspects: new unit installed, working properly, permits pulled. You proceed to closing with confidence."
En Español: Re-inspección — una inspección de seguimiento para verificar que las reparaciones negociadas se hayan completado correctamente.
Related Terms: Home Inspection, Repair Request
R

Repair Request

Inspection · Contract
Inspection Contract
▼
A formal request submitted by the buyer after the home inspection asking the seller to fix specific issues or provide credits for repairs.
In Plain English: After inspection, you submit a list of repairs you want addressed. Seller can: agree to all, agree to some, offer credits instead, or refuse. Focus on major items (roof, foundation, HVAC, electrical, plumbing), not cosmetic issues. Be reasonable—asking for $50K in repairs on a $380K house will likely get rejected. Typical: $3,000-10,000 in requests/credits.
Example: "Inspection finds: roof needs repair ($4,500), HVAC low on refrigerant ($350), fence broken ($800), paint touchups needed ($400). You request: roof repair + HVAC fix (total $4,850). Seller agrees to $4,000 credit. You accept and proceed."
En Español: Solicitud de Reparación — una solicitud formal del comprador pidiendo al vendedor que arregle problemas específicos o proporcione créditos.
Related Terms: Home Inspection, Amendment, Re-Inspection
R

Roof Inspection

Inspection
Inspection
▼
A specialized inspection of the roof to assess condition, remaining lifespan, hail damage, and whether replacement is needed soon.
In Plain English: In DFW's hail-prone climate, roof condition is critical. Roofs last 15-25 years depending on material and weather exposure. Roofers inspect for: missing/damaged shingles, hail damage, flashing issues, ventilation, and structural problems. Cost: $150-300. Roof replacement: $8,000-15,000+. If roof is 12+ years old or shows hail damage, get this inspection—it's cheap insurance against a $12K surprise.
Example: "You're buying a 2008 home in Lewisville. General inspector says roof 'appears functional.' You hire a roofing specialist for $225. They find significant hail damage from 2023 storms and estimate 3-5 years remaining life. Replacement quote: $11,500. You negotiate a $9,000 seller credit."
En Español: Inspección de Techo — una inspección especializada del techo para evaluar su condición, vida útil restante y daños por granizo.
Related Terms: Home Inspection , North Texas Weather Impact
S

Seller Concession

Contract · Closing
Contract Closing
▼
Money the seller agrees to contribute toward the buyer's closing costs or repairs, typically negotiated as part of the purchase agreement.
In Plain English: This helps buyers who have enough for down payment but need help with closing costs. Lender limits: conventional (3-9% of purchase price depending on down payment), FHA (6%), VA (4%). Seller credits reduce cash you need at closing. Often used to cover repairs buyer doesn't want to fix themselves.
Example: "You offer $375K on a home with $8,500 closing costs. You ask for $6,000 seller concession. Seller counters at $4,000. You accept. Your cash needed at closing drops from $8,500 to $4,500."
En Español: Concesión del Vendedor — dinero que el vendedor acepta contribuir hacia los costos de cierre o reparaciones del comprador.
Related Terms: Closing Costs , Repair Request
S

Seller's Disclosure Notice

Texas · Contract
Texas Contract
▼
A legally required form in Texas where sellers disclose known defects, issues, and material facts about the property.
In Plain English: Texas law requires sellers to disclose: foundation issues, roof problems, plumbing/electrical defects, prior flooding, environmental hazards, HOA issues, etc. Sellers must answer honestly or face legal liability. Receive this before going under contract. Read it carefully—it often reveals red flags. Sellers who check "unknown" on everything are hiding something.
Example: "Disclosure shows: 'Prior foundation repair in 2019 ($8,500), roof replaced 2021 after hail, minor plumbing leak fixed 2023.' This is transparency—seller disclosed issues and fixes. Green flag. If every box says 'unknown,' that's a red flag."
En Español: Aviso de Divulgación del Vendedor — un formulario legalmente requerido en Texas donde los vendedores divulgan defectos conocidos y hechos materiales.
Related Terms: Disclosure , Due Diligence
S

Setback

Property
Property
▼
The minimum required distance between a property line and where a structure can be built, established by local zoning regulations.
In Plain English: Zoning rules say you can't build right up to your property line. Typical DFW setbacks: 5-10 feet from sides, 20-25 feet from street, 10 feet from rear. Matters when adding rooms, pools, sheds, or fences. Violating setbacks can force you to remove structures or get fined. Check plat and city zoning before building anything.
Example: "You want to build a pool in your Plano backyard. City requires 10-foot rear setback and 5-foot side setbacks. Your lot is 85 feet deep, 60 feet wide. After setbacks, you have 70×50 feet of buildable space. Pool fits perfectly."
En Español: Retroceso — la distancia mínima requerida entre una línea de propiedad y donde se puede construir una estructura.
Related Terms: Zoning , Plat , Survey
S

