Real Estate Glossary of Terms™

Real Estate

Glossary of Terms™

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Glossary of Terms


1 Percent Rule - A common rule of thumb for many landlords that the monthly rent earned from an investment property should exceed that property’s monthly mortgage payment.


1031 Exchange - A section of the U.S. Internal Revenue Service Code that lets investors defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.


2 Percent Rule - A general guideline some investors use to determine if a rental property is a good deal—basically saying that the monthly net rent from a rental property should be 2 percent or more of the cost of a rental property.


50 Percent Rule - A way some landlords use to estimate what the typical expenses will be on rental properties. Basically that the average expenses on a rental property will be 50% of the rents. This rule does not account for any mortgage expenses.


70 Percent Rule - A way some property flippers determine what to pay for a fix and flip to make money. The rule states that an investor should pay 70% of the ARV (after repair value) of a property minus the repairs needed. See also Maximum Allowable Offer (MAO).


Absentee Landlord - When a landlord owns a rental property, but lives at a considerable distance away from the rental, usually outside of the rental property’s local economic area.


Abstract of Title - This is the summary that provides details of the title deeds and documents that prove the seller/owner’s right to dispose of the property.


Acre - This is a unit of land area used in the imperial and US customary systems. It is defined as the area of 1 chain by 1 furlong (66 by 660 feet), which is exactly equal to 43,560 square feet.


Adjustable Rate Mortgage (ARM) - A type of mortgage in which the rate of the outstanding balance varies throughout the life of the loan. With an adjustable rate mortgage, it is more difficult for the borrower to predict and plan for monthly payments.


Adverse Possession - A legal doctrine that allows a person to claim a property right in land owned by another. Common examples of this are continuous use of a private road or driveway, or agricultural development of an unused parcel of land. By favoring the adverse possessor over the true landowner, this doctrine rewards the productive use of land and punishes landowners who “sleep on their rights.”


After Repair Value (ARV) - An estimate of a property's future after any repairs/renovations that are made to the property. To be clear, this is not the value of the property at purchase, but a projection of future value after repairs/renovations are completed, based on what comparable properties have recently sold for.


ALTA Settlement Statement - A statement that title insurance and settlement companies to use to itemize all the fees and charges that both the homebuyer and seller must pay during the settlement process of a housing transaction. It was created by ALTA or American Land Title Association. It used to be known as the “HUD”or HUD-1 and many still refer to it as the HUD. In many cash transactions, they will just use a HUD statement.


Amortization - The process of spreading the loan out into a series of fixed payments over a period of time, and a portion of each payment includes both interest and principal payment. Although a purchaser’s total payment remains equal each period, the loan’s interest and principal will be paid off in different amounts each month. Early in the payment schedule, the majority of each payment goes to interest, and only a small amount goes to reducing the principal balance. The ratio gradually adjusts over time, and at some point transitions to the majority of each payment going to principal and less to interest—until eventually the entire principal is paid off, based on the amortization schedule.


Annual Depreciation Allowance - The depreciation of an asset and how much an investor is allowed to deduct or write off every year according to tax code—basically the process of deducting costs related to buying and improving a property. So, Instead of one large deduction during the year the property is bought or improved, depreciation deduction is distributed over the “useful life” of a property.


Annual Percentage Rate (APR) - This rate is charged to the borrower. It is expressed as a percentage that represents the actual yearly cost of funds over the term of the loan.


Appraisal - An unbiased professional opinion of a home’s value typically required by a lender to determine a property’s value. It's based on a property's condition, comparable listings, and recently sold properties nearby. This process helps validate the agreed upon purchase price between a buyer and seller. Typically happens during escrow or if a person is refinancing their home.


Appraised Value - The evaluation of a property’s value based on condition, location and similar properties that have sold recently in proximity.


Appreciation - The increase in a home’s value over time. A home’s appreciation can be calculated based on the fair market value of comparable homes in the neighborhood of the property in question. Appreciation of a home can come through the natural appreciation of the value of the home over time or can be forced into the home through upgrades, remodels, or renovations that add value to the home.


As-Is - A property that is stated “as-is” indicates the seller is unwilling to perform repairs. It could also mean the property’s price is “as-is.” This price is usually lower than market prices in the local area.


Asbestos - A natural material made up of tiny fibers that is used as thermal insulation. Inhalation of asbestos fibers can lead to asbestosis and mesothelioma.


Assessed Value - The dollar value assigned to a property by a public assessor to measure applicable property taxes. This is different from an “appraised value”, which is done by an independent appraiser to determine the resale value and takes comparable property sales and inspections of the property into consideration.


Asset Protection - A part of one’s financial planning in order to protect one’s assets from creditor claims. Both individuals and businesses use this technique to make sure they limit creditors access to claim valuable assets.


Assignment - A term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee. Contract assignments are historically a very common way for property wholesalers to earn profits by assigning a purchase contract for a property to another buyer, in exchange for an “assignment fee”, and never actually taking ownership of the property.

Backup Offer - A secondary offer that can be accepted by the seller as a backup, but will not go into effect unless the the current offer is rejected, expires or is withdrawn.


Bad Title - When the current sellers are not granted the ownership of title due to a multitude of reasons. These can be either legal or financial problems that lead to a bad title and therefore can prevent the seller from being able to sell the asset.

Balloon Mortgage - A fixed rate, typically low payment loan, with a large remainder due at the end of the loan period. Frequently, these loans are re-amortized before the balloon payment comes due.

Bandit Signs - A common name for small signs with marketing messages posted in highly visible, well trafficked areas such as busy intersections or in people's yards. Some real estate investors have historically used bandit signs to advertise “We Buy Houses” messages to attract motivated sellers passing by the spot. The term “bandit” is used because most areas have laws against such signs, and fines/penalties for those who are caught having deployed them.


Bank Owned Property - A property that is taken back into a bank’s inventory after the owner defaults on the mortgage loan. This type of property is likely to be sold at a discounted price or lower than other comparables in the same location.

Bird Dog - Refers to someone who spends their time trying to locate properties with substantial investment potential. Usually, the intent is to find properties that are distressed and selling at a discount that can be repaired or remodeled and sold for a sizable profit.

Broker - A real estate agent who passed the broker license exam. The main difference between the two is that a real estate broker can also own a real estate agency or firm. Real estate agents are the ones that work for a real estate broker firm.


Broker Price Opinion - A report by a real estate agent or broker that is used to support the professional and unbiased opinion that helps determine the potential selling price. Based on comparable properties nearby that have sold recently, a BPO is used frequently by banks to price their properties for a quick sale.


