The ABC's of Real Estate Terms

Dusty Rhodes • December 2, 2019

Need a crash course on real estate terms? This glossary from Zillow will get you started.


DTI, PMI, LTV … TBH, it can be hard to keep all this stuff straight. This lexicon of real estate terms and acronyms will help you speak the language like a pro.


Appraisal management company (AMC): An institution operated independently of a lender that, once notified by a lender, orders a home appraisal.


Appraisal: An informed, impartial and well-documented opinion of the value of a home, prepared by a licensed and certified appraiser and based on data about comparable homes in the area, as well as the appraiser’s own walkthrough.


Approved for short sale: A term that indicates that a homeowner’s bank has approved a reduced listing price on a home, and the home is ready for resale.


American Society of Home Inspectors (ASHI): A not-for-profit professional association that sets and promotes standards for property inspections and provides educational opportunities to its members. (i.e., Look for this accreditation or something similar when shopping for a home inspector.)


Attorney state: A state in which a real estate attorney is responsible for closing.


Back-end ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares the borrower’s monthly debt payments (proposed housing expenses, plus student loan, car payment, credit card debt, maintenance or child support and installment loans) to gross income.


Buyers market: Market conditions that exist when homes for sale outnumber buyers. Homes sit on the market a long time, and prices drop.


Cancellation of escrow: A situation in which a buyer backs out of a home purchase.


Capacity: The amount of money a home buyer can afford to borrow.


Cash-value policy: A homeowners insurance policy that pays the replacement cost of a home, minus depreciation, should damage occur.


Closing: A one- to two-hour meeting during which ownership of a home is transferred from seller to buyer. A closing is usually attended by the buyer, the seller, both real estate agents and the lender.


Closing costs: Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 1% to 3% of the home’s purchase price.


Closing disclosure (CD): A five-page document sent to the buyer three days before closing. This document spells out all the terms of the loan: the amount, the interest rate, the monthly payment, mortgage insurance, the monthly escrow amount and all closing costs.


Closing escrow: The final and official transfer of property from seller to buyer and delivery of appropriate paperwork to each party. Closing of escrow is the responsibility of the escrow agent.


Comparative market analysis (CMA): An in-depth analysis, prepared by a real estate agent, that determines the estimated value of a home based on recently sold homes of similar condition, size, features and age that are located in the same area.


Compliance agreement: A document signed by the buyer at closing, in which they agree to cooperate if the lender needs to fix any mistakes in the loan documents.


Comps: Or comparable sales, are homes in a given area that have sold within the past six months that a real estate agent uses to determine a home’s value.


Condo insurance: Homeowners insurance that covers personal property and the interior of a condo unit should damage occur.


Contingencies: Conditions written into a home purchase contract that protect the buyer should issues arise with financing, the home inspection, etc.


Conventional 97: A home loan that requires a down payment equivalent to 3% of the home’s purchase price. Private mortgage insurance, which is required, can be canceled when the owner reaches 80% equity.


Conventional loan: A home loan not guaranteed by a government agency, such as the FHA or the VA.


Days on market (DOM): The number of days a property listing is considered active.


Depository institutions: Banks, savings and loans, and credit unions. These institutions underwrite as well as set home loan pricing in-house.


Down payment: A certain portion of the home’s purchase price that a buyer must pay. A minimum requirement is often dictated by the loan type.


Debt-to-income ratio (DTI): A ratio that compares a home buyer’s expenses to gross income.


Earnest money: A security deposit made by the buyer to assure the seller of his or her intent to purchase.


Equity: A percentage of the home’s value owned by the homeowner.


Escrow account: An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes.


Escrow agent: A neutral third-party officer who holds all paperwork and funding in trust until all parties in the transaction fulfill their obligations as part of the transfer of property ownership.


Escrow state: A state in which an escrow agent is responsible for closing.


Fannie Mae: A government-sponsored enterprise chartered in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country.


Federal Reserve: The central bank of the United States, established in 1913 to provide the nation with a safer, more flexible and more stable monetary and financial system.


Federal Housing Administration (FHA): A government agency created by the National Housing Act of 1934 that insures loans made by private lenders.


FHA 203(k): A rehabilitation loan backed by the federal government that permits home buyers to finance money into a mortgage to repair, improve or upgrade a home.