Settlement Statement

Closing
Closing
▼
A detailed accounting of all financial transactions in a real estate closing, showing all costs, credits, and payments for both buyer and seller.
In Plain English: This is the final accounting at closing—replaced by Closing Disclosure for most transactions now. Shows: purchase price, down payment, loan amount, closing costs (itemized), seller credits, prorations, title fees, and exactly how much money changes hands. Review it carefully before signing.
Example: "Your Closing Disclosure shows: $380K purchase, $19K down (5%), $361K loan, $9,200 closing costs, $4,000 seller credit, $650 prepaid taxes proration. Cash you bring to closing: $24,850."
En Español: Declaración de Liquidación — una contabilidad detallada de todas las transacciones financieras en un cierre de bienes raíces.
Related Terms: Closing Disclosure , Proration
S

Sewer Scope

Inspection
Inspection
▼
A video camera inspection of the sewer line from the house to the street to identify blockages, root intrusion, cracks, or collapses.
In Plain English: Plumber runs a camera through your sewer line looking for: tree root intrusion, pipe cracks, bellying (sagging sections), or old clay pipes about to fail. Cost: $200-400. Sewer line replacement: $3,000-15,000+. Highly recommended for homes 30+ years old or with large trees near sewer lines. Many DFW homes have old clay pipes that tree roots destroy.
Example: "You're buying a 1972 home in Irving. Sewer scope reveals: clay pipes heavily infiltrated by tree roots, one section partially collapsed. Repair quote: $8,200 to replace 45 feet of line. You negotiate a $7,000 seller credit, handle repair after closing."
En Español: Inspección de Alcantarillado — una inspección con cámara de video de la línea de alcantarillado para identificar bloqueos o daños.
Related Terms: Home Inspection
S

Slab Foundation

Property
Property
▼
A type of foundation where concrete is poured directly on the ground in one thick layer, forming the floor of the lowest level of the home.
In Plain English: Most common in modern DFW homes (1980s+). Cheaper to build than pier-and-beam, no crawl space. Types: monolithic (one pour) or post-tension (steel cables add strength). DFW's expansive clay soil causes slab movement—watch for cracks, uneven floors, sticking doors/windows. Minor cracks are normal; major shifting requires expensive repairs ($5,000-25,000+).
Example: "You're buying a 2015 home in Frisco with post-tension slab. Inspector finds hairline cracks in garage (common, cosmetic). Living areas are level, doors operate smoothly. Foundation is in good shape—normal for age and soil conditions."
En Español: Cimentación de Losa — un tipo de cimentación donde el concreto se vierte directamente sobre el suelo en una capa gruesa.
Related Terms: Foundation , Pier and Beam
S

Survey

Property
Property
▼
A professional measurement and mapping of property boundaries, improvements, easements, and encroachments to establish legal property lines.
In Plain English: Shows exactly where your property starts/ends, where structures sit, and if anything crosses boundaries. Texas lenders require a survey (or updated survey from seller). Cost: $400-800 for standard residential. Reveals encroachments (neighbor's fence 2 feet onto your lot), easements (utility access), and whether your additions are legal. Critical for boundary disputes.
Example: "Survey on your Keller purchase shows: property is 9,200 sq ft (matches listing), neighbor's shed is 6 inches over your property line (encroachment), 10-foot utility easement along back. Title company requires neighbor to move shed or sign easement agreement before closing."
En Español: Levantamiento Topográfico — una medición profesional de los límites de la propiedad, mejoras, servidumbres e intrusiones.
Related Terms: Encroachment , Easement , Plat
T

Title Insurance

Closing
Closing Property
▼
Insurance that protects you and your lender against problems with property ownership. Covers things like unknown liens, fraudulent deeds, or errors in public records.
In Plain English: Before you close, a title company searches public records to make sure the seller actually owns the home and there are no hidden liens or claims. Title insurance protects you if they missed something. There are two policies: (1) Lender's title insurance (protects the bank, you pay for it, required), and (2) Owner's title insurance (protects you, optional but highly recommended). One-time fee at closing, covers you forever.
Example: "After closing, you discover the seller's ex-spouse had an ownership claim that wasn't found during title search. The ex-spouse sues for their share. Title insurance pays your legal fees and either resolves the claim or compensates you. Without it, you'd be on your own."
En Español: Seguro de Título - Seguro que lo protege a usted y a su prestamista contra problemas con la propiedad de la propiedad.
Related Terms: Title Search Clear Title
U