BRRRR - A strategy was coined by Brandon Turner and stands for Buy, Rehab, Rent, Refinance, Repeat. This strategy is where an investor buys a fixer-upper property using short-term funds (oftentimes cash, hard money, private money, or other creative means), fixes up the property, rents out the newly renovated property, and seeks a new long-term loan (a refinance) to pay off the old short-term loan. This refinance will free up the short-term capital that was used, allowing the investor to repeat the process again and again.


Building Classifications (A,B,C,D) - These allow an investor to differentiate buildings and rationalize market data. Investment properties and their value falls into four category classifications, A, B, C or D.


Buy and Hold - A long-term investing strategy where a real estate investor purchases a property with the intention of holding onto and renting it for the foreseeable future.


Buyer’s Agent - An agent that works with buyers to find and purchase a property. The buying agent works for a commission that is typically paid by the seller at closing.


Buyers List - Real estate entrepreneurs can strike investment deals more quickly by relying on a buyers list, or a rolodex of investors who are actively looking for investment opportunities. These lists are built via marketing, networking and repeated business.

Capital Expenditure (CapEx) - Refers to large expenses that are performed infrequently but should still be budgeted for. Examples include a new roof or systems like a furnace or air conditioning unit.


Capital Gains Tax - Taxes paid on the profit from the sale of an asset that has been sold for more than you paid for it.

Capital Improvement - Capital improvement is the addition of permanent structural changes to a property that add to the property value or adapt the property to new uses.


Capitalization Rate (Cap Rate) - Used to indicate the rate of return that an investor can expect on any given real estate investment property. This is measured by a formula based on the net income that the property is expected to produce and is calculated by dividing net operating income by the property asset value and is expressed as a percentage: NOI / Property Value = CAP RATE %. Used by investors to understand the potential ROI on an investment property. While useful, cap rates should not be the only deciding factor when considering an investment property. The cap rate indicates the property’s intrinsic, natural, and un-leveraged rate of return.


Carrying Costs - The expenses incurred from the time the property is purchased until the time that it is sold, including interest payments, taxes, insurance and utilities. An investor must factored these into their expenses when they purchases a property to rehab.


Cash Flow - The net income generated by a rental property, after subtracting the costs of owning and operating the property. In real estate terms, cash flow is the byproduct of owning a rental property and leasing it to tenants for a monthly rental income. Real estate investors look for rental properties reaping positive cash flow returns, or, in other words, they invest in positive cash flow properties.

Cash Offer - A potential buyer's purchase price submitted to a seller, usually in writing, in which the buyer omits/excludes any financing contingency due to having immediate access to sufficient capital for the purchase amount offered.


Cash On Cash Return (COCR or CRR) - A rate of return often used in real estate transactions that calculates the cash income earned on the cash invested in a property.


Cash Reserves - Money an individual has set aside for unexpected expenses like home improvement emergencies, such as plumbing issues, appliance replacements, flooding, etc., as well as vacancies, capital expenditures, and non-paying tenants.

Cash-Out Refinance - A cash-out refinance will replace a person’s existing mortgage with a new home loan for more than is currently owed on a property. The difference is refunded to the property owner in cash and can be spent on home improvements, debt consolidation, or any other financial needs. In order to use a cash-out refinance, a property owner would need to have built up equity in the property.


Central Air Conditioning - Circulate cool air through a system of supply and return ducts.

Certificate of Title - This is the state-issued document that identifies the owner of real property. A certificate of title provides documentary evidence of the right of ownership so that the seller is actually able to transfer title and sell a property.


Certified Commercial Investment Member (CCIM) - A recognized expert in the commercial and investment real estate industry. The designation process ensures that CCIMs are proficient not only in theory, but also in practice.


Chain of Title - This is the sequence of historical transfers of a title of real property from sellers to buyers. This is a valuable tool to identify the past owners of any given property. This chain will follow the title from the original owners to the current owners.


Clear Title - Title that is clear of any type of lien or anything else that might pose a question about legal ownership. An owner with a clear title has legal ownership of the title and property and is able to transfer this title legally to a purchaser.


Close in Escrow - This means a real estate transaction has been completed and the sale is final. An ‘escrow’ is a common feature of standard real estate transactions. They function as an independent third party that holds all monetary funds and documents until the close of the sale.


Closing - A meeting at which a buyer and seller finalize a real estate transaction. Both the buyer and seller are required to fill out legal paperwork to officially transfer ownership of the property in question at the time of closing. The closing is when the buyer and seller sign the official papers to transfer ownership.


Closing Costs - Expenses over and above the price of the property in a real estate transaction. Costs incurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed recording fees, and credit report charges.


Closing Fee - A fee charged by the Title Company to close a real estate transaction.


Cloud on Title - An issue that might invalidate or make it difficult to transfer a title, and is usually discovered during the title search once a property is under contract. Such issues are typically in the form or a document, claim, unreleased lien, or other “strings attached” that must be resolved in order to restore a clear, transferrable title.


Co-Borrower - The second person on a mortgage loan. This can be anyone from a parent or friend to a significant other or spouse. Co-borrowers are used to help qualify for a loan and are also equally responsible for the mortgage should the initial borrower default.


Co-Tenancy Clause - A co-tenancy clause in retail lease contracts allows tenants to reduce their rent if key tenants or a certain number of tenants leave the retail space.


Code Violations - Each city, county or state creates or adopts municipal codes. There are codes for building, landscaping, and more. If a property violates these codes it could be in violation, which allows the city to fine the property owner until the violation is fixed. If the property was once in adherence to the codes, but the codes changed a property may be grandfathered in. When a property is grandfathered in, they may not be in violation of codes as long as the use of the property does not change.


Commercial Real Estate (CRE) - A commercial property refers to a real estate property that is used for business purposes or large scale residential dwellings, such as apartment buildings.

Comparables - Investors, agents and lenders alike find it useful to identify comparables, or similar homes in close proximity, to derive a precise value for the property in question. The act of conducting this research is referred to as a comparative market analysis (CMA).


Comparative Market Analysis (CMA) - This is an examination of the prices of different properties within the same area as the property a buyer is considering for purchase. Real estate agents perform this analysis to determine an accurate listing price.


Condo - A condo is like an apartment, but you own the space. A condo may have neighbors above, below, or beside you. The space in the building is owned, but not the land in most cases. Condos will have association dues that cover exterior maintenance, landscaping, and common amenities.


Consignor - If a buyer cannot qualify for a loan, they may be able to use a consignor. If a consignor signs for a loan, they are responsible for that loan and it can count against their debt to income ratio.


