Someone who owns a property but doesn’t live in it or actively manage it. Technically, “absentee owner” could apply to any property investor who rents out their properties and uses an agent or service to manage them.

A summary of all conveyances, transfers, and other facts (of record) as evidence of title or that which would impair title of real property.

Consent to an offer to enter into contract.

In real estate, “acquisition” describes the effort, action, and process of buying a property.

Tax based on assessed property value.

An addition or change to a contract.

Any real estate loan in which the interest rate varies over time according to a prescribed formula or set of conditions, usually changes in economic conditions. (Also known as a variable rate mortgage).

The acquisition of title to property through possession without the owner’s consent for a certain period of time.

The relationship of trust that exists between sellers and buyers and their agents. The agency is usually formed through a written contract.

An amount negotiated within a contract that the seller agrees to pay toward buyer’s designated repairs.

Amortization is an accounting method that spreads out the costs for the use of an asset over time. The most common example is amortizing a loan, which involves paying down debt in regular intervals.

Schedule showing principal and interest payments throughout the life of the loan.

A measure of interest rate that expresses the cost of a mortgage as a yearly rate on the loan balance. The APR assumes the loan is held for its full term. For adjustable-rate loans, the APR assumes the loan’s index doesn’t change from its initial value.

A real estate appraisal is an unbiased assessment of a property's value, prepared by a professional appraiser, accompanied by supporting data to support the validity of the valuation.

Charged by an appraiser to give an opinion or statement (written or oral) of the value of property.

Increase in value due to any cause.

A method of resolving a dispute in which a third party renders a decision.

In real estate, an arms-length transaction happens when a property is bought and sold between two unrelated parties acting independently, in their own best interests, and there is no pre-existing relationship between the buyer or seller to skew the sale price from the property’s fair market value.

Value of property for taxation purposes as determined by the tax assessor.

An assignment (or assignment of contract) involves one party to a contract assigning their contractual rights and responsibilities to a third party. In turn, the third party fulfills the terms of the contract.

An agreement wherein the buyer assumes or takes responsibility (becomes liable) for payment of an existing note secured by a mortgage or deed of trust.

Charged by existing mortgage company to process existing loan.

Charged by attorney for preparing legal documents for the transaction.

A lender calculation that compares a borrower’s total debt (principal, interest, property taxes, and insurance, plus other monthly debt payments) to gross monthly income.

A balloon payment is the final payment of a loan, typically a mortgage, that does not fully amortize. Generally, it is a considerable sum because it covers the remaining principal balance.

A bidding war happens when several buyers put in competitive bids (the amount of money they’re willing to pay), resulting in a higher demand for the property or item.

A Blue Ocean Strategy is a business plan that captures uncontested market space through differentiation and innovation. Executed properly, it can render the market competition irrelevant, improve profitability, and lower operating costs.

Capital is a resource, such as money or assets, that an individual or an organization uses to run its daily operations and fund future growth.

Capital gains occur when selling a capital asset (such as real property or securities) at a higher price than its original acquisition cost. The GRA taxes realized capital gains depending on several factors.

Carrying costs or “holding costs” are the ongoing expenses an owner pays for the duration of their property ownership.

Cash flow measures cash and cash equivalents flowing in and out of an organization. In real estate, a property owner generates cash flow when they lease their property to a tenant in return for monthly rent payments.

Closing costs are the expenses, fees, and charges that must be settled at the end of the buying and selling process to complete a real estate transaction.

A cloud on title is an unresolved issue in the chain of title. If a property owner cannot resolve a cloud on title, they cannot transfer a clear title to the new buyer when selling the property.

Collateral is an asset or property pledged to secure a loan. The borrower forfeits this asset to the lender in case of default. Collateral protects the lender's interests and allows them to recoup some (or all) of their losses on the defaulted loan.

Comparables (often abbreviated as “comps”) are properties that have similar attributes (such as the size, age, location, condition, and features) to the subject property being evaluated.

Creative financing describes any financing arrangement that does not involve conventional means, such as a mortgage. Some examples are hard money loans, seller financing, rent-to-own, among others.

Curb appeal refers to the exterior, and physical features of a property that appeal to a prospective buyer. In most cases, a buyer's impression of a property’s physical features will be from the curb, hence the name.

Delinquency occurs when a person or company is behind on payments, usually more than 30 days past the due date. In real estate, delinquency typically describes back-due mortgage payments or property taxes.

Direct mail is a type of marketing that involves sending a physical copy of promos, offers, or other information to interested parties through a courier, such as the dropping of leaflets, etc.

“Dispositions” refers to the effort, action, and process of selling a property. As an antonym to the real estate investing term “acquisitions,” dispositions is the act of “disposing” of inventory, which happens either through selling it or donating it to charitable institutions.

A double closing is a coordinated real estate arrangement involving two separate transactions between three parties: from a seller to a wholesaler and then from the wholesaler to a buyer. A double closing typically occurs on the same day.

An easement is the legal right of another party to access or use property they do not own but can utilize for a specific purpose.

Economies of scale refer to the advantages or savings in cost when a company becomes more efficient in their scale of operations (i.e., production), hence the name.

Encumbrance is a broad term that pertains to any liability or limitation that affects one’s ability to sell a property or use it as intended, such as a non-owner or third party’s claim.

Equitable interest allows a person to use, enjoy, and eventually take title to a property, even though they do not currently own it. In real estate, a buyer receives equitable interest upon signing a purchase contract and paying an earnest money deposit or commitment fee.