Underwriting

Financing
Financing
▼
The process where the lender verifies all your information (income, assets, credit, employment) and the property value to decide whether to officially approve your loan.
In Plain English: After your offer is accepted, your loan goes to an underwriter—a person who reviews EVERYTHING. They verify your pay stubs, call your employer, check bank statements, review the appraisal, and look for any red flags. They might ask for more documents (bank statement missing a page, explanation for large deposit, etc.). This is the most stressful part because they can deny your loan even after you're under contract. Don't make ANY financial changes during underwriting—no new jobs, no big purchases, no new credit cards.
Example: "You're in underwriting. The underwriter sees a $5,000 deposit in your bank account last month. They ask you to explain it (gift from parents? Loan? Bonus?). If it's a gift, they need a gift letter. If it's a loan, it counts as debt and might kill your approval. Be ready to document EVERYTHING."
En Español: Suscripción - El proceso donde el prestamista verifica toda su información para decidir si aprueba oficialmente su préstamo.
Related Terms: Pre-Approval , DTI
T

T-47 Affidavit

Texas · Property
Texas Property
▼
A Texas-specific document where the seller swears there have been no changes to the property since the last survey, allowing use of an older survey instead of ordering a new one.
In Plain English: Saves buyers $400-800 on a new survey. Seller signs saying: no boundary changes, no new structures, no encroachments since last survey. If seller built a fence, shed, or addition, they can't sign a T-47—you'll need a new survey. Title companies review it. Most common in DFW transactions where seller has a recent survey (under 10 years).
Example: "Seller has a 2019 survey. They sign a T-47 affidavit stating nothing has changed. You save $550 on a new survey. Title company accepts it, closing proceeds smoothly."
En Español: Declaración Jurada T-47 — un documento específico de Texas donde el vendedor jura que no ha habido cambios en la propiedad desde el último levantamiento topográfico.
Related Terms: Survey
T

Tarrant County vs Dallas County Taxes

DFW · Texas
DFW Texas
▼
The significant difference in property tax rates between the two major DFW counties, affecting affordability and long-term homeownership costs.
In Plain English: Tarrant County (Fort Worth area) averages 2.2-2.4% property tax rates. Dallas County averages 2.3-2.6%, but some cities (Garland, Richardson) hit 2.8-3.0%. On a $380K home: Tarrant ~$8,800/year, Dallas ~$9,500/year, high-tax Dallas cities ~$10,500/year. Over 30 years, that's a $51,000+ difference. Always check exact tax rate by city/ISD when comparing homes.
Example: "Same $375K home: Keller (Tarrant County, 2.3% rate) = $8,625/year taxes. Richardson (Dallas County, 2.9% rate) = $10,875/year. That's $2,250/year difference, or $188/month more in Richardson."
En Español: Impactos del Condado de Tarrant vs Dallas — la diferencia significativa en las tasas de impuestos a la propiedad entre los dos condados principales de DFW.
Related Terms: PITI , Property Tax Protest
T

Termite Inspection

Inspection
Inspection
▼
An inspection specifically for termites and other wood-destroying insects that can cause structural damage to homes.
In Plain English: Texas has subterranean termites—they eat wood from inside out, often undetected for years. Pest control company inspects foundation, attic, wood structures for: active termites, termite damage, conducive conditions (moisture, wood-to-soil contact). Cost: $75-150. If found: treatment $500-2,000+, damage repair varies. Many lenders require this for final approval, especially VA loans.
Example: "Termite inspection on your Mansfield home finds active infestation in garage framing and minor damage to two joists. Treatment quote: $1,200. Repair: $800. You negotiate seller pays treatment before closing, you handle cosmetic repairs after."
En Español: Inspección de Termitas — una inspección específica para termitas y otros insectos que destruyen la madera.
Related Terms: WDI Report , Home Inspection
T

Texas Homestead Exemption

Texas · Property
Texas Property
▼
A Texas property tax reduction available to homeowners who use the property as their primary residence, reducing the taxable value of the home.
In Plain English: File with your county appraisal district after buying. Removes $100,000 from your home's taxable value for school taxes, plus additional exemptions for county/city. On a $380K home at 2.5% rate: saves ~$800-1,200/year. Also caps annual tax increases at 10% while you own/occupy. Must apply by April 30 to get exemption for current year. It's free money—always file for it.
Example: "You buy a $370K home in Denton County. Appraised value: $370K. You file homestead exemption. School district removes $100K, taxes calculated on $270K for school portion. Annual savings: ~$1,000. Plus future increases capped at 10%/year."
En Español: Exención de Propiedad Familiar de Texas — una reducción de impuestos a la propiedad disponible para propietarios que usan la propiedad como residencia principal.
Related Terms: Assessed Value , Property Tax Protest
T

