The Most Confusing Washington Real Estate Terms — Explained Simply (2025 Guide)

Dec 2

Real estate language can feel like another world—especially in Washington, where our contract timelines, inspection rules, and financing steps move quickly. Whether you’re a first-time buyer, a long-time homeowner who hasn’t sold in decades, or a military family relocating to JBLM, it's completely normal to feel overwhelmed.

This guide breaks it all down in a simple, clear way—so you can move through your Washington real estate journey with confidence.

1. Earnest Money

Earnest money is a buyer’s good-faith deposit that shows the seller they’re serious.
In Washington, it’s usually 1–3% of the purchase price and is held in escrow.

You can lose it only if you walk away for reasons not protected in your contract.

Related blog you already published:
WA Buyers: What Earnest Money Actually Means (And How You Could Lose It – 2025 Guide)

2. Contingencies

A contingency is a condition that must be met for the sale to move forward.
Common ones in WA include:

Inspection
Financing
Appraisal
Sale-of-home

If a contingency isn’t satisfied, the buyer typically can walk away and keep their earnest money.

3. Appraisal Gap

This happens when the appraisal comes in lower than the agreed purchase price.
If you offered $650,000 and the appraisal is $620,000, the $30,000 difference is the “appraisal gap.”

This is common in Pierce County and across competitive WA markets.

4. Underwriting

Underwriting is the lender’s deep verification stage. They check:

Income
Credit
DTI
Assets
Employment
Documentation

This is the final approval step before closing.

5. Escrow

Escrow is a neutral third party that handles all money, documents, timelines, and closing logistics in Washington.

They make sure every deadline and contract detail is followed correctly.

6. Pre-Inspection

This is an inspection done before making an offer, often used to strengthen an offer in a competitive market.

7. Pre-Approval vs. Pre-Qualification

Pre-qualification = estimate
Pre-approval = verified, strong, and required in Washington’s market

8. Repair Credits

Instead of fixing items after inspection, sellers can offer buyers a credit at closing.
This works well when sellers need fast timelines or when repairs are large or complex.

9. Contingent Sale Addendum

This outlines exactly how a buyer will purchase a new home while selling their current one.
It sets timelines, protections, and how other offers are handled.

10. Post-Closing Occupancy (Rent-Back)

This is when sellers stay in the home after closing for an agreed period.
Often used during simultaneous buy/sell moves or when waiting for a new home to close.

11. Title Insurance

Title insurance protects buyers and lenders from ownership disputes or liens on the property.
Required in Washington and included in closing costs.

12. Escalation Clause

This clause allows buyers to automatically outbid competing offers up to a set limit.
Common in competitive areas like Tacoma, Puyallup, Bonney Lake, Gig Harbor, and Spanaway.

13. HOA Resale Certificate

If a home is part of an HOA, buyers receive:

Rules
Budgets
Assessments
Reserve studies
Meeting notes
Financials

Buyers often have a window to review and back out if needed.

14. Seller Disclosure (Form 17)

This is Washington’s required form where sellers disclose known issues about the home.
It’s not a warranty but helps buyers understand key details.

15. Sewer Scope

A sewer scope is a camera inspection of the sewer line, especially important in Pierce County where tree roots, age, and soil conditions cause issues.

Related blog:
WA Sewer Scope Guide (2025 Buyer Guide)

16. Well & Septic Reports

These are critical for rural properties in Eatonville, Graham, Orting, Spanaway, and Buckley.
Buyers learn about tank condition, drain fields, flow rates, and county requirements.

17. Closing Costs

In Washington, buyers and sellers pay different closing costs, and many are negotiable.
These may include lender fees, escrow fees, title, insurance, taxes, and more.

18. Final Walkthrough

This is a buyer’s chance to make sure the home is in the condition agreed upon—clean, repaired, and empty—before closing.
It’s not another inspection, but it matters.

19. Market Value vs. List Price

Market value is what buyers are willing to pay.
List price is a strategy.

Many Washington sellers price based on emotion or online estimates instead of current market data.

20. Mutual Acceptance

This is when all parties agree to all terms in writing.
From this moment, every timeline in the contract officially begins.

Final Thoughts

Understanding these terms helps you avoid costly mistakes and move through your Washington real estate journey with clarity. Whether you're buying your first home, downsizing after 30 years, or relocating to Washington for work or a PCS, having clear explanations makes the entire process easier.

If you're planning a move in Washington, I’d love to help you create a plan that actually makes sense for your timeline and budget.

Written by: Lani Fisher — Washington Realtor Helping Everyday Buyers & Sellers With Confidence

Washington Real EstateBuyer Education WASeller Education WAPierce County Real EstateWA InspectionsWA Inspections WA AppraisalsWA Home Buying 2025WA Home Selling 2025Financing & Lending WAWA Market TipsJBLM Area Real EstateWashington Homeownership

Lani Fisher

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