Real Estate Terms You Need to Know in Granbury and Texas

A Texas homebuyer and seller’s guide to understanding the real estate process.

If you are buying or selling a home in Granbury, Texas, you will quickly notice that real estate comes with its own language. From contracts to closing, understanding key real estate terms helps you make informed decisions and feel confident throughout the home buying or home selling process in Hood County.

You do not need to memorize every word, but knowing these essential terms used by real estate agents, lenders, and title companies in Texas will make your transaction smoother.

The Must-Know Basics in Real Estate

Listing – A property that is officially for sale on the market.

MLS (Multiple Listing Service) – The database real estate agents in Granbury and across Texas use to share homes for sale.

Buyer’s Agent – A licensed real estate agent who represents the BUYER’S interests in a transaction.

Listing Agent – A licensed real estate agent who represents the SELLER’S interests in a transaction.

Appraisal – A professional opinion of a home’s value ordered by the lender to confirm the purchase price is supported.

Home Inspection – A professional evaluation of the property’s condition, including structure, roof, HVAC, plumbing, and electrical systems.

Down Payment or Earnest Money – The portion of the purchase price the buyer pays upfront, separate from the loan.

Closing – The final step of a real estate transaction where documents are signed, funds are transferred, and ownership officially changes.

Mortgage – The home loan used to purchase real estate.

Equity – The difference between a home’s market value and the remaining loan balance.

Making an Offer on a Home

Offer – A written proposal to purchase a property with specific terms, including, but not limited to price, closing costs, repairs and/or upgrades.

Earnest Money – A good-faith deposit that shows the buyer is serious. In Texas real estate transactions, it is held in escrow (see in Financing and Mortgage Terms) and applied at closing.

Contingency – A condition that must be satisfied for the sale to proceed, such as financing approval or a satisfactory inspection.

Counteroffer – When a seller responds with different terms instead of accepting the original offer.

Pending or Under Contract – A home with an accepted contract that has not yet closed.

Backup Offer – A secondary offer accepted in case the first contract terminates.

Addendum – A document added to the contract that includes additional terms.

Amendment – A change made to an already executed contract.

Financing and Mortgage Terms

Pre-Approval – A lender has reviewed income, credit, and assets and approved a buyer for a specific loan amount.

DTI (Debt-to-Income Ratio) – The percentage of monthly income used to pay debts. Lenders use this to determine loan eligibility.

PMI (Private Mortgage Insurance) – Insurance required when a buyer puts less than 20 percent down on a conventional loan. This is to protect the lender, not the homebuyer.

Escrow – A neutral account where earnest money and documents are held until closing.

Closing Costs – Fees paid at closing, including lender charges, title fees, and prepaid taxes and insurance.

Points – Fees paid upfront to lower the mortgage interest rate.

Underwriting – The lender’s final review of a borrower’s financial information.

Clear to Close – Final lender approval allowing the transaction to move to closing.

LTV (Loan-to-Value Ratio) – The percentage of the property’s value that is financed. Lower LTV often means better loan terms.

Property and Ownership Terms

Title – Legal ownership of a property.

Deed – The legal document that transfers property ownership.

Title Insurance – Protection against ownership disputes or undiscovered claims on the property.

Survey – A drawing showing property boundaries, improvements, and easements.

Easement – A legal right for another party to use a portion of the property for a specific purpose.

Lien – A legal claim placed on a property for unpaid debt.

HOA (Homeowners Association) – An organization that manages neighborhood rules and collects dues.

As-Is – The seller is offering the property in its current condition.

Encumbrance – Any claim or restriction on a property, such as a lien or easement.

Deed of Trust – In Texas, this document secures the home loan instead of a traditional mortgage.

Mineral Rights – Ownership of oil, gas, or minerals beneath the property, which can be separate from surface ownership in Texas.

Behind-the-Scenes Real Estate Terms

CMA (Comparative Market Analysis) – A report prepared by a real estate agent in Granbury to estimate a home’s market value using recent sales.

Comps (Comparables) – Similar recently sold homes used to determine fair market value.

Proration – Dividing expenses like property taxes between buyer and seller at closing.

Possession – When the buyer receives the keys and can move into the home.

Recording – Filing the deed with Hood County to make the ownership transfer official.

Final Walk-Through – The buyer’s last opportunity to view the property before closing.

Texas-Specific Real Estate Terms

Option Period – A negotiated timeframe when a buyer can terminate the contract for any reason and typically recover earnest money.

Option Fee – A non-refundable fee paid to the seller for the option period.

Seller’s Disclosure Notice – A required Texas form where sellers disclose known property conditions.

TREC (Texas Real Estate Commission) – The state agency that regulates Texas real estate agents and contracts.

TREC Promulgated Forms – Standard contracts required for most Texas real estate transactions.

IABS (Information About Brokerage Services) – A required disclosure explaining brokerage relationships.

MUD (Municipal Utility District) – A special district providing utilities that may add additional property taxes.

PID (Public Improvement District) – Special assessments for neighborhood improvements.

Homestead Exemption – A property tax reduction for a primary residence in Texas.

T-47 Affidavit – A document used when an existing survey is relied upon.

Ag Exemption – A tax valuation for agricultural land that may trigger rollback taxes if the use changes.

Why Understanding Real Estate Terms Matters

When buying or selling real estate in Granbury, TX, understanding these terms helps you:

Ask informed questions
Recognize potential issues early
Negotiate with confidence
Avoid unexpected costs

A knowledgeable local real estate agent should explain each step clearly. Real estate is one of the largest financial decisions most people make, and you deserve to understand the process from contract to closing.

Still have questions? GranburyOne Realty Team is happy to help you better understand the process. Give us a call today at 682.498.8878 to get your questions answered.