California real estate glossary

An accessory dwelling unit is a second, self-contained home on the same lot as a house or apartment building, with its own kitchen, bathroom and sleeping area. It can be attached, detached or converted from existing space such as a garage. State law requires cities to allow ADUs on most residential lots, and they can be rented. Before buying, ask for the permit, final inspection and certificate of occupancy, because a converted garage is not automatically a legal unit.

Buying a home with an ADU in Orange CountyPre-approved ADU plans in Orange County, city by citySource: California Government Code section 66313

An adjustable-rate mortgage is a home loan whose interest rate is fixed for an initial period, often several years, and then changes at set intervals based on a market index plus a margin set by the lender. Caps limit how much the rate can rise at each adjustment and over the life of the loan. An ARM can lower the starting payment, but the payment can rise later, so compare the worst case with a fixed-rate loan before choosing one.

California home loans: fixed vs. adjustableSource: CFPB: What is the difference between a fixed-rate and adjustable-rate mortgage?

The AVID is the C.A.R. form real estate agents use to record what they saw during the visual inspection California requires on a home of one to four units. Under Civil Code section 2079, the listing agent and the cooperating buyer's agent must each make a reasonably competent and diligent visual inspection and disclose material facts it reveals. It is not a home inspection: it skips areas that are not reasonably accessible, public records and permits, and a condo's common areas.

What you must disclose when selling in CaliforniaSource: California Civil Code section 2079

An appraisal is an appraiser's written opinion of a property's market value as of a specific date, usually based on recent comparable sales. Lenders order one to confirm the home is worth enough to support the loan, and a value below the contract price can change your financing and reopen negotiations. Under California law, a real estate agent's opinion of price is not an appraisal and may not be called one.

What to do about a low appraisal in CaliforniaSource: California Business and Professions Code section 11302

An appraisal contingency lets a buyer cancel the purchase, and generally recover the deposit, if the home does not appraise at or above the agreed price. In the C.A.R. purchase agreement it is separate from the loan contingency, so removing one does not remove the other, and it must be removed in writing. Buyers sometimes shorten or waive it to compete, which means being ready to cover any gap between the appraisal and the price in cash.

What to do about a low appraisal in CaliforniaCalifornia escrow timeline, offer to keysSource: C.A.R. Quick Guide: Contingencies and Cancellation

Selling as-is means the seller will not make repairs or give credits for the home's condition, and the buyer takes it in its present physical state. In California, as-is does not excuse disclosures: the Transfer Disclosure Statement cannot be waived in an as-is sale, and known material facts must still be disclosed. Under the standard purchase agreement, the buyer can usually still inspect and cancel within the contingency period.

Selling a house as-is in Orange CountyWhat you must disclose when selling in CaliforniaSource: California Civil Code section 1102.1

Assessed value is the value the County Assessor uses to calculate your property tax. Under Proposition 13 it starts from the base year value, generally the market value when you buy or build, and then rises with inflation by no more than 2% a year, which is called the factored base year value. It resets only on a change in ownership or new construction, and if market value on January 1 falls below it, the Assessor can enroll the lower value temporarily.

Property taxes in Orange County explainedOrange County property tax calculatorSource: California State Board of Equalization: Publication 29, California Property Tax: An Overview

A buyer representation agreement is the written contract between a homebuyer and their agent's brokerage that sets the services, the agent's compensation, when it is due and how the agreement ends. California requires one no later than when the buyer signs an offer, limits its term to three months for individual buyers and bans automatic renewals. MLS rules for most agents also require it before you tour a home together. Its terms, including compensation, are negotiable.

California buyer representation agreement guideSource: California Civil Code section 1670.50

Buyer's agent compensation is what the buyer's brokerage is paid for representing the buyer, as set in the buyer's written agreement. Commissions are not fixed by California law and are negotiable. Since August 2024, offers to pay buyer's agents no longer appear on the MLS, but a seller can still agree to pay some or all of it, usually as a negotiated term of the offer, and the agent cannot collect more than the buyer's agreement allows.

Seller's guide to buyer's agent compensationCalifornia buyer representation agreement guideSource: California DRE: Consumer alert on changes to real estate representation and compensation

MyHome is a down payment and closing cost assistance loan from the California Housing Finance Agency for first-time buyers who meet its income limits and complete homebuyer education. It is a deferred-payment second loan of up to 3.5% of the price or appraised value with a CalHFA FHA first mortgage, or up to 3% with a CalHFA conventional, VA or USDA loan. Nothing is due monthly; it is repaid when you sell, refinance or pay off the first loan. You apply through a CalHFA-approved lender.

Down payment assistance in Orange CountySource: CalHFA: MyHome Assistance Program Handbook

California real estate withholding is a prepayment of the seller's state income tax that escrow takes from the sale proceeds unless an exemption applies. The standard amount is 3 1/3% of the total sales price, or the seller can elect an alternative amount based on the estimated gain. Common exemptions include a total price of $100,000 or less, a home that qualifies as your principal residence, and a loss or zero gain, claimed on Form 593. Any amount withheld is credited on your California return.

