Texas Real Estate Terms Explained Simply: A San Antonio Homebuyer’s Guide

Buying or selling a home can feel like learning a whole new language.

Option period. Earnest money. Escrow. Appraisal. Contingency. Title commitment.

Real estate professionals use these terms every day, but most people don't. And when you're making one of the biggest financial decisions of your life, you shouldn't have to pretend you know what everything means.

Whether you're buying or selling a home in San Antonio, Boerne, Bulverde, Cibolo, Schertz, New Braunfels, Converse, Castroville, Universal City, or anywhere in South Texas, here's a simple breakdown of common Texas real estate terms.

Earnest Money

Earnest money is money a buyer deposits after entering into a contract to show they're serious about purchasing the property.

Think of it as putting some skin in the game.

The amount can vary depending on the transaction. It's typically held by an escrow agent, such as a title company, while the property is under contract.

What happens to the earnest money depends on the contract and whether the buyer closes or properly terminates under a contractual right.

Option Period

The option period is a negotiated amount of time when a buyer may have the unrestricted right to terminate the contract.

This is commonly when buyers conduct inspections and investigate the property further.

For example, you might use the option period to evaluate:

• Foundation
• Roof
• HVAC
• Plumbing
• Electrical system
• Appliances
• Overall property condition

The length of the option period and option fee are negotiated as part of the contract.

Under Contract

When a home is under contract, the seller has accepted an offer and both parties have entered into a contract.

That doesn't necessarily mean the transaction is guaranteed to close.

Inspections, financing, appraisal, title issues, and other contract terms may still need to be completed.

Closing Costs

Closing costs are expenses associated with completing the real estate transaction.

Depending on the transaction, these could include:

• Lender fees
• Title-related fees
• Appraisal costs
• Prepaid taxes
• Homeowners insurance
• Recording fees
• Other transaction expenses

Buyers should ask their lender for an estimate of these costs early in the process.

Pre-Approval

A mortgage pre-approval is when a lender reviews financial information to determine how much a buyer may qualify to borrow.

This may include reviewing:

• Income
• Credit
• Employment
• Assets
• Debts

Getting pre-approved before touring homes helps you understand your price range and makes you better prepared when it's time to submit an offer.

Appraisal

An appraisal is an independent opinion of a property's value, typically ordered as part of the lender's process.

The appraiser evaluates the property and comparable sales to estimate its market value.

This matters because lenders generally don't want to lend more than the property supports under their loan guidelines.

Home Inspection

A home inspection is a professional evaluation of the property's visible and accessible systems and components.

The inspector may evaluate things like the roof, foundation, plumbing, electrical system, HVAC, and other parts of the property.

An inspection isn't a pass-or-fail test.

It's information that helps the buyer better understand what they're purchasing.

Comparable Sales or "Comps"

Comps are recently sold properties used to help estimate the value of another property.

Good comparable properties usually have similarities in:

• Location
• Size
• Age
• Condition
• Bedroom count
• Bathroom count
• Lot size
• Property type

Realtors commonly use comps when helping sellers determine a listing price or buyers evaluate an asking price.

Contingency

A contingency is a contract condition that must be satisfied for certain obligations to move forward or that may give a party specific rights.

For example, some transactions may involve financing, appraisal, or the sale of another property.

The exact rights depend on the language of the contract and any applicable addenda.

Escrow

Escrow is when money or documents are held by a neutral third party during the transaction.

In Texas real estate transactions, a title company often serves as the escrow agent.

They may hold funds such as earnest money until the transaction closes or the funds are otherwise released according to the contract.

Title

Title refers to legal ownership rights in a property.

Before closing, a title company researches public records to identify potential issues affecting ownership, such as certain liens, claims, or other matters.

The goal is to help determine whether the seller can convey the ownership interest required by the contract.

Title Insurance

Title insurance helps protect against certain covered title problems.

Unlike homeowners insurance, which generally deals with future events involving the property, title insurance focuses on covered ownership or title issues.

There are different types of title insurance policies, so buyers should understand which coverage applies to their transaction.

Survey

A survey shows information about the property's boundaries and may identify improvements, easements, encroachments, and other property features.

If there's already an existing survey, it may sometimes be usable depending on the transaction and requirements.

Otherwise, a new survey may be needed.

HOA

HOA stands for Homeowners Association.

An HOA may establish community rules and collect assessments to maintain certain common areas or amenities.

