COMMONLY USED REAL ESTATE TERMS - Amazon S3Estate...COMMONLY USED REAL ESTATE TERMS Buyers On Fire A...

COMMONLY USED

REAL ESTATE

TERMS

COMMONLY USED REAL ESTATE TERMS

Absentee Owner

An individual who owns a piece of real estate but does not live in it.

Appraisal

An appraisal is the evaluation of a property by a licensed appraiser on its price

based on previous sales of similar properties. The appraised value is used by a

bank to determine the lending limit on a given property. A seller may also have a

property appraised to determine the offering price during a sale.

Assignment

Assignment is the process by which a right or contract is transferred from one

party to another. Examples of typical assigned contracts are mortgages, leases

and deeds of trust.

Authorization to Release Information (ATR)

A form that gives permissions to an individual to obtain information that would

normally be classified as private.

Bandit Signs

18x24 inch corrugated white sign that you put a short marketing message on that

drives buyers or sellers to call you.

Buyer's Broker / Buyer’s Agent

A buyer's broker is a broker who represents the buyer in effectuating a purchase.

Normally in residential real estate transactions, the buyer's broker shares the

commission received by the listing broker, who represents the seller.

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Buyers On Fire

A software developed to assist Real Estate investors run their business in the most

efficient manner. It is a full CRM allowing investors to easily keep in contact with

their buyers and sellers list. Buyers on Fire also offers a plethora of features such

as the property launch, lead capture numbers, tagging of contacts, and broadcast

messaging. Simply put, Buyers on Fire is your marketing department.

Capital Gain

Capital gain is the seller's gain on an asset used in a trade or business or for

investment, including real estate. This gain is taxed at varying rates depending on

whether the asset was held for more or less than one year.

Cash Flow

Cash flow is the income produced by an investment property after deducting

operating expenses and debt.

Closing

The closing is when the transfer of ownership of a property from the seller to the

buyer occurs according to the sales contract.

Closing Costs

Closing costs are the expenses incurred in the purchase and sale of real property

paid at the time of settlement or closing. Some examples of closing costs are title

insurance, attorney fees, appraisal fees, recording fees and taxes.

Closing Statement / Settlement Statement

A closing statement is an accounting of the funds received and distributed in a real

estate transaction.

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Collateral

Collateral is the security put up in exchange for a loan, which can be taken by the

bank if the loan goes unpaid. In the case of a mortgage loan, the collateral is the

property.

Commission

The commission is the payment to the broker for his or her efforts on marketing

and selling the property, and is usually a percentage of the total purchase price.

Commission Split

A commission split is the sharing of commissions between the listing agent and

the broker of the buyer.

Comparables / Comps

Comps are used in assessing or establishing the fair market value of a property, a

property which has been sold recently that is similar in size, condition, location and

amenities.

Condominium

A condominium is a building in which ownership has been partitioned into unit

interests. Each apartment owner receives a unit deed and owns an individual unit,

but common areas are shared with the other unit owners of the building.

Contingency

Contingency is a condition in a contract relieving a party of liability if a specified

event occurs or fails to occur.

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Contract

A contract is a legally binding agreement between two parties, and in order to have

a valid Contract of Sale in real estate there must be: an offer, an acceptance,

competent parties, consideration, legal purpose, written documentation,

description of the property, and signatures of the principals.

Conventional Mortgage Loan

A conventional mortgage loan is a loan in which the federal government does not

insure or guarantee payment to the lender, but is under the amount of a jumbo

mortgage.

Counter-offer

A counter-offer is a new offer made by either the buyer or seller when rejecting a

previous offer.

Deceased Owner

When a homeowner passes away.

Deed

A deed is a written instrument transferring an interest in real property when

delivered to the grantee.

Deed in Lieu of Foreclosure

Deed in lieu of foreclosure is the conveyance of title to the mortgagee by a

mortgagor in default to avoid a record of foreclosure.

Deed Restriction

A deed restriction is a limitation on land use appearing in a deed.

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Default

An act performed by the buyer, seller, tenant or landlord that breaches the contract

of sale or lease and permits a claim for damages.

Down Payment

The down payment is the amount of money a buyer pays upfront in order to

purchase a property. It is usually paid at the signing of the contract in the form of a

certified check. The amount is typically 10% of the sales price.