Transfer Tax

Closing
Closing
▼
A tax imposed by state, county, or city governments when property ownership transfers from seller to buyer.
In Plain English: Good news: Texas has NO state-level transfer tax. Some states charge 1-2% of purchase price—you'd pay $3,600-7,200 on a $360K home elsewhere. Texas saves you thousands compared to states like New York, California, or Illinois. Some Texas cities have small fees ($50-150), but nothing like other states. One more reason Texas is affordable for homebuyers.
Example: "You buy a $375K home in Fort Worth. No state transfer tax. Compare to buying same home in New Jersey: 1% transfer tax = $3,750 extra. Texas saves you that money."
En Español: Impuesto de Transferencia — un impuesto impuesto cuando la propiedad se transfiere del vendedor al comprador (Texas no tiene este impuesto estatal).
Related Terms: Recording Fee , Closing Costs
T

TREC

Texas
Texas
▼
Texas Real Estate Commission—the state agency that licenses and regulates real estate professionals and creates standardized contract forms.
In Plain English: TREC oversees agents, brokers, and inspectors in Texas. They create the standard forms everyone uses (purchase contracts, disclosure forms, amendments). If your agent behaves unethically, you file a complaint with TREC—they can investigate, fine, or revoke licenses. TREC contracts are designed to protect buyers and sellers equally.
Example: "Your agent pressures you to waive the inspection contingency. You refuse. Later, you discover major foundation issues. You report the agent to TREC for ethical violations. TREC investigates and disciplines the agent."
En Español: TREC — Comisión de Bienes Raíces de Texas, la agencia estatal que otorga licencias y regula a los profesionales de bienes raíces.
Related Terms: Buyer Agent Agreement , Listing Agreement
U

USDA Loan

Financing
Financing
▼
A zero-down-payment mortgage guaranteed by the U.S. Department of Agriculture for homes in eligible rural and suburban areas.
In Plain English: Designed for low-to-moderate income buyers in less-dense areas. Requirements: income limits (varies by area, typically $90K-110K for DFW suburbs), 640+ credit, property must be in USDA-eligible zone. Many DFW suburbs qualify: parts of Denton County, Kaufman County, Ellis County, outer Tarrant County. 0% down but you pay guarantee fee (1% upfront + 0.35% annual). Rates competitive with FHA.
Example: "You make $85K, have 610 credit, want to buy in Anna (north of McKinney). The area is USDA-eligible. You get a USDA loan—0% down on a $295K home. Monthly payment includes $85 guarantee fee. You save $10,000-15,000 on down payment."
En Español: Préstamo USDA — una hipoteca sin pago inicial garantizada por el Departamento de Agricultura de EE. UU. para viviendas en áreas rurales elegibles.
Related Terms: FHA Loan , VA Loan , Conventional Loan
V

VA Loan

Financing
Financing
▼
A zero-down-payment mortgage guaranteed by the Department of Veterans Affairs for eligible veterans, active-duty service members, and qualifying spouses.
In Plain English: One of the best loan programs available. 0% down, no PMI, competitive rates, lenient credit (580+ often acceptable). Catch: VA funding fee (2.3% first-time, 3.6% subsequent use—waived for disabled veterans). DFW has massive military presence (Fort Worth Naval Air Station, multiple bases), so VA loans are common. Sellers sometimes hesitate due to strict appraisal requirements.
Example: "You're a veteran buying in Benbrook for $365K. VA loan: 0% down, 6.5% rate, no PMI. Funding fee: $8,395 (rolled into loan). Monthly P&I: $2,310. Compare to conventional with 5% down: similar payment but you saved $18,250 upfront."
En Español: Préstamo VA — una hipoteca sin pago inicial garantizada por el Departamento de Asuntos de Veteranos para veteranos elegibles.
Related Terms: FHA Loan , Conventional Loan , USDA Loan
W

Warranty Deed

Closing · Property
Closing Property
▼
A deed that guarantees the seller has clear title to the property and has the right to sell it, providing the strongest protection for buyers.
In Plain English: Most common deed type in Texas. Seller promises: they own the property, there are no hidden liens/claims, they'll defend your ownership if anyone challenges it. General Warranty Deed covers all history. Special Warranty Deed only covers seller's ownership period. Always get title insurance even with warranty deed—belt and suspenders approach.
Example: "At closing, seller signs General Warranty Deed transferring ownership to you. It's recorded with county, making you the legal owner. If someone later claims they owned the property in 1985, seller is legally liable to defend your title."
En Español: Escritura de Garantía — una escritura que garantiza que el vendedor tiene título claro de la propiedad y tiene el derecho de venderla.
Related Terms: Deed , Title Insurance , Clear Title
W

