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Why this glossary exists
Cash buyers, lenders and title companies use a lot of jargon. Some of it is harmless shorthand. Some of it hides terms you should understand before you sign. Here are the words Twin Cities sellers hear most, in plain English, each linked to a longer guide. If a word here comes up in a conversation with any buyer, including us, ask them to explain it in writing.
Pricing terms
ARV (After Repair Value). What the house would sell for fully fixed up, based on recent sales of similar updated homes nearby. Every cash offer starts here. See how ARV drives the offer.
Repair estimate. The cost of every repair a buyer plans to make, line by line. Ours comes from Jordan.
Holding costs. What it costs to own a house while it’s being fixed and resold: taxes, insurance, utilities, interest.
Margin. The buyer’s profit. We say ours out loud.
CMA (Comparative Market Analysis). An agent’s estimate of market value from recent nearby sales. Used to set a list price.
Net sheet / net proceeds. What you actually walk away with after every cost and payoff.
Contract terms
Purchase agreement. The contract to buy your house. Nothing is binding until both sides sign it.
Earnest money. A deposit the buyer puts down to show commitment, held by a title company. A token amount like $10 is a red flag.
Proof of funds. A bank statement or letter showing the buyer has the cash to close.
Assignment / “and/or assigns.” Language that lets the buyer sell your contract to someone else. Wholesalers use it.
Wholesaler. Someone who contracts to buy your house and sells the contract for a fee instead of closing.
As-is. You won’t make repairs. It doesn’t erase your disclosure duty.
Inspection contingency. Lets a buyer back out or renegotiate after an inspection.
Financing contingency. Lets a buyer back out if their loan falls through. Cash offers don’t have one.
Settlement statement. The closing document showing every dollar in and out.
Creative financing terms
Subject-to. The buyer takes title while your existing mortgage stays in place, in your name. See subject-to explained.
Due-on-sale clause. The lender’s right to demand full payment if the house is transferred.
Seller financing. You carry the loan and get paid monthly.
Contract for deed. You keep legal title while the buyer pays in installments. Minnesota requires it to be recorded, and cancellation follows Minn. Stat. 559.21.
Balloon payment. A large lump sum due at the end of a short-term note or contract.
Foreclosure terms
Notice of default. The lender’s notice that you’re behind.
Foreclosure by advertisement. Minnesota’s common out-of-court foreclosure process.
Sheriff’s sale. The public auction of the property by the county sheriff.
Sheriff’s certificate of sale. The document the winning bidder gets at the sheriff’s sale.
Redemption period. Time after the sheriff’s sale to pay the debt and keep the house, or sell. Usually six months in Minnesota under Minn. Stat. 580.23. See the redemption period guide.
Reinstatement. Paying all arrears to bring the loan current before the sale.
Short sale. A sale for less than the loan balance, with the lender’s approval.
Deficiency. What’s still owed after a short sale or foreclosure sale, if the lender can pursue it.
Title and estate terms
Title search / title commitment. The review of public records for liens and ownership, and the title company’s promise to insure.
Lien. A legal claim against the property for a debt: mortgage, taxes, judgments, contractors.
Curative title work. Fixing title problems so a sale can close.
Torrens / abstract. Minnesota’s two title systems.
Personal representative. The person appointed to manage an estate, often called an executor.
Transfer on death deed (TODD). A recorded deed that passes the house to named beneficiaries without probate.
Estate recovery. Minnesota DHS’s claim against an estate for certain Medical Assistance benefits.
Don’t see a word you heard? Ask Ryan. If a buyer can’t explain a term in plain English, that tells you something.