Capital gains tax on California home salesSeller net proceeds calculatorSource: California Franchise Tax Board: Publication 1016, Real Estate Withholding Guidelines

The RPA is the California Association of REALTORS standard contract used for most California home purchases; once it is signed and acceptance is delivered, it is the binding contract and also serves as joint escrow instructions. It sets the price, deposit, financing terms, contingency deadlines, closing date and who pays which costs. Its default timelines, such as 17 days for the buyer's investigations, can be changed in writing. C.A.R. revises the form periodically, so check which version you sign.

California escrow timeline, offer to keysHow to buy a home in CaliforniaSource: California DRE Reference Book: Basic Contract Provisions and Disclosures in a Residential Real Estate Transaction

Cancellation of escrow ends a pending sale after the contract is cancelled, with the deposit released by signed instructions from both buyer and seller, usually on C.A.R.'s Cancellation of Contract, Release of Deposit and Joint Escrow Instructions form. Escrow cannot release the deposit on one party's say-so. Under California law, a party who refuses to sign within 30 days of a written demand, without a good-faith dispute, can owe three times the amount withheld, at least $100 and no more than $1,000.

California escrow timeline, offer to keysSource: California Civil Code section 1057.3

The Section 121 exclusion lets you exclude up to $250,000 of gain on the sale of your main home from taxable income, or $500,000 for most married couples filing jointly. You generally must have owned and lived in the home for at least two of the five years before the sale and not used the exclusion on another home in the prior two years. California follows the same exclusion but taxes any gain above it as ordinary income.

Capital gains tax on California home salesSource: IRS: Topic no. 701, Sale of your home

A cash-out refinance replaces your current mortgage with a new, larger loan and pays you the difference in cash. Lenders limit how much you can borrow based on the home's current appraised value, and the new loan comes with its own rate, term and closing costs. Fannie Mae, for example, generally requires the existing first mortgage to be at least 12 months old before a cash-out refinance.

California home loans: fixed vs. adjustableSource: Fannie Mae Selling Guide: B2-1.3-03, Cash-Out Refinance Transactions

A Certificate of Eligibility is the VA document that confirms to a lender that you qualify for a VA-backed home loan and shows how much entitlement you have. You can request it online through VA, have your lender get it electronically, or mail VA Form 26-1880. Veterans generally need discharge papers such as a DD214, while active-duty members need a signed statement of service.

VA loans 101 for California veteransSource: VA: How to request a VA home loan Certificate of Eligibility

Close of escrow is when a sale is complete and ownership officially changes hands. Under the C.A.R. purchase agreement it is the day the grant deed is recorded with the County Recorder; recording puts the deed in the public record, which gives legal notice of the new owner. 'Closing' also describes the last steps leading up to it: signing, funding the loan and recording. By default, buyers get keys once recording is confirmed, unless the contract says otherwise.

California escrow timeline, offer to keysClosing costs for Orange County buyers and sellersSource: California Civil Code section 1213

The Closing Disclosure is a five-page federal form showing the final terms and costs of your mortgage, including the rate, monthly payment, closing costs and cash to close. Your lender must give it to you at least three business days before closing so you can compare it with your Loan Estimate. In California, escrow also prepares a settlement statement that itemizes every charge and credit for buyer and seller, including prorations and loan payoffs.

Closing costs for Orange County buyers and sellersCalifornia escrow timeline, offer to keysSource: CFPB: What is a Closing Disclosure?

A coastal development permit is the approval required before most development in California's coastal zone, from new homes and additions to demolitions and some changes in how land is used. It is issued by the city or county where the Coastal Commission has certified a Local Coastal Program, or otherwise by the Commission, which also hears certain appeals. Buyers planning to remodel or rebuild near the Orange County coast should confirm what permits apply before removing contingencies.

Source: California Coastal Commission: Coastal Development Permits

Comparable sales are recently sold homes similar to the subject property in location, size, age, condition and features, used to estimate what it is worth. Appraisers on Fannie Mae loans must report at least three closed comparables, generally sold within the last 12 months, with sales from the same neighborhood preferred, and then adjust for differences. Agents use the same approach to price listings and offers.

What to do about a low appraisal in CaliforniaSource: Fannie Mae Selling Guide: B4-1.3-08, Comparable Sales

A comparative market analysis is a real estate agent's estimate of a home's likely selling price based on recent comparable sales, active and pending listings and current market conditions. Sellers use it to set a list price, and buyers use it to decide what to offer. Under California law an agent's price opinion is not an appraisal and may not be called one; a lender will still order its own appraisal.

How to sell a house in Orange CountySource: California Business and Professions Code section 11302

A condominium is a form of ownership in which you own a unit, the space defined on a recorded map or plan, plus an undivided interest in the common areas shared with the other owners. An HOA manages the common areas and charges assessments to maintain them. In California a condo is defined by how it is owned, not by what the building looks like, so a townhome or even a detached house can be a condo.

What to know before buying a condo in Orange CountyBuying a townhome in Orange CountySource: California Civil Code section 4125

The conforming loan limit is the largest loan Fannie Mae and Freddie Mac can buy, set each year by the Federal Housing Finance Agency. For 2026, the one-unit limit in Orange County is $1,249,125, the high-cost ceiling, while the baseline for most of the country is $832,750. A loan above the limit is a jumbo loan, which each lender or investor underwrites to its own down payment, credit and reserve standards.