Consumer Price Index - The Consumer Price Index indicates how much prices of consumer goods and services have increased over a set period of time.

Contingencies - Conditions that must be met, either by the seller or the buyer, before the purchase of a property can close. Contingencies are intended to protect buyers and sellers, and often include items such as inspections, mortgage approvals and appraisals.

Contingency Clause - A contingency clause is a portion of a contract that will require certain things to take place before the contract can be considered valid. This often is a part of a conditional offer made on a property during a real estate transaction.

Contract Assignment - A wholesaler operates by negotiating below-market-value deals with motivated sellers. They then sell the property contract to an end buyer, such as a rehabber, by using a legal document called a contract assignment.

Contract for Deed - A tool that can allow buyers who either don't qualify for traditional lending options or who want a faster financing option to purchase property.


Conventional Mortgage - A mortgage loan not insured by the Federal Housing Administration (FHA), usually requiring between a 10 percent to 20 percent down payment.


Counter Offer - The seller can accept, reject or counter any offer. When they counter an offer, the seller can change the price, dates, contingencies, or many other terms. Any changes the seller wants must be listed in the counter.


Covenants, Conditions & Restrictions (CC&R) - Covenants, Conditions & Restrictions, commonly called CC&Rs, are a set of rules established by a developer or homeowners association that govern residences in a particular neighborhood or condominium. CC&Rs may put restrictions on parking, paint colors, noise-levels and pets, for example.

Debt Service Ratio (DSCR) - Also known as “debt coverage ratio” (DCR), this is the ratio of operating income available to debt servicing for interest, principal and lease payments.


Debt-to-Equity Ratio (D/E) - This ratio is a measure of ownership. How much of the property an investor owns versus how much is owed on the mortgage.


Debt to Income Ratio (DTI) - This is the ratio a lender looks at when qualifying a buyer. The lender looks at the buyers’ monthly income versus their monthly debts. The ratio allowed varies based on the type of loan the buyers are getting.


Deed - A deed is a legal document that passes and confirms an interest, right, or property and is signed, attested, delivered, and sealed. It is commonly associated with transferring the title of a property from the seller to the buyer.


Deed Book - These can be found at the county courthouse and are under the jurisdiction of the registrar of deeds. The deed book contains the record of property transfers.


Deed in Lieu - A potential option taken by a mortgagor (a borrower) to avoid foreclosure under which the mortgagor deeds the collateral property (the home) back to the mortgagee (the lender) in exchange for the release of all obligations under the mortgage.

Deed of Trust (DOT) - A Deed of Trust is a type of secured real-estate transaction that some states use instead of mortgages. A deed of trust involves three parties: a lender, a borrower, and a trustee. The lender gives the borrower money. In exchange, the borrower gives the lender one or more promissory notes.


Default - Within real estate, default is when a property owner fails to make monthly mortgage payments and therefore defaults on their mortgage loan. When the mortgage payments are not made and a borrower defaults on the loan, the property can then be taken away by the lender through a process called foreclosure.


Deficiency Balance - This is the amount of the loan that remains unpaid after the lender has taken the property back from the owner.


Delinquent - When a borrower is late or overdue on a mortgage payment.


Depreciation - The decrease of a property’s value over time, attributed in part to wear and tear.


Disclosure - What a seller has to tell the buyer of a home. They must disclose any material facts that are known.


Distressed Property - A property becomes distressed when a homeowner defaults on their mortgage payments, is delinquent on paying property taxes, or is condemned for disrepair.


Double Close - Also referred to as a back-to-back closing. This will witness a wholesaler purchase a property and immediately resell it to an end buyer. A double close is different from an assignment of contract because the wholesaler takes legal possession of the property for a short amount of time. The simultaneous purchase and sale of a real estate property involving three parties: the original seller, an investor (middleman), and the final buyer. Commonly used by wholesalers.


Downturn - Downturn is when the economy or real estate market has softened, resulting in properties typically taking longer to sell.


Dual Agency - Dual agency is when a real estate agent represents both the buyer and the seller in a single transaction.

Due Diligence - The due diligence period is a time frame allowing a buyer to fully examine a property. This is often done by hiring specific experts to inspect and perform tests. Buyers who may want to renegotiate the contract based on the results.


Due on Sale Clause (DOS) - A clause in a loan or promissory note that stipulates that the full balance of the loan may be called due (repaid in full) upon sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to call the note due in such a circumstance.


Earnest Money - After an offer is accepted, a deposit is made to the seller by the buyer as a symbol of good faith that you will be following through on buying the property. This can be refundable under certain circumstances based on inspection, loan approvals, appraisal, and other contingencies. This deposit can be forfeited if the buyer does not follow through on the purchase.


Easement - The legal right to use someone else’s land for a specific and limited purpose. When someone is granted an easement, they are legally allowed to use the property, but the property title and ownership remain in the possession of the owner.

Effective Gross Income (EGI) - Can be calculated by taking the potential gross income from an investment property, adding other forms of income generated by that property, and subtracting vacancy and collection losses.


Egress - When buying a property, there are certain things that qualify a room as “conforming” or “non-conforming.” For example, a basement room with regular windows would be considered a “non-conforming” bedroom. Egress is a way to exit the property, and in order for a room to be a legal bedroom, it must have two points of egress or exit.


Ejectment - Law term for the civil action to recover the possession of a title to the land.


Eminent Domain - Eminent domain refers to the right of the government to take private property and convert it to public use.


Equity - Real estate equity expresses the difference between a property’s current market value, and the outstanding amount on the mortgage. The more a homeowner pays down a mortgage, the lower the outstanding mortgage will be, thus helping to increase their personal equity in a property.


Equity Stripping - This is a set of strategies designed to reduce overall equity in a property. These can be used by debtors as means of making properties unattractive to creditors.

Escrow - A financial account that is funded by a homeowner’s mortgage payments, used to pay for homeowners insurance and property taxes.


Escrow (Held in Escrow) - Funds pertaining to a real estate transaction can be held in Escrow. That means the title company, a real estate office or another party can collect funds and hold them until they are ready to be released. Earnest money, money to repair a house after closing, and much more can be held in escrow.


Escrow (House in Escrow) - Some states call a house “in escrow” when someone has a contract to buy and the price is accepted by the seller. This is similar to a house going “under contract.” Once the buyer and seller have signed a contract on a home, the seller cannot accept another contract from a new buyer (except a backup offer) unless the current contract terminates.


Escrow Agent - An escrow agent is the person that holds property in trust for third parties while a transaction is finalized on the property in question.


