Glossary — cash buying, listing, and selling terms in plain English

How to use this glossary

Each entry has the term, the textbook definition, and an "in practice" note that tells you what the term actually signals in a real transaction. The textbook is the surface; the practice is what you need to know when you're sitting across from a buyer, an agent, or an attorney. Where a term ties into a longer article, I link out so you can go deeper.

A

ARV (After-Repair Value)

The price the house will sell for on the MLS once it's renovated to current market finish. It's the central input in every flipper's purchase formula.

In practice: When a cash buyer says "the ARV on this is $300k," they're stating their estimate of what the renovated house would close at. Their max offer is roughly 70% of that minus the cost to do the renovation (see how much do cash buyers actually pay).

As-is

A sale where the seller will not be making any repairs. The buyer takes the property in its current condition.

In practice: "As-is" doesn't waive the buyer's inspection contingency or your seller disclosure obligation. The buyer can still inspect, ask for credits, or walk during the inspection window. "As-is" mostly affects what you're obligated to fix after closing — which on a normal financed sale is "nothing post-close anyway." On a true cash sale with no inspection contingency, "as-is" actually has teeth.

Assignment / and-or-assigns

A contract clause that allows the buyer to transfer the contract to another party before closing. Wholesalers depend on this to make their business model work.

In practice: If you see "John Smith and/or assigns" on the buyer's signature line, the person signing might not be the person closing. They may be shopping your contract to an end buyer they haven't found yet. Read the article on how flippers really negotiate for what to do about it.

Attorney review

A statutory window after contract signing during which either party's attorney can modify or cancel the contract. Standard in Illinois, New Jersey, parts of New York, Massachusetts, and several other states.

In practice: If your state runs attorney review, get an attorney before you sign. The window is short (5–10 business days typically) and once it closes, the contract is binding.

B

Buyer cushion / buyer margin

The profit-plus-risk buffer the cash buyer needs to make the deal worth doing. It's what's between the buyer's all-in cost (purchase + rehab + carry + selling costs) and the resale price.

In practice: A flipper targeting $40k of net profit on a $300k ARV deal needs a cushion that reflects both their target and their risk on the specific deal. Bigger cushion = lower offer. Riskier deals = bigger cushion.

C

Cash discount

The gap between a cash offer and a retail (MLS) sale price for the same house.

In practice: The gross-price gap is bigger than the actual money-in-pocket gap. The retail sale has commission, repairs, inspection credits, appraisal risk, and carrying cost subtractions that eat the premium. The article on all-in closing costs walks the math.

Closing costs

The fees and taxes paid at closing — commission, transfer tax, title insurance, attorney fees, escrow fees, prorations, and so on.

In practice: 8–10% of gross sale price total on a typical listed sale (commission is the biggest piece). 1–3% on a cash sale (no commission).

CMA (Comparative Market Analysis)

An agent's report estimating what your house would sell for, based on recent comparable sales in the area. Used to set list price.

In practice: A CMA is only as good as the comps the agent picks. Three agents will give three different numbers. The right choice is the agent who can defend each comp, not the one who quoted the highest list price (see listing agent incentives).

Comp (comparable sale)

A recently closed sale of a similar property in the same area, used to estimate value.

In practice: Closed sales matter, not active listings (asks aren't transactions). Last 90 days, within 0.5 mile, similar sqft, bed/bath, condition. The fewer adjustments needed to make the comp match your property, the better the comp.

Contingency

A condition in the contract that must be met for the sale to close. Common: inspection contingency, appraisal contingency, financing contingency, sale of buyer's existing home contingency.

In practice: Each contingency is a free walk option for the buyer. More contingencies = more risk the deal collapses. Cash sales typically have only a short due-diligence/inspection window and no financing or appraisal contingency.

D

Days on market (DOM)

How long the house has been actively listed.

In practice: Median DOM across most US metros has hovered between 30 and 50 days in recent reports (Redfin Data Center). Long DOM signals the house is mispriced or in rough condition; short DOM signals right pricing or hot demand. After 60+ days, sellers start to lose negotiating leverage with buyers who know the house has been sitting.