California home loans: fixed vs. adjustableSource: FHFA: FHFA Announces Conforming Loan Limit Values for 2026

A contingency is a condition in a purchase contract that lets a party cancel if it is not satisfied, such as acceptable inspections, loan approval or an appraisal at the price. The C.A.R. purchase agreement includes loan, appraisal, title, disclosure and investigation contingencies by default, each with a deadline counted from acceptance. Contingencies do not expire on their own: they stay open until removed in writing or until the seller properly cancels after a Notice to Buyer to Perform.

California escrow timeline, offer to keysSource: C.A.R. Quick Guide: Contingencies and Cancellation

Contingency removal is the buyer's signed, written release of a contingency, usually on C.A.R.'s Buyer's Contingency Removal form, confirming the buyer will proceed. Once a contingency is removed, the buyer gives up the right to cancel for that reason, so failing to close afterward can put the deposit at risk. Remove a contingency only after you have what it protects, such as inspection reports, the appraisal or written loan approval.

California escrow timeline, offer to keysHome inspections and repair requestsSource: C.A.R. Quick Guide: Contingencies and Cancellation

A conventional loan is any mortgage that is not insured or guaranteed by the government, unlike FHA, VA and USDA loans. Most follow Fannie Mae or Freddie Mac guidelines and must fit within the conforming loan limit; larger loans are jumbo loans. With less than 20% down, a conventional loan usually requires private mortgage insurance, which can be removed later as you build equity.

California home loans: fixed vs. adjustableSource: CFPB: Mortgage key terms

A counteroffer is a response to an offer that changes any of its terms; under California law a qualified acceptance is a new proposal, so a counteroffer rejects the original offer. There is no deal until one side signs the other's final terms and that acceptance is delivered. With a seller multiple counteroffer (C.A.R. Form SMCO), a seller counters several buyers at once, and no contract forms until the seller signs a final acceptance of one buyer's response.

Multiple offers and escalation clauses in Orange CountySource: California Civil Code section 1585

CC&Rs are the recorded rules that govern a condominium, planned development or other common interest development, covering matters such as how property can be used, architectural changes, rentals, maintenance duties and assessments. In California they are enforceable against every owner unless they are unreasonable, and unless they say otherwise, the HOA, any owner or both can enforce them. Buyers receive them with the HOA documents and should read them before removing contingencies.

What to know before buying a condo in Orange CountyBuying a townhome in Orange CountySource: California Civil Code section 5975

Days on market counts how long a home has been listed for sale, usually from the day it goes active on the MLS until the seller accepts an offer. Market reports use the median as a gauge of demand; C.A.R. publishes the median number of days it took to sell a California single-family home each month. A long time on market for one listing can signal room to negotiate, though price changes and relisting can affect how it is counted.

Orange County housing market reportSource: C.A.R.: September 2026 home sales and price report

Your debt-to-income ratio is your total monthly debt payments divided by your gross monthly income, shown as a percentage. Lenders use it to judge whether you can afford a mortgage, counting the new housing payment, including property taxes, insurance and any HOA dues, along with car, student loan and credit card payments. Maximum ratios vary by loan program and lender.

California home loans: fixed vs. adjustableSource: CFPB: What is a debt-to-income ratio?

A deed of trust is the recorded document that makes your home the security for a mortgage in California. It involves three parties: you as trustor, the lender as beneficiary, and a neutral trustee who can sell the home through foreclosure if the loan is not repaid. After payoff, the lender has 30 days to send the trustee a request for reconveyance, and the trustee has 21 days to record a full reconveyance, which releases the lien.

California escrow timeline, offer to keysSource: California Civil Code section 2941

The defensible space disclosure is documentation that a home in a high or very high fire hazard severity zone meets state or local rules for clearing vegetation around buildings. Since July 1, 2021, sellers in those zones must give it to buyers where a local ordinance requires it or a qualifying inspection is available. If the seller has none, buyer and seller sign an agreement that the buyer will obtain it, within one year of closing where no local ordinance applies.

What you must disclose when selling in CaliforniaHomeowners insurance for Orange County buyersSource: California Civil Code section 1102.19

Discount points are an upfront fee paid at closing to lower a mortgage's interest rate. One point costs 1% of the loan amount, so one point on an $800,000 loan is $8,000. Whether points pay off depends on how long you keep the loan, so compare the monthly savings with the upfront cost.

California home loans: fixed vs. adjustableSource: CFPB: What are discount points and lender credits?

The documentary transfer tax is a tax on recording a deed that transfers real property. In Orange County it is $0.55 for each $500 of value, which equals $1.10 per $1,000, figured on the price minus any existing loan the buyer takes over, and it does not apply when the consideration is $100 or less. In Orange County the seller customarily pays it, though the purchase contract decides.

Closing costs for Orange County buyers and sellersSeller net proceeds calculatorSource: Orange County Clerk-Recorder: Documentary Transfer Tax information sheet

A DRE license is the real estate license issued by the California Department of Real Estate. State law makes it unlawful to act as a real estate broker or salesperson for others without one, and a salesperson must work under a licensed broker. You can confirm any agent's or brokerage's license status, and see any public disciplinary actions, on DRE's free online license lookup.