Escrow Agreement - This is the contract that defines an arrangement between parties where one party deposits an asset with a third party. This third party then delivers the asset to the second party when the conditions of the contract are met.


Estate - A word with deep legal origins, “estate” has been consistently defined for centuries while adapting to the needs of the times. In essence, one’s estate is everything they own; it’s everything that belongs to a person.


Eviction - The legal method for removing a tenant from a rental property. Eviction typically takes place after the tenant fails to make their monthly rent payments on time.


Exit Strategy - How an investor plans to cash out on an investment property. This can include strategies such as renting out a buy-and-hold property or selling a rehabbed property.


Fair Housing Act - The Fair Housing Act was initiated to make sure that everyone who applies for housing has the right to be treated the same. For landlords, this means you cannot discriminate against potential tenants based on color, disability, familial status, national origin, race, religion, or sex.


Fair Market Rent (FMR) - The monthly rent a particular property type is likely to receive.


Federal Housing Administration (FHA) - The Federal Housing Administration, generally known as “FHA”, is a U.S. agency that provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories.


Fee Simple - It is a way that real estate may be owned in common law countries, and is the highest possible ownership interest that can be held in real property. A fee simple represents absolute ownership of land; therefore, the owner may do whatever he or she chooses with the land.

FHA Financing - A type of loan insured by the Federal Housing Administration (part of the U.S. Department of Housing and Urban Development or HUD), which requires a lower down payment than conventional loans.

FHA Loan - This is a type of mortgage loan that is insured by the Federal Housing Administration. These types of loans are popular among first time home buyers due to the low down payment requirements—as low as 3.5%—as well as a more lenient credit score requirement.


First Mortgage - This is the first mortgage loan on a property and has priority over all other liens or claims on a property in the event of a default on the home.

Fix and Flip - A type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. Profit is generated either through the price appreciation that occurs as a result of a hot housing market and/or from renovations and capital improvements. This term is coined for properties that need a lot of rehab to make them appealing to buyers.

Fixed Price Purchase Option - The right, but not the obligation, to buy a leased property at the end of a lease term at a price determined from the onset of the lease agreement.

Fixed Rate Mortgage - Contrary to an adjustable-rate mortgage, the interest rate of a fixed rate mortgage remains the same throughout a loan term.


Flipping - In real estate, flipping houses describes the strategy of purchasing a property, making improvements to it, and then putting it back on the market for a profit.


Flood Zone - Geographic areas that the FEMA has defined according to varying levels of flood risk. These zones are depicted on a community’s Flood Insurance Rate Map (FIRM) or Flood Hazard Boundary Map. Each zone reflects the severity or type of flooding in the area.

For Sale By Owner (FSBO) - Process by which a homeowner sells their home directly instead of going through a brokerage firm to sell the property. The benefit to the seller is that there is no commission to pay out at the end of the selling process.


Forced Air Heat - One which uses air as its heat transfer medium. These systems rely on ductwork, vents, and plenums as means of air distribution, separate from the actual heating and air conditioning systems.

Forced Equity - Equity that is instantly put into the home by making improvements to it. By improving the home, you not only increase the home' market value, but also increase the market rent, which permits you to make more money each month and pay off your property faster. This can be a good way to build equity in a home versus waiting for the home’s market value to increase naturally.


Foreclosure - The legal process in which a lender or bank takes control of a property, evicts the homeowner, and sells the home after a homeowner is unable to make full principal and interest payments on his or her mortgage, as decided upon in the mortgage contract. If a homeowner stops making payments on their loan, the bank can take the home back. The foreclosure process is different in every state in regards to how the bank takes possession of a home.


Fractional Ownership - A method in which several unrelated parties can share in, and mitigate the risk of, ownership of a real estate property.


Freddie Mac - Federal Home Loan Mortgage Corporation (Freddie Mac) is a private corporation founded by Congress. Their mission is to promote stability and affordability in the housing market by purchasing mortgages from banks and other loan makers.


Gentrification - A process where a neighborhood undergoes urban development, involving an influx of higher-income residents to an otherwise abandoned or rundown area. Gentrification is a controversial political and social topic.


Gift of Equity - When a family member sells you a property for below market value. This difference is considered an amount of equity. This equity can be used toward the down payment or to help pay off debt in order to qualify to buy the home.


Ginnie Mae (GNMA) - The Government National Mortgage Association is a U.S. government corporation that guarantees the timely payment of principal and interest on mortgage-backed securities (MBSs) issued by approved Ginnie Mae lenders.

Graduated Lease - An agreement under which a tenant and landlord agree to a periodic adjustment of monthly payments. This typically occurs when the market conditions increase and the landlord then needs to increase the price on the lease.


Gross Operating Income - The actual amount of rental income an investor receives to service or operate the property, minus vacancy and credit loss.

Gross Rental Yield - The total income made from a property, divided by the purchase price and closing costs.


Gross Rent Multiplier (GRM) - The ratio of the price of a real estate investment to its annual rental income before accounting for expenses such as property taxes, insurance, and utilities; GRM is the number of years the property would take to pay for itself in gross received rent. For a prospective real estate investor, a lower GRM represents a better opportunity.

Gross Scheduled Income (GSI) - Annual rental income an investment property could potentially produce if 100% of units were rented.


Ground Lease - An agreement between a tenant and a property owner that allows the tenant to develop a piece of property during the lease period. After the lease, all of these developments are to be transferred over to the property owner.

Habitable - Suitable or good enough to live in.


Hard Money - A loan typically used for fix and flips that is short (6 months to 18 months usually). Hard money loans normally have interest rates from 10 to 16 percent.


Hard Money Lender (HML) - A private lender that uses property collateral instead of credit scores in order to qualify lending a buyer money.

Hard Money Loan (HML) - A short-term loan typically used for fix-and-flips. Hard money loans typically require a large down payment and a short repayment time frame.

Hazard Insurance - Hazard insurance protects a homeowner against the costs of damage from fire, vandalism, smoke, and other causes. Required with a mortgage to protect the investment.


HELOC - A home equity line of credit. It is a type of second mortgage that lets you access cash as needed based on your home's value.


Hold Harmless Agreement - An agreement or contract in which one party agrees to hold the other free from the responsibility for any liability or damage that might arise out of the transaction involved.

Holding Costs - When real estate investors purchase property, their main goal is to sell the property for a profit. But during this process, the investor must take into consideration the amount of money they will need to pay out before the investment is re-sold. Holding costs are also known as carrying costs. When calculating the holding costs, investors must include the purchase price, and deduct operating income to come to an estimated figure.


