Popular Real Estate Lingo That Every Investor Should Know

Your real estate career can bring forth challenges that have little to do with money, investing or monthly rental income. Real estate professionals know how to speak in certain verbage that average people know nothing about. There are words that are exclusive to the investment property industry and learning these words in advance can help you. There is popular real estate lingo that every investor should know to be able to compete in real estate. Losing a deal due to misinformation happens quite often to beginning real estate investors that do not know the key words and phrases to help them achieve investment property success. 

Popular Real Estate Lingo That Every Investor Should KnowAcceptance – The written approval that a buyer has accepted a seller's offer.

Adverse Use  – A property that is used strictly without the consent of the owner listed on the property deed.

Agreement of Sale – A document that is written by a buyer and sent to a seller that gives detailed information about the price and proposed terms of the sale of a property.

Amortization – The actual payments that are arranged through a time series of months or years to repay a loan for property or land.

Appreciation – The increase of a property through the natural process of aging and economic factors that are estimated on an annual basis. 

Back-to-Back Escrow – The process of buying a property, arranging all of the details and selling a second property all at the same time.

Balloon Payment – Loan payments that were not large enough to paydown the interest and mortgage as a whole requiring a final lump sum payment due to close out a loan.

Capital Gains Tax – The federal taxes that are assessed upon the same of any real estate property or land.

Cap Rate – The estimated profits listed in a percentage form based on the actual income received from an investment property.

Closing Statement – A finalized document that lists the financial details for a specific transaction between buyer and seller.

Days on Market – The actual amount of time between the listing of a property and the sale of the property on the open market. 

Deed of Trust – A contract between a buyer and lender that allows lenders to foreclosure on a property if a loan is in default.

Equity – The amount of financial value that a property has when all liens, loans or mortgages are removed from the appreciated value.

Examination of Title – The search by a title company of all previous owners, lienholders or other potential owners of a property.

Forbearance – The legal blockade by a lender to halt or stop the process of foreclosure by forgiving past due mortgage debt.

IRA – A federally monitored retirement account that can allow an investor to receive tax-free withdrawals upon reaching a certain age.

Notice of Default – The formal notice by a mortgage lender to a property owner that a loan agreement has been breached.

Right of Recision – The amount of time that a borrower has to cancel a signed loan agreement before the agreement is enforced.

Title Insurance – An insurance policy that is issued to protect both a buyer and a seller over any type of property ownership dispute.

Walk Through – The final act by a buyer before a sale is completed to ensure the property is correctly advertised in the closing statement.

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