Looking for A House? Here are the Top 9 Terms You Need to Know

House hunting is an exciting time, but it can also feel like learning a new language. Between legal jargon, real estate slang, and mortgage terminology, it’s easy to get lost. And while a quick Google search might help define a term, it often doesn’t tell you what it really means for you, the homebuyer. 

To help, we’ve put together a guide on how these terms show up in the homebuying process, what they mean for your wallet, and how to use them to make smarter decisions. 

1. Contingent 

If you’re browsing real estate listings, you might notice that some homes are labeled as “contingent.” But what does contingent mean in this context? 

A contingent listing means the seller has accepted an offer, but the sale depends on one or more conditions being met, like the buyer securing financing, a home inspection passing, or the buyer selling their current home. If the contingency isn’t met, the contract can fall through. 

What it means for you: You can still express interest in a contingent home, especially if it’s marked “accepting backup offers.” Just understand that another buyer has the first shot and the home will only come back on the market if their deal doesn’t go through. 

2. Grantor vs. Grantee 

Another area that often trips people up during the transaction is legal terminology, especially when it comes to documents like the deed. Understanding the difference between a grantor and a grantee can clear up a lot of confusion. 

Grantor: The person who is transferring ownership of the property (usually the seller) 

Grantee: The person receiving the property (usually the buyer) 

Understanding grantor vs grantee is essential when reviewing title documents. It helps you see who legally owned the property and who’s taking it over. 

3. Condo vs. Townhouse 

As you search for the right home, you may find yourself weighing the pros and cons of different types of properties. Two common types—condos and townhouses—often get lumped together, but they come with distinct differences. 

Condos (condominiums): You own the inside of your unit, but not the exterior or land. A homeowners association (HOA) manages maintenance and shared amenities like pools or gyms. 

Townhouses: You typically own both the interior and exterior of the home, including the land it sits on. Townhouse communities may also have HOAs, but ownership tends to be more like a single-family home. 

Deciding between a condo vs townhouse comes down to your lifestyle: if you want low-maintenance living and access to shared amenities, a condo might fit the bill. But if you prefer a little more space and control over your property, a townhouse may be the better choice. 

4. Closing Costs 

One of the most important financial elements in the buying process (and often one of the most surprising) is closing costs. These are the fees and expenses you’ll pay at the end of the transaction. Closing costs usually include: 

• Loan origination fees 
• Appraisal and inspection costs 
• Title insurance 
• Recording fees 
• Attorney fees (in some states) 
• Prepaid property taxes or homeowners’ insurance 

Closing costs typically range from around 2–5% of the home’s purchase price, so if you’re buying a $350,000 home, that could mean $7,000 to $17,500 in additional costs due at closing.  

5. Comps 

Short for “comparables,” comps in real estate refer to recently sold homes in the same area that are similar in size, condition, and features to the one you’re considering. 

Why do comps matter? They help determine a home’s fair market value. Real estate agents and appraisers use comps to guide listing prices, evaluate offers, and support appraisals. 

6. Escrow 

“Escrow” is a term you’ll hear more than once during your homebuying journey because it can refer to two different things. 

During the purchase: 
When you make an offer on a home, you’ll usually include earnest money, which is a small deposit that shows you’re serious about buying. That money is held in an escrow account managed by a neutral third party, such as a title company, until the sale closes. This protects both you and the seller by ensuring funds are only released when all parts of the agreement are met. 

After you buy the home: 
Many lenders also set up a mortgage escrow account to manage your property taxes and homeowners insurance. Each month, part of your mortgage payment goes into this account, and your lender uses it to pay those bills when they’re due. This arrangement saves you from having to track and pay those expenses on your own. 

7. Fixed-Rate vs. Adjustable-Rate Mortgages 

When choosing a home loan, one of the biggest decisions you’ll make is whether to go with a fixed-rate or adjustable-rate mortgage (ARM). 

Fixed-rate mortgage: The interest rate stays the same for the life of the loan, offering predictability. 

ARM: The interest rate can adjust after a set period, sometimes going up, sometimes down. 

Which is better? It depends on your financial situation and how long you plan to stay in the home. Fixed-rate mortgages are more popular for long-term stability, while ARMs can be appealing if you’re planning a short-term stay and want to save on early interest. 

8. Loan-to-Value Ratio (LTV) 

Your loan-to-value ratio, or LTV, is another behind-the-scenes number that has a big impact on your mortgage. LTV compares the size of your loan to the appraised value of the property.  

Let’s say you want to buy a $250,000 house and plan to borrow $200,000. Your LTV would be 80%. 

Why it matters: LTV affects your interest rate, whether you need mortgage insurance, and how attractive you look to a lender. The lower the LTV, the lower the risk—and often, the better the terms. 

9. Title vs. Deed 

Finally, let’s clear up one last area of confusion: the difference between a title and a deed. These terms are often used interchangeably, but they’re not the same.  

Title: The legal concept of ownership. 

Deed: The physical document that transfers ownership from grantor to grantee. 

When you buy a home, you receive a deed that shows the property has been legally transferred to you, making you the new title holder. Understanding this distinction is especially important when reviewing paperwork during and after your closing. 

Speak the Language, Shop with Confidence 

The homebuying process doesn’t need to feel like decoding a foreign language. By learning these essential terms and how they apply to real-world situations, you’ll feel more confident and empowered in every conversation, negotiation, and decision. 

Have questions about terms, the process, or your loan options? Reach out to one of our loan officers today. We’re here to help you move forward, one confident step at a time.