WDI Report

Inspection
Inspection
▼
Wood-Destroying Insect Report—a formal inspection report documenting the presence or absence of termites, carpenter ants, and other wood-damaging pests.
In Plain English: Same as termite inspection, just the official name. Licensed pest control inspector examines for active infestation and previous damage. Report states: clear (no issues), active infestation found, or evidence of previous treatment. Many lenders require this before closing, especially VA loans. Cost: $75-150, often combined with treatment quote if issues found.
Example: "Your lender requires WDI report before final approval. Inspection finds property is clear—no active termites, no previous damage. Report costs $90. Lender approves loan to close."
En Español: Informe WDI — un informe de inspección formal que documenta la presencia o ausencia de termitas y otras plagas que dañan la madera.
Related Terms: Termite Inspection , Home Inspection
W

Wire Fraud

Closing
Closing
▼
A scam where criminals impersonate title companies or real estate professionals to trick buyers into wiring closing funds to fraudulent accounts.
In Plain English: Massive problem in real estate. Scammers hack emails, monitor transactions, then send fake wire instructions that look identical to real ones—except the account number is theirs. You wire $50K+ to them, it's gone forever. NEVER trust wire instructions sent by email. Always call the title company using a verified phone number (not one in the email) to confirm routing/account numbers before wiring.
Example: "Day before closing, you get an email from 'your title company' with wire instructions. Looks perfect—logos, signatures, everything. You call the title company's number from their website (not the email). They say, 'We didn't send that—it's a scam.' You avoided losing $45,000."
En Español: Fraude Bancario — una estafa donde criminales se hacen pasar por compañías de títulos para engañar a compradores para que transfieran fondos a cuentas fraudulentas.
Related Terms: Closing Agent , Closing Costs
Z

Zoning

Property
Property
▼
Local government regulations that control how land can be used, including what types of structures can be built and what activities are permitted.
In Plain English: Cities divide areas into zones: residential (single-family, multi-family), commercial, industrial, agricultural, mixed-use. Zoning dictates: can you run a business from home? Build a garage apartment? Keep chickens? Add a fence? Most DFW suburbs have strict residential zoning. Check zoning before buying if you have specific plans (home office, ADU, workshop).
Example: "You want to buy a home in Allen and run a small consulting business from home. Property is zoned R-1 (single-family residential). City code allows home offices with no clients visiting. Perfect—you can operate legally."
En Español: Zonificación — regulaciones del gobierno local que controlan cómo se puede usar la tierra, incluyendo qué tipos de estructuras se pueden construir.
Related Terms: Setback , Plat
A

Adjustable Rate Mortgage (ARM)

Financing
Financing
▼
A mortgage where the interest rate can change periodically based on market conditions, typically starting lower than fixed rates.
In Plain English: ARMs usually start with a lower rate than fixed mortgages—say 5.5% instead of 7%. After an initial fixed period (commonly 5, 7, or 10 years), the rate adjusts annually based on market indexes. This can be great if you're only staying 5-7 years or expect rates to drop, but risky if rates rise significantly.
Example: "You get a 7/1 ARM at 5.5% on a $370K loan. Payment is $2,100/month for 7 years. In year 8, if rates rise to 7.5%, your payment jumps to $2,588/month. Plan accordingly."
En Español: Hipoteca de Tasa Ajustable - Una hipoteca donde la tasa de interés puede cambiar periódicamente según las condiciones del mercado.
Related Terms: Fixed Rate Interest Rate
A

Addendum

Contracts
Contract
▼
An addition to the original contract that adds new terms or conditions before both parties sign.
In Plain English: Think of this as a "before signing" attachment. If you want to add specific conditions (seller must fix fence, include appliances, etc.) before the contract is finalized, you use an addendum. Once signed, it becomes part of the contract. Not to be confused with an amendment, which changes things after signing.
Example: "The contract doesn't mention appliances. You add an addendum: 'Seller to include refrigerator, washer, and dryer.' Both parties initial it. Now those items are part of the deal."
En Español: Anexo - Una adición al contrato original que agrega nuevos términos o condiciones antes de que ambas partes firmen.
Related Terms: Amendment
A

Amendment

Contracts
Contract
▼
A formal change to an existing signed contract, requiring agreement from all parties.
In Plain English: After you're under contract, if something needs to change (closing date, purchase price after appraisal, repair requests), you file an amendment. Both buyer and seller must agree and sign. Common amendments include extending option period, adjusting price, or changing closing date.
Example: "Contract says close on June 15. Your lender needs more time. You submit an amendment requesting June 22 closing. Seller agrees and signs. New closing date is now legally June 22."
En Español: Enmienda - Un cambio formal a un contrato firmado existente, que requiere el acuerdo de todas las partes.
Related Terms: Addendum
A