Dual Agent

A dual agent is a broker or salesperson who represents both the buyer and seller in

the same transaction.

Due Diligence

Due diligence is the investigation and review of a property to determine any legal

liability.

Earnest Money Deposit

Earnest money deposit is the deposit a buyer makes at the time of submitting an

offer to demonstrate the true intent to purchase. It is also called a binder or good

faith deposit.

Equity

Equity is the difference between what something is worth and any loan secured by

the asset (i.e. the value of a property less the outstanding mortgage). For

example, if a home is worth $100,000 and the owner/borrower owes $65,000 on

the mortgage loan secured by the borrower's home, then the borrower's equity is

$35,000 or 35% equity in the home.

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Escrow

A state where consideration, benefits, legal rights, document, or a sum of money

is held by one person in trust for another, for the purpose of assuring performance

under an agreement. Normally in a residential real estate sale, the attorney for the

seller is the escrow agent for the deposit money securing the deal until closing.

The money is held in an escrow account.

Estate

Estate refers to the collection of all assets of a deceased person. It is also the

extent of interest a person has in real property.

Executed Contract

An executed contract is an agreement that has been fully performed.

Fair Market Value

The fair market value is the price for a property agreed upon between a buyer and

seller in a competitive market.

Fannie Mae

Fannie Mae is the nickname for the Federal National Mortgage Association

(FNMA), a privately owned corporation that purchase FHA, VA, and conventional

mortgages.

Federal Housing Administration Loan (FHA Loan)

An FHA insured loan is a mortgage insured by the Federal Housing Administration.

The Federal Housing Administration (FHA) is a federal agency that is part of the

Department of Housing and Urban Development (HUD) that sets policy for

mortgage underwriting and provides insurance for residential mortgages.

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FICO Score

A person's credit score calculated with software from Fair Isaac Corporation

(FICO).

Financing

A loan secured by personal property, such as real estate property. The stock and

lease of a cooperative corporation also constitute such personal property, and a

loan secured by these instruments is referred to as a financing loan. Generally,

real estate brokers refer to these financing loans as mortgages because they

operate in the same manner, even though technically they are not.

First Mortgage

A first mortgage is a mortgage whose lien is superior to the lien of any other

mortgage on the same property. This lien is superior either because it was

recorded prior to all other mortgages or because the mortgagee of another

mortgage which had been recorded ahead of this mortgage has agreed to have a

lien subordinated to the lien of this mortgage.

Foreclosure

Foreclosure is an enforcement process in which the lender under a defaulted

mortgage takes title to the property for the purposes of selling it to recoup moneys

owed under the mortgage.

Freddie Mac

Freddie Mac is the nickname for Federal Home Loan Mortgage Corporation

(FHLMC), a corporation wholly owned by the Federal Home Loan Bank System that

purchases FHA, VA, and conventional mortgages.

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Full Bath

A full bath is a bathroom that consists of a sink, toilet, and a bathtub or shower.

General Warranty Deed

A general warranty deed is a deed denoting an unlimited guarantee of title.

Gross Profit

The profit a company makes after deducting the costs associated with making and

selling its products, or the costs associated with providing its services. Gross profit

will appear on a company's income statement or can be calculated with this

formula: Gross profit = revenue - cost of goods sold.

Half Bath

A half bath, or powder room, has a sink and toilet, but does not have a bathtub or

shower.

Hard Money Lenders

Hard money lenders are lending companies, or individuals, offering a specialized

type of collateral backed loan. They tend to lend short-term capital (also called

bridge loans) that provide funding and or cash, based on the value of the collateral.

Hard money lenders can and will utilize all types of collateral- cars, boats, land,

airplanes, hard assets, paintings, etc. to complete the loan .

HVAC

HVAC is an acronym that stands for heating, ventilation and air conditioning.

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Improvements

Improvements are changes or additions made to a property. These typically

increase the value of the property.

Interest Rates

The interest rate is the cost of borrowing money from a lender. Rates will vary and

will change over time.

Judgment Lien

A judgment lien is a general lien resulting from a court decree.