Before buying a property in an HOA, review:

• HOA dues
• Restrictions
• Rules
• Amenities
• Transfer-related fees
• Leasing restrictions, if applicable

Don't wait until after closing to discover that your plans conflict with HOA restrictions.

Property Taxes

Texas homeowners pay local property taxes based on taxable property values and applicable local tax rates.

In the San Antonio area, rates can vary significantly depending on the property's location and taxing jurisdictions.

When comparing homes in Bexar County and surrounding communities, don't look at the sales price alone.

Two similarly priced properties can have very different estimated monthly payments because of taxes.

Homestead Exemption

A residence homestead exemption may reduce the taxable value of a qualifying homeowner's principal residence for certain taxing entities.

Texas homeowners may qualify for different exemptions depending on their circumstances.

After purchasing a primary residence, check your eligibility and the current filing requirements with the appropriate appraisal district.

Seller Concessions

Seller concessions are amounts the seller agrees to contribute toward certain buyer expenses, subject to the contract and financing rules.

For example, a buyer may negotiate for assistance with eligible closing costs.

Sometimes getting closing-cost assistance can be more valuable to a buyer than negotiating the same amount off the sales price.

Days on Market

Days on Market, often shortened to DOM, generally measures how long a property has been marketed for sale under the applicable listing system's rules.

A property with a high number of days on market isn't automatically a Buying or selling a home can feel like learning a whole new language.

Option period. Earnest money. Escrow. Appraisal. Contingency. Title commitment.

Real estate professionals use these terms every day, but most people don't. And when you're making one of the biggest financial decisions of your life, you shouldn't have to pretend you know what everything means.

Whether you're buying or selling a home in San Antonio, Boerne, Bulverde, Cibolo, Schertz, New Braunfels, Converse, Castroville, Universal City, or anywhere in South Texas, here's a simple breakdown of common Texas real estate terms.

Earnest Money

Earnest money is money a buyer deposits after entering into a contract to show they're serious about purchasing the property.

Think of it as putting some skin in the game.

The amount can vary depending on the transaction. It's typically held by an escrow agent, such as a title company, while the property is under contract.

What happens to the earnest money depends on the contract and whether the buyer closes or properly terminates under a contractual right.

Option Period

The option period is a negotiated amount of time when a buyer may have the unrestricted right to terminate the contract.

This is commonly when buyers conduct inspections and investigate the property further.

For example, you might use the option period to evaluate:

• Foundation
• Roof
• HVAC
• Plumbing
• Electrical system
• Appliances
• Overall property condition

The length of the option period and option fee are negotiated as part of the contract.

Under Contract

When a home is under contract, the seller has accepted an offer and both parties have entered into a contract.

That doesn't necessarily mean the transaction is guaranteed to close.

Inspections, financing, appraisal, title issues, and other contract terms may still need to be completed.

Closing Costs

Closing costs are expenses associated with completing the real estate transaction.

Depending on the transaction, these could include:

• Lender fees
• Title-related fees
• Appraisal costs
• Prepaid taxes
• Homeowners insurance
• Recording fees
• Other transaction expenses

Buyers should ask their lender for an estimate of these costs early in the process.

Pre-Approval

A mortgage pre-approval is when a lender reviews financial information to determine how much a buyer may qualify to borrow.

This may include reviewing:

• Income
• Credit
• Employment
• Assets
• Debts

Getting pre-approved before touring homes helps you understand your price range and makes you better prepared when it's time to submit an offer.

Appraisal

An appraisal is an independent opinion of a property's value, typically ordered as part of the lender's process.

The appraiser evaluates the property and comparable sales to estimate its market value.

This matters because lenders generally don't want to lend more than the property supports under their loan guidelines.

Home Inspection

A home inspection is a professional evaluation of the property's visible and accessible systems and components.

The inspector may evaluate things like the roof, foundation, plumbing, electrical system, HVAC, and other parts of the property.

An inspection isn't a pass-or-fail test.

It's information that helps the buyer better understand what they're purchasing.

Comparable Sales or "Comps"

Comps are recently sold properties used to help estimate the value of another property.

Good comparable properties usually have similarities in:

• Location
• Size
• Age
• Condition
• Bedroom count
• Bathroom count
• Lot size
• Property type

Realtors commonly use comps when helping sellers determine a listing price or buyers evaluate an asking price.

