Buying and value
- After-repair value (ARV)
- An estimate of what a house could sell for once the planned work is done. Agents and appraisers base it on comparable sales.
- Comparable sales (comps)
- Recently sold homes that are similar in size, age, location and condition, used to estimate value.
- As-is sale
- A sale where the seller does not agree to make repairs. Disclosure rules may still apply.
- Contingency (contract)
- A condition in a purchase contract, such as a satisfactory inspection or approved financing, that must be met for the sale to go ahead.
- Earnest money
- A deposit made with an offer to show the buyer is serious. What happens to it if the deal falls through depends on the contract.
- Seller disclosure
- A form, required in many states, where the seller lists known problems with the property.
Title and closing
- Title search
- A review of public records to confirm who owns a property and whether there are liens or claims against it.
- Title insurance
- A policy that protects against certain losses from title problems that were not found in the search.
- Lien
- A legal claim against a property for an unpaid debt, such as a loan, taxes or unpaid work.
- Closing costs
- Fees paid at the purchase or sale for services like title, recording, escrow and loan processing.
Renovation
- Scope of work
- A written list of every renovation task, where it happens and to what standard. See renovation scope.
- Change order
- A written change to the agreed scope, with its own cost and time.
- Rough-in
- The stage where new plumbing, wiring and ducts are installed inside open walls, before insulation and drywall.
- Punch list
- A final list of small items to fix or finish before the work is complete.
- Load-bearing wall
- A wall that carries weight from above. Removing or changing one needs engineering and a permit.
- Lien waiver
- A document from a contractor or supplier giving up the right to file a lien for work that has been paid for.
- Draw schedule
- A plan for releasing loan or contract payments as stages of work are finished.
Permits and code
- Building permit
- Official permission from the local building department to do certain work. See permits.
- Building code
- The construction rules a city, county or state has adopted.
- Final inspection
- The last inspection on a permit, done when the work is complete.
- Certificate of occupancy
- A document some jurisdictions issue to confirm a building may be lived in, often after major work.
Money terms
- Holding costs
- Ongoing costs of owning the house during the project, such as interest, taxes, insurance and utilities.
- Hard costs
- Labor and materials for the physical work.
- Soft costs
- Costs that are not physical work, such as permits, drawings and inspections.
- Contingency (budget)
- Money set aside for problems found once work starts. See budgeting.
Definitions here are general. The exact meaning of a term in your contract or loan documents depends on how those documents are written. Ask your attorney or lender if anything is unclear.