Confused by Real Estate Lingo? You’re Not Alone.
Buying a home in Palm Beach County is exciting—but it also comes with a lot of industry terms that can feel like a foreign language.
Let’s break it down in plain English so you can navigate your home purchase with confidence.
Buying a Home: Terms You Need to Know
Pre-Approval vs. Pre-Qualification
- Pre-Approval: A lender verifies your income, credit, and finances to confirm how much you can borrow.
- Pre-Qualification: A quick estimate of how much you might be able to borrow—but not guaranteed.
Pro Tip: A pre-approval makes you a stronger buyer when submitting an offer.
Earnest Money Deposit (EMD)
A good faith deposit you put down when your offer is accepted. It shows sellers you’re serious.
- Usually 1-3% of the purchase price
- Held in escrow until closing
- Goes toward your down payment or closing costs
Escrow
A neutral third party (like a title company) holds your money and documents until the deal is finalized.
Example: Your earnest money sits in escrow until closing day.
Contingency
A condition that must be met before closing. Common ones include:
- Financing Contingency – You get approved for your loan.
- Inspection Contingency – Home inspection comes back clean.
- Appraisal Contingency – The home’s value matches the offer price.
Why it matters: If contingencies aren’t met, you can usually walk away with your deposit.
Closing Costs
Fees paid at the end of the transaction, usually 2-5% of the home price. These cover:
- Lender fees
- Title insurance
- Appraisal fees
- Taxes and more
Tip: Sellers sometimes agree to cover closing costs as part of the deal.
The Home Itself: What to Know
MLS (Multiple Listing Service)
A database where real estate agents list homes for sale.
Appraisal
A professional opinion of your home’s value.
- Ordered by your lender
- Based on recent sales (comps)
- Determines how much they’ll loan you
Problem: If the appraisal comes in lower than your offer, you might have to renegotiate.
Home Inspection
A deep dive into the home’s condition before you buy. It checks the roof, plumbing, HVAC, electrical, and more.
Tip: If big issues pop up, you can ask for repairs or negotiate the price.
Legal & Financial Terms
Title vs. Deed
- Title: Legal ownership of the property.
- Deed: The physical document proving ownership.
Tip: A title company ensures there are no legal issues before you close.
Mortgage Rate vs. APR
- Mortgage Rate: The interest rate on your home loan.
- APR (Annual Percentage Rate): Includes the mortgage rate plus lender fees for a clearer picture of costs.
Lower APR = Less money spent over time.
Final Thoughts: Why This Matters
Real estate terms might sound complicated, but understanding them puts you in control when buying a home in Palm Beach County.
- Know what’s in your contract
- Avoid common buyer mistakes
- Negotiate with confidence
Have questions about any of these terms? Text me—no pressure, just answers.