Contingency

A contingency is a contract condition that must be satisfied for certain obligations to move forward or that may give a party specific rights.

For example, some transactions may involve financing, appraisal, or the sale of another property.

The exact rights depend on the language of the contract and any applicable addenda.

Escrow

Escrow is when money or documents are held by a neutral third party during the transaction.

In Texas real estate transactions, a title company often serves as the escrow agent.

They may hold funds such as earnest money until the transaction closes or the funds are otherwise released according to the contract.

Title

Title refers to legal ownership rights in a property.

Before closing, a title company researches public records to identify potential issues affecting ownership, such as certain liens, claims, or other matters.

The goal is to help determine whether the seller can convey the ownership interest required by the contract.

Title Insurance

Title insurance helps protect against certain covered title problems.

Unlike homeowners insurance, which generally deals with future events involving the property, title insurance focuses on covered ownership or title issues.

There are different types of title insurance policies, so buyers should understand which coverage applies to their transaction.

Survey

A survey shows information about the property's boundaries and may identify improvements, easements, encroachments, and other property features.

If there's already an existing survey, it may sometimes be usable depending on the transaction and requirements.

Otherwise, a new survey may be needed.

HOA

HOA stands for Homeowners Association.

An HOA may establish community rules and collect assessments to maintain certain common areas or amenities.

Before buying a property in an HOA, review:

• HOA dues
• Restrictions
• Rules
• Amenities
• Transfer-related fees
• Leasing restrictions, if applicable

Don't wait until after closing to discover that your plans conflict with HOA restrictions.

Property Taxes

Texas homeowners pay local property taxes based on taxable property values and applicable local tax rates.

In the San Antonio area, rates can vary significantly depending on the property's location and taxing jurisdictions.

When comparing homes in Bexar County and surrounding communities, don't look at the sales price alone.

Two similarly priced properties can have very different estimated monthly payments because of taxes.

Homestead Exemption

A residence homestead exemption may reduce the taxable value of a qualifying homeowner's principal residence for certain taxing entities.

Texas homeowners may qualify for different exemptions depending on their circumstances.

After purchasing a primary residence, check your eligibility and the current filing requirements with the appropriate appraisal district.

Seller Concessions

Seller concessions are amounts the seller agrees to contribute toward certain buyer expenses, subject to the contract and financing rules.

For example, a buyer may negotiate for assistance with eligible closing costs.

Sometimes getting closing-cost assistance can be more valuable to a buyer than negotiating the same amount off the sales price.

Days on Market

Days on Market, often shortened to DOM, generally measures how long a property has been marketed for sale under the applicable listing system's rules.

A property with a high number of days on market isn't automatically a bad property.

It could be related to pricing, condition, marketing, changing market conditions, or other factors.

Final Walkthrough

The final walkthrough usually happens shortly before closing.

It gives the buyer an opportunity to view the property and confirm its condition relative to the contract, including checking agreed-upon repairs when applicable.

It's not the same thing as a full home inspection.

Closing

Closing is the final stage of the real estate transaction.

Documents are signed, funds are handled, and once all closing and funding requirements are satisfied, ownership can transfer according to the transaction.

And yes, this is usually when everyone starts asking the important question:

"So when do I get the keys?"

Why Understanding These Terms Matters

You don't need to become a real estate expert before buying a house.

That's what your Realtor, lender, title company, inspector, and other professionals are there to help with.

But understanding the basics makes it easier to ask better questions and make informed decisions.

That's especially important in the San Antonio real estate market, where property taxes, new construction, HOAs, military relocations, acreage properties, and different communities can make every transaction a little different.

Final Thoughts

Real estate doesn't have to be complicated.

If you're buying or selling a home in San Antonio, Boerne, Bulverde, Cibolo, Schertz, New Braunfels, Converse, Universal City, Castroville, or anywhere in the greater San Antonio area, don't be afraid to ask what something means.

A good real estate professional should be able to explain the process without making it sound like you need a law degree just to buy a house.

The more you understand, the more confidently you can make decisions throughout your real estate journey

bad property.

It could be related to pricing, condition, marketing, changing market conditions, or other factors.

Final Walkthrough

The final walkthrough usually happens shortly before closing.

It gives the buyer an opportunity to view the property and confirm its condition relative to the contract, including checking agreed-upon repairs when applicable.

It's not the same thing as a full home inspection.