A–Z
Real estate glossary
Plain-English definitions with PA-specific notes where it matters.
A
- Appraisal
- A licensed appraiser's written opinion of a property's market value. Lenders require one to confirm the home is worth what the buyer is paying.
C
- Closing (Settlement)
- The final meeting where ownership transfers, documents are signed, and funds are disbursed. In PA this happens at a title company.
- CMA vs. Appraisal
- A CMA is an agent's pricing opinion using comps. An appraisal is a licensed appraiser's formal valuation required by the lender.
- Comparable Sales (Comps)
- Recently sold homes similar in size, age, condition, and location used to estimate a property's market value.
- Comparative Market Analysis (CMA)
- A pricing report your agent prepares using recent comparable sales, active listings, and pending sales in your immediate area.
- Condominium
- A unit you own outright with shared ownership of common areas, governed by an HOA.
- Contingency
- A condition in a purchase agreement that must be met for the deal to proceed (e.g., inspection, appraisal, financing).
- Conventional Loan
- A mortgage not backed by a government program. Down payments start at 3%; PMI is required under 20%.
D
- Days on Market (DOM)
- How long a listing has been active. High DOM relative to local median often signals a pricing or condition issue.
- Debt-to-Income Ratio (DTI)
- Monthly debt payments divided by gross monthly income. Most conventional loans cap DTI around 43–50%.
E
- Earnest Money
- A good-faith deposit a buyer makes when an offer is accepted, typically 1–3% of the purchase price. Applied to the purchase at closing.
- Escrow
- A neutral third party (often a title company) that holds funds or documents until closing conditions are met.
- Escrow Account (Mortgage)
- An account your lender uses to collect monthly property tax and insurance with your mortgage payment and pay them when due.
F
- FHA Loan
- A government-insured mortgage allowing 3.5% down with more flexible credit requirements. Carries mortgage insurance for the loan's life.
H
- Home Inspection
- A licensed inspector's evaluation of the home's major systems and structure. Not pass/fail — a report buyers use to negotiate or walk.
- Homeowners Association (HOA)
- A community organization with mandatory dues for shared amenities or maintenance. Common in condos and planned developments, rare in older PA suburb neighborhoods.
I
- Inspection Period
- A defined window (typically 7–10 days in PA) for the buyer to inspect the property and negotiate repairs, credits, or terminate.
J
- Jumbo Loan
- A mortgage above the annual conforming loan limit. Requires stronger credit and a larger down payment.
L
- Loan-to-Value (LTV)
- The loan amount divided by the appraised value, expressed as a percentage. Lower LTV reduces lender risk.
M
- Millage Rate
- The tax rate per $1,000 of assessed value. Used in PA to calculate property tax across county, municipal, and school district levies.
- Multiple Listing Service (MLS)
- The regional database of for-sale properties licensed agents use to list, share, and search homes. Bright MLS covers the Philadelphia region.
P
- Pre-Approval
- A lender's written commitment to lend up to a specific amount based on a verified credit, income, and asset review. Stronger than a pre-qualification.
- Private Mortgage Insurance (PMI)
- Required on conventional loans with less than 20% down. Protects the lender if the borrower defaults. Removable once equity reaches 20%.
- Property Tax
- An annual tax assessed by your county, township, and school district based on assessed value. PA suburb rates commonly fall between 1.8% and 3.0%.
R
- Realty Transfer Tax (PA)
- A tax of 1% to the state plus 1% to local municipality on PA real estate transfers, typically split between buyer and seller.
S
- Seller Assist
- A credit the seller gives the buyer at closing to offset closing costs. Capped by the loan type (typically 3–6% of price).
- Seller's Property Disclosure
- A PA-required form where the seller discloses known material defects. Failing to disclose can create post-closing liability.
T
- Title Insurance
- A one-time premium that protects against defects in the property's title (liens, ownership disputes). PA buyers typically pay for both lender's and owner's policies.
- Townhouse
- An attached single-family home, typically two or three stories, sharing walls with neighbors. May or may not have an HOA.
V
- VA Loan
- A government-backed mortgage for eligible veterans. 0% down, no PMI, generally the lowest total cost when eligible.