Buyer resources · Plain-language cheat sheet
You shouldn’t need an industry dictionary to buy a house. Start here when a word feels unfamiliar—or when two similar-sounding costs seem like the same thing.
The signed contract sets the inspection period. There is no universal number of days for every Washington purchase. Confirm the exact deadline with Kyle, including when counting starts, whether the agreement uses calendar or business days, and how notice must be delivered. Booking an inspector does not extend the period. If more time is needed, seek an agreed extension before the deadline.
Possibly—but not just because you decide against buying. A contract may give you a right to cancel under an inspection, financing or another condition and receive the deposit back if you follow its requirements. Canceling without an available right, missing a deadline or waiving a protection can put the deposit at risk. Have Kyle review the signed documents before taking action; get legal advice if the right to cancel or keep the money is disputed.
Not necessarily. Being entitled to a refund and the holder being able to release it are separate questions. The holder needs to follow the agreement and applicable release procedures. A disagreement can delay disbursement. Washington’s earnest-money handling law describes procedures when a holder receives a demand or conflicting instructions.
No. An inspection can inform your decision, but it does not automatically require the seller to repair anything. Depending on your contract, you may request repairs or a credit, accept the condition, or use an available cancellation right. Your response and negotiation options have deadlines.
It depends on the protections in your agreement and your financing. A low appraisal does not automatically terminate the purchase. Possible next steps include negotiating the price, reviewing the appraisal with your lender, bringing additional funds, or using a valid contract right to cancel. Do not assume an appraisal protection remains after it has been waived or its deadline has passed.
Pre-approval is not a final loan guarantee. Tell Kyle and your lender immediately. Whether you can cancel and recover the deposit depends on the financing terms, your compliance with the agreement and the required timing and notices.
Do not assume so. An inspection fee generally pays for work performed, separately from earnest money. Ask the inspector and other providers about their payment and cancellation policies before booking. A refund of the deposit does not automatically refund inspection or appraisal costs.
A document that adds to or changes the purchase contract. Inspection, financing and other terms may be contained in addenda rather than the main form. Read all signed documents together—not just the first page.
The scheduled repayment of a loan over time through payments that cover interest and reduce principal. With a typical fixed-rate mortgage, earlier payments devote more to interest; the principal share generally grows as the balance falls.
A yearly measure of borrowing cost that includes the interest rate and certain loan charges. It can help compare loans, but also compare the payment, upfront fees and how long you expect to keep the loan.
An estimate of a home’s value prepared for the lender. It helps the lender evaluate the loan; it does not replace a home inspection. A low value can affect financing and the choices available under your contract.
A contract provision addressing the home’s appraised value. It may give the buyer options if the value is lower than expected. Your options depend on the wording, financing terms and deadlines; an appraisal alone does not cancel the contract.
A written agreement describing the brokerage’s representation of you and the terms of working together. Review its duration, scope, exclusivity, compensation and termination provisions. The terms can vary and compensation is negotiable.
Money kept available after buying for repairs, surprises and other needs. Some lenders require specific reserves. Your practical household cushion may need to be different from the lender’s minimum.
The money you still need to provide at closing after credits and amounts already paid are accounted for. It does not include every expense of buying and moving. Your final Closing Disclosure shows the lender’s closing calculation.
Expenses to complete the purchase and loan, separate from your down payment. They may include lender, title, escrow and recording charges, plus prepaid items. Check the itemized estimate so costs are not counted twice.
The date the contract sets for completing the purchase. Signing papers, loan funding and recording may occur at different times. Possession and the time you receive keys come from the agreement; do not assume signing alone means you can move in.
The lender’s final breakdown of loan terms, payments and closing costs for most home mortgages. Compare it with your Loan Estimate and ask about changes before signing.
Recent sales of reasonably similar properties used to help assess a home’s price or value. Location, condition, size, lot and sale timing matter. An asking price is not the same evidence as a completed sale.
A condition in the purchase contract, such as financing or an inspection. It can provide options if the condition is not met, but the exact protection depends on the wording, deadlines and required notices.
A comparison of your monthly debt payments with your gross monthly income. Lenders use it when evaluating a loan. Qualification and a comfortable household budget are different questions.
