What Does It All Mean? Understanding Legal Terms in Real Estate

If you’ve ever read through a real estate contract and felt like you needed a translator, you’re not alone. Real estate transactions are filled with legal terms that can feel foreign, even to seasoned professionals, and understanding them is the first step toward protecting your interests.

Let’s break down a few of the most common ones:

• Contingency – A built-in condition in the contract. If the condition isn’t met, the protected party can often walk away without penalty.

• Earnest Money – A deposit made by the buyer to show good faith. How and when it can be refunded depends on the terms of the contract.

• Title – The legal right to own the property. A clear title means no legal disputes or claims exist.

• Escrow – A neutral third-party holding money/documents until all parts of the agreement are met.

• Breach of Contract – When one party fails to do what the contract requires.

Understanding these terms isn’t just about vocabulary — it’s about decision-making power. Misunderstanding a clause could mean losing your deposit, missing a critical deadline, or ending up in a dispute.

If you’re a consumer, speak to a trained REALTOR® in your area who understands complex situations. Soon, you’ll be able to use our interactive map to connect with a REALTOR® personally trained by me. If you’re a REALTOR®, reach out for training opportunities.