Offers & negotiation

Earnest Money

A good-faith deposit (often 1-3% of the price) that shows a seller you are serious. It is credited toward your purchase at closing, and is at risk only if you back out outside your contingencies. How much for a Bellingham offer →

Escalation Clause

A clause that automatically raises your offer by a set increment over any verified higher bid, up to a cap you choose. A key tool in multiple-offer situations. Play it out with the simulator →

Contingency

A condition that must be met for the sale to proceed – inspection, financing, appraisal, or sale of your current home. Contingencies are your exits; how you write them is the whole game. The inspection contingency →

Appraisal Gap

The difference when a home appraises below the agreed price. The buyer must cover the gap in cash or renegotiate, since the lender only finances up to the appraised value. Size your loan with the mortgage calculator.

Pre-Approval vs. Pre-Qualification

Pre-qualification is an informal estimate; pre-approval is a lender’s verified commitment based on your documents – far stronger with sellers. The difference, explained →

Highest and Best

A seller’s request, in a multiple-offer situation, for every buyer to submit their top offer by a deadline. Bring your real number, not a fishing bid.

Financing & costs

Down Payment

The cash you put toward the price up front, expressed as a percent. It drives your loan size, your rate, and whether you pay mortgage insurance. See what you can actually afford.

DTI (Debt-to-Income Ratio)

Your monthly debt payments divided by gross monthly income. Lenders use it to size your loan – most cap total DTI around 43-50%. It is the number behind your affordability ceiling.

PMI (Private Mortgage Insurance)

Insurance a lender requires when you put down less than 20% on a conventional loan. It protects the lender, not you, and drops off once you reach ~20% equity.

Amortization

The schedule by which your loan is paid down. Early payments are mostly interest; later ones mostly principal. See it on the mortgage calculator, and how extra payments help on the payoff calculator.

Points

Optional fees paid at closing to buy down your interest rate. One point is 1% of the loan amount and typically lowers the rate by about 0.25%. Whether they pay off depends on how long you stay.

Closing Costs

The one-time fees to finalize a purchase – lender, title, escrow, appraisal, and prepaids – usually 2-3% of the price for a buyer. Estimate yours → or read the full breakdown.

Down Payment Assistance (DPA)

Programs that help cover your down payment or closing costs, often as a second loan or grant. Washington and Bellingham both run them. See what you may qualify for →

Seller Financing

When the seller acts as the bank, carrying a note instead of the buyer getting a mortgage – a real path when bank underwriting does not fit. The complete guide → or model a deal.

Cap Rate

For investors: a rental’s net operating income divided by its price, expressed as a percent – a quick yardstick for return. Run one on the rental calculator.

Inspections & disclosures

Inspection Contingency

Your right to have the home professionally inspected and to renegotiate or walk based on what turns up. The most important protection a buyer has. Buyer strategy →

Form 17

Washington’s standard seller disclosure statement, where the seller discloses known issues with the property. You will see it early. What to look for →

Appraisal

A licensed appraiser’s independent estimate of a home’s value, required by lenders to confirm the price is supported before they fund the loan.

Title Insurance

A policy that protects you (and your lender) against defects in the property’s ownership history – liens, errors, or competing claims – discovered after closing.

Washington-specific

REET (Real Estate Excise Tax)

Washington’s tax on real estate sales, paid by the seller on a graduated scale (roughly 1.1-3.0% by price). Explained for sellers → or calculate it.

NWMLS

The Northwest Multiple Listing Service – the broker-owned database where homes are listed and shared across our region. Most accurate local sales data lives here.

Net Proceeds

What a seller actually walks away with after commission, REET, payoff, and costs. Always smaller than the sale price. Estimate your take-home →

Community Property

Washington is a community-property state: most property acquired during a marriage is owned equally by both spouses, which affects how title is held and transferred.

Closing & title

Escrow

A neutral third party that holds funds and documents and only releases them when both sides meet the contract terms – the referee of the transaction.

Closing (Settlement)

The day ownership transfers: documents are signed, funds disburse, and the deed is recorded. In Washington, closing is the recording date, not just the signing.

Recording

Filing the deed with the county so the transfer is part of the public record. A Washington sale is officially closed when it records.

Possession Date

When the buyer actually gets the keys – usually at closing, but sometimes negotiated for a few days after, especially if the seller needs to move.

Contingent vs. Pending

Contingent means an offer is accepted but conditions (inspection, financing) are still open; pending means those are cleared and the sale is moving to close. A contingent home may still be worth a backup offer.

Selling & value

CMA (Comparative Market Analysis)

A broker’s pricing analysis based on recent comparable sales – the real-world basis for a list price. Get one for your home →

Equity

The share of your home you actually own: market value minus what you owe. It grows as you pay down the loan and as values rise.

Days on Market (DOM)

How long a listing has been active. Rising DOM signals a cooling market or an overpriced home. Track the local trend on the market statistics explorer.

FSBO (For Sale By Owner)

Selling without a broker. Possible, but national data shows FSBO homes typically net less, often more than the saved commission. The honest selling math →

List Price vs. Sale Price

The price a home is advertised at versus what it actually sells for. The ratio between them is one of the clearest signals of who has leverage in the market.

Quick answers