Foreclosure: A property repossessed by a bank when the owner fails to make mortgage payments.


Freddie Mac: A government agency chartered by Congress in 1970 to provide a constant source of mortgage funding for the nation’s housing markets.


Funding fee: A fee that protects the lender from loss and also funds the loan program itself. Examples include the VA funding fee and the FHA funding fee.


Gentrification: The process of rehabilitation and renewal that occurs in an urban area as the demographic changes. Rents and property values increase, culture changes and lower-income residents are often displaced.


Guaranteed replacement coverage: Homeowners insurance that covers what it would cost to replace property based on today’s prices, not original purchase price, should damage occur.


Homeowners association (HOA): The governing body of a housing development, condo or townhome complex that sets rules and regulations and charges dues and special assessments used to maintain common areas and cover unexpected expenses respectively.


Home equity line of credit (HELOC): A revolving line of credit with an adjustable interest rate. Like a credit card, this line of credit has a limit. There is a specified time during which money can be drawn. Payment in full is due at the end of the draw period.


Home equity loan: A lump-sum loan that allows the homeowner to use the equity in their home as collateral. The loan places a lien against the property and reduces home equity.


Home inspection: A nondestructive visual look at the systems in a building. Inspection occurs when the home is under contract or in escrow.


Homeowners insurance: A policy that protects the structure of the home, its contents, injury to others and living expenses should damage occur.


Housing ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to gross income.


In escrow: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title searched for liens, etc.


Jumbo loan: A loan amount that exceeds the Fannie Mae/Freddie Mac limit, which is generally $425,100 in most parts of the U.S.


Listing price: The price of a home, as set by the seller.


Loan estimate: A three-page document sent to an applicant three days after they apply for a home loan. The document includes loan terms, monthly payment and closing costs.


Loan-to-value ratio (LTV): The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios.


Market value coverage: Homeowners insurance that covers the amount the home would go for on the market, not the cost to repair, should damage occur.


Mechanic’s lien: A hold against a property, filed in the county recorder’s office by someone who’s done work on a home and not been paid. If the homeowner refuses to pay, the lien allows a foreclosure action.


Mortgage broker: A licensed professional who works on behalf of the buyer to secure financing through a bank or other lending institution.


Mortgage companies: Lenders who underwrite loans in-house and fund loans from a line of credit before selling them off to a loan buyer.


Mortgage interest deduction: Mortgage interest paid in a year subtracted from annual gross salary.


Mortgage interest rate: The price of borrowing money. The base rate is set by the Federal Reserve and then customized per borrower, based on credit score, down payment, property type and points the buyer pays to lower the rate.


Multiple listing service (MLS): A database where real estate agents list properties for sale.


Origination fee: A fee, charged by a broker or lender, to initiate and complete the home loan application process.


Piggyback loan: A combination of loans bundled to avoid private mortgage Insurance. One loan covers 80% of the home’s value, another loan covers 10% to 15% of the home’s value, and the buyer contributes the remainder.


Principal, interest, property taxes and homeowners insurance (PITI): The components of a monthly mortgage payment.


Private mortgage insurance (PMI): A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity.


Points: Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment.


Pre-approval: A thorough assessment of a borrower’s income, assets and other data to determine a loan amount they would qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.


Pre-qualification: A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.


Property tax exemption: A reduction in taxes based on specific criteria, such as installation of a renewable energy system or rehabilitation of a historic home.


Round table closing: All parties (the buyer, the seller, the real estate agents and maybe the lender) meet at a specified time to sign paperwork, pay fees and finalize the transfer of homeownership.


Sellers market: Market conditions that exist when buyers outnumber homes for sale. Bidding wars are common.


Short sale: The sale of a home by an owner who owes more on the home than it’s worth (i.e., “underwater” or “upside down”). The owner’s bank must approve a lower listing price before the home can be sold.


Special assessment: A fee charged by a condo complex HOA when cash on reserve is not enough to cover unexpected expenses.


Tax lien: The government’s legal claim against property when the homeowner neglects or fails to pay a tax debt.


Third-party review required: Verbiage included in a home listing to indicate that the lender has not yet approved the home for short sale. The seller must submit the buyer’s offer to the lender for approval.