Home Equity - The current market value of your home, minus what a borrower still owes on a mortgage.

Home Equity Loan - A type of loan in which the borrower uses the equity of his or her home as collateral.


Home Inspection - Something that a home buyer will pay to have conducted during the escrow period. A home inspector will come to the property and look at different aspects of the home that may deter a buyer from wanting to follow through with the purchase.

Home Warranty - An annual service contract that covers the repair or replacement of important appliances’ and systems’ components in the event they break down.


Homeowners Association (HOA) - Manages a large property’s or neighborhood's common areas, such as roads, parks, and pools. Homeowners are obligated to pay dues, which can be anything from $100 to $10,000 a year, depending on the building/neighborhood and its amenities. This is an added monthly expense on top of a mortgage payment and should be considered as such when home buying.


Homeowners Insurance - Protects against damage to a home. Often required by the lender.

Hot Water Heat - Central heating by means of hot water circulated through pipes or radiators.

House Hacking - When you live in one of the multiple units of your investment property as your primary residence, and have renters from the other units pay your mortgage and expenses. This strategy is typically done with a multifamily unit but can also be done in single family homes by renting out extra rooms.

Housing Starts - The number of new projects for residential construction that began over the duration of any given month and is a pivotal economic indicator.

HUD Home - When a government-insured loan (FHA) gets foreclosed and the Federal Housing and Urban Development pays the defaulted loan off, and then puts the home on the market.


HUD Settlement Statement - Formerly known as “The HUD” or HUD-1 and now commonly referred to as an ALTA Settlement Statement (see definition above). In many cash transactions, a HUD is still used. This form provides a breakdown of the fees and charges for the buyer and seller.


Improvement Location Certificate (ILC) - Used in order for mortgage and/or title companies to have some assurance that the improvements to a property are not encroaching into an easement or beyond the deed lines.


Income Producing Assets - Investments that offer ongoing passive income to the owner.


Individual Retirement Account (IRA) - An account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis.

Industrial Real Estate - Properties that are used for storage, manufacturing, and possibly commercial as well.


Inflation - A quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time.

Ingress - The right to enter a property.


Inspection - An examination to determine a property's condition, and assess any needed repairs and/or code violations.

Interest - The cost of borrowing money over time, and is ultimately the responsibility of the lender to set. A monthly mortgage is typically composed of interest and principal payments on a loan.

Interest Only Loan (I/O) - A loan in which the borrower pays only the interest for some or all of the term, with the principal balance unchanged during the interest-only period.


Interest Rate - A rate which is charged for use of money, often expressed as an annual percentage of the principal.


Interim Interest - Interest that accrues on your mortgage between the closing date and the date of record. This is the time between when you close on the mortgage and the end of the month.

Internal Rate of Return (IRR) - Measure of an investment’s rate of return.


Intestate - Intestate refers to when a person dies before determining a will. An intestate estate is also one in which the will presented to the court was deemed to be invalid.


Joint Tenancy - The holding of an estate or property jointly by two or more parties (known as joint tenants), the share of each passing to the other or others on death.


Joint Tenants - In estate law, this is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property.


Joint Venture (JV) - A commercial enterprise undertaken jointly by two or more parties which otherwise retain their distinct identities.


Judicial Foreclosure - Foreclosure cases that go through the court system.

Jumbo Loan - Type of mortgage that is used to finance real estate that is too expensive for a conventional conforming loan.


Land Lease - When you purchase a home, you typically own the home and the land the property is built on as well. However, a land lease is when you would pay rent to the landowner for the land even while owning the home.


Land Trust - A legal entity that takes ownership of, or authority over, a piece of property at the behest of the property owner.


Land Value - Value of a piece of property, including both the value of the land itself as well as any improvements that have been made to the property over time.

Landlord - Someone (a person or company) who owns a property that they allow others to occupy, in exchange for receiving routine compensation, usually via monthly rent payments outlined in a rental agreement.


Leach Field - Are subsurface wastewater disposal facilities used to remove contaminants and impurities from the liquid that emerges after anaerobic digestion in a septic tank.


Lead-Based Paint - Defined as “paint, surface coating that contains lead equal to or exceeding one milligram per square centimeter (1.0 mg/cm2) or 0.5% by weight.”


Lease - The legally binding contract that governs the circumstances in which a landlord will rent their property to a tenant.

Lease Option (L/O) - Agreement that gives a renter a choice to purchase the rented property during or at the end of the rental period.


Leasehold - The holding of property by lease.


Legal Description - The geographical description of a real estate property for the purpose of identifying the property for legal transactions.


Lender - People or companies that allow you to borrow money with the promise that it will be repaid.


Lessee - A person who rents land or property from a lessor. Also known as the “tenant”.


Lessor - The property owner or landlord that rents out the property to the lessee.


Leverage - The use of various financial instruments or borrowed capital to increase the potential return of an investment.


Lien - A legal interest in a property, which must be paid in full before the property can be sold. Liens on a property are typically identified in the escrow process and will break the contract.


Lien Waiver - A document from a contractor, subcontractor, materials supplier, equipment lessor or other party to the construction project stating they have received payment and waive any future lien rights to the property for the amount paid.

Line of Credit (LOC) - A preset amount of money that a bank or credit union has agreed to lend you. You can draw from the line of credit when you need it, up to the maximum amount. You'll pay interest on the amount you borrow.


List Price - The price at which a property is listed by the seller.


Listing - A property for sale.


Live-in Flip - When a property owner lives in the property as they flip in order to limit costs during the time of the flip.


Loan Estimate - Form that a potential borrower receives after applying for a mortgage. With important details such as estimated interest rate, monthly payment, and total closing costs for the loan.

Loan Origination Fee - Charged by the lender for evaluating, preparing and submitting a proposed mortgage loan.


Loan Payoff - A statement prepared by a lender showing the remaining terms on a mortgage or other loan.


Loan Policy - Protects the lender's interests and is based on the dollar amount someone is borrowing from the bank, not on the full value of the property.


Loan Term - Period over which a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term.


Loan-to-Value (LTV) - Financial term used by lenders to express the ratio of a loan to the value of an asset purchased.


Lot - A parcel of land that a house, duplex or multi-unit property is located on.


Market Value - The price an asset would fetch in the marketplace.


Material Fact - A fact that, if known, might have caused a buyer or seller of real estate to make a different decision with regards to remaining in a contract or to the price paid or received.


Maximum Allowable Offer (MAO) - Maximum price point at which investors in a real estate deal can realistically expect to pull in a profit while minimizing the risk of losing money.


