Selling a home introduces you to a vocabulary that sounds like a different language. Escrow, contingencies, encumbrances, title reports. Most sellers nod along during explanations and then call me three days later asking me to repeat everything because none of it stuck.
I don't blame them. Real estate terminology is designed by lawyers and lenders, not normal people trying to sell their houses. But understanding these terms before you list makes the process less stressful.
Here are the terms that matter most for Bay Area sellers.
Listing Terms
List Price is what you initially advertise your home for. This isn't the same as what you'll actually get. In the East Bay, homes often sell above list price when priced strategically.
Days on Market (DOM) tracks how long your property has been actively listed. Buyers pay attention to DOM because it signals market reception. The median in the Inner East Bay is currently 15 days.
Comparative Market Analysis (CMA) shows recent sales of similar properties. A good CMA includes homes that sold, not just active listings, because listings show asking prices, not actual market value.
MLS (Multiple Listing Service) is where agents list properties. When your home goes on the MLS, it appears everywhere buyers search online.
Offer and Negotiation Terms
Earnest Money Deposit (EMD) is money the buyer puts down with their offer, typically 1% to 3% of the purchase price. This shows they're serious. The EMD goes toward their down payment at closing or gets returned if they cancel within contingency periods.
Contingencies are conditions that must be met for the sale to proceed. The main ones are loan approval, appraisal, and inspection. Buyers can cancel and get their EMD back during these periods. Once removed, canceling becomes much harder.
Appraisal Contingency protects buyers if the home doesn't appraise for the purchase price. Many Bay Area buyers waive this in competitive situations.
Inspection Contingency gives buyers time to inspect and request repairs, typically 17 days in California. Buyers can cancel for almost any reason during this period.
Loan Contingency protects buyers if they can't secure financing, usually 21 days. Pre-approval isn't the same as final loan approval.
As Is means you're selling in current condition without making repairs. Buyers can still inspect and negotiate, but you're signaling you won't do work.
Escrow and Title Terms
Escrow is the neutral third party holding money and documents during the transaction. They ensure all conditions are met before releasing funds.
Title is legal ownership of the property. The title company researches ownership history to ensure you can sell it.
Title Insurance protects the buyer and lender against title defects discovered after closing. You typically pay for this as the seller.
Encumbrances are claims or liens against your property like mortgages, tax liens, or HOA liens. These must be cleared before closing.
Preliminary Title Report lists all encumbrances. Review it carefully because you're responsible for clearing most items.
Closing Disclosure is the final settlement statement showing all money changing hands and exactly where every dollar goes.
Financial Terms
Net Proceeds is what you walk away with after paying your mortgage, closing costs, and commissions. This matters more than the sale price.
Closing Costs include escrow fees, title insurance, transfer taxes, and HOA documents. Sellers typically pay 1% to 2% beyond commission.
Transfer Tax is a tax on property transfers. In Alameda County, it's $1.10 per $1,000. Oakland and Berkeley add their own transfer taxes.
Prorations are adjustments for expenses like property taxes and HOA dues you've prepaid.
Commission is what you pay real estate agents, typically 5% to 6% of the sale price. On a $1,250,000 sale at 5%, that's $62,500.
Disclosure Terms
Transfer Disclosure Statement (TDS) is where you disclose everything you know about the property's condition. Complete this honestly. Failing to disclose known issues creates legal liability.
Natural Hazard Disclosure (NHD) reports whether your property is in earthquake, flood, fire, or other hazard zones.
Seller Property Questionnaire (SPQ) asks detailed questions about systems, repairs, and issues. When in doubt, disclose.
Lead Based Paint Disclosure is federally required for homes built before 1978.
Contingency Removal happens when buyers remove their contingencies. This is major because they now have serious money at risk if they cancel.
Timeline Terms
Active Listing means your home is on the market and available for showings.
Pending Sale means you've accepted an offer and entered escrow, but the sale hasn't closed.
Close of Escrow (COE) is when ownership officially transfers. The deed records, funds transfer, and you no longer own the property.
Recording is when the county documents the ownership change in public records.
Why This Matters
You don't need to memorize everything before listing. Your agent should explain each term as it becomes relevant. But having this reference helps you follow conversations and ask better questions.
The sellers who have the smoothest transactions understand what's happening at each stage. They know what contingency removal means, why title matters, and what affects their net proceeds. That knowledge creates realistic expectations and reduces stress.
Real estate vocabulary exists for precision. Every term means something specific, and using the right language prevents misunderstandings that can derail transactions.
Kelly
