Indiana Real Estate Glossary

Real estate has a jargon problem. Most of these words describe simple ideas dressed up in language that makes buyers feel like they're missing something. They usually aren't. Below is every term you're likely to meet in a Central Indiana transaction, defined plainly, with Indiana-specific notes where the state does things its own way.

Terms shown as links have a full explainer page. If something here still isn't clear, just call us — no obligation.

Adjustable-rate mortgage (ARM)

A mortgage whose interest rate changes periodically after an initial fixed period, causing your payment to rise or fall.

Amortization

The schedule by which loan payments are applied to interest and principal over time. Early payments are mostly interest; later ones mostly principal.

Appraisal

An independent professional estimate of a property's market value, ordered by your lender to confirm the home supports the loan amount.

Appraisal gap

The difference between the contract price and a lower appraised value, which the buyer generally must cover in cash.

As-is

A sale in which the seller will not make repairs. You can still inspect, and in Indiana the seller must still complete a disclosure.

Backup offer

A formal second-position offer that moves to first if the current contract falls through. Worth submitting on a contingent listing.

Buyer's agency agreement

A written agreement setting out what your agent will do and how they're paid. Buyers now sign one before touring homes.

Closing

The final step, where documents are signed, funds are disbursed, and ownership transfers to the buyer.

Closing costs

Fees and prepaid items due at closing — loan origination, title, recording, taxes and insurance. Commonly 2–5% of price for buyers.

Closing disclosure

A standardized form itemizing your final loan terms and closing costs, provided at least three business days before closing.

Comparables (comps)

Recently sold homes similar in size, age, condition and location, used to estimate value.

Comparative market analysis (CMA)

An agent's estimate of a home's value based on recent comparable sales, current competition, and market trends.

Contingency

A condition that must be met for a sale to proceed. If unmet, the buyer can usually cancel and recover their earnest money.

Contingent

A listing status meaning an offer is accepted but conditions such as inspection or financing are still outstanding.

Conventional loan

A mortgage not insured by a government program. Often as little as 3–5% down, with PMI required under 20%.

Days on market (DOM)

How long a home has been actively listed before going under contract — a signal of demand and of negotiating room.

Deed

The legal document transferring ownership of real property from one party to another.

Down payment

The portion of the purchase price you pay upfront. Ranges from 0% on VA and USDA loans to 20%+ on conventional.

Earnest money

A good-faith deposit submitted with an offer, held in escrow and credited toward your costs at closing.

Easement

A right allowing someone else to use part of your property for a specific purpose, such as utility access.

Equity

The difference between your home's market value and what you still owe on it.

Escrow

A neutral third party holding money or documents until conditions are met. Also the lender account that pays your taxes and insurance.

FHA loan

A government-insured mortgage with lower credit thresholds and a low down payment, popular with first-time buyers.

Fixed-rate mortgage

A mortgage whose interest rate stays the same for the life of the loan.

HOA (homeowners association)

An organization governing a community, funded by dues, that maintains shared areas and enforces rules. Always review the documents and dues history.

Home inspection

A professional evaluation of a home's condition and systems, typically performed during the inspection contingency period.

Homestead exemption

An Indiana property tax deduction available on your primary residence. File it after closing — it lowers your tax bill.

Lien

A legal claim against a property for an unpaid debt. Liens must generally be cleared before ownership transfers.

Loan estimate

A standardized form showing your estimated loan terms and closing costs, provided shortly after you apply.

MIBOR

The Metropolitan Indianapolis Board of Realtors, which operates the MLS covering Central Indiana.

MLS

The Multiple Listing Service — the database where brokers share active listings and sale data.

Pending

A listing status meaning contingencies are cleared and the sale is moving toward closing.

PMI (private mortgage insurance)

Insurance protecting the lender when a conventional borrower puts less than 20% down. Removable once you build enough equity.

Pre-approval

A lender's conditional commitment based on verified income, assets and credit. Stronger than a pre-qualification.

Pre-qualification

An informal estimate of what you might borrow, based on unverified information.

Principal

The amount you borrowed, separate from interest.

Property tax caps

Indiana constitutional limits on property tax as a share of assessed value, which vary by property type.

Seller's disclosure

An Indiana-required form on which sellers report known defects. It reflects knowledge, not condition — never a substitute for inspection.

Short sale

A sale for less than the mortgage balance, requiring lender approval.

Survey

A drawing showing a property's legal boundaries, structures and easements.

Title

Legal ownership of a property, and the history of that ownership.

Title insurance

A one-time policy protecting against ownership problems that predate your purchase, such as liens or recording errors.

Underwriting

The lender's final review of your finances and the property before issuing loan approval.

USDA loan

A zero-down loan for eligible rural areas — which covers more of Central Indiana than most buyers expect.

VA loan

A loan for eligible veterans and service members, typically with no down payment and no mortgage insurance.

Walk-through

A final inspection shortly before closing to confirm the home's condition and that agreed repairs were made.