Title insurance: Insurance that protects the buyer and lender should an individual or entity step forward with a claim that was attached to the property before the seller transferred legal ownership of the property or “title” to the buyer.


Transfer stamps: The form in which transfer taxes are paid by the home buyer. Stamps can also serve as proof of transfer tax payment.


Transfer taxes: Fees imposed by the state, county or municipality on transfer of title.


Under contract: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens, etc.


Underwater or upside down: A situation in which a homeowner owes more for a property than it’s worth.


Underwriting: A process a lender follows to assess a home loan applicant’s income, assets and credit, and the risk involved in offering the applicant a mortgage.


VA home loan: A home loan partially guaranteed by the United States Department of Veteran Affairs and offered by private lenders, such as banks and mortgage companies.


VantageScore: A credit scoring model lenders use to make lending decisions. A borrower’s score is based on bill-paying habits, debt balances, age, variety of credit accounts and number of inquiries on credit reports.


Walkthrough: A buyer’s final inspection of a home before closing.


Water certificate: A document that certifies that a water account has been paid in full. The seller must produce this certificate at closing.


Source: Zillow


 

Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!


Share

Thinking about Selling Your House As-Is? Read This First.

By Dusty Rhodes • January 19, 2026
If you’re thinking about selling your house this year, you may be torn between two options: Do you sell it as-is and make it easier on yourself? No repairs. No effort. Or do you fix it up a bit first – so it shows well and sells for as much as possible? In 2026, that decision matters more than it used to. Here’s what you need to know. More Competition Means Your Home’s Condition Is More Important Again Over the past year, the number of homes for sale has been climbing. And this year, a Realtor.com forecast says it could go up another 8.9% . That matters. As buyers gain more options, they also re-gain the ability to be selective. So, the details are starting to count again. That’s one reason most sellers choose to make some updates before listing. According to a recent study from the National Association of Realtors (NAR), two-thirds of sellers (65%) completed minor repairs or improvements before selling ( the blue and the green in the chart below ). And only one-third (35%) sold as-is : 

