Real Estate Glossary

A good-faith deposit the buyer puts down shortly after mutual acceptance, held in escrow and credited toward the buyer's down payment and closing costs at closing. If the buyer walks away without a contingency protecting them, the seller may be entitled to keep it.

An addendum that automatically raises the buyer's offered price above a competing offer, in set increments, up to a stated cap. Common in multiple-offer situations; the seller must typically share the competing offer that triggered the escalation.

A neutral third party that holds money and documents — earnest money, loan funds, the deed — on behalf of buyer and seller, and releases them only when the contract's conditions are met. Closing escrow is the final step where funds are disbursed and the deed is recorded.

A one-time-premium policy protecting against defects in a property's title, such as undisclosed liens, recording errors, or ownership disputes. The seller customarily provides an owner's policy for the buyer, while the buyer's lender requires its own separate lender's policy.