Source: California DRE: Verify a License

Dual agency is when one brokerage, through the same agent or two of its agents, represents both the buyer and the seller in the same transaction. California allows it only with both parties' knowledge and consent; the dual agent owes duties to both but cannot, without permission, tell either side confidential price information, such as the seller's willingness to take less or the buyer's to pay more. Agents must give each client the state's agency relationship disclosure form explaining these roles.

California buyer representation agreement guideSource: California Civil Code section 2079.16

An earnest money deposit is the money a buyer puts into escrow after acceptance to show good faith; it counts toward the down payment or closing costs. The C.A.R. purchase agreement gives the buyer 3 business days to deliver it unless otherwise agreed. A buyer who cancels properly under a contingency generally gets it back. If both sides initialed the liquidated damages clause, the seller can keep it after a buyer default, generally valid up to 3% of the price for a one-to-four-unit home the buyer will occupy.

California escrow timeline, offer to keysMultiple offers and escalation clauses in Orange CountySource: California Civil Code section 1675

An escalation clause is an offer term that automatically raises the buyer's price by a set increment above a competing offer, up to a stated maximum. It usually requires proof of the competing offer and should address what happens if the appraisal comes in low. C.A.R. has no standard escalation form, and sellers do not have to accept one; many respond with a counteroffer or a request for highest and best offers instead.

Multiple offers and escalation clauses in Orange CountySource: C.A.R.: List of Standard Forms

Escrow is a neutral third party that holds the buyer's money and the seller's deed and releases them only when every condition in the parties' written instructions has been met. An escrow officer at an escrow company, title company or bank manages the file: collecting funds and documents, ordering loan payoffs, coordinating with the lender and title company, preparing settlement statements and disbursing money at closing. Independent escrow companies in California are licensed by the Department of Financial Protection and Innovation.

California escrow timeline, offer to keysSource: California Financial Code section 17003

A FEMA flood zone is the flood-risk category FEMA assigns to land on its Flood Insurance Rate Maps. Zones beginning with A or V are Special Flood Hazard Areas, land with a 1% chance of flooding in any year, often called the 100-year flood; shaded Zone X is moderate risk and unshaded Zone X minimal risk. If the home is in an A or V zone and your mortgage is federally regulated or backed, the lender must require flood insurance.

Homeowners insurance for Orange County buyersSource: FEMA: Flood Zones

An FHA loan is a mortgage made by a private lender and insured by the Federal Housing Administration, part of HUD. It allows a down payment as low as 3.5% and more flexible credit standards, but it carries mortgage insurance: an upfront premium plus an annual premium paid monthly. For FHA case numbers assigned in 2026, the one-unit loan limit in Orange County is $1,249,125.

California home loans: fixed vs. adjustableDown payment assistance in Orange CountySource: HUD: FHA announces 2026 loan limits

The final walkthrough is the buyer's last visit to the home before closing, called the final verification of condition in the C.A.R. purchase agreement, which by default schedules it within 5 days before closing. It confirms the home is in the agreed condition, agreed repairs were completed and the seller met its other obligations. It is not a contingency, so it is not a chance to renegotiate issues that were known earlier.

California escrow timeline, offer to keysSource: California DRE Reference Book: Basic Contract Provisions and Disclosures in a Residential Real Estate Transaction

A fire hazard severity zone is an area mapped by the Office of the State Fire Marshal, part of CAL FIRE, as moderate, high or very high fire hazard, based on factors such as vegetation, terrain, fire history and typical fire weather. The maps measure hazard, not the risk to an individual house. A high or very high zone triggers seller disclosures, including the Natural Hazard Disclosure and defensible space documentation, and can affect building standards for new construction and remodels.

Homeowners insurance for Orange County buyersWhat you must disclose when selling in CaliforniaSource: Office of the State Fire Marshal (CAL FIRE): Fire Hazard Severity Zones

FIRPTA is the federal law that requires the buyer, usually through escrow, to withhold tax when a foreign person sells U.S. real estate. The withholding is generally 15% of the amount realized and is credited against the seller's U.S. tax. An exception applies when the amount realized is $300,000 or less and the buyer plans to live in the home, and U.S. sellers typically sign a non-foreign status affidavit so no FIRPTA withholding is taken.

Capital gains tax on California home salesSource: IRS: FIRPTA Withholding

A grant deed is the deed most often used to transfer ownership in a California home sale. By using the word 'grant,' the seller implicitly promises that they have not already conveyed the property to someone else and that it is free of encumbrances they created, except those disclosed. It does not guarantee the seller's title against every possible claim; buyers get that protection from title insurance.

California escrow timeline, offer to keysSource: California Civil Code section 1113

HOA documents are the association records a condo or planned-development seller must give the buyer before closing under Civil Code section 4525. They include the governing documents, such as the CC&Rs and bylaws, the latest budget report, a statement of current and unpaid assessments and fees, approved upcoming assessment changes, unresolved violation notices, any rental restrictions and the latest required balcony inspection report. The association must provide them within 10 days of the seller's written request and may charge its actual cost.

