Selling your home for the first time can feel like stepping onto a movie set where everyone speaks a different language. Just last month, I had a client who was so overwhelmed by the jargon they said, “I feel like I need a dictionary just to keep up!” If you can relate, don’t worry. You’re not alone, and you don’t need a degree in real estate to navigate the process like a pro.
Here’s a quick guide to the most common (and sometimes confusing) terms first-time sellers should know and why they matter to you.
Listing Agreement
This is the contract between you and your real estate agent that authorizes them to market and sell your home. Think of it as a team-up contract: it outlines how long your home will be on the market, your listing price, and the agent’s commission. Without this, no marketing or open houses can legally happen!
Comparative Market Analysis (CMA)
A CMA is a detailed report that helps determine your home’s market value based on recently sold, similar properties nearby. It’s like checking what your neighbors got for their place so you can price yours competitively. My client thought they could just pick a price she “felt good about,” but the CMA helped them understand what buyers were actually willing to pay.
Contingency
A contingency is a condition that must be met for a sale to go through. Common examples? The buyer must sell their current home or secure financing. If contingencies aren’t met, the deal can fall apart. Sellers should understand these so they don’t panic if a buyer requests them.
Disclosure
In California, sellers are legally required to disclose certain information about their property from roof leaks to pesky termite problems. Transparency protects you from legal headaches later. Remember: honesty is always the best policy!
Earnest Money Deposit
This is the buyer’s way of showing they’re serious, which is typically 1% to 3% of the purchase price. If they back out for a reason not covered in the contingencies, they could lose this deposit. My client was shocked when they first saw this term on an offer, but it’s a pretty standard part of the game.
Escrow
Escrow is like a neutral middle ground where money and documents are held safely until all parts of the transaction are completed. You’ll hear “escrow” a lot such as “open escrow,” “closing escrow,” etc. Basically, it’s your money’s safe little waiting room until keys and funds are exchanged.
Staging
This is the process of decorating and arranging your home to look its best for buyers. Some sellers think it’s all fluff, but staging can actually help sell your home faster and often for a higher price. My client hesitated at first but ended up loving the transformation and so did the buyers!
Closing Costs
These are fees associated with finalizing the sale. They include agent commissions, title insurance, escrow fees, and more. In San Diego, sellers typically pay the real estate agent commissions, which is usually around 5–6%, but buyers often cover other costs too.
Appraisal
An appraisal is an unbiased estimate of your home’s value, usually required by the buyer’s lender to ensure the price matches the home’s worth. If it comes in low, you may need to renegotiate the price or make other concessions.
When my client learned these terms, they went from overwhelmed to empowered, and you can too. Understanding the lingo won’t just make you feel smarter (although that’s a nice bonus!), it’ll also help you make informed decisions and avoid surprises.
So, if you’re thinking about selling your home, don’t be afraid to ask questions. A trusted agent should walk you through every step, explain every form, and decode every piece of jargon. Remember, the smoother the process, the quicker you’ll be handing off those keys and moving on to your next adventure!