Smart Home, Big Risks: Top Cybersecurity Threats Homeowners Need To Know

By Dusty Rhodes • January 12, 2026
Smart home devices are becoming increasingly common. From webcams to thermostats, to TVs and even AI-improved refrigerators, homeowners have an array of choices to make their lives easier. These devices can also boost home prices, making them a worthwhile investment. Yet, these smart home gadgets can also be compromised and are subject to a slew of cybersecurity threats. In fact, Rambus , a chip and silicon IP provider, found that an eye-popping 80% of Internet of Things (IoT) devices “are vulnerable to a wide range of attacks.” Mike Halbouni , founder of PoyntGuard , a security camera and surveillance installation company, said that as homes become more connected, cybersecurity is just as critical as physical security. “Every smart device that connects to your network, including cameras, doorbells, thermostats, smart locks, and voice assistants, can become a potential entry point for hackers if not properly secured,” he said. Common cybersecurity threats, from weak passwords and credentials Jason Chen , technical director and tech expert at JarnisTech , a professional electronics manufacturer, said that the more “smart” your home gets, the more exposed you become. “Convenience has a cost, and that cost is usually hidden in the fine print of your device’s security settings,” he said. The most threat to your smart home security comes from weak default credentials and passwords, according to Thomas S. Hyslip , assistant professor of instruction for the M.S. in cybercrime program in the criminology department at the University of South Florida . As Hyslip explained, many smart devices, including smart cameras, baby monitors, smart doorbells, network routers, and smart hubs, are shipped with publicly known or easily guessable factory passwords and settings, such as "admin" or "123456.” “Cybercriminals use automated tools to scan the internet, searching for devices with these default settings to gain immediate and full control, potentially compromising your entire home network,” he said. To mitigate this threat, homeowners must change passwords immediately and often. Another tip: Avoid inexpensive IoT devices with hard-coded, unchangeable passwords, as these products are permanently vulnerable to takeover and pose an unacceptable risk to your network security, he added. Lack of knowledge Tony Anscombe , chief security evangelist at ESET, a cybersecurity vendor, echoed the sentiment, saying that smart devices introduce several potential risks, the primary ones being privacy and security. Anscombe added that consumers need to ensure they understand exactly what data is being collected by smart devices, how it’s being secured, where it’s being stored, and whether it will be used for any other purposes or shared with a third party. Tim Kravchunovsky , CEO of Chirp , an IoT solutions provider for short-term rentals, also said that the biggest cybersecurity threat most homeowners face isn’t a single device, it's their own home network and IT knowledge. “Depending on how much home automation someone has, their devices may hold extremely sensitive information. Yet most people who automate their homes aren’t very technical, and that lack of expertise creates wide security gaps,” he said. He added that nearly all consumer IoT devices operate over Wi-Fi. Once an attacker gains access to a home’s Wi-Fi network, which is often far easier than people think, they can pivot to the devices themselves and access the data flowing through them. “Businesses recognized this risk years ago, which is why many now isolate IoT devices in a completely separate environment rather than letting them live on the main network,” he said. Smart cameras and doorbells According to Chen, these devices, which are designed to keep you safe, are actually easy prey for hackers themselves. “I know individuals who have used hacked cameras to spy on families, to record them inappropriately, to even broadcast those feeds for everyone to see without their consent,” he said, adding that this happens because many people never update default passwords, update firmware, or connect cameras to their main Wi-Fi networks. “A hacker, after penetrating, can monitor all of your movements—literally,” he said. Chen added that to fix this, there are several steps you can take: turn on two-factor authentication (2FA); change all default login credentials; and set up a separate Wi-Fi network just for smart devices. Smart speakers and voice assistants Dave Meister , cybersecurity evangelist of Check Point Software Technologies , said there have been instances in which attackers have tricked these devices into making purchases or controlling other smart-home features. They’re also constantly listening, which makes them a privacy risk if not configured well, he said. What to do: According to Meister, turn off voice-purchasing, use strong and unique passwords, and use the physical mute button when you’re not using it. And as Chen said: “The golden rule here is if a device is always listening, assume it is always collecting and act accordingly.” Smart locks and garage systems Smart locks make life easier, especially for those among us who constantly forget where they put their keys. However, as Chen put it, these introduce a terrifying vulnerability: If someone compromises your smartphone or your Wi-Fi, your front door could literally unlock for them. “The same goes for connected garage systems. Many rely on cloud-based apps that, if breached, could grant access to your home in seconds,” he said. Instead, Chen urges homeowners to use locks with end-to-end encryption; lock down your smartphone with biometrics and remote wipe options; and audit who has access—remove old guest codes or app permissions you’ve forgotten about. Smart TVs and streaming devices Gene Petrino , lead adviser for Security.org , a company specializing in personal and home security, and a retired SWAT commander, said that many devices include microphones and cameras that can be exploited if security is weak. Petrino recommends turning off unused connectivity features, such as voice control and camera, and only installing apps from trusted sources. In addition, he urges homeowners to enable firmware updates regularly. “Think of your smart home like a digital ecosystem; each device is a door. The more devices you connect, the more doors you create. Secure each one with strong passwords, regular updates, and separate networks for critical systems,” he said. Check Point Software Technologies’ Meister added that, surprisingly, these are among the most vulnerable devices in the home. “A lot of the cheaper streaming boxes run old software, and we’ve seen cases this year where malware actually came pre-installed on knockoff devices people bought online. Once they’re plugged in, they can be used for things like click-fraud or even large-scale attacks,” he said. Meister offered another tip: Stick to reputable brands and keep up to date. Home Wi-Fi router “The router is basically the front door to your digital house,” said Meister. As he noted, the average home sees dozens of attack attempts a day, and a lot of IoT traffic isn’t encrypted at all. If your router is old or still using the default login, it’s an easy target. What you can do is use a strong Wi-Fi password and turn on automatic updates, he said. Smart thermostats Security.org’s Petrino said attackers can gather data on your daily routines—like when you’re home or away—or use unsecured devices to access your entire Wi-Fi network. He said that homeowners should create a separate network for smart devices, use strong router passwords and WPA3 encryption, and avoid connecting unnecessary appliances to the internet. Meister also cautions that many owners don’t realize appliances can be hacked, too, and that older or cheap models often never get software updates, which means any vulnerability lives forever. His advice? Before buying, check whether the brand actually updates its products. And if a device stops getting updates, it’s time to replace it. “If I had to give homeowners one simple rule, it’d be this: Treat every smart device like a tiny computer. Update it, use a strong password, and don’t put it on the same network as the devices that actually matter, like your laptop or phone,” he added. 