What to know before buying a condo in Orange CountyWhat you must disclose when selling in CaliforniaSource: California Civil Code section 4525

A homeowners association is the nonprofit corporation or unincorporated association that manages a common interest development, such as a condo project or planned community, enforces its CC&Rs and collects assessments for shared areas and reserves. Many Orange County master-planned communities also have a master association for community-wide amenities, so owners may pay dues to both a neighborhood association and the master. Unpaid assessments can become a lien on the home.

Mello-Roos vs. HOA: what costs more long termWhat to know before buying a condo in Orange CountySource: California Civil Code section 4080

The homeowners' exemption reduces the taxable value of an owner-occupied principal residence by $7,000, saving at least $70 a year. The home must be your principal residence on the January 1 lien date. In Orange County, the Assessor mails new owners a pre-filled claim; file by February 15 for the full exemption, or by December 10 for 80% of it. You file once, but must tell the Assessor if you sell, move out or rent the home.

Property taxes in Orange County explainedOrange County property tax calculatorSource: Orange County Assessor: Homeowners' Exemption

An impound account, also called an escrow account, is an account your mortgage servicer funds from part of each monthly payment to pay your property taxes and homeowners insurance when due. In California, a lender generally cannot require one on an owner-occupied single-family loan unless an exception applies, such as a government-backed loan, a loan of 90% or more of the price or appraised value, total loans above 80% of value, or a higher-priced mortgage loan. Supplemental tax bills usually are not paid from it.

Property taxes in Orange County explainedSource: California Civil Code section 2954

The inspection contingency, called the investigation contingency in the C.A.R. purchase agreement, gives the buyer time to inspect the home and cancel if, in good faith, they are not satisfied with its condition. The default period is 17 days after acceptance, during which buyers typically order a general home inspection, a wood-destroying pest inspection and any specialist inspections, and may ask the seller for repairs. The seller does not have to agree to repairs.

Home inspections and repair requestsCalifornia escrow timeline, offer to keysSource: C.A.R. Quick Guide: Contingencies and Cancellation

An Interest Rate Reduction Refinance Loan is a VA refinance that replaces an existing VA-backed loan with a new one, usually to lower the interest rate or switch from an adjustable to a fixed rate. You must already have a VA loan on the home and certify that you live there or used to. The VA funding fee is 0.5% of the loan unless you are exempt, and closing costs can be rolled into the new loan.

VA loans 101 for California veteransSource: VA: Interest rate reduction refinance loan

A junior accessory dwelling unit is a living unit of no more than 500 square feet created entirely within a single-family home, which can include an attached garage. It needs at least an efficiency kitchen and may share a bathroom with the main house. A JADU cannot be sold separately from the house, and under a rule in effect since January 1, 2026, owner occupancy can be required only when it shares sanitation facilities with the main home.

Buying a home with an ADU in Orange CountySource: California Government Code section 66333

A land lease, or leasehold, is an arrangement in which you own the home but lease the land under it from a separate owner for a fixed term, usually paying ground rent. It affects value, financing and resale because your right to the land ends when the lease does; Fannie Mae, for example, requires the lease to run at least five years beyond the mortgage's maturity date. Before buying, review the remaining term, rent increases and renewal rights.

Source: Fannie Mae Selling Guide: B2-3-03, Leasehold Estates

The lead-based paint disclosure is a federal requirement for selling most homes built before 1978. The seller must disclose any known lead-based paint or hazards, provide available reports, give the buyer the EPA pamphlet Protect Your Family From Lead in Your Home and include a Lead Warning Statement in the contract. Buyers get 10 days to test for lead unless they agree in writing to a different period or waive it.

What you must disclose when selling in CaliforniaSource: U.S. EPA: Real Estate Disclosures about Potential Lead Hazards

The list-to-sale price ratio compares what homes sold for with what they were listed at, calculated as the final sale price divided by the original list price. C.A.R. reports it monthly as a gauge of buyers' negotiating power. A ratio of 100% or more means homes, on average, sold at or above their original asking price; below 100% means buyers negotiated discounts.

Orange County housing market reportSource: C.A.R.: August 2026 home sales and price report

A listing agreement is the written contract in which a seller hires a brokerage to market and sell their home, setting the list price, the brokerage's compensation, its services and the term. In California, a form listing agreement for a home of one to four units must state in bold type that commissions are not fixed by law and may be negotiable, and the rate cannot be pre-printed. An exclusive listing must also have a definite end date.

How to sell a house in Orange CountySeller's guide to buyer's agent compensationSource: California Business and Professions Code section 10147.5

The loan contingency lets a buyer cancel the purchase, and generally recover the deposit, if they cannot obtain the loan described in the contract. It must be removed in writing by its deadline, which buyer and seller can negotiate, and buyers should have written loan approval before removing it. It does not protect against a low appraisal on its own; that is the separate appraisal contingency.

California escrow timeline, offer to keysWhat to do about a low appraisal in CaliforniaSource: C.A.R. Quick Guide: Contingencies and Cancellation

The Loan Estimate is a three-page federal form a lender must give you within three business days of receiving your mortgage application. It shows the estimated interest rate, monthly payment, closing costs and cash needed to close in a standard format, so you can compare offers from different lenders. Before closing, compare it line by line with your Closing Disclosure.