Appraisal

Property
Property
▼
A professional evaluation of a property's market value, ordered by your lender to confirm the home is worth what you're paying.
In Plain English: Your lender won't loan you $400K on a house worth $350K. An independent appraiser inspects the property, measures it, and compares it to recent sales of similar homes nearby (comps). If it appraises at or above your offer price, you're good. If it appraises low, you need to renegotiate price, bring more cash, or walk away.
Example: "You offer $385K. Appraisal comes back at $370K. You can: (1) ask seller to drop price to $370K, (2) bring an extra $15K cash to cover the gap, or (3) use appraisal contingency to terminate contract."
En Español: Tasación - Una evaluación profesional del valor de mercado de una propiedad.
Related Terms: Comparable Sales Fair Market Value
A

Appraisal Contingency

Contracts
Contract
▼
A contract clause that lets you back out and get your earnest money back if the home doesn't appraise for at least the purchase price.
In Plain English: This protects you from overpaying. If you offer $400K and it appraises for $380K, the appraisal contingency lets you walk away without penalty. Many Texas buyers waive this in competitive markets to make stronger offers, but that means you're on the hook for the price difference in cash if it appraises low.
Example: "You keep the appraisal contingency. Home appraises $20K low. Seller won't budge on price. You terminate using the contingency and get your $4,000 earnest money back."
En Español: Contingencia de Tasación - Una cláusula del contrato que le permite retirarse si la casa no se valúa por al menos el precio de compra.
Related Terms: Appraisal Contingency
A

As-Is

Contracts
Contract
▼
A property sold in its current condition with no repairs or improvements to be made by the seller.
In Plain English: Seller is saying "what you see is what you get." They won't fix anything, even if inspection reveals issues. You can still do inspections and negotiate price, but seller won't do repairs. Common with estate sales, distressed properties, or sellers who don't want the hassle. Proceed carefully—budget for repairs yourself.
Example: "Home listed as-is. Inspection finds $8,000 in needed HVAC work. Seller won't repair it. You can ask them to drop the price by $8,000, pay for it yourself, or walk away during option period."
En Español: Tal Como Está - Una propiedad vendida en su condición actual sin reparaciones o mejoras por parte del vendedor.
A

Assessed Value

Property
Property
▼
The value assigned to a property by the county appraisal district for property tax purposes.
In Plain English: This is NOT the same as market value or appraisal value. Your county tax assessor determines this value annually to calculate your property taxes. In Texas, it's often close to market value but can lag behind. You can protest it if it seems too high. Lower assessed value = lower property taxes.
Example: "You buy a home for $380K. County assesses it at $375K. Your annual property tax is $375K × 2.5% = $9,375/year ($781/month). If you successfully protest it down to $360K, you save $375/year in taxes."
En Español: Valor Evaluado - El valor asignado a una propiedad por el distrito de evaluación del condado para fines de impuestos a la propiedad.
Related Terms: Property Tax Protest Market Value
A

Attorney Review

Closing
Closing
▼
A period (typically 3-5 days) where either party can have an attorney review and potentially modify the contract.
In Plain English: Not common in Texas residential transactions (we use standardized TREC forms), but more common in other states or commercial deals. If included, it gives you a short window to have a lawyer review everything before you're fully bound. Most Texas buyers don't need this—your agent and title company handle most legal aspects.
Example: "Your contract includes 3-day attorney review. Your lawyer finds a concerning clause about seller's timeline to move out. They negotiate an amendment before the 3 days expire."
En Español: Revisión de Abogado - Un período donde cualquier parte puede hacer que un abogado revise el contrato.
B

Binding Agreement

Contracts
Contract
▼
A contract that is legally enforceable once all parties have signed and all conditions are met.
In Plain English: Once you and the seller sign the contract, you're legally committed (with some escape routes like option period and contingencies). "Binding" means if you back out without a valid reason, there are legal consequences—typically losing earnest money, and in extreme cases, being sued for specific performance. Take contracts seriously.
Example: "You sign the contract. Seller signs. It's now binding. If you get cold feet after option period expires and have no valid contingency, you can't just walk away—you'll lose your earnest money."
En Español: Acuerdo Vinculante - Un contrato legalmente exigible una vez que todas las partes han firmado.
B

Buyer Agent Agreement

Contracts
Contract
▼
A contract between you and your real estate agent that establishes representation, duties, and compensation terms.
In Plain English: This formalizes your relationship with your buyer's agent. It spells out: how long they represent you, what areas they'll help you search, their commission (usually paid by seller), and your obligations. Read it carefully—some are exclusive (you can't work with other agents), others aren't. Make sure you trust your agent before signing.
Example: "You sign a 6-month exclusive buyer agreement with your agent. If you buy a house during those 6 months—even if you find it yourself—that agent gets the commission. Choose wisely."
En Español: Acuerdo de Agente del Comprador - Un contrato entre usted y su agente de bienes raíces que establece la representación y los términos.
C

