Real Estate Terms Explained
A helpful guide to common real estate terminology for buyers and sellers in the Littleton, CO area.
Appraisal
An objective, professional valuation of a property's market value, typically required by a lender before approving a mortgage.
Assumable Loan
A type of mortgage that can be transferred from the seller to the buyer, allowing the buyer to take over the seller's existing interest rate and terms.
Closing Costs
Fees and expenses paid at the end of a real estate transaction, including title insurance, loan origination fees, appraisal fees, and taxes.
Comparative Market Analysis (CMA)
A report compiled by a real estate agent comparing a property to similar recently sold properties to determine an accurate market value.
Contingency
A condition in a real estate contract that must be met before the sale can become legally binding, such as a satisfactory home inspection or loan approval.
Earnest Money
A good faith deposit made by the buyer when an offer is accepted, held in an escrow account until closing.
Escrow
A neutral third party that holds funds, documents, and instructions until all conditions of the real estate transaction are met and the sale is finalized.
FHA Loan
A mortgage insured by the Federal Housing Administration, popular among first-time buyers because it requires a lower down payment and has more flexible credit requirements.
FSBO (For Sale By Owner)
A property being sold directly by the homeowner without the representation of a real estate agent.
Home Inspection
A thorough, professional examination of a property's condition, including its structural, electrical, and plumbing systems.
Multiple Listing Service (MLS)
A private database created and maintained by real estate professionals to share information about properties for sale.
Pre-Approval
A conditional commitment from a lender to loan a specific amount to a buyer, based on a preliminary review of their credit and finances.
Principal
The outstanding balance of a loan, excluding interest and fees. Also refers to the amount borrowed.
Radon
A naturally occurring, radioactive gas that is common in Colorado soils. It is highly recommended to test for radon during a home inspection.
Sewer Scope
A video inspection of a property's lateral sewer line to check for blockages, damage, or root intrusions—a critical inspection in the Denver Metro area.
Title Insurance
An insurance policy that protects the buyer and lender against financial loss from defects in the property's title or legal ownership.
VA Loan
A mortgage loan guaranteed by the U.S. Department of Veterans Affairs, offering eligible veterans and active-duty service members the ability to buy a home with $0 down.
Bryan Messick | United Real Estate Prestige Denver
720-650-2250 | LivingInLittleton.com
Still Have Questions?
Real estate terminology can be confusing. Reach out today and we'll help you navigate the process in plain English.