First-Time Home Buyer Vocabulary Cheat Sheet
First-Time Home Buyer Vocabulary Cheat Sheet by CJ Brasiel

First-Time Home Buyer Vocabulary Cheat Sheet

As a qualified realtor who has helped hundreds of first time home buyers, I understand that the real estate industry and lenders use jargons that may confuse many people. For this reason, I created this First-Time Home Buyer Guide, or to be more exact, a Cheat Sheet of Terms related to Buying A House. 

Experience The Difference


People you’ll work with 

Listing agent

They represent the sellers in the transaction, so it’s critical that they are familiar with the local real estate market and ways to increase the offers. Sometimes, they double as both a buyer and listing agent. 


Buyer’s agent

As their name implies, they are real estate agents who help buyers purchase a new home and do all the paperwork involved in buying a home. 


Home inspectors

Both home buyer and seller can hire professionals who conduct the home inspections or physical examination of the house to determine its structural integrity, the possible presence of wood-damaging pests, and the condition of HVAC, plumbing, and electrical systems. 


Multiple listing services

MLS is the service that compiles and distributes information about all residential properties listed for sale by its members in the region. This information is shared with 3rd party real estate sites like Zillow, Redfin, and


Escrow Officer

This is a neutral third party responsible for handling the exchange for money and title on the home.  They will be the person coordinating the final signing of documents, recording of title with the county, and monies related to the sale and purchase. 


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Finance-related terms 

Net income

When you’re applying for a mortgage loan, lenders look into your net income to decide whether to approve your application. This means they want to know your after-tax pay or the money in your hand after all the taxes have already been deducted. 


Conventional Loan

This type of loan is the most common for first-time homebuyers and is usually around 20% down payment. This loan can be issued by a mortgage banker or broker and does not require mortgage insurance.  These loans are often sold after closing. If the lender keeps the loan on its books; it is called a portfolio loan.  


Government Backed loans include FHA, Fannie Mae, and VA loans

FHA loans require a minimum of 5% down, while some Fannie Mae homes require only 3% down. However, VA loans do not require any downpayment for the veteran. 



The annual percentage rate or APR is the “truest” cost of a mortgage because it combines interest rates and lender fees. For this reason, use this when comparing different financing options. 


Closing cost

Many first time homebuyers don’t realize that there are additional costs beyond the home price. In a nutshell, closing costs are fees settled at the end of the real estate transaction; they usually include attorney and appraiser fees, insurance, title fees, and taxes. In general, they account for 2-7% of the home’s purchase price. 


Listing Price

This is the suggested gross sales price of a home when put on the market. Take note that it is not the same as the sales price. In fact, in a hot market in which there is a high demand for properties, you may want to pay more than a home’s listing price. 



This is a rough estimate of a home’s current market value. Appraisers come up with a number by taking into account the current real estate market and the homes location, amenities, upgrades, and condition. They also use a comparative market analysis on similar properties that were sold in the previous three months. 


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Legal jargons 


This clause allows the buyer or seller to back out of the contract in case the specified terms are not met. In a seller’s market, buyers may choose to remove contingencies and assume the risk.  Before removing any contingencies, speak with your real estate professional about the risks.


Under Contract or Pending Sale

This means the seller has officially accepted the offer, but the sale has not been finalized. Once under contract, it usually takes 21-30 days to close on a deal, depending on when both parties sign all contracts and meet all the conditions. 



This legal arrangement protects both the buyer and seller in the event that one of the conditions is not met. Think of it as a mediator or third-party entity that receives, holds the funds, and disburses the money until the buyer and the seller meet the agreed-upon conditions. 



This is a right to hold home belonging to another person until he pays off the debt. 


Private mortgage insurance

Lenders usually require borrowers to carry PMI, which on average costs 0.58-1.86% of the original loan amount, if they can’t put 20% or more down payment for their new home. This protects your lender from losing money in the event that you end up in foreclosure. 


Homeowner’s insurance

This combines home and liability insurance for residential home owners. 


Back end ratio

This ratio represents all fixed debt, including housing expenses to gross income. 



If you’re a first time buyer in California, I strongly recommend that you get pre-approved from a lender before looking at homes to increase your chances of closing on a property. Make sure that you provide your lender with complete documentation of your income and financial history to get pre-approval. 


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First-Time Home Buyer Vocabulary Cheat Sheet

With this first time home buyer guide, I hope that it helps you understand some of the most commonly used terms involved in home buying. But if you have more questions or want a qualified realtor who can help you search for your dream home, call or text me at (408) 406-6035

With an extensive knowledge of California’s real estate market and neighborhoods, I can help you find your dream home, whether you’re looking for a family-oriented community in Campbell Willow Glen, a trendy neighborhood in San Jose, or a charming house in Rose Garden.

I have also helped hundreds of people find their dream home in Los Gatos, Saratoga, Morgan Hill, Gilroy, and throughout the Bay Area. 

Again, please contact me at (408) 406-6035 to Schedule A FREE Consultation. I’m excited to hear from you!


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or call / text me (408) 406-6035

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