The plain-English real estate glossary

01The words behind your monthly payment

These are the terms that decide what you can carry every month, and how ownership actually builds over time.

PITI. The four parts of a monthly mortgage payment: principal, interest, taxes and insurance. Lenders weigh the whole PITI, not just the loan part, when they judge what you can afford.

Principal. The money you actually borrowed, separate from the interest you pay to borrow it. Paying principal down is the part that turns into ownership.

Amortization. The schedule that pays a loan down to zero over its term. Early payments are mostly interest and later ones are mostly principal, so equity builds slowly at the start.

Escrow. A neutral third party that holds money until agreed conditions are met. Your deposit sits in escrow between offer and closing, and after closing an escrow account can collect the tax and insurance part of each payment.

02The words that decide who really owns what

This is the language of the transaction itself: how you stay protected, and what claims can ride along with a property long after the sale.

Contingency. A condition written into an offer that lets you walk away without losing your deposit. Financing, inspection and appraisal contingencies are the common ones: if the condition is not met, you are protected.

Lien. A legal claim against a property for a debt, such as a mortgage, unpaid taxes or an unpaid contractor. Liens travel with the property rather than the person, so they usually have to be cleared before a clean sale.

Easement. A right for someone else to use part of your land for a set purpose, like a shared driveway, a utility line or a footpath. It stays attached to the land even after you sell.

Title. The legal record of who owns a property and what claims sit against it. A title search hunts for liens and easements before any money changes hands.

Deed. The document that actually transfers ownership from seller to buyer. Title is the status; the deed is the paper that moves it.

03The words that put a price on a property

Every property attracts several numbers at once, and they rarely agree. These terms tell you which number is which, and what it is worth.

Comp. Short for comparable sale: a property much like yours in size, condition and location that sold recently. Comps are the backbone of any estimate, because they are real prices real people paid.

Assessment. The value a town or city puts on a property for tax purposes. It is not the market price and is often years out of date, so treat it as one input, never the answer.

Cap rate. For a rental, the yearly income left after operating costs, divided by the price, shown as a percentage. It is a rough yardstick for comparing income properties, not a promised return.

Yield. What a property earns each year relative to what it cost. A higher yield usually carries higher risk: the two tend to move together, so read them together.

FAR. Floor area ratio: a zoning limit on how much building floor area a lot is allowed, relative to the size of the lot. It is one of the main rules that caps how big you can build.

Setback. The minimum distance a building must sit from the edges of its lot. Setbacks decide where on the land you can build, not just how much, and the exact limits vary by town and state.

Assessed, listed, and sold are three different numbers. Only one of them is a real price.