Plain English

Real Estate Terms for Divorcing Homeowners

The real estate words you may meet during a divorce, in plain English, grouped by topic. General information, not legal or tax advice.

Updated September 2026 · Rudy Flores · Coldwell Banker West

When a home is part of a divorce, a list of unfamiliar terms arrives at the worst possible time. This glossary defines the ones you are most likely to meet, in plain English. It is general information; your attorney and tax advisor guide your own case.

The terms at a glance

Appraisal · Base-year value (Proposition 13) · Closing costs · Contingency · Earnest money deposit · Escrow · HOA and CC&Rs · Interspousal transfer · Months of supply · Pre-approval · Rate lock and points · Share of listings with a price cut · Transfer Disclosure Statement · Typical home value · Wood-destroying pest (termite) report

Money and loans

Earnest money deposit: A good-faith deposit the buyer delivers to escrow shortly after the seller accepts an offer, commonly a percentage of the price. It counts toward the purchase, and it can be at risk if a buyer backs out for a reason the contract does not allow.
Appraisal: An estimate of a home’s market value by a licensed appraiser, ordered by the lender. If it comes in below the price, the buyer, the seller and the lender have to decide how to close the gap.
Pre-approval: Where a pre-qualification is a conversation, a pre-approval is paperwork: the lender pulls credit, checks income, assets and debts, and states in writing what it is prepared to lend, subject to the appraisal and final underwriting.
Closing costs: The fees due at closing on top of the down payment: loan charges, title and escrow fees, recording fees, and prepaid taxes and insurance. The Loan Estimate and the Closing Disclosure list them line by line.
Base-year value (Proposition 13): When a home sells, the county assessor generally resets its taxable value to the price paid. From then on the taxable value grows by the inflation factor, capped at 2%, however fast the market moves. That is why two similar neighbors can pay very different property tax.
Local example: For a typical home in the San Diego metro area (San Diego–Chula Vista–Carlsbad) at $930,785, the 1% base tax would be about $9,308 a year, or roughly $10,704 with an assumed 0.15% for voter-approved charges. Real bills vary by address and by any special taxes.
Rate lock and points: A rate lock is a lender’s promise to hold an interest rate for a set number of days while the loan is processed. Discount points are prepaid interest: each point costs 1% of the loan and typically lowers the rate.
Local example: Freddie Mac’s weekly survey put the average 30-year fixed rate at 7.03% on Sep 24, 2026. Your rate depends on the lender, the loan and your finances.

Paperwork and disclosures

Escrow: A neutral third party, usually an escrow company, that holds the buyer’s deposit and the signed documents, follows both sides’ written instructions and releases the money and the deed only when every condition has been met.
Contingency: A condition in the purchase contract that lets the buyer cancel and keep the deposit if it is not met, most often for the home inspection, the appraisal, the loan approval and the review of disclosures. The standard California contract commonly gives about 17 days for these.
Transfer Disclosure Statement: In California a seller answers a standard questionnaire about the home’s condition, known defects, remodeling and permits. The buyer receives it early and can use it to decide what to inspect and what to ask.
Interspousal transfer: An interspousal transfer moves a home from one spouse to the other, often through a settlement or a buyout. California generally excludes such transfers from reassessment; confirm the details for your case with a professional.

The property and the neighborhood

HOA and CC&Rs: An HOA is the organization that maintains a community’s shared spaces and enforces its rules. Members pay regular dues, and the association’s governing documents, called CC&Rs, can limit rentals, pets, parking and exterior changes.
Wood-destroying pest (termite) report: A licensed inspector’s report on wood-destroying pests and the conditions that lead to them, such as dry rot and moisture. Section 1 items are active problems; Section 2 items are conditions likely to lead to them. Buyers commonly order one during escrow.

Reading the market

Months of supply: How many months it would take to sell every home now listed at the recent pace of sales. Under about four months usually favors sellers and over about six usually favors buyers, though local conditions vary.
Local example: In the week ending Sep 12, 2026, the San Diego metro area (San Diego–Chula Vista–Carlsbad) had 3.4 months of supply.
Typical home value: Zillow’s index tracks the value of a typical home in an area’s middle third of prices, adjusted for seasons. It shows direction well and says little about any one house.
Local example: For the San Diego metro area (San Diego–Chula Vista–Carlsbad) as a whole, Zillow’s typical home value was $930,785 in Aug 2026.
Share of listings with a price cut: The share of active listings that have reduced their asking price. A rising share often means sellers are adjusting to what buyers will pay.
Local example: In the week ending Sep 12, 2026, about 10% of listings in the San Diego metro area (San Diego–Chula Vista–Carlsbad) had a price cut.

A note on what this is

These definitions describe general California practice in plain English. Contracts, forms and rules change and differ by case, so confirm details with your lender, the escrow officer, the county and a licensed advisor. Rudy Flores is a licensed real estate agent (CalDRE #02257808) with Coldwell Banker West, not an attorney or tax professional. Market numbers come from Zillow Research and Freddie Mac and are dated on the page.

Keep exploring

Closing cost estimator — Estimate the cash to close.
The divorce home guide — Selling, keeping or buying out.
Property tax when one spouse keeps the home — What changes and what does not.
Seller net proceeds — What a sale might net.

Talk to a lender. Rates, loan programs and approvals come from lenders, not from websites or real estate agents. Talk to your own mortgage broker, or use our preferred lender, Rodrigo Ballon with CrossCountry Mortgage, at 858-735-0255. You are always free to choose any lender you like, and you can verify any lender’s license at nmlsconsumeraccess.org.

Sources

General information for orientation, not legal, tax, financial or appraisal advice. Details change; confirm anything that matters with the official source, your lender and your agent.