Top 5 Real Estate Terms Home Sellers Need to Know

The world of real estate is full of jargon and industry-specific terms all home sellers need to understand before listing their home for sale. The good news is it doesn’t take hours of study to understand these terms and what they mean. Here are the 5 of the top terms you’ll want to get a handle on before listing your home for sale.

Absorption Rate

The absorption rate in real estate is how fast your local market “absorbs” the inventory of listings. In other words, it’s an indicator of how fast homes are selling.

Real estate agents and home sellers benefit from knowing this metric because it can help give an idea of how fast a home will sell and if it’s a good time to sell.

The absorption rate is calculated for specific time frames. For example, if you wanted to know the absorption rate for the past 3 months, then you would take the total number of houses sold during that time and divide it by the total listings on the market for that same time.


A home appraisal is a process completed by a qualified home appraiser to determine the market value of a home. A buyer that is taking out a mortgage to buy your home needs to offer an amount that aligns with the appraised value in order to get the loan. If the home value appraises for less than the amount offered, home sellers may need to accept a lower price or work with the buyer to determine a way to cover the difference.

Comparative Market Analysis

Also known as a CMA, a comparative market analysis is a process real estate agents use to determine a likely selling price for your home if you are considering selling. There are many factors that determine the value of a home (location, features, amenities, repairs required, etc).

Preparing a solid CMA is one of many reasons it’s best to list your home with an experienced Realtor, who will compare your home to recent homes sold in the area and make adjustments based on your specific property. Some sellers insist on starting at a higher price, which can add months to the time it takes to sell, as quite often, that price is higher than the market will bear. The more experienced your Listing Agent is, the more likely your home is to be accurately priced.

Deed and Title

The terms title and deed are often used to refer to the same thing, but they are actually different.

“Title” is a legal term for ownership. A home seller that owns the property holds title to that property, for example.

“Deed” refers to a legal document that proves ownership (or title) to a property. The deed contains the exact details of the property and the legal owner that holds the title to the property.

Earnest Money

First, it’s important to note that “earnest money” money is not a down payment. Earnest money is a cash or check deposit given to a home seller by a potential buyer with an offer to purchase the property. Earnest money is also known as a “good faith deposit” because it shows that the offer is serious and is being made in good faith. An earnest money deposit may be deemed non-refundable after a set period of time, called an option period, unless certain conditions are set in advance for the deposit to be returned to the buyer. Earnest money is normally held in an escrow account until closing at which time the funds are applied to the purchase price of the home.

Listing Agreement

Real estate agents require home sellers to sign a legal contract known as a “listing agreement” in order for the agent to market the property. The real estate agent needs to ensure they have a firm commitment from the home seller because they bear the upfront costs and time to help get the property sold.

A typical listing agreement will include the agent’s fees and/or commission, a defined length of time the agreement is in force, and other details about selling the home.

Looking to sell a property in the Tyler area?

We can help. With nearly 40 years of experience in Tyler area real estate, Pamela Walters has the knowledge to help you stage your home, walk you through the entire process, explain the vocabulary and concepts you need to know and help you get top dollar for your home. Contact us today to start a conversation.