Land Contract

An agreement between a buyer and seller of property in which the buyer makes

payments toward full ownership (as with a mortgage), but in a land contract, the

title or deed is held by the owner until the full payment is made.

Lead Capture Numbers (LCN)

LCN’s are real phone numbers that you can put in any marketing piece, yard sign,

online etc that as soon as their dialed act as a caller id and capture the callers

phone number and store it in a database for you. Market any LCN and immediately

when someone dials it, our software will forward it to any phone number of your

choice and at the same time we capture the callers correct phone number and

store it in a database for you for future marketing. You should use a LCN anytime

you market anything to build your subscriber base and make future marketing a

breeze

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Lease Option

More formally Lease With the Option to Purchase, is a type of contract used in

both residential and commercial real estate. In a lease-option, a property owner

and tenant agree that, at the end of a specified rental period for a given property,

the renter has the option of purchasing the property.

Lease Purchase

Also known as a Lease Purchase Agreement, is the heart of Rent-To-Own

properties. It combines elements of a traditional rental agreement with an

exclusive right of first refusal option for later purchase on the home. It is a

shortened name for Lease with Option to Purchase Contract.

Lien

A lien is an encumbrance on property which acts as security for the payment of a

debt or the performance of an obligation. A mortgage is a lien. A lender will want

most, if not all, liens on a property removed before making a mortgage loan.

Limited Liability Company (LLC)

A form of organization that is similar to a partnership, in that recognition of income

and expenses flow directly through to the owners for tax purposes (without a

corporate tax), but that still permits insulation from liability similar to that of a

corporation.

Liquidity

Liquidity refers to the ability of assets that are readily convertible to cash.

Lis Pendens

Lis pendens means a "lawsuit pending". See Notice of Lis Pendens.

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Listing

The term used by brokers to market an apartment for sale or rent.

Listing Broker

The listing broker represents the interests of the seller or landlord in the sale or

rental of his or her property.

Loan-to-Value Ratio (LTV)

The loan-to-value ratio is the mortgage amount divided by the lower of the

purchase price or the appraised value of the property. This ratio is expressed as a

percentage. A lender will use this ratio in determining the maximum mortgage

loan that it will make on the property.

Lot

A lot is a measured section of land.

Market Value

The market value of a property is an estimation of the price for a property in

relation to the current real estate market.

Mechanic's Lien

A mechanic's lien is a statutory lien available to anyone supplying labor or material

to the construction of an improvement of land that has not been properly

compensated.

Membership Site

Your one stop shop for all of Real Estate U’s trainings. Simply log in with your

unique credentials and you’ll immediately have access to all of the training videos

and Mindmaps for the course(s) that you have purchased.

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Mindmaps

Mindmaps are the organizational tool that Real Estate U uses to teach our

students. They are laid out in a simple, easy to follow format that teaches in a step

by step manner. To get the free software go to Xmind.Net

Mortgage

A mortgage is a pledge of real estate collateral to secure a debt. Also, it is a legal

document describing and defining the pledge. The mortgage may also include the

terms of repayment of the debt. It is also referred to as a deed of trust.

Mortgage Note

A mortgage note is a document signed at closing which states the borrower's

promise to repay a sum of money. The note states an interest rate and a fixed

period of time (term) for repayment.

Mortgagee

The mortgagee is the lender in a mortgage transaction.

Mortgagor

The mortgagor is the borrower in a mortgage transaction.

Motivated Seller

A seller of property - for example, a residence or automobile - who is compelled to

entertain reasonable offers from prospective buyers. The motivation may come

from economic circumstances or a desire to abandon ownership . The buyer is often

able to purchase the property at a reduced price or under favorable terms.

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Multi-Family Unit

A structure with two or more residential units.

Multiple Listing Service (MLS)

A MLS is a central service for real estate listings available to member brokers.

National Association of Realtors (NAR)

The NAR is the largest and most prominent trade organization for real estate

brokers and agents.

Net Profit

The actual profit after working expenses not included in the calculation of gross

profit have been paid.

Non Owner Occupancy

A property that is not occupied by the purchaser or owner of that property. Many

mortgages given on non owner occupied properties are related to multi-unit rental

properties like an apartment complex . Mortgages for non owner occupied

properties typically will have a higher interest rate than those for owner occupied

properties.

