Helping First-Time Buyers
Understanding Escrow, Inspections and other Jargon
Buying your first home is one of life’s biggest milestones; it’s exciting, empowering and, let’s be honest, a little overwhelming. From your first open house to your mortgage paperwork, you’ll likely hear terms like escrow, earnest money, or contingencies and wonder “is there a translator for all of this?”
We at Ji Group believe that knowledge brings confidence. The more you understand, the smoother and less stressful the journey becomes. With this in mind, let’s break down some of the most common real estate terms you will encounter as a first-time buyer.
Escrow: The “In-Between” Stage
Think of escrow as a neutral third-party to hold and manage funds and documents during your transaction. Once your offer is accepted, the escrow company holds your earnest money deposit and important documents while all the details of the sale are finalized. It’s a safety measure that protects both the buyer and seller until everything is complete. When closing day arrives and all conditions are met, escrow releases to record with the county, and later that day you get the keys.
Earnest Money: Making the Commitment
When you make an offer on a home, you’ll usually include an earnest money deposit - a small percentage of the purchase price that shows the seller you’re serious; aka “skin in the game”. It is held in escrow until closing, and it’s typically applied toward your down payment. If you back out for a reason covered in your contract (contingencies, i.e. inspection, appraisal.), you usually get it back. If you simply change your mind, the seller might keep it.
Home Inspection: Peace of Mind
A home inspection is your chance to make sure the house you’re hoping will become your home is in good shape before you finalize the deal. A licensed inspector examines the house from top to bottom - literally - from the roof to the foundation - and provides a detailed report. If major issues are found, you can negotiate repairs, request a credit, or even walk away - depending on your contract terms. It’s not about nitpicking; it’s about protecting your investment and helping you move forward with confidence. The cost of the inspection is the burden of the buyer.
Contingencies: The Ifs
Contingencies are conditions that must be met for the sale to go through. Common ones include:
Financing contingency: You’ll only buy if your loan is approved
Inspection contingency: You’ll proceed if the inspection is satisfactory.
Appraisal contingency: The home’s value must meet or exceed the agreed price
Closing Costs: The Final Details
Beyond your down payment, you’ll have closing costs - fees related to finalizing the transaction (think: lender fees, title insurance, property taxes, and more). These typically range from 2-5% of the purchase price. Your agent and lender will provide a detailed breakdown early on, so there are no surprises at signing time.
Title & Title Insurance: Securing your Ownership
Before you close, a title company verifies that the property’s ownership is clear - meaning no old liens (debts) or legal issues exist on the property. Title insurance protects you, and your lender, in case any disputes arise later. It is a one-time cost that offers long-term peace of mind.
The home-buying process can feel like learning a new language. But, with the right team by your side, it all starts to click. Every term, every step brings you closer to that moment when you turn the key in the door and realize: this is yours.
At the Ji Group, we’re passionate about our first-time buyers! We strive to help them feel confident, informed and share in the excitement about their journey. From translating the fine print, answering the questions you might not even know to ask, and celebrating that incredible milestone when the keys are finally yours.
Home isn’t just where you live, it’s where your next chapter begins.