Buying your first home is an exciting milestone—but it can also be overwhelming if you’re not familiar with the terms used in the real estate world. From “appraisal” to “zoning,” there’s a lot of jargon that can make your journey confusing. That’s why we’ve compiled a simple guide to help you understand the most important real estate terms, so you can make informed decisions with confidence.
1. Appraisal
An appraisal is an expert’s opinion of your property’s market value. Lenders use this to ensure the amount you borrow matches the actual worth of home. If the appraisal comes in lower than expected, the buyer might have to cover the difference.
2. Down Payment
This is the initial payment made when purchasing a home—typically a percentage of the total price. A larger down payment generally means lower monthly loan payments.
3. Closing Cost
These are the expenses over and above the price of the property. They include brokerage, taxes, insurance, stamp duty, legal fees, and other administrative charges paid at the time of finalizing the deal.
4. Carpet Area
Carpet areas actually the actual usable areas in our houses like where we place our furniture and the space left for our daily activity. It means carpet area refer to that space which left after common areas, walls, balconies and terraces.
Generally, carpet area is calculated by this formula
Carpet Area = (living room + area of bedroom + kitchen + toilets) – thickness of the inner walls
5. Built -Up Area & super built- up area
Now we know about caret area, let’s understand build up area. When a first-time buyer purchases a house, he/she should know about buildup & super build-up area. Built-up area includes carpet area and thickness of walls. Basically, built-up area is sum of carpet area and interior and exterior walls and other areas like balcony and terrace etc.
On the other hand, super, built-up area includes built-up area and the amenities like life shaft, stairs, gardens and clubhouses, lobby and swimming pool etc.
6. RERA
First time home buyer should know about RERA, RERA is a law established in 2016 to regulate the real state industry and to secure the interest of homebuyers. It implements state-level Real Estate Regulatory Authorities (RERAs) responsible for overseeing projects, ensuring compliance, and resolving disputes. If the property registered under RERA Act, a buyer is able to verify all the details regarding the property, which gives them a good idea about property about its built-up area, carpet area and super built-up area.
RERA implemented a mechanism for homebuyers to file complaints against the developers of building or home developers for non-compliance with authorities and RERA tries to solve the dispute within 60 days.
RERA also provides standard format for sale agreements, ensuring fairness and clarity for both builders and developers.
7. Brokerage
Brokerage is the amount a paid to the mediator who helped the home buyer to purchase a plot, home or apartments. Mediator is the third party who arranges meetings and do negotiation with the developers and the home buyer
8. Per Square Foot Rate
The term per square foot rate, refers to the price buyer pays for the size of the plot. Fo example if the per foot rate in Jaipur is $300 and the size of plot is 1500 sq. feet than in that case price of plot will be calculated by multiplication of $300 x 1500 sq. feet.
10. Gross External Area (GEA)
Gross External Area is the whole area of building whether it is roof, terrace, roof shafts and internal & external walls of apartments.
11. Bare Shell
Bare shell means, when in a property flooring, plastering walls and installation of basic services are completed and then it is called bare shell, since many home buyers wants to customise their homes, to those customers builders offer houses or apartments have basic facilities means offers bare shell.
12. Force Majeure
It is a phrase of French, which means “Act of god” or inevitable accident. It is a clause mentioned in the contract between buyer and builder or developer to give some extra time to the buyer to fulfil and obligations, if any uncertain event occurs.
13. Credit Score
Credit score basically a three-digit number that is used by the lenders (banks and non-financial institutes) to give loan. It is a number 300 to 900. In certain situations, if you credit score is high, you will get the benefit lower interest rate. If your credit score is not good there are high chances that lenders will not give loan to that person or if it’s given, then interest rate would be high. In short, credit score speaks for individual’s creditworthiness.
There are many factors which contribute towards individual’s creditworthiness like history of repayment, credit utilization and number of loans taken etc.
14. Absolute Title
Absolute title means now the property belongs to its owner the builder has no right on the property. Without this owner is not able to sell, rent, lease or use the property to take loan.
15. Agreement to sell
Agreement to sell is sales agreement or purchase agreement, which shows that the developer or builder has a interest to sale the property for money. The main purpose of this agreement is to safeguard the interest of both home buyer and seller (builder).
16. Zoning
Understanding of zoning is important for the first-time home buyer who is buying plot. As zoning means the government made different zones and to purchase a plot for residential purpose and commercial purpose, a first-time buyer should know that the construction he/she wants to construct in the plot is permitted or not.
The understanding of zoning also helps the buyer to know the correct price of the plot, more importantly government made different rules and regulation for different zones, so its important to have knowledge about zoning to comply those rules and regulations.
So, the next time you step into the world of real estate, don’t just walk in—walk in informed.
Because knowing these important terms doesn’t just make you sound smart—it makes you smart. For first-time buyers, this knowledge becomes your silent partner, saving you money, time and a whole lot of unnecessary stress.
17. Masterplan
A master plan is a long-term strategy or blueprint for a city or region, in which future development and growth of all areas comes under that region are mentioned. While buying a plot buyer should know the term “Master plan”, to understand the development opportunities. When it comes to Jaipur, the Jaipur Development Authority (JDA) plays a key role in shaping the city’s future. JDA's Master Plan guides planned urban expansion, infrastructure development, and zoning regulations across the Jaipur region.
18. Sector Road
A sector road is a planned road within a specific area of a city, designed to connect residential, commercial, or institutional zones. In Jaipur, these roads are part of the JDA (Jaipur Development Authority) Master Plan and play an important role in organized urban development.
19. RERA Approved
RERA-approved plots are those plots which are officially registered with the Real Estate Regulatory Authority (RERA) of the state. If the project is RERA approved, it means developers comply with the standards and regulations set by the RERA Act.
Agreement to sell
An agreement to sell is a proof of formal contract between a seller and a buyer in which terms and conditions of the property transaction are mentioned. Basically, it is a promise to sell and purchase the property between buyer and seller. If the buyer pays more than 10% of the down payment, then the buyer is eligible to get the Agreement to sell.