Common Real Estate Terms Explained

Buying your first home is huge exciting, emotional, and let’s be real... a little overwhelming. Especially when people start throwing around terms like “escrow,” “contingency,” or “appraisal” like they’re part of everyday conversation. (Spoiler alert: they’re not.)

The good news? You don’t need to be fluent in real estate jargon to successfully buy a home in New Hampshire. That’s what I’m here for. But understanding a few key terms can make you feel way more confident and in control during the process.

Your Quick-Start Guide to Homebuying Terms

Knowing what these words actually mean will help you make smarter decisions when it really counts—like when you're reviewing your offer, negotiating, or reading through your contract.

As Redfin puts it:

“Having a basic understanding of important real estate concepts before you start the homebuying process will give you peace of mind now and could save you a fortune in the future.”

Let’s break a few down:

Appraisal
An expert's estimate of your home’s value. Your lender requires this to make sure they’re not loaning you more than the property is worth.

Contingencies
Think of these as “deal breakers” built into your contract. A home inspection or appraisal are common examples. You can waive contingencies in a hot market, but it’s not always the smartest move—especially for first-timers.

Closing Costs
These are the one-time fees due at closing, and they include everything from title insurance to lender fees to taxes. Ask your lender for a breakdown so there are no surprises.

Down Payment
This is the portion of the home price you pay upfront usually 3.5% to 20%, depending on your loan. And no, 20% isn’t required for everyone. That’s a big myth. There are even 0% down options for some buyers here in NH.

Escalation Clause
In a competitive market like we’ve seen in southern NH, this clause lets you automatically outbid other offers up to a limit. It can make your offer stronger without going all-in from the start.

Mortgage Rate
This is the interest rate on your loan and it directly affects your monthly payment. Even a small change can have a big impact, so chat with a lender early on.

Pre-Approval Letter
This is your golden ticket. It shows sellers you're serious and financially ready. Getting pre-approved should always be step one before touring homes (or falling in love with one on Zillow).

Bottom Line

You don’t need to memorize every real estate term, but having a solid grasp on the basics can make the whole homebuying process feel way less stressful.

Have a term you’ve heard but don’t fully understand?
Shoot me a message or comment below, I’d love to walk you through it.

Let’s make your first homebuying experience in New Hampshire a confident one.