Mixed Use Real Estate - Properties with a variety of uses, usually residential and commercial.


Mortgage - A type of loan used to buy houses with a portion of the payment going towards interest and principal each month. Money may also be collected every month for property taxes and homeowner’s insurance.


Mortgage Broker - An individual or entity acting as an intermediary between borrowers and lenders, such as originating a mortgage or placing the loan with a funding source.


Mortgage Insurance Premium - An insurance policy used in FHA loans if your down payment is less than 20 percent. The FHA assesses either an “upfront” MIP at the time of closing or an annual MIP that is calculated every year and paid in 12 installments.


Motivated Sellers - Investors are attracted to homeowners who are motivated to sell because if offers opportunity for negotiating a below-market purchase price. Homeowners typically become strongly motivated due to some kind of distress. This can be either 1) Circumstantial distress—living/managing a property out of the area, sudden financial or life change, foreclosure looming, etc; or 2) Physical distress—the property needs significant repairs or renovation beyond the seller's ability or self-interest).

Multi-Family - A building or structure that is designed to house several different families in separate housing units. A multifamily or multi-unit property has more than one unit on the same property. An apartment complex or a duplex could be multifamily if they are on the same lot.


Multiple Listing Service (MLS) - A database accessed by licensed real estate agents to view property listings. It is a marketing database set up by a group of cooperating real estate brokers. It is also a mechanism for listing brokers to offer compensation to buyer brokers who bring a buyer for their listed property.


National Housing Act - The American Housing Act of 1949 was a sweeping expansion of the federal role in mortgage insurance and issuance and the construction of public housing.

Negative Equity - Negative equity occurs when the value of real estate property falls below the outstanding balance on the mortgage used to purchase that property. Negative equity is calculated by taking the current market value of the property and subtracting the balance on the outstanding mortgage.


Net Operating Income (NOI) - A calculation used to analyze the profitability of income-generating real estate investments. NOI equals all revenue from the property, minus all reasonably necessary operating expenses.


Net Worth - Financial resources or other wealth belonging to a particular person, especially when used for investment purposes.


New Construction - Refers to site preparation for, and construction of, entirely new structures whether or not the site was previously occupied.

No-Appraisal Refinancing - A no-appraisal mortgage is a type of home loan refinancing for which the lender does not require an appraisal, meaning an independent opinion of the property's current fair market value is not necessary.


Non-Judicial Foreclosure - Refers to foreclosure cases that are not required to go through the court system. Instead of taking the foreclosure to court at the start of the process, the lender pursues a foreclosure with the assistance of a foreclosure trustee & trustee's sale, which is typically a much more efficient & expedient process than required by a judicial foreclosure. The process of a non-judicial foreclosure varies more widely from state to state than the process of a judicial foreclosure. Every state allows a lender to get a judicial foreclosure, but not every state provides procedures for a non-judicial foreclosure.

Note - Mortgage notes are a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise.


Open House - An open house is held by the selling agent in order for prospective buyers to come and look at a property. It enables interested parties to view property without scheduling a showing with their agent.

Open Listing - An “open listing” is a non-exclusive real estate contract in which more than one broker may be employed to sell a property, including the owners themselves.


Origination Fee - A fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan.

Owner Occupant - A resident of a property who also holds the title to that property.

Owner Occupied (OO) - Owner-occupancy or home-ownership is a form of housing tenure where a person, called the owner-occupier, owner-occupant, or home owner, owns the home in which they live.


Patio Home - A patio home is usually a free-standing home, but the landscaping and exterior is maintained by an association.

Pending Status - When a home goes under contract and the seller does not want to accept a backup offer.


Personal Use Property - Personal use property is a type of property that an individual does not use for business purposes or as an investment.


PITI - PITI stands for principal, interest, taxes, and insurance. Together, these are the elements that make up a conventional loan's mortgage payment.


Pocket Listing - A pocket listing is a signed real estate listing that is not entered into the multiple listing service, or MLS.


Points - Points are fees you pay to your lender upfront when you borrow a loan.


Power of Sale - Power of sale is a clause written into a mortgage note authorizing the mortgagee to sell the property in the event of default in order to repay the mortgage debt.


Pre-Approval Letter - Homebuyers can get financially vetted and receive a loan approval estimate from their lender in the form of a letter, helping to add credibility to any offers they make. A pre-approval letter is a document that states the loan amount a lender is willing to extend to a borrower. It is not a guarantee to lend, but it carries significant weight, especially to other parties in a real estate transaction, such as agents and sellers.


Pre-Qualification - Most sellers require a buyer to be pre-qualified before they will accept an offer. A buyer must get pre-qualified with a lender who checks credit income and other financial information.

Prepayment Penalty - A clause in a mortgage contract stating that a penalty will be assessed if the mortgage is prepaid within a certain time period. The penalty is based on a percentage of the remaining mortgage balance or a certain number of months’ worth of interest.

Principal - The portion of a mortgage payment that goes towards paying off the balance of a loan. Part of your payment will also go towards interest.


Private Money - Money borrowed from private individuals. Example: A loan from a parent to buy a house.


Private Money Loan - Private money lending means borrowing money from an individual investor. Real estate investors use private lenders to finance deals that either won’t qualify for a traditional loan or can’t wait the usual 30 days or so that a conventional mortgage loan needs for approval.


Private Mortgage Insurance (PMI) - A type of mortgage insurance buyers might be required to have if he or she uses anything other than a conventional loan. Like other kinds of mortgage insurance, PMI protects the lender if the buyer stops making monthly loan payments.


Pro-Rated - To divide or distribute a sum of money proportionately.


Probate Sale - Probate is the legal process through which a deceased person's estate is properly distributed to heirs/beneficiaries and any debt to creditors is paid off, if the death occurs before the person has written a will. A probate sale is required when the death of a homeowner occurs before writing a will or giving the property to someone. Consequently, the probate court authorizes an estate attorney or representative to hire a real estate agent to sell the home.

Proof of Funds - A document that stipulates that a buyer is financially capable of securing a mortgage or has the funds necessary to make an all-cash purchase in a real estate transaction.


Property Disclosure - A disclosure the seller fills out describing all material facts they know about a home.

Property Manager - A property manager is an individual or a company that is hired by a property owner in order to run the rental property. Typically property owners will hire a property management company to run it day to day because they are unwilling or don’t have the time to do so.

Property Taxes - Is a levy on the value of a property. The tax is levied by the governing authority of the jurisdiction in which the property is located.