In an offer, ‘deposit’ usually means earnest money: funds paid early, held under the contract and normally credited at closing. It is not automatically an additional cost on top of your down payment. In mortgage paperwork, a deposit may instead mean money placed in a tax-and-insurance escrow account. Ask which deposit is meant, who holds it, and how it is applied or refunded.
An upfront charge paid to the lender to obtain a lower interest rate. One point equals 1% of the loan amount. Compare the upfront cost with the savings over the time you expect to keep the loan.
Your down payment is the part of the purchase price not financed by your main mortgage. Earnest money is a deposit paid earlier and normally credited toward the money you owe at closing—not an extra down payment. For example, a $25,000 down payment with $5,000 already deposited leaves $20,000 of the down payment unpaid, plus the remaining closing costs. Your closing figures determine the actual credit.
A deposit paid early and normally credited toward what you owe at closing—not an extra cost on top of the purchase. If you cancel, a refund depends on your contract, the reason for cancellation and whether required deadlines and notices were met. Using a valid contingency correctly may protect it; simply changing your mind may not. Ask Kyle to review your options before a deadline passes.
A right for someone else to use part of a property for a specific purpose, such as access or utilities. It can affect how you use the land. Review the recorded document and location.
In a home sale, a neutral third party holds money and documents and helps complete the transaction under the contract. In a mortgage payment, escrow can instead mean an account for property taxes and insurance. Ask which meaning applies.
A purchase-contract condition addressing the buyer’s financing. It may provide options if the loan cannot be obtained, but it is not a blanket promise that your deposit will be returned. The agreement’s conditions, deadlines and notices control.
The difference between the home’s value and the debts secured against it. A $500,000 home with $400,000 in mortgage debt has about $100,000 in equity before selling costs. Equity is not cash in your bank account, and it changes as values and loan balances change.
An inspector’s assessment of the home’s observable condition and systems within the agreed scope. It is not an appraisal, a warranty or a promise to find every defect. Septic, wells, structural concerns and other issues may require separate specialists.
An organization that manages shared responsibilities in a community. Owners may owe dues and follow rules. Review its finances, restrictions, assessments and documents before buying.
A contract provision giving the buyer specified rights to investigate the property and respond to findings. It does not guarantee repairs or unlimited time. Read what you can request or do, the deadline, and how notice must be given.
The time your purchase contract gives you to investigate the home and take the permitted next steps. There is no single inspection period for every sale. Check the signed agreement for its length, when counting starts, how days are counted and when notice is due. Scheduling or completing an inspection does not automatically extend the deadline.
The buyer’s formal response to inspection findings under the contract. Asking for repairs or a credit does not mean the seller must agree. The contract sets the response options, deadlines and what happens if the parties do not reach agreement.
Money from your lender that reduces certain upfront closing costs, often in exchange for a higher mortgage interest rate. Compare both the immediate savings and the longer-term cost.
An amount the contract identifies as compensation for a specified breach, instead of calculating the loss later. In a home purchase, an earnest-money provision may address this. Whether it applies or is enforceable requires review of the actual contract and law; do not assume your exposure is always limited to the deposit.
The amount the seller is currently asking for the home. It is not necessarily the final sale price, appraised value or remaining mortgage balance. Negotiation and the contract determine what you agree to pay.
An approved transfer of an existing mortgage to a new borrower, potentially preserving its terms. Approval is required, and the buyer still needs to cover the difference between the sale price and the assumed balance. Seller liability and VA entitlement need separate review.
The amount of the mortgage still owed at a given time. It is different from the home’s sale price or market value. A payoff quote may be higher than the stated balance because it includes interest through the payoff date and applicable charges.
A standard lender document showing proposed loan terms, estimated payment and estimated closing costs. Use it to compare offers. It is an estimate, not the final closing bill or a guarantee of approval.
Upfront charges for making and processing your mortgage. Review the itemized lender fees rather than comparing one headline charge. Points may appear in this section but serve a different purpose: paying upfront for a lower interest rate.
An account your mortgage servicer uses to pay covered property taxes and insurance bills. You may fund it at closing and add to it through your monthly payment. This is different from the escrow company handling the sale.