Offer

An offer is made to purchase a property at a specific price. Once an offer is

accepted, then a contract of sale is issued by the seller's attorney.

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Origination Fee

The origination fee is a service charge by a lending institution for a mortgage.

Origination is the first step in the mortgage loan process consisting of the

completion of the application.

Parcel

A parcel is a specific portion of land such as a lot.

Partnership

A business or firm owned and run by two or more partners.

Points

Points refer to the payment made to a lender as consideration for issuing a

mortgage, usually based on a percentage of the loan amount. Each point is equal

to 1% of the principal of the mortgage.

Power of Attorney (POA)

Written legal authority given by one party (the principal) to another (the agent or

attorney-in-fact) to act on the principal's behalf. It may be a (1) General power Of

attorney that authorizes the agent to act generally on behalf of the principal, or (2)

Special power of attorney that is limited to a specific act or situation. Decisions

made and actions taken by an attorney in fact (within the scope of his or her

authority) are legally binding on the principal. A power of attorney can remain in

force only so long as the principal is alive and does not become disabled or

incapacitated. Although it is often conferred on the principal's attorney, one does

not need to be an attorney at law to be an attorney-in-fact.

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Prehab

Prehabbing is the happy medium between wholesaling and rehabbing.You’re

making mostly minor cosmetic improvements to the property using builder’s grade

materials. The end product is a home that feels completely new, updated, fresh

and clean with way less renovation costs. These homes are priced 10% below full

retail value and are marketed to owner occupants. As a result, they sell very

quickly. In basic terms, you making a property rental ready.

Pre-Vacant / Moved

A Pre-Vacant home is where someone is moving and has filled out the change of

address form at the post office.

Primary Residence

Generally, a primary residence of an owner or renter is one that they occupy the

majority of time, usually considered to be 6 months and 1 day out of every year.

Private Money Lenders

A private money lender is a non-institutional (non-bank) individual or company that

loans money, generally secured by a note and deed of trust, for the purpose of

funding a real estate transaction. Private money lenders are generally considered

more relationship-based than hard money lenders.

Proof of Funds (POF)

A proof of funds (POF) is a document or bank statement proving that a person has

the financial ability to perform a transaction.

Property Description

The property description is an accurate, legal description of the land.

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Property Launch

The property launch feature inside Buyers On Fire is a marketing process that

requires minimal time from the seller and yields a large number of leads. All the

seller must do is fill out a simple form (number of bedrooms, bathrooms,

sq.ft,upload pictures, etc) and Buyers on Fire blasts their property all over the

internet (Facebook, Blogger, Craigslist, etc). Sellers can also easily order bandit

signs to be shipped which will increase the number of leads significantly. When

properties are launched correctly, they often sell in less than 7 days.

Property Tax

The tax issued by a municipality on the ownership of a property.

Quick Claim Deed

A type of deed that transfers an interest in real property, like a house, vacant land

or a mobile home. The person giving the property is the grantor. The person

receiving the property is the grantee. Quitclaim deeds are sometimes referred to

as quit claim or quick claim deeds.

Radon

Radon is a colorless, odorless gas present in soil that enters a home through small

spaces and openings.

Real Estate Broker

A real estate broker is essentially the boss of all agents at a real estate brokerage.

All agents must be supervised by a broker. A broker is also able to complete the

tasks of a Real Estate Salesperson (Realtor).

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Real Estate Salesperson / Realtor

A person who acts as an agent for the sale and purchase of buildings and land.

Real Estate Settlement Procedures Act (RESPA)

RESPA is a federal law that regulates the activities of lending institutions in making

mortgage loans.

Real Property Tax Lien / Real Estate Taxes

This lien is a tax levied against real property by the local government and has

priority over all other liens.

Recording

Recording is registering the ownership, lien, or claim of a party to a specific parcel

of real estate with the local county.

Recording Fees

Recording fees are the fees charged by the recorder's office to record a document

such as a mortgage, deed of trust, deed and UCC Financing Statement.

Referral Fee

A referral fee is a percentage of a broker's commission paid to another broker for

the referral of a buyer or seller.