Planned Unit Development (PUD) - A planned unit development (PUD), is a type of building development and also a regulatory process. As a building development, it is a designed grouping of both varied and compatible land uses, such as housing, recreation, commercial centers, and industrial parks, all within one contained development or subdivision.

Quiet Title - A quiet title action is a circuit court action, or lawsuit, intended to establish or settle the title to a property, especially when there is a disagreement. It is a lawsuit brought to remove a claim or objection on a title.

Quitclaim Deed - Quitclaim deeds are most often used to transfer property within a family. For example, when an owner gets married and wants to add a spouse's name to the title or when the owners divorce and one spouse's name is removed from the title.

Radon - A colorless, odorless, radioactive element in the noble gas group. It is produced by the radioactive decay of radium and occurs in minute amounts in soil, rocks, and the air near the ground.


Real Estate - Real Estate refers to property containing land, buildings, or both.

Real Estate Agent - Real estate agents are licensed professionals who arrange real estate transactions for either a buyer or a seller.


Real Estate Auction - Financial institutions will routinely sell properties, such as those they repossessed through foreclosure, at auctions available to the public.


Real Estate Broker - Real estate brokers are real estate agents but with a broker’s license. They work for a real estate brokerage and assist buyers or sellers in the transfer of ownership of a property, much like a real estate agent.


Real Estate Owned (REO) - The name given to foreclosed-upon real estate. It's basically a synonym for “foreclosed property”, or “post-bank foreclosure.” Basically, when a borrower fails to make monthly mortgage payment, he/she defaults on the loan. In this case, the property goes back to the bank or lender for sale, and it becomes an REO.


REALTOR® - Only real estate agents registered with the National Association of REALTORs® (NAR) are allowed to call themselves REALTORs®. Only REALTORs® have access to the MLS, have signed up to NAR’s code of ethics, and participate in regular training and continuing education.

Recession - A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Recording Fees - The fee charged by a government agency for registering or recording a real estate purchase or sale, so that it becomes a matter of public record. Recording fees are generally charged by the county.


Refinance Rate - One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance.

Refinancing - Refinancing is done to allow a borrower to obtain a better interest term and rate. The first loan is paid off, allowing the second loan to be created, instead of simply making a new mortgage and throwing out the original mortgage.


REI - An industry acronym commonly used for for “Real Estate Investors” or “Real Estate Investing”

REIT - REIT stands for real estate investment trust. This is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands.

Rent To Own (RTO) - When a tenant signs a rental agreement or lease that has an option to buy the house or condo later — usually within three years. The renter's monthly payments will include rent payments and additional payments that will go towards a down payment for purchasing the home.


REO - Real estate owned or REO is a term used in the United States to describe a class of property owned by a lender.


Repair Costs - Repair costs within real estate investing are typically applied to fix and flips or even BRRR properties where there is repairs and renovations to be done. Repair costs should be properly calculated before buying any investment property in order to accurately assess a deal. For this, you can use the BiggerPockets Fix and Flip calculator.

Reserve Fund - A reserve fund is a savings account or other highly liquid asset set aside by an individual or business to meet any future costs or financial obligations, especially those arising unexpectedly.


Residential Real Estate - Properties that are zoned for residential use. You may not be able to legally run a business out of them.

Residential Rental Property - Residential rental property is a type of rented real property, such as a house or apartment complex.

Return on Investment (ROI) - Return on investment (ROI) measures how much money or net profit is made on an investment, displayed as a percentage of the cost of that investment.

Reverse Exchange - A reverse 1031 exchange is a tax deferment strategy that allows investors to purchase a second investment property before selling their relinquished investment property—and importantly, defer capital gains taxes and other taxes that you would normally need to pay upon sale of a property.


Reverse Mortgage - A financial agreement in which a homeowner relinquishes equity in their home in exchange for regular payments, typically to supplement retirement income.

Rural Housing Service - USDA’s multifamily housing programs that offers loans to provide affordable rental housing for very low-, low-, and moderate-income residents, the elderly, and persons with disabilities.


Sales and Purchase Agreement (SPA)
- A legal contract that obligates a buyer to buy and a seller to sell a product or service. SPAs are often associated with real estate deals as a way of finalizing the interests of both parties before closing the deal.


Security Deposit - A security deposit is a paid amount of money to the landlord meant to ensure that rent will be paid and other responsibilities of the lease performed (e.g., paying for damage caused by the tenant). The laws surrounding these deposits vary from state to state.


SDIRA Investing - Using your IRA or retirement account to invest in real estate. Any returns generated from the investment property are tax-deferred and must be deposited back into the IRA. These funds cannot be withdrawn prior to retirement.


Seller Financed Sale - Seller financing is where the seller becomes the bank and is a

agreement that allows the buyer to pay the seller in installments rather than using a traditional mortgage from a bank, credit union or other financial institution. Most sellers want 30 to 50% down although there are exceptions to this.

Seller-Paid Points, Seller's Points or Seller Contributions - Lump sum payments (or finance charges) made by the seller to the buyer's lender to reduce the cost of the loan to the buyer.


Settlement Statement - An itemized document of services and charges relating to the closing of a property.


Shared Equity Finance Agreements - A financial agreement entered into by two parties who would like to purchase a piece of real estate together.


Short Refinance - A transaction in which a lender agrees to refinance a borrower's home for the current market value, in effect making it more cost effective for the borrower.


Short Sale
- A short sale when the net proceeds from selling a property will fall short of the debts secured by liens against the property. This happens when the mortgage company allows a homeowner to sell a house, but pay less to the mortgage company than what they are owed. Mortgage companies allow this in some cases when the homeowners are behind on payments because it is faster and cheaper than a foreclosure.


Single Family Home (SFH) or Single Family Residence (SFR) - A home that is zoned for one family to live (It is possible that zoning may allow more unrelated people to live in the property). The home can be detached (stand alone) or attached (a neighbor connected), but the property comes with land ownership rights.

Squatter - A person who unlawfully occupies an uninhabited building or unused land.


Staging - Is the act of preparing a private residence for sale in the real estate marketplace. The goal of staging is to make a home appealing to the highest number of potential buyers.

Sublease - Lease from one tenant (lessee) to another (called subtenant or sublessee). The agreement between the landlord (the lessor) and the first lessee remains in force and governs the terms of the sublease.


Subto (subject to) Real Estate - The buyer takes title to the property, and takes over the existing mortgage payment, but the loan (or existing financing) is not paid off, and it stays in the name of the original seller. This is legal in all 50 states and can be found on the HUD or closing statement.


Survey - A process carried out to determine property lines and define true property corners of a parcel of land described in a deed. It indicates the extent of any easements or encroachments and may show the limitations imposed on the property by state or local regulations.


