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No one loves an acronym more than Realtors, we even put the federal government to shame.

So here is our cheat sheet to understand the most real estate terms and phrases


Assessment of the property’s market value, for the purpose of obtaining a mortgage and performed by a licensed appraiser.

Tax Assessed Value

Value placed upon property by the local town or city for purposes of collecting taxes. This value is independent of market value and is based on a formula calculated by accountants.

Closing Costs

The cost of purchase outside of your down payment. These costs are incidental to a sale of real estate, and include loan fees, appraisal fees, title fees and county charges as well as title insurance.


Certain criteria included in the contract that have to be met in order to finalize the sale.
(i.e. financing, appraisal, inspections, sale of home)

Date of Ratification

The date of delivery of the final acceptance in writing by buyer and seller of all the terms of the contract. The date of ratification is important because all contingency timelines are calculated in relation to this date.

Under Contract | Ratified

The buyer and the seller have come to a written agreement and the property is now under contract or “in escrow” and the contingencies process begins.

Debt-to-income ratio (DTI)

The percentage of an individual’s monthly gross income relative to the amount of debt owed. The debt to income ratio is taken into account when calculating the amount a lender will let you borrow for your home loan.

Earnest Money Deposit (EMD)

A good faith deposit the buyer makes as collateral against the contract to show their intent to purchase. The money is held by the title company during the contract process and the monies do contribute towards your total cash needed at closing. In the past few years the typical amount expected for an EMD is between 1-3% of the purchase price depending on the amount of competition on the home.

Final Walkthrough

Prior to the final settlement, the buyer and buyers agent perform a final walkthrough of the home to confirm the home is in the same condition as of the date of the offer, as well as any agreed upon improvements and repairs the seller was obligated to make. Receipts for any inspection items and repairs are provided for review.

HOA (Home Owner’s Association or Condo Association)

If the subject property falls into an HOA or Condo association, you have the right to review the documents that govern the association and the rules that are required of homeowners within the community. In the Northern Virginia Regional Sales Contract, a purchaser is given until the 3rd day at 9 pm to review the documents from the date of delivery.


A licensed home inspector performs a non intrusive property inspection of the interior and exterior of the property. The inspector will test and examine elements like electrical and plumbing, systems, windows and siding, roofing and items that are accessible.

Title Search | Lien Search

A background check on the property to ensure there are no outstanding debts or claims upon the property.


Advanced approval from a bank or other lending institution for a home mortgage where all assets and documents have been received and reviewed. .


Potential buyers provide an overall financial picture and mortgage brokers provide an estimate of what level of loan you will likely be pre-approved for.


Underwriting is the most integral part of the loan process in which the loan investors assign an independent review of the loan file and analyze the buyer’s assets and documents to assess the financial risk of the loan.

Title Insurance

Learn more about Title Insurance – Title Insurance Basics
Insurance to protect the buyer and lender against losses arising from disputes over the ownership of a property. Lender title insurance will be required as a part of your loan.

Recording Fees

A fee paid to the local government to officially report a sale of a home; usually paid by the buyer.

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