Dallas Real Estate Glossary

Amortization

The process of paying off your mortgage over time through regular monthly payments. Early payments go mostly toward interest, while later payments go increasingly toward the loan principal.

Appraisal

A third-party estimate of a property’s market value based on comparable recent sales. Your lender requires it to confirm the home is worth the requested loan amount.

Closing

The final step of the transaction, where the buyer’s funds are delivered to the seller and you receive the keys. In Texas this is handled by a title company and typically takes about an hour.

Closing Costs

The fees paid at the end of the purchase by the buyer, seller, or both. These can include taxes, title fees, insurance, lender fees, and prepaid items.

Comparable Sales (Comps)

Recently sold homes similar to the one you are buying or selling, used to estimate fair market value. Often called “comps,” they are the basis of both your offer strategy and the lender’s appraisal.

Contingency

A condition that must be met before a sale becomes final — such as financing, inspection, or appraisal — that protects you if something falls through.

Earnest Money

A good-faith deposit, typically 1%+ of the sales price, held in escrow to show you are serious about the home. It is credited back to you at closing.

Escrow

A neutral third-party account that holds funds — such as your earnest money, or later your property tax and insurance reserves — until the terms of the transaction are met.

Home Inspection

A professional examination of the property’s condition, completed within the option period. Your agent negotiates any repair items on your behalf based on the inspector’s findings.

Homeowners Association (HOA)

An organization that maintains shared areas and enforces rules in some neighborhoods and condos, funded by mandatory dues. Review the HOA’s rules and fees before closing.

Homestead Exemption (Texas)

A Texas property-tax break on your primary residence that lowers its taxable value and limits how much that value can rise each year. You file with your county appraisal district after closing.

Leaseback / Temporary Lease

A short-term lease that lets the seller stay in the home for an agreed period after closing. It is a common negotiating tool in competitive Texas markets.

MLS (Multiple Listing Service)

The database real estate agents use to list and find homes for sale. Your agent has full MLS access to homes the moment they hit the market.

Mortgage Points

Optional fees paid to your lender at closing to “buy down” your interest rate. One point equals 1% of the loan amount and lowers your rate by a set amount.

Non-Realty Items

Personal property or accessories not permanently attached to the home. These do not convey with the sale unless they are specifically negotiated into the contract.

Option Period & Fee (Texas)

A Texas-specific negotiated window during which you can terminate the contract for any reason. You pay the seller an option fee, often $200 or more, for this right, and all inspections and repair negotiations should happen within it.

Pre-Approval

A preliminary evaluation by a lender showing how much you can borrow, based on verified documentation. It strengthens your offer by proving to sellers that you have the funds to purchase.

Pre-Qualification

An informal, early estimate of how much you might be able to borrow, based on information you provide. It is a lighter step than a pre-approval, which involves verified documentation.

Private Mortgage Insurance (PMI)

A monthly premium most lenders charge when your down payment is less than 20%. It protects the lender, not you, and can usually be removed once you build enough equity.

Seller’s Disclosure Notice (Texas)

A Texas form in which the seller lists what they know about the property — good or bad. You review it before finalizing your offer.

Survey

A drawing of the property’s boundaries showing the location of the home, fences, and any encroachments. Lenders and title companies use it to confirm exactly what you are buying.

Title Commitment

The title company’s promise to issue title insurance, disclosing the record owner and any liens, defects, or obligations on the property. It is made up of four schedules, A through D.

Title Insurance

A policy that protects you and your lender against past defects in the property’s title — such as undisclosed liens or ownership disputes — that surface after closing.

Underwriting

The lender’s final review of your income, credit, employment, and the appraisal before approving your loan. Avoid major purchases or credit changes during this stage.

Putting it all together? Read the full Dallas home buying guide.