Syndicate - Real estate syndication is an effective way for investors to pool their financial and intellectual resources to invest in properties and projects much bigger than they could afford or manage on their own.

Tax Lien - The government's claim on when a taxpayer, such as a business or individual, fails to pay taxes owed. When homeowners stop paying property taxes, the state can place a tax lien against the home or even sell the home at a tax sale. If you have a mortgage on the home, the mortgage company will usually pay the taxes if the homeowner does not.


Tax-Exempt - Some organizations like churches and non-profits are exempt from paying property taxes. In some areas, seniors pay fewer property taxes. In some areas, locals pay fewer taxes than those who live out-of-state.


Tenancy in Common - A specific type of concurrent, or simultaneous, ownership of real property by two or more parties. All tenants in common hold an individual, undivided ownership interest in the property. This means that each party has the right to alienate or transfer their ownership interest.


Tenant - Anyone who leases a property instead of purchasing it.


Tenant Screening - The process of interviewing and vetting candidates for a rental unit in order to find the best possible tenant. Screening activities include running background and credit checks, as well as calling references.


Tenants by Entirety (TBE) - This is a method in some states by which married couples can hold the title to a property. In order for one spouse to modify his or her interest in the property in any way, the consent of both spouses is required by tenants by entirety.

Tenant Improvements (TI) - These are improvements that are completed by the landlord for commercial tenants.


Tenement - Also called a tenement house. A run-down and often overcrowded apartment house, especially in a poor section of a large city. By law, any species of permanent property, as lands, houses, rents, an office, or a franchise, that may be held of another.


Timeshare - A timeshare (sometimes called vacation ownership) is a property with a divided form of ownership or use rights. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted a period of time.


Title - In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest.


Title Commitment - The title company's promise to issue a title insurance policy for the property after closing. The title commitment contains the same terms, conditions, and exclusions that will be in the actual insurance policy.


Title Company - A company that provides title insurance and many times provides closing services as well for real estate transactions.


Title Defect - A title defect refers to any potential threat to the current owner's full right or claim to sell a property. The property has a publicly-recorded issue, like a lien, mortgage, or judgment, that gives another party a claim to the property.


Title Insurance - Typically required as a part of the closing process, title insurance protects buyers in case there are any outstanding liens on a property. Every title insurance policy covers either a homeowner or the lender that financed the mortgage for the property. Lenders require you to pay for lender's title insurance as part of your mortgage closing costs. Homeowner's title insurance is mostly optional and is paid for by the seller or the buyer of the property.


Title Search - A title search is done to verify the seller's right to transfer ownership. It is used to discover any claims, errors, assessments, debts, or other restrictions on the property.


Townhouse - Like a condo, but there aren’t any neighbors above or below the unit.

Transactional Funding - A form of short term, hard money lending, which allows a wholesaler to purchase a property with none of his/her funds, provided that there is already an end buyer in place to purchase the property from the wholesaler within a short time frame, usually 2-5 days.


Triple Net Lease (NNN) - A lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property including real estate taxes, building insurance, and maintenance.


Truth in Lending Act (TILA) - A federal law passed in 1968 to ensure that consumers are treated fairly by businesses in the lending marketplace and are informed about the true cost of credit.


Turn-key Investing - A real estate investor who wishes to acquire income-producing property yet does not wish to make any repairs or renovations to a property may turn to turnkey investing. Turnkey describes a property that has already been repaired and updated to current market standards.

Under Contract - A home goes under contract when a buyer and seller accept a contract. A new buyer cannot buy a home that is under contract unless the accepted offer terminates.

Underwriter - In real estate, underwriting is when an individual or business entity seeks funding for a real estate project or purchase and the loan request is scrutinized to determine how much risk the lender is willing to accept. This procedure is performed by an underwriter.


Unsecured Loan - An unsecured loan is a loan that is issued and supported only by the borrower's creditworthiness, rather than by any type of collateral.


USDA Loan - A home loan from the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan offered to rural property owners by the United States Department of Agriculture.


Use and Occupancy (U&O) - Refers to a type of permit required by some local governments whenever real property is transferred.


VA Loan - A mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry).


Vacancy Rate - A vacancy rate expresses the percentage or ratio of unoccupied rental units rented versus the total number in the rental property at a given time. Because vacant units are not generating any income, rental property owners are incentivized to lower their vacancy rates as much as possible.


Voluntary Foreclosure - A foreclosure proceeding that is initiated by a borrower who is unable to continue making loan payments on a property in an attempt to avoid further payments and prevent involuntary foreclosure and eviction.


Waiver - A waiver is the voluntary action of a person or party that removes that person's or party's right or particular ability in an agreement.


Warranty Deed - A warranty deed is one in which a property owner, when transferring the title, warrants that he or she owns the property free and clear of all liens. A warranty deed is used in most property sales. The warranty deed says that: The grantor is the rightful owner and has the right to transfer the title.

Warranty of Title - A warranty of title is a guarantee by a seller to a buyer that the seller has the right to transfer ownership and no one else has rights to the property.


Water Rights - The legal right of a property owner to use, sell, divert and manage water from a specific source for a specific purpose. These sources include both groundwater (such as well water) and surface water (such as rivers, lakes and streams) that border the land they own.


Well - An excavation or structure created in the ground by digging, driving, boring, or drilling to access groundwater in underground aquifers.

Wholesaling - A term typically describing buying an asset at once price, and then quickly reselling it for a higher price. In the real estate arena, a real estate wholesaler contracts with a home seller, markets the home to his potential buyers, and then either assigns the contract to the buyer, or contracts separately with the buyer, and closes both transactions near-simultaneously. A wholesaler's profit is either (i) a flat fee for assigning the contract to new buyer, or (ii) the spread between the purchase price in the first transaction, and the resale price in the other.


Workout Agreement - A mutual agreement between a lender and borrower to renegotiate terms on a loan that is in default. Generally, the workout includes waiving any existing defaults and restructuring the loan’s terms and covenants.


Zoning - How the city, state or county classifies the use of land.

MOBILE

727-350-7003

ADDRESS

St. Petersburg, FL

St. Petersburg, FL, USA

LAURA MARIE | REALTOR® | EXP REALTY

Copyright © 2025

All Rights Reserved

Come get social with me!

MOBILE

727-350-7003

ADDRESS

St. Petersburg, FL

St. Petersburg, FL, USA

LAURA MARIE | REALTOR® | EXP REALTY

Copyright © 2025

All Rights Reserved

Come get social with me!