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Rehab

Rehabbing a home is the process of completely re-doing a home. It can include

tearing down walls, relocating plumbing/electrical, replacing the roof/siding,

changing the house’s layout, etc… A full rehab completely transforms the house.

While they can be rather expensive and time consuming, a rehabbed home can

bring very large profits if done correctly.

Sale Price

The sale price, also referred to as the purchase price, refers to the amount of

money paid by the purchaser to the seller.

Seller Contribution

The seller contribution is a payment by the seller of a property of some, or all, of

the buyer's closing costs.

Seller's Agent

A seller's agent is the listing agent that works in the best interests of the seller.

Short Sale

A sale of real estate in which the proceeds from selling the property will fall short

of the balance of debts secured by liens against the property, and the property

owner cannot afford to repay the liens' full amounts and where the lien holders

agree to release their lien on the real estate and accept less than the amount owed

on the debt.

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Simple Interest

Money you can earn by initially investing some money (the principal). A percentage

(the interest) of the principal is added to the principal, making your initial

investment grow!

Special Warranty Deed

A deed in which the seller warrants or guarantees the title only against defects

arising during the period of his or her tenure or ownership of the property. The

grantor makes no warranty against defects existing before the time of his or her

ownership.

Square Footage

The area measured in square feet of a certain property. Square footage can be

measured in different ways and is usually considered approximate. Condominium

apartments have specific laws that determine the way in which the apartment is

measured and usually more accurately reflect the actual square footage within a

property.

Staging

Staging is decorating a house to make it look like a model home: cozy,

comfortable, colorful and inviting, with a personalized look to make it stand out

from the rest of the other houses on the market. Sellers can choose to stage an

entire home or to partially stage a home. When partially staging a home it is often

the Master Bedroom, Kitchen and Living room that are staged.

Survey

A survey is a document indicating measurements, boundaries and the area of a

property.

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Sweet Spot

Your Real Estate Sweet Spot tells you which areas you should be doing business

in. You have 3 different types of sweet spots : Wholesale, Prehab and Rehab.

Sweet Spots are based off of unit sales in an area which essentially tells you where

most people want to buy homes in your area.

Sweet Spot Locator

The Sweet Spot Locator is an app designed to tell you what areas you should and

should NOT be doing business in. SweetSpotLocator.Com will give you a

comphrensive report. The report will tell you what zones/areas you can wholesale,

prehab and rehab in. It will also tell you which areas to avoid. The report will give

you a summary of your area that includes: total homes sold, average sale price,

average bedrooms, average bathrooms, and average sq.ft. For each zip code it will

tell you how many units sold and the average sold price.

Title

The title of a property is the evidence or documentation that an owner is in lawful

possession of the property, such as a property deed.

Title Insurance

Title insurance is an insurance policy protecting the insured from financial loss

caused by a defect or question about the title to real property.

Title Search

Title search is a process that examines local public records, laws and related court

decisions to determine if any other parties have valid claims against the subject

property (such as past due taxes, judgments or mechanic’s liens). It also discloses

past and current facts about the subject property's ownership.

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Title Transfer Tax

Title transfer tax is a tax imposed on the conveyance of title to real property by

deed.

Underwriting

In mortgage lending, underwriting is the decision-making process used to

determine whether the loan risk is acceptable to the lender. Underwriting involves

the satisfactory review of the property appraisal and examination of the borrower's

ability and willingness to repay the debt and sufficiency of collateral value of the

property.

U.S. Department of Housing and Urban Development (HUD)

A federal agency that administers funding for projects related to housing.

USDA Home Loan

A USDA 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. This is

typically for first time home buyers and usually is 100% financing.

VA Guaranteed Loan

A VA guaranteed loan is a mortgage loan in which the loan payment is guaranteed

to the lender by the Department of Veteran Affairs.

Vacant Home

A home that has no occupants.

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Walk-Through Inspection

The walk-through inspection of a property occurs right before a closing to ensure

that the property is being delivered as stipulated in the contract of sale.

Wholesaling

The process of putting a property under contract and assigns or resells the

property to another investor.

Zoning

Zoning are the laws regulating land use.

Zoning Ordinance / Zoning Restriction

Laws setting limits on how you can use your property. For example, a business

cannot be built on land that has been zoned residential.

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