Closing costs for Orange County buyers and sellersSource: CFPB: What is a Loan Estimate?

A manufactured home is a factory-built home on a permanent chassis, transportable in one or more sections, built on or after June 15, 1976; homes built before that date are legally mobilehomes. In California, most are titled through the Department of Housing and Community Development rather than recorded as real property, unless they are installed on a permanent foundation. In Orange County parks, buyers usually own the home and rent the space under the Mobilehome Residency Law.

Source: California Health and Safety Code section 18007

The median price is the midpoint of the homes sold in a period: half sold for more and half for less. It is preferred over the average because a few very expensive sales do not skew it as much. A change in the median can reflect a shift in the size and type of homes selling, not only rising or falling values, so read it alongside other measures.

Orange County housing market reportSource: C.A.R.: August 2026 home sales and price report

The Megan's Law database notice is a statement required in California contracts to sell homes of one to four units, telling buyers that information about registered sex offenders is available from the state Department of Justice at www.meganslaw.ca.gov. Once the notice is given, the seller and agents generally have no duty to provide more information about where registered offenders live. Buyers who want that information can search the site themselves.

What you must disclose when selling in CaliforniaSource: California Civil Code section 2079.10a

Mello-Roos is a special tax levied by a community facilities district, formed under the Mello-Roos Community Facilities Act of 1982, to repay bonds or pay for public facilities and services, often in newer master-planned communities. It appears as a line item on the property tax bill and follows the district's formula rather than the home's price. Sellers must make a good-faith effort to give buyers a notice of special tax showing the current and maximum annual tax and how long it can be levied.

How to look up Mello-Roos in Orange CountyMello-Roos vs. HOA: what costs more long termSource: California Civil Code section 1102.6b

A Mills Act contract is an agreement between a city or county and the owner of a qualified historic property: the owner commits to restore and maintain it, and in exchange the property is assessed with an income-based formula that often lowers the property tax. Contracts run at least 10 years, renew automatically each year and stay with the property when it is sold. Whether one is available depends on whether the local city or county runs a program.

Property taxes in Orange County explainedSource: California Office of Historic Preservation: Mills Act Program

The Natural Hazard Disclosure statement tells a buyer whether the property lies in any of six mapped hazard zones: a FEMA special flood hazard area, a dam inundation area, a high or very high fire hazard severity zone, a wildland area with substantial fire risk, an earthquake fault zone, or a seismic hazard zone for landslide or liquefaction. Sellers usually order it from a third-party report provider, which helps protect them from errors in mapped information they did not know about.

What you must disclose when selling in CaliforniaHomeowners insurance for Orange County buyersSource: California Civil Code section 1103.2

A Notice to Buyer to Perform is the written notice, C.A.R. Form NBP, that a seller must deliver before cancelling because the buyer has not removed a contingency or met another deadline. It gives the buyer at least two days to act. If the buyer removes the contingency in time, the sale continues; if not, the seller may cancel, but a seller who cancels this way must authorize the deposit's return. A similar Notice to Seller to Perform works the other way.

California escrow timeline, offer to keysSource: C.A.R. Quick Guide: Contingencies and Cancellation

The parent-child exclusion lets a parent's home pass to a child without full property tax reassessment. Under Proposition 19, for transfers since February 16, 2021, it covers only a family home or family farm, and a child must make the home their principal residence within one year. The child keeps the parent's taxable value plus an exclusion amount, $1,044,586 for transfers from February 16, 2025 through February 15, 2027; market value above that is added.

Inheriting a home in California: Prop 19 and probateProp 19 calculatorSource: California State Board of Equalization: Proposition 19

A planned unit development is a community in which each owner owns their lot and home, while common areas such as parks, pools or private streets are owned or maintained by an HOA that can charge assessments. California law calls it a planned development and treats it as a common interest development, like a condominium. Many townhomes and detached homes in Orange County master-planned communities are PUDs; the title report and CC&Rs show which you are buying.

Buying a townhome in Orange CountyWhat to know before buying a condo in Orange CountySource: California Civil Code section 4175

Pre-qualification and pre-approval are lender letters estimating how much you can borrow, but lenders use the two terms differently. Often a pre-qualification relies on information you report yourself, while a pre-approval follows a credit check and verification of your income, assets and documents. Neither is a guaranteed loan offer, but a well-documented pre-approval makes an offer more convincing to sellers.

How to buy a home in CaliforniaCalifornia home loans: fixed vs. adjustableSource: CFPB: What's the difference between a prequalification letter and a preapproval letter?

A set of accessory dwelling unit building plans that a city or county has already reviewed for code compliance. Since January 1, 2025, every California city and county must run a program to pre-approve ADU plans and post the approved plans online. A complete application for a detached ADU that uses a plan the agency pre-approved in the current building code cycle must be approved or denied within 30 days. You still submit a site plan and other site-specific documents.

Pre-approved ADU plans in Orange County, city by citySource: California Government Code section 65852.27

A preliminary title report is the title company's report, issued early in escrow, showing who holds title and the liens, easements, restrictions and other items it would exclude from coverage in a title insurance policy. Under California law it is an offer to issue a policy on those terms, not a statement of the condition of title. Buyers review it during the contingency period and should ask about anything unfamiliar.