Deed

The legal document that transfers ownership of real property. Most residential transfers use a "warranty deed" (seller warrants clean title); some use a "quitclaim deed" (seller transfers whatever interest they have, no warranty).

In practice: If a buyer asks you to sign a quitclaim deed instead of a warranty deed in a normal sale, that's a red flag. Quitclaims are appropriate for intra-family transfers and divorce settlements, not arm's-length sales.

Disclosure (seller disclosure statement)

A statutory form (in most US states) where the seller must disclose known material defects in the property — roof leaks, foundation issues, sewer problems, mold, etc.

In practice: Disclosure obligations apply even on as-is sales in most states. Failing to disclose known defects is fraud, actionable post-close. State statutes vary; the standard is "what a reasonable seller in your position would have known and disclosed."

DTI (Debt-to-Income ratio)

The buyer's monthly debt payments divided by their monthly gross income. Lenders use this to determine whether the buyer qualifies for the mortgage.

In practice: Usually a buyer-side concern, but it can affect you when the appraisal comes in low and the buyer's restructured loan pushes them over the DTI cap, killing their financing.

Dual agency

When the same agent represents both the seller and the buyer in the same transaction.

In practice: A built-in conflict of interest. Banned in some states, allowed with disclosure in most. You can disallow it in your listing agreement, and you should — see listing agent incentives.

E

Earnest money deposit (EMD)

The buyer's good-faith deposit at contract signing, held in escrow. Typically $1,000–$5,000 on cash deals; 1–3% of price on financed deals.

In practice: The EMD must be held by a title company or escrow attorney, NOT by the buyer. If held by the buyer, it's no longer protection — the buyer can walk and refuse to release it, forcing you to sue.

Easement

The legal right of someone other than the property owner to use a portion of the property for a specific purpose (utility easement, driveway access easement).

In practice: Most easements are routine utility easements and don't affect sale. Encroachment easements (your fence is on the neighbor's lot) and prescriptive easements (longstanding use) are the ones that complicate closing.

Equity

Your ownership stake in the property — current value minus what you owe on the mortgage.

In practice: Thin equity changes the cash-vs-listing math. Listing-side costs (5–6% commission alone) might exceed your equity, meaning you'd be paying out of pocket to sell on the MLS. Cash often wins on thin-equity sales.

Escrow

A neutral third party (title company, escrow agent, or attorney) that holds funds and documents during the transaction and disburses them according to the contract terms.

In practice: Earnest money goes to escrow, not to the buyer. Closing funds go to escrow, then get disbursed to the seller, lender, lien holders, and tax authorities.

F

FHA loan

A government-insured mortgage program (Federal Housing Administration) for buyers with smaller down payments (3.5%+) and lower credit thresholds. Lots of first-time buyers use FHA.

In practice: FHA appraisals are stricter than conventional. The appraiser flags health and safety issues that the seller must repair before the loan can fund. The FHA appraisal value also "follows" the property for 120 days, so a low FHA appraisal hurts you with the next FHA buyer too. See appraisal gap.

FSBO (For Sale By Owner)

A sale where the seller doesn't use a listing agent and markets the property themselves.

In practice: Saves you the listing-side commission (2.5–3%) but costs you in time, MLS access, marketing, and negotiation expertise. Most FSBOs end up paying the buyer's agent commission anyway. NAR research has consistently shown FSBOs net less than agented sales on average — partly selection bias, but real.

I

iBuyer

An institutional algorithmic cash buyer — Opendoor, Offerpad. They make algorithmic cash offers in specific metros, charge service fees of 5–10%, and hold properties briefly before reselling.

In practice: Headline offer looks generous; after service fee + repair credits + closing costs, the net to you typically runs 11–15% below ARV per academic research (Buchak et al, NBER WP 28252). See cash buyer vs wholesaler vs flipper vs iBuyer.

Inspection contingency

A clause in the contract giving the buyer a window (typically 5–14 days) to inspect the property and terminate or renegotiate based on findings.