Insurance that generally protects the lender if a borrower fails to repay. It adds to your costs and does not replace homeowners insurance. Requirements, cost and cancellation rules vary by loan type.
In mortgage discussions, interest is the lender’s charge for borrowing money. It is different from principal, which repays the amount you borrowed. Prepaid interest is the same kind of charge, collected at closing for the initial days of the loan rather than through a later monthly payment.
The point when buyer and seller have agreed to the contract’s terms and acceptance has been communicated as required. Many transaction deadlines are measured from this point. Your broker should confirm the actual date and how each deadline is calculated.
Charges your loan rules allow a particular credit or assistance program to pay. ‘Permitted’ does not mean every expense of buying a home is covered. Ask your lender which fees, prepaid expenses or other charges qualify, what limits apply, and whether the full credit can be used. Moving costs, cash reserves and your down payment should not be assumed eligible.
The buyer’s contractual right to occupy or take control of the home. Its timing may differ from signing or closing. Confirm the agreed date and time, and any separate arrangement if the seller stays after closing.
A lender’s preliminary assessment of how much it may lend based on the information reviewed. It is not a guaranteed loan. The property, final documents and your financial situation still need to meet the lender’s requirements.
Costs paid in advance, such as interest for the remaining days of the closing month or a homeowners insurance premium. These are separate from the fees charged to make the loan or transfer the home.
It is regular mortgage interest—not a different kind of interest or an extra penalty. You pay it at closing for the days from closing through the end of that month because your mortgage has already started. Later monthly payments typically pay interest for the preceding period. Closing later in the month usually reduces this upfront item, not your interest rate. Your lender confirms the dates and amount.
Principal is the amount borrowed that you still owe; the principal portion of a payment reduces that balance. Interest is the charge for borrowing. A quoted ‘principal and interest’ payment is not necessarily your full monthly housing cost: taxes, insurance, mortgage insurance and HOA dues may be additional.
A groundwater source supplying the property rather than a utility water connection. Check records, water quality, available supply and any shared-use agreement. A well log alone does not establish today’s water quality or reliability.
A bill divided between buyer and seller based on who is responsible for each part of a period. Property taxes or dues may be adjusted this way at closing. Review the dates and whether the adjustment is a charge or a credit to you.
Charges to place documents such as the deed or mortgage-related document in the public county records. They are transaction costs, not money that reduces your loan balance.
Undoing or canceling an agreement using an available legal or contractual right. It is not interchangeable with simply walking away. Which rights apply, how notice is delivered and what happens to the deposit depend on the circumstances. Get advice before relying on a rescission right.
Money the seller agrees to contribute toward eligible buyer costs, rather than a reduction in the sale price. The lender decides which charges qualify and the maximum allowed for your loan. A $5,000 credit does not automatically mean $5,000 cash back, and generally cannot replace your required down payment. Have the lender confirm how much you can actually use.
An on-site system that treats household wastewater instead of sending it to a public sewer. Records and a qualified evaluation can help you understand its design, condition and maintenance needs. An address alone cannot establish the system type.
An additional charge for a specific expense, often from an HOA or local authority. It may be separate from regular dues or taxes. Confirm who pays, the amount and when it is due.
Coverage for certain covered problems with ownership rights, such as an old claim or recording error. A lender’s policy and an owner’s policy protect different parties. Review the policy, exclusions and title report.
A document identifying recorded ownership information and items such as liens, easements or restrictions that may affect the property. Review the listed exceptions and underlying documents. It is not a home inspection or a guarantee that every property issue has been found.
The lender’s review of your finances, documents and the property to decide whether the loan meets its rules. Approval may depend on additional information or conditions.
Giving up a condition or right you might otherwise use to investigate, negotiate or cancel. Waiving an inspection contingency can change your options even if you still hire an inspector. Understand exactly what rights remain before agreeing to a waiver.
These are educational explanations. Your contract, lender’s figures, program rules and property records determine what applies to your purchase.
Financial definitions were checked against the CFPB Closing Disclosure explainer. Contract definitions should be read alongside your actual agreement.
By Kyle Murphy · Works Real Estate · Reviewed October 7, 2026.
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