Common Real Estate Terms Explained (From Contingencies to Escrow)

Buying or selling a home is exciting, but let’s be real, the language of real estate can sometimes feel like a foreign language. Between contracts, negotiations, and paperwork, it’s easy to get lost in the jargon. My job is to make sure you never feel in the dark.

If you’re considering a move in the Colorado Foothills, understanding the terms you’ll encounter along the way can make the process less overwhelming and more empowering. Below, I’ve broken down some of the most common terms buyers and sellers encounter, explained them, and tied them to the realities of our local market.

Contingency

A contingency is a condition that must be met for a real estate contract to move forward. Think of it as a safety net. For example, a buyer might write an offer “contingent on inspection” or “contingent on financing.” That means if the inspection uncovers major issues or the loan falls through, the buyer has a way out without losing their earnest money.

In the Foothills, inspection contingencies often flag things like septic systems, well water quality, or roof condition. These are big-ticket items that can be more common in mountain properties than in suburban homes, so contingencies matter here more than most places.

Escrow

Escrow is a fancy word for a neutral third party holding onto funds until both sides of the transaction meet all conditions. It’s like having a referee in the middle of the deal, making sure no one walks away with money or a house until the contract is fulfilled.

In Colorado, escrow often comes into play when you put down earnest money, the deposit buyers make to show they’re serious. That money sits in escrow until closing, when it’s applied toward the purchase. Escrow protects both parties, and in competitive markets like Evergreen or Conifer, it reassures sellers that buyers are committed.

Appraisal

An appraisal is when a licensed appraiser determines the fair market value of the property. Lenders require this step to make sure they’re not loaning more money than the house is worth.

In the Foothills, appraisals can be tricky. Unique properties like log cabins, homes on large acreage, or houses with mountain views don’t always have perfect “comps” (comparable sales). This is why it’s so important to work with an agent who understands the nuances of the local market and can help you price strategically.

Closing Costs

Closing costs are the fees and expenses (beyond the purchase price) that come due at the closing table. These include things like title insurance, loan origination fees, and recording fees.

In Colorado, buyers typically cover most closing costs, though sometimes sellers agree to contribute as part of negotiations. It’s smart to budget a few thousand dollars for this, depending on the price of the home.

Title

When you buy a home, you’re not just buying walls and a roof; you’re buying the title, which is the legal right to the property. A title company will research the property’s history to ensure there aren’t any liens, disputes, or surprises that could affect your ownership.

For Foothills buyers, this step is especially important because some properties have long histories, easements, or unique access agreements. You want to be sure your dream home is legally yours without strings attached.

Earnest Money

Earnest money is the deposit a buyer puts down when making an offer, typically 1–3% of the purchase price. It shows the seller you’re serious. If the deal goes through, that money is applied to your purchase. If the deal falls apart for a valid reason under the contract (like inspection or appraisal issues), you usually get it back.

In competitive markets, offering a strong earnest money deposit can make your offer stand out. But don’t worry, your agent (that’s me!) will help you structure it wisely so your interests are protected.

Inspection

A home inspection is when a professional checks the property for issues. In the Foothills, this goes beyond looking at the roof and appliances. Inspectors often pay close attention to wells and septic systems, radon levels, and driveway access in winter.

I always encourage clients to attend inspections in person if possible. Not only do you learn about the house, but you also get a clearer picture of what to expect living at altitude.

Why This Matters

The truth is, real estate doesn’t have to feel intimidating. Once you strip away the jargon, the process makes a lot more sense, and you’re better equipped to make confident decisions. Whether it’s understanding contingencies that protect you, knowing why appraisals can be complex in the mountains, or budgeting for closing costs, these terms are all part of the bigger picture.

Buying or selling a home in the Foothills isn’t just about the paperwork; it’s about making sure you feel informed and supported through each step. If any of these terms still feel unclear, or if you’re ready to explore their implications in your specific situation, I’d be happy to sit down and walk you through them.

Real estate doesn’t have to be overwhelming when you have a partner who values transparency and communication. Let’s make your journey as rewarding as your destination.