In practice: The biggest free-walk window the buyer has on a listed sale. Almost every listed deal sees an inspection-credit ask of $5,000–$20,000 during this window. See inspection renegotiation.

L

Lien

A legal claim against the property that must be paid before clear title can transfer. Mortgages, tax liens, judgment liens, mechanic's liens, HOA liens.

In practice: Most liens get paid at closing out of your proceeds — they reduce your net but don't kill the deal. The exception is when liens exceed your equity. Full catalog in title issues and clouds.

Listing agent

The licensed real-estate agent representing the seller in a listed sale.

In practice: Their fiduciary duty is to you; their economic incentives sometimes point sideways. See listing agent incentives for the gap.

Lis pendens

Latin for "suit pending." A recorded notice that a lawsuit is pending which affects title to the property.

In practice: A cloud on title that prevents sale until released. Sometimes filed by aggressive buyers as leverage; legitimately filed when there's a real ownership dispute.

M

MAO (Maximum Allowable Offer)

An investor's calculated maximum offer on a property, typically computed as ARV × 70% − rehab cost.

In practice: When a flipper says "my MAO on this is $170k," they're telling you their formula ceiling. They'll often anchor below it to leave room. See how much do cash buyers actually pay.

Mechanic's lien

A lien filed by a contractor, subcontractor, or materials supplier who did work on the property and wasn't paid.

In practice: Common surprise on title searches. Get paid at closing out of your funds unless you bond around them. Recent state-by-state statutes set the filing windows (60–180 days post-completion typically).

MERS

Mortgage Electronic Registration Systems — the database that tracks ownership of most modern mortgages as they get sold between lenders.

In practice: Title companies use MERS to track down current note-holders for payoff. Mostly transparent to sellers; matters when older or non-MERS mortgages need their note-holder traced through assignments.

MLS (Multiple Listing Service)

The cooperative database where listing agents post properties for sale, syndicating to Zillow, Redfin, Realtor.com, and other consumer sites.

In practice: The MLS is where most retail buyers find houses. Off-market sales bypass it. See off-market vs MLS for the path comparison.

O

Off-market

A sale that happens without listing on the MLS. Includes cash investor sales, pocket listings, and private network deals.

In practice: Off-market doesn't always mean "below retail." A buy-and-hold investor in your network might pay close to retail without you listing. But most off-market sales are speed-or-condition discounted.

P

Pocket listing

A property an agent markets only inside their brokerage or network, not on the MLS.

In practice: Sometimes good (privacy reasons, strong off-market buyer network). Often a way for an agent to capture both sides of the commission. NAR's Clear Cooperation Policy limits pocket-listing duration but loopholes exist.

Probate sale

A sale of property owned by a deceased person, going through the court-supervised probate process.

In practice: Adds 60–270 days depending on whether there was a will, whether heirs cooperate, and the state's probate procedure. Cash buyers experienced with probate handle these routinely; many retail buyers and lenders won't touch them.

Proof of funds (POF)

Documentation showing the buyer has the cash to close — bank statement, bank letter, or hard money lender pre-approval.

In practice: Required from any cash buyer before signing. Should be in the same name as on the contract, dated within 14 days, and equal to or greater than the purchase price. See vetting a cash buyer.

Q

Quitclaim deed

A deed that transfers whatever interest the grantor has in the property, without any warranty of clear title.

In practice: Used in intra-family transfers, divorce settlements, and to clear specific title issues. Should NOT be used in normal arm's-length sales — buyers should always demand a warranty deed there.

R

Repair reserve

The dollar amount a flipper sets aside to cover renovation costs in their underwriting. Used as a subtraction from ARV in computing maximum offer.

In practice: The flipper's repair reserve should be calibrated against contractor pricing in your market — RSMeans data, HUD FHA 203(k) scope standards, and actual local quotes. Inflated repair reserves are how flippers justify low offers; honest reserves match what the work actually costs.

Retrade

When a buyer comes back after contract signing and tries to negotiate the price down based on something they "discovered" during inspection or walkthrough.