California escrow timeline, offer to keysSource: California Insurance Code section 12340.11

Private mortgage insurance protects the lender, not you, if you stop paying a conventional loan, and it is usually required when you put less than 20% down. You can ask your servicer to cancel it when your balance is scheduled to reach 80% of the home's original value, if you meet the conditions, and it generally ends automatically at 78%. FHA loans use their own mortgage insurance premiums, and VA loans have no monthly mortgage insurance.

California home loans: fixed vs. adjustableSource: CFPB: When can I remove private mortgage insurance (PMI) from my loan?

Proposition 13, approved by California voters in 1978, limits the general property tax rate to 1% of assessed value, plus rates for voter-approved debt, and limits yearly increases in assessed value to 2%. A home is reassessed to market value only when it changes ownership or new construction is completed. As a result, two similar homes can have very different tax bills depending on when each was bought.

Property taxes in Orange County explainedOrange County property tax calculatorSource: California State Board of Equalization: Publication 29, California Property Tax: An Overview

A Proposition 19 base year transfer lets a homeowner who is 55 or older, severely disabled, or a wildfire or natural disaster victim move their taxable value to a replacement principal residence anywhere in California, bought or built within two years of selling the original. If the new home is worth more than the original, or more than 105% or 110% when bought in the first or second year after the sale, the difference is added. Owners qualifying by age or disability can do this three times.

Prop 19 for owners 55 and olderProp 19 calculatorSource: California State Board of Equalization: Proposition 19

Prorations divide ongoing property expenses between buyer and seller as of the closing date, so each pays only for their own period of ownership. Property taxes, HOA dues and, on rental property, rent are commonly prorated, and the results appear as credits and charges on the escrow settlement statement. Because Orange County property taxes are paid in two installments, a seller who has prepaid may receive a credit, or the buyer may be credited for taxes the seller still owes.

Closing costs for Orange County buyers and sellersProperty taxes in Orange County explainedSeller net proceeds calculatorSource: California DRE Reference Book: Basic Contract Provisions and Disclosures in a Residential Real Estate Transaction

A quitclaim deed transfers whatever interest the signer has in a property, if any, with no promises or warranties about title. In California it is commonly used between spouses, such as in a divorce, or to clear a minor cloud on title, rather than in ordinary home sales. Because a quitclaim can have property tax and loan consequences, check with a title company or attorney before signing one.

Source: California State Board of Equalization: Property Ownership and Deed Recording

A rate lock is a lender's commitment to hold a specific interest rate for a set period, often 30, 45 or 60 days, while your loan is processed. If closing is delayed past the lock's expiration, the rate can change or you may have to pay to extend the lock. Match the lock period to your escrow timeline and ask how the lender handles extensions.

California home loans: fixed vs. adjustableSource: CFPB: What's a lock-in or a rate lock?

SB 9 is a 2021 California law requiring cities and counties to approve, without a hearing, up to two primary homes on an eligible single-family lot and a split of that lot into two parcels. It excludes historic properties and projects that would demolish or alter rent-restricted housing or housing rented to a tenant within the last three years. A lot split requires the owner to sign an affidavit to live in one unit for three years, and each new lot can be limited to two units, ADUs included.

Buying a home with an ADU in Orange CountySource: California Government Code section 66411.7

The SPQ is a C.A.R. disclosure form in which the seller answers detailed questions that go beyond the state Transfer Disclosure Statement, such as past repairs and alterations, water problems, neighborhood conditions and any death on the property within the last three years. The standard C.A.R. purchase agreement requires it whenever the seller must provide a TDS. Sellers exempt from the TDS typically complete C.A.R.'s Exempt Seller Disclosure instead.

What you must disclose when selling in CaliforniaSource: C.A.R.: List of Standard Forms

A short-term rental permit is a city or county license to rent a home for short stays, generally 30 days or less, the stays subject to local transient occupancy (hotel) tax. Orange County rules vary by city: some prohibit short-term rentals, some cap or waitlist permits, and others allow them only in certain zones or when the owner lives on site. HOA rules can also restrict them, so confirm the rules before buying with rental plans.

Source: California Revenue and Taxation Code section 7280

A special assessment is a charge on real property that pays for a public improvement or service providing a special benefit to that property, such as lighting, landscaping or sewer work, and it must be proportional to that benefit. It appears on the property tax bill, and sellers must disclose known assessments, including 1915 Act bonds. In an HOA, the term instead means a charge beyond regular dues, which sellers must disclose if it has been approved.

Mello-Roos vs. HOA: what costs more long termSource: California Government Code section 53750

The Statewide Buyer and Seller Advisory is a lengthy C.A.R. form, used in most transactions written on C.A.R. contracts, that explains conditions buyers should investigate and laws that can affect a California home sale. It covers topics such as inspections, permits, insurance, natural hazards, environmental issues and neighborhood conditions. It is general information, not a disclosure of facts about the specific property, but buyers should read it closely before signing.