Clear Title

Closing
Closing
▼
A property title with no liens, disputes, or legal claims against it—free and clear for transfer.
In Plain English: Before closing, a title company searches public records to make sure the seller actually owns the property outright with no issues. Clear title means no outstanding mortgages, tax liens, mechanic's liens, or ownership disputes. If title isn't clear, seller must resolve issues before closing. You want clear title before you buy.
Example: "Title search reveals seller has an unpaid $12,000 contractor lien from a roof job 2 years ago. Title isn't clear. Seller must pay off the lien before you can close. This delays closing by 2 weeks."
En Español: Título Limpio - Un título de propiedad sin gravámenes, disputas o reclamaciones legales.
Related Terms: Title Search Lien
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Closing Agent

Closing
Closing
▼
The neutral third party (usually from a title company) who coordinates the closing, ensures all documents are signed, and handles the exchange of funds.
In Plain English: This person runs your closing appointment. They explain what you're signing, collect your down payment and closing costs, pay off the seller's mortgage, distribute funds to everyone (seller, agents, etc.), and record the deed in your name. They're the quarterback of closing day.
Example: "You arrive at the title company. The closing agent walks you through 40 pages of documents, verifies your wire transfer, collects signatures, then hands you the keys. Deal done."
En Español: Agente de Cierre - El tercero neutral que coordina el cierre y maneja el intercambio de fondos.
Related Terms: Escrow
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Closing Date

Contracts
Contract
▼
The date specified in the contract when the sale is finalized, ownership transfers, and you get the keys.
In Plain English: This is the finish line. Typically 30-45 days after your offer is accepted. On this date, you sign final paperwork, wire your down payment and closing costs, and officially become the owner. The exact date is negotiable and can be amended if needed (lender delays, inspection issues, etc.). Plan your move-out/move-in around this date.
Example: "Offer accepted May 1. Contract says close June 15. Appraisal delayed by a week. You file an amendment to move closing to June 22. Seller agrees. New closing date: June 22."
En Español: Fecha de Cierre - La fecha especificada en el contrato cuando se finaliza la venta y se transfiere la propiedad.
C

Closing Disclosure

Financing
Financing
▼
A 5-page form you receive at least 3 days before closing that shows your final loan terms, monthly payment, and closing costs.
In Plain English: This is the final, official version of your Loan Estimate. By law, you get it 3 business days before closing so you can review everything. Compare it to your Loan Estimate—numbers should be close. If something changed dramatically, ask why. This is your last chance to catch errors before you sign.
Example: "Your Loan Estimate showed $8,500 in closing costs. Closing Disclosure shows $9,200. You ask your lender why. Turns out higher homeowners insurance premium. You shop for better insurance and save $400/year."
En Español: Divulgación de Cierre - Un formulario que muestra sus términos finales del préstamo y costos de cierre.
Related Terms: Loan Estimate Closing Costs
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Closing Costs

Financing
Financing Closing
▼
Fees and expenses you pay at closing beyond your down payment, typically 2-5% of the purchase price.
In Plain English: These are all the costs to actually complete the purchase: loan origination fee, appraisal, title insurance, title search, recording fees, prepaid property taxes, homeowners insurance, etc. On a $380K home, expect $7,600-$19,000 in closing costs. You can sometimes negotiate for seller to cover some of these (seller concessions).
Example: "You're buying a $370K home with 5% down ($18,500). Your closing costs are $9,800 (2.65%). Total cash needed at closing: $28,300. Budget accordingly."
En Español: Costos de Cierre - Tarifas y gastos que paga al cerrar más allá de su pago inicial.
Related Terms: Seller Concession Closing Disclosure
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CMA (Comparative Market Analysis)

Property
Property
▼
A report prepared by a real estate agent comparing a property to similar recently sold homes to estimate its market value.
In Plain English: Your agent pulls recent sales of comparable homes (same neighborhood, similar size/age/features) to determine what a home is worth. It's not an official appraisal, but it's based on real data. Good CMAs help you make smart offers—not overpaying in a hot market or lowballing in a realistic one.
Example: "You like a home listed at $395K. Your agent runs a CMA showing 3 recent sales: $370K, $378K, $382K for similar homes. You offer $380K based on data, not emotion."
En Español: Análisis Comparativo de Mercado - Un informe que compara una propiedad con casas vendidas recientemente para estimar su valor de mercado.
Related Terms: Comparable Sales Appraisal
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Commission