When Is the Right Time to Downsize Your Home?

By Dusty Rhodes • January 5, 2026
Downsizing your home is a major decision, and the right moment to act is not always obvious. The best time to downsize is whenever your current home no longer aligns with your financial, lifestyle, or personal needs. It’s less about the market and more about your life stage. But deciding to downsize can be hard, and leaving a home filled with cherished memories can bring heartache. So, when is the right time to downsize? If owning your home in Seattle, WA , or renting a house in Portland, OR , has brought more stress and worry than joy in recent years, the time may be right to downsize into something smaller. In this Redfin real estate article, we’ll explore how, by considering financial, emotional, and maintenance factors, you can determine if now is the perfect time to trade your large property for a smaller, more manageable space. Financial signs you should consider downsizing Your finances often provide the clearest signal that it is time to downsize. Carrying a large mortgage or facing ever-increasing utility and maintenance bills can put unnecessary strain on your budget. High maintenance costs : Is your maintenance budget constantly being stretched by repairs on a large or older home? The costs of running and maintaining unused square footage add up significantly over time. Downsizing can drastically reduce these expenses, freeing up money for other goals. Nearing or entering retirement : Many people choose to downsize right before or as they enter retirement. This is an excellent opportunity to reduce housing payments, eliminate your mortgage, and unlock home equity. As Patricia Cavanaugh of The 3rd Act , a retirement planning service for seniors, says, “It’s time to downsize when your personal possessions and material goods are weighing you down and preventing you from making room for your new retirement lifestyle.” Desire to free up equity : Selling a larger, more expensive home and buying a smaller one means you will have a substantial amount of equity released. This money can be used to travel, invest, or simply create a more secure financial cushion for the future. Lifestyle and emotional indicators Beyond money, your day-to-day life is a powerful indicator of whether a smaller home makes sense. The way you use your space can reveal if your home is now too big for your needs. Living a simpler life may offer helpful benefits to your emotional and mental health. Becoming an empty nester : When your children move out, you might find yourself with multiple unused bedrooms and living areas. This space not only costs money to maintain and heat, but it can also feel unnecessary. Downsizing to a cozier home allows you to repurpose that space and focus on a new, simpler chapter. Too much unused space: Walk through your home and identify rooms you rarely or never use. If you have rooms that feel like storage areas rather than functional living spaces, it is a sign that your home is simply too large for your current lifestyle. Downsizing allows you to live more efficiently. A simpler, less demanding life : Large properties require a lot of effort to clean, maintain, and landscape. If you are starting to feel burdened by the chores associated with your home, downsizing to a smaller house or a low-maintenance condo can dramatically improve your quality of life. This trade-off gives you more time for hobbies or relaxation. What about the housing market? While your personal situation is the most important factor, the market can influence your timing. The best financial time to downsize is generally when your current home’s value is high. This allows you to maximize the profit from the sale, which directly translates to more funds for your smaller purchase. However, remember that when sale prices are high, so are purchase prices. A good real estate agent can help you analyze the market to find a sweet spot where you achieve the best outcome on both transactions. Making the move Once you decide it is the right time to downsize , the next big step is to declutter. This process can be the most time-consuming part of the move. Leaving an old home can be an emotional process, so the best approach is to start early and be ruthless about what you truly need. Focus on organizing, donating, and selling items well before you list your property . Frequently asked questions: What is the main benefit of downsizing? The main benefit is financial: Reducing your monthly expenses, cutting utility and maintenance bills, and freeing up a significant amount of home equity. Will downsizing definitely save me money? In most cases, yes. While the cost of moving and closing on a new, smaller home is a factor, the long-term savings from lower property taxes , lower utility costs, and reduced or eliminated mortgage payments almost always result in substantial savings. What should I do before I list my current home? The most important step is decluttering and organizing every space. A home that is neat and free of excess belongings shows much better to potential buyers and makes your eventual move much easier.