Real Estate Investing Definitions — InvestorFunnel

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All Acquisitions 55 Investing 127 Marketing 31 Real Estate 81

A

Adjustment A change to the price or terms of a property sale based on inspection findings, appraisal… Agent A licensed real estate professional who represents buyers or sellers in property transact… Agreement A legally binding contract between parties outlining terms and conditions of a real estat… Amenities Features or facilities that add value and comfort to a property (e.g., pool, gym, parking… Appraisal A professional assessment of a property's market value conducted by a licensed appraiser;… As-Is Property sold in its current condition with no repairs or warranties; buyer accepts all d… Assessment The value placed on property by a government authority for taxation purposes; also refers… Attorney A legal professional who reviews contracts, handles closings, and ensures legal complianc…

B

Backup Offer A secondary offer on a property that becomes active if the primary offer falls through. Broker A licensed real estate professional with additional training who can operate independentl… Buyer The individual or entity purchasing a property. Buyer's Agent A real estate agent who represents the buyer's interests in a transaction; fiduciary duty… Buyer's Market Market conditions favoring buyers due to high inventory and low demand; prices typically …

C

Closing The final step in a real estate transaction where ownership transfers from seller to buye… Commission The fee paid to real estate agents and brokers, typically a percentage (5-6%) of the sale… Comparable Sales (COMPS) Recently sold properties similar to the subject property; used to determine market value … Conditional Offer An offer to purchase property that includes specific conditions that must be met before t… Contract A legally binding agreement between buyer and seller outlining all terms and conditions o… Counteroffer A response to an offer that changes the terms; becomes a new offer that the original offe…

D

Deed A legal document that transfers ownership of real property from seller to buyer; must be … Deposit Money paid by buyer (typically 1-3% of purchase price) to demonstrate serious intent; hel… Disclosure Legal requirement for sellers to inform buyers of known defects, issues, or material fact… Dual Agency When one agent or brokerage represents both buyer and seller in the same transaction; req…

E

Earnest Money See DEPOSIT; demonstrates buyer's good faith commitment to the purchase. Easement Legal right for someone to use a portion of another's property for a specific purpose (e.… Encumbrance Any claim, lien, or liability attached to a property that may affect its value or transfe…

F

Fair Market Value (FMV) The price a property would sell for in an open market with willing buyer and seller, both… Fixture Personal property that has become permanently attached to real property and is included i… Floor Plan A scaled diagram showing the layout and dimensions of a property's rooms and spaces. For Sale by Owner (FSBO) Property sold directly by owner without representation from a real estate agent; owner ha…

G

Garage A covered structure for parking vehicles, either attached or detached from the main dwell… Gross Living Area (GLA) Total finished, above-grade living space in a property; used in appraisals and comparable…

H

Home A residence where people live; can be a house, apartment, condo, or any dwelling; implies… Home Inspection A professional examination of a property's condition, systems, and structure; identifies … Homeowner's Association (HOA) An organization that manages common areas and enforces rules in planned communities, cond… Homeowner's Insurance Insurance protecting property owners from losses due to damage, theft, or liability; requ… House The physical structure of a residential dwelling; more technical/objective than "home."

K

Key Physical device to access the property; also refers to important information or critical …

L

Lease A contract allowing a tenant to occupy property for a specified period in exchange for re… Lien A legal claim against a property used as security for a debt; must be paid before propert… Listing A property advertised for sale or rent, including all marketing materials; also the agree… Listing Agent The real estate agent who represents the seller and markets the property. Listing Price The price at which a property is advertised for sale; may be different from final sale pr… Location The geographic position of a property; one of the most important factors affecting value … Lockbox A secure device attached to a property containing keys; allows agents to show the propert… Lot A parcel of land; the plot on which a building sits or can be built.

M

Market The overall environment for buying and selling real estate, influenced by supply, demand,… Market Value The most probable price a property should bring in a competitive market under normal cond… Mortgage A loan secured by real property; borrower makes monthly payments over a set term (typical… Multiple Listing Service (MLS) A database used by real estate professionals to share information about properties for sa…

N

Neighborhood The immediate area surrounding a property; includes nearby homes, schools, amenities, and…

O

Offer A formal proposal to purchase a property at a specified price with stated terms and condi… Open House A scheduled period when a listed property is open for viewing by prospective buyers witho…

P

Permit Official authorization from local government to perform construction, renovation, or alte… Pre-Approval Lender's written commitment stating the amount a borrower is qualified to borrow; more re… Pre-Qualification An informal estimate of how much a borrower can afford based on self-reported financial i… Price The amount of money requested or paid for a property. Property A piece of real estate including land and any buildings or structures; can be residential…

R

Recording The act of filing legal documents (deed, mortgage) with the appropriate government office… Refinance Replacing an existing mortgage with a new loan, typically to get better terms, lower inte… Renovation Improvements or updates made to a property to improve condition, functionality, or value. Roof The top covering of a building that protects from weather; a critical component affecting…

S

Sale Price The final amount paid for a property after negotiations; may differ from listing price. Seller The individual or entity selling a property. Seller's Agent A real estate agent who represents the seller's interests in a transaction; fiduciary dut… Seller's Market Market conditions favoring sellers due to high demand and low inventory; prices typically… Showing An appointment for a prospective buyer to view a property for sale. Sign A physical marker placed on or near a property advertising that it is for sale or rent. Square Footage (Sq Ft) The total area of a property measured in square feet; includes all finished living space. Staging The process of preparing and decorating a property to appeal to the widest range of poten…

T

Title Legal ownership of property; also the document that proves ownership. Title Insurance Insurance that protects buyers and lenders from losses due to defects in title or ownersh… Title Search An examination of public records to verify legal ownership and identify any liens or clai…

V

Vacancy A property that is unoccupied and available for rent or sale. Valuation The process of determining the economic value of a property. Viewing See SHOWING; an opportunity to see the property in person.

W

Walk-Through A final inspection of the property by the buyer before closing to ensure condition has no… Warranty A guarantee provided by the seller or manufacturer regarding the condition of the propert…

Y

Yard The outdoor area surrounding a property; includes front, back, and side yards.

Z

Zoning Government regulations that control how property can be used (residential, commercial, in… Zoning Variance Permission to use property in a way that deviates from current zoning regulations; requir…