Contracts
Contract
▼
The fee paid to real estate agents for their services, typically a percentage of the sale price (usually 5-6% total, split between buyer's and seller's agents).
In Plain English: Traditionally, the seller pays both agents' commissions from the sale proceeds. On a $380K sale with 6% commission, that's $22,800 total—split $11,400 to each agent's brokerage. As a buyer, you typically don't pay your agent directly. However, recent NAR settlement changes mean this may evolve—ask your agent how they're compensated.
Example: "Home sells for $370K. Listing agreement says 6% commission ($22,200). Seller's agent gets $11,100, buyer's agent gets $11,100 from the seller's proceeds at closing."
En Español: Comisión - La tarifa pagada a los agentes de bienes raíces por sus servicios.
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Comparable Sales (Comps)

Property
Property
▼
Recently sold properties similar to the one you're buying or selling, used to determine fair market value.
In Plain English: "Comps" are the foundation of pricing. Appraisers and agents look at homes that sold in the last 3-6 months with similar: square footage, bedrooms/baths, lot size, age, condition, and location. The closer the match, the better the comp. Three strong comps give you confidence in what a home is actually worth.
Example: "You're buying a 1,850 sq ft, 3/2, built 2018 in Frisco. Agent finds 3 comps: 1,820 sq ft sold for $378K, 1,900 sq ft sold for $385K, 1,870 sq ft sold for $381K. Fair range: $378K-$385K."
En Español: Ventas Comparables - Propiedades vendidas recientemente similares a la que está comprando, utilizadas para determinar el valor justo de mercado.
Related Terms: Appraisal CMA
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Contingency

Contracts
Contract
▼
A condition that must be met for the contract to proceed; if not met, you can back out without penalty.
In Plain English: Contingencies are your safety nets. Common ones: financing contingency (you get your loan approved), appraisal contingency (home appraises for purchase price), inspection contingency (home passes inspection). If a contingency isn't satisfied, you can cancel and get your earnest money back. In competitive markets, buyers sometimes waive contingencies to make stronger offers—risky but effective.
Example: "Your offer includes financing contingency. Your loan gets denied. You use the contingency to terminate the contract and recover your earnest money."
En Español: Contingencia - Una condición que debe cumplirse para que el contrato proceda.
Related Terms: Appraisal Contingency Financing Contingency
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Conventional Loan

Financing
Financing
▼
A mortgage not insured or guaranteed by the federal government, typically requiring 620+ credit score and conforming to Fannie Mae/Freddie Mac guidelines.
In Plain English: This is the standard mortgage for buyers with decent credit and steady income. You can put down as little as 3%, but you'll pay PMI until you reach 20% equity. Better credit scores get better rates. Conventional loans have stricter requirements than FHA but offer more flexibility and lower costs long-term.
Example: "You have a 720 credit score, stable job, 5% down saved. You qualify for a conventional loan at 6.75% with PMI of $185/month. Once you hit 20% equity, PMI drops off automatically."
En Español: Préstamo Convencional - Una hipoteca que no está asegurada por el gobierno federal.
Related Terms: FHA Loan PMI
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Counter Offer

Contracts
Contract
▼
A response to an offer that changes the terms (price, closing date, repairs, etc.), essentially rejecting the original offer and proposing new terms.
In Plain English: You offer $375K. Seller counters at $385K. Your original offer is now void—the ball is in your court. You can accept their counter, reject it, or counter back with $380K. This can go back and forth multiple times. Be strategic—every counter is a negotiation move.
Example: "You offer $370K with seller paying $5K closing costs. Seller counters: $378K, no closing cost help. You counter back: $375K, seller pays $3K costs. Seller accepts. Deal done at $375K."
En Español: Contraoferta - Una respuesta a una oferta que cambia los términos.

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Pro Tip: Don't Memorize, Bookmark

You don't need to know every term. You just need to know where to look them up. Bookmark this page. When someone throws jargon at you in a meeting, pull this up on your phone and search.

Terms You'll Hear Constantly

💰 Financing

Pre-approval, DTI, PMI/MIP

📋 Contracts

Earnest money, option period, contingency

🔑 Closing

Escrow, closing costs, prorated

🏠 Property

Appraisal, title, survey

Master those 12 terms and you'll be able to follow 90% of conversations.

Key Takeaways

  • Real estate jargon exists to protect industry insiders—you're not supposed to know it automatically
  • Focus on mastering the 12 most common terms: they'll get you through 90% of conversations
  • Bookmark this page and use it as a reference during meetings, calls, and document reviews
  • Every term includes plain English explanations, real examples, and Spanish translations
  • Texas-specific terms like MUD Tax and Option Period can significantly impact your purchase

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