What you must disclose when selling in CaliforniaHow to buy a home in CaliforniaSource: C.A.R.: List of Standard Forms

A supplemental property tax bill charges the extra tax owed when a purchase or completed new construction raises a property's assessed value partway through the tax year. In Orange County it is prorated from the first day of the month after the change, and closings from January 1 through May 31 produce two bills. It is mailed to the owner, not the lender, and is generally not covered by impound accounts, so buyers should plan to pay it directly.

Property taxes in Orange County explainedOrange County property tax calculatorSource: Orange County Treasurer-Tax Collector: Supplemental Property Taxes FAQ

California's Tenant Protection Act of 2019 limits rent increases on covered units to 5% plus the regional change in the cost of living, or 10%, whichever is lower, over any 12 months, and requires just cause to end a tenancy once the tenants have lived there 12 months. Many houses and condos are exempt when the owner is not a corporation or real estate investment trust and the tenant received the required notice. The protections carry over when a rented home is sold and run until January 1, 2030.

Buying a house with a tenant in placeSelling a house with tenants in CaliforniaSource: California Civil Code section 1946.2

Title insurance protects against covered losses from problems with a property's title that existed before the purchase, such as undisclosed liens, forgery or recording errors. A lender's policy, which most lenders require, protects the amount of the loan; an owner's policy protects the buyer's ownership interest. Both are issued at closing for a one-time premium, with exceptions listed in the preliminary title report.

Closing costs for Orange County buyers and sellersSource: CFPB: What is owner's title insurance?

A townhome is a multi-level home that shares one or more walls with neighboring homes, usually with its own entrance and no unit above or below. In California the word describes a building style, not a type of ownership: legally, most townhomes are either condominiums or lots in a planned development, which decides what you own, what the HOA maintains, and which insurance and loans apply. The title report and CC&Rs show which one you are buying.

Buying a townhome in Orange CountyWhat to know before buying a condo in Orange CountySource: California Civil Code section 4175

The Transfer Disclosure Statement is the California form in which the seller of a home with one to four units discloses known defects and the condition of its features and systems, with sections where the agents add their own visual inspection findings. Some transfers, such as court-ordered sales and foreclosures, are exempt. If the TDS or a material amendment arrives after the buyer signs an offer, the buyer can cancel within 3 days of in-person delivery or 5 days of mail or electronic delivery.

The Transfer Disclosure Statement, section by sectionWhat you must disclose when selling in CaliforniaSource: California Civil Code section 1102.3

An unincorporated area is land outside any city's boundaries, governed directly by the county. In Orange County, communities such as Ladera Ranch, Coto de Caza, Rancho Mission Viejo and North Tustin are unincorporated, so the County of Orange and its Board of Supervisors, not a city council, set zoning, issue building permits and adopt local rules. That affects which permit office, short-term rental rules and local taxes apply to a home.

Source: Orange County Board of Supervisors: About the Board

The Unsold Inventory Index measures the number of months it would take to sell all homes currently for sale at the current pace of sales, a figure C.A.R. reports monthly. Lower numbers favor sellers, while higher numbers give buyers more choice and leverage. The absorption rate looks at the same balance from the other side, as the share of available listings that sell in a period, so a fast absorption rate means a low months' supply.

Orange County housing market reportSource: C.A.R.: September 2026 home sales and price report

VA entitlement is the amount the Department of Veterans Affairs will guarantee to your lender, which is what makes a no-down-payment VA loan possible. With full entitlement there is no VA loan limit; your lender decides how much you can borrow based on income, credit and the appraisal. If part of your entitlement is tied to another VA loan, VA uses the county conforming limit, $1,249,125 for a one-unit Orange County home in 2026, to figure what remains, and a down payment may be needed.

VA loans 101 for California veteransSource: VA: VA home loan entitlement and limits

The VA funding fee is a one-time charge on most VA-backed loans, figured as a percentage of the loan amount, that can be paid at closing or financed into the loan. For purchase loans it is 2.15% for first use with less than 5% down, 3.3% for later use with less than 5% down, 1.5% with at least 5% down and 1.25% with at least 10% down. Veterans receiving VA disability compensation, active-duty Purple Heart recipients and certain surviving spouses are exempt.

VA funding fee calculatorVA loans 101 for California veteransSource: VA: VA funding fee and loan closing costs

A VA loan is a mortgage from a private lender that the Department of Veterans Affairs partly guarantees, available to eligible veterans, service members and some surviving spouses. It usually needs no down payment if the price does not exceed the appraised value, and no private mortgage insurance, though most borrowers pay a one-time funding fee. You need a Certificate of Eligibility, and the home must be your primary residence and meet VA's property requirements.

VA loans 101 for California veteransVA funding fee calculatorSource: VA: Purchase loan

The Water Heater and Smoke Detector Statement of Compliance is the C.A.R. form California sellers use to certify in writing that the home meets state safety rules: water heaters must be braced, anchored or strapped against earthquake movement, and one- and two-unit homes must have working smoke alarms. Homes with a fuel-burning heater or appliance, fireplace or attached garage must also have carbon monoxide alarms. Sellers usually correct missing items before closing.

What you must disclose when selling in CaliforniaSource: California DRE Reference Book: Basic Contract Provisions and Disclosures in a Residential Real Estate Transaction