In practice: Standard flipper move on cash deals; standard buyer-agent move on listed deals. Avoidable on cash with a no-retrade contract clause; expected and negotiated on listed sales. See how flippers really negotiate and inspection renegotiation.

RON (Remote Online Notarization)

A notarization performed via video call, with the notary verifying the signer's identity and witnessing the signing remotely.

In practice: Authorized in nearly every US state since 2020–2022. Lets out-of-state sellers close without flying in. Standard for inherited probate sales where heirs are scattered.

S

Seller disclosure statement

A statutory form requiring the seller to disclose known material defects in the property. Required in most US states.

In practice: Failing to disclose known defects is fraud, actionable post-close. The standard is what a reasonable seller in your position would have known and disclosed.

T

Title cloud

Any defect, encumbrance, or potential claim on title that prevents the title insurer from issuing a clean policy.

In practice: Most clouds get cleared at closing out of your proceeds (mortgage payoff, lien payoff, easement releases). The catalog of common clouds is in title issues and clouds.

Title insurance

Insurance protecting the buyer (and the buyer's lender) against title defects discovered after closing. The owner's policy protects the buyer; the lender's policy protects the lender.

In practice: 0.3–0.6% of purchase price. State custom dictates whether buyer or seller pays the owner's policy. The lender's policy is almost always paid by the buyer.

Transfer tax / deed stamps

State and county taxes for transferring real property. Highly variable by state — $0 in some states, 2%+ in others.

In practice: Show up on the settlement statement. Negotiable in some places, fixed by custom or law in others. See all-in closing costs for state-by-state ranges.

W

Walkthrough

The cash buyer's in-person inspection of the property after contract signing, during the due-diligence window. Not a third-party home inspection — usually the buyer or their construction person.

In practice: Confirms the buyer's underwriting. On honest deals, no surprises and no price changes. On bad-faith deals, the walkthrough is the moment a flipper tries to retrade.

Wholesaler

A real-estate operator who signs a contract to buy a property, then sells (assigns) the contract to an end buyer for an assignment fee. The wholesaler doesn't actually buy the property — they sell the contract.

In practice: The "and/or assigns" language on a contract signature line is the tell. Wholesaling is legal in most states with limits; some states (Illinois, Oklahoma, others) have tightened up regulation in recent years. See cash buyer vs wholesaler vs flipper vs iBuyer for the deeper picture.

Numbers and acronyms

70% rule

The shorthand formula investors use to set their maximum offer: 70% of ARV minus rehab cost.

In practice: Used as 65–80% in real life depending on market and deal type. The number that works for a typical 6-month flip in a typical market is 70%; market and deal flex the factor.

1% rule

The shorthand formula buy-and-hold investors use: monthly rent should be at least 1% of purchase price.

In practice: Holds up in most Midwestern and Southern markets; rarely achievable in expensive coastal markets where investors accept lower rent-to-price ratios for appreciation upside.

ALTA

American Land Title Association. Sets the standard forms (settlement statement, title commitment, title policy) used in most US closings.

AMC

Appraisal Management Company. Lenders order appraisals through AMCs to comply with Dodd-Frank appraisal-independence rules — the lender doesn't get to pick the specific appraiser.

ASHI / InterNACHI

The two main professional certifications for home inspectors. Either is fine; both certify the inspector against industry standards of practice.

HOA

Homeowners Association. The governing body of a planned community. Collects dues, enforces restrictions, can lien properties for unpaid amounts.

HUD

U.S. Department of Housing and Urban Development. Sets FHA mortgage rules, rehab-scope standards (FHA 203(k) program), and federal housing policy.

NAR

National Association of Realtors. The trade association for licensed real-estate agents. Source of most industry data on commissions, days on market, pending sales, and the August 2024 commission settlement.

USPAP

Uniform Standards of Professional Appraisal Practice. The ethical and methodological standards every licensed appraiser is bound by.

What's not in this glossary

State-specific terms (Texas's "earnest money contract," California's "Form RPA," Illinois's "attorney modification rider") aren't in this list because they don't generalize. If you're working with an attorney in your state, they'll handle the local vocabulary. The terms above are what you'll encounter no matter where you sell.