Resources · Glossary
Real estate terms, in plain English.
Closings come with their own vocabulary. Here are the words you will actually hear, defined the way we would explain them to you across the table.
Term of the day
Find it in the full list belowThe terms, defined.
Alphabetical. These definitions describe Connecticut practice; Massachusetts and Rhode Island differ. If a word you're hearing isn't here, just ask us.
- Appraisal
- A licensed appraiser’s opinion of a home’s market value. Lenders usually require one to confirm the property is worth what you are borrowing against. Some loans qualify for an appraisal waiver, which lenders also call value acceptance.
- Closing (settlement)
- The final step where ownership transfers. Documents are signed, funds change hands, and the deed is recorded. In Connecticut, an attorney runs it.
- Closing Disclosure
- A standardized form that lists the loan terms and every cost. If you are getting a mortgage, you receive it at least three business days before you sign. Cash purchases do not involve a CD.
- Contingency
- A condition in the contract that must be met for the deal to go forward, such as financing, inspection, or appraisal. Whether a party may terminate, and on what notice, depends on the specific contract language and deadlines.
- Conveyance tax
- Connecticut’s tax on selling real estate, paid by the seller. It has a state portion and a municipal portion, and the amount depends on the sale price and town.
- Deed
- The legal document that transfers ownership of the property from seller to buyer. It gets recorded in the town land records after closing. Which kind of deed you get matters, because warranty, limited warranty, and quitclaim deeds make very different promises about the title.
- Earnest money (deposit)
- A good-faith deposit the buyer puts down when the offer is accepted, held in escrow and applied toward the purchase at closing.
- Easement
- A right for someone else to use part of your property for a specific purpose, such as a utility line or a shared driveway.
- Encumbrance
- Any claim or restriction on a property, such as a lien, easement, or unpaid tax, that can affect ownership or transfer.
- Escrow
- A neutral third party holding funds or documents until the deal’s conditions are met. Also the account that holds your taxes and insurance after closing.
- Good funds
- Money that has fully cleared and is available, such as a wire or certified check. Closings pay out in good funds, not a personal check that might bounce.
- Lien
- A legal claim against a property for an unpaid debt, such as a mortgage, tax, or contractor bill. Liens are typically paid off or released at closing. Under the contract, the seller’s attorney clears them.
- Limited warranty deed
- A narrower deed. The seller stands behind the title only for the stretch of time they owned the property, so anything that happened before they bought it is not covered.
- Mortgage commitment
- The lender’s written commitment to fund your loan, issued after underwriting reviews you and the property. It is normally subject to conditions that still have to be satisfied, so it is a milestone rather than a guarantee.
- Owner’s title insurance
- An optional one-time policy that protects your ownership from title problems that surface after closing. Coverage continues while you own the home, and in some cases for heirs and for warranty liability after a sale.
- Prepaids
- Costs collected in advance at closing, like property taxes, homeowners insurance, and prepaid interest, often placed into an escrow account.
- Purchase and sale agreement (P&S)
- The binding contract that sets the price, terms, contingencies, and dates for the deal. Worth reading closely before you sign.
- Quitclaim deed
- A deed that transfers whatever interest the seller has, with no promise that the title is good. If an old lien or an ownership gap turns up later, the deed gives the new owner no recourse against the seller. Common between family members or when moving property into an LLC, and less common in arm’s-length sales. More on quitclaim deeds.
- Recording
- Filing the deed and mortgage in the town land records so ownership and any loan are part of the public record.
- Title
- Legal ownership of the property, and the history of who has owned it. Clean title means no unexpected claims stand in the way of your ownership.
- Title search
- A review of public records that traces ownership and looks for liens, easements, and gaps before you buy. More on title.
- Underwriting
- The lender’s review of your finances and the property to decide whether to approve the loan and on what terms.
- Walkthrough
- A final look at the property, usually shortly before closing, to confirm its condition and that agreed repairs were done. Whether you get one depends on your contract.
- Warranty deed
- The deed used in most Connecticut sales. The seller warrants that the title is good and agrees to defend it against claims, including ones that go back before they owned the property.
- Wire fraud
- A scam where criminals impersonate the closing team and send fake wiring instructions. Always confirm instructions by phone using a number you trust. How to protect yourself.
This is general information, not legal advice. Every situation is different. Reach out to discuss yours.
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