Equity is the value of an asset less any liabilities against it. Equity can apply to a single asset, such as a car or a piece of real estate, or an entire business entity.

An escrow is an arrangement where a neutral party temporarily holds assets following a transaction. Once the primary transacting parties have fulfilled the conditions stated in the escrow agreement, the neutral party releases the held assets to the other party.

Fair market value (FMV) is the hypothetical price a buyer and a seller would agree upon for an asset (such as a piece of real estate) on the open market in an arms-length transaction.

Any cost that does not increase or decrease based on production volume within a given period.

Fixed interest or fixed-rate interest is an interest rate that remains unchanged over a specific period, usually for the life of the loan.

Flash cash (also known as transactional funding or same-day funding) refers to money borrowed for a short timeframe, usually 24 to 48 hours, to conduct a double closing.

These areas have an elevated risk of flooding on an annual basis.

A Geographic Information System (GIS) is a computer system that combines geographic data with attribute data. A GIS captures, displays, and records this data in various ways. A land investor will commonly use this data to view parcel maps.

A procedure that evaluates whether the soil's physical characteristics, load-bearing capacity, and underlying layers at a site are suitable for a proposed purpose (such as construction or land development).

Imputed interest is interest that the GRA assumes the lender has collected even though the lender did not. It is often associated with loans that charge no interest or interest below applicable central bank rates.

Interest is an expense paid by a borrower for the use of borrowed money. Interest is usually expressed as a percentage of the outstanding balance of money owed to the lender. Interest can also be expressed as a rate of return on an investment.

Joint tenancy is a form of property ownership involving two or more parties who hold equal ownership of the property and enjoy equal rights and responsibilities.

Judicial foreclosure is a foreclosure process that proceeds through the courts. It offers more protection for the borrower, but it takes much longer to conclude.

A land contract is a legal agreement between two parties on the sale of real estate, such as land and any structure on it. A land contract is a form of seller financing where the buyer makes payments to the seller or owner.

Land entitlement is the legal process in which a real estate developer or landowner obtains approval from the local governing body for their development plans.

A land lease or ground lease is an arrangement where a landowner rents out a parcel of land to a tenant. This is a more common arrangement in commercial real estate than in residential.

A land survey maps the boundaries and features of a parcel of land, including roads, utility lines, structures, and natural elements, such as ponds and streams.

A legal description describes the exact location and boundaries of a piece of land. It is information critical to a transfer of legal ownership.

A letter of intent (LOI) or letter of interest is a written statement that expresses a desire to do business without entering into a formal agreement.

A lien is a claim against an asset (such as real estate) that empowers a creditor to collect on a debt. A lien is generally used as collateral to satisfy a loan.

A third-party entity that handles the collection of installment payments for a loan, whether it's a seller-financed property, private note, or conventional mortgage loan.

A loan underwriter is a specialist who determines the risks associated with lending to a loan applicant, typically based on the applicant's financial standing, credit profile, and other factors.

Expresses the correlation between the amount of a loan against an asset and the asset's value. It’s one of the metrics lenders use to gauge the risk involved in a loan.

Maximum Allowable Offer or MAO refers to the highest amount real estate investors can pay for a property and realistically expect to earn a profit when they sell or lease it.

A mortgage is a legal document that typically comes with a home loan. It allows the lender to repossess the property if the borrower defaults on payments or violates the terms of the loan agreement.

A mortgage loan originator (MLO) is an entity, organization, or individual that initiates and assists a borrower through the loan application, underwriting, and approval process.

A non-arm’s length transaction in real estate occurs when two parties have a pre-existing relationship (such as marriage, blood relation, friendship, business partnership, or employment) that may influence the fairness and outcome of the sale.

Non-judicial foreclosure is a foreclosure process that allows the lender to foreclose the property without involving the courts. Its timeline is much shorter than a judicial foreclosure.

A note, specifically a real estate note, is a legal document that spells out the terms and conditions of an agreement or loan between two parties, such as a buyer and a lender.

A notice of default is a letter sent to a defaulting party as a notification that they have failed to meet their contractual obligations.

An option gives a buyer the exclusive right but not the obligation to buy a property from a seller at a pre-determined price within a specific timeframe.

Owner-occupied refers to property that is the titleholder’s primary residence. Owner-occupied is the opposite of an absentee-owned property, where the titleholder lives at a different location.

A power of sale is a mortgage clause that authorizes the lender to sell the property if the borrower defaults on the loan. This process only applies to non-judicial foreclosure situations.

The legal process that settles the estate of a deceased person. During probate, the court supervises the payment of expenses and debts and the distribution of assets to heirs following the will or law if the deceased died intestate.

A promissory note is a document that legally binds a borrower to repay the loan according to the note's terms and conditions. It is also known as IOU, loan agreement, or simply a note.

“Property Insurance” is a generic term for various types of insurance that protect a specified property against damage, theft, or personal liability. Real estate is the most popular subject of property insurance, but one can get a policy for almost anything of value.

A purchase agreement (PA) is a written agreement between a buyer and seller to purchase and sell real estate.

A quiet title action is a legal proceeding that establishes the rightful owner of the property, especially when there is a disagreement or competing claim on it. Its name refers to “quieting” the disputing claim.

Return on investment (ROI) measures the profitability of an investment. ROI is an investment's net gain or loss ratio versus its return.

Seller financing or owner financing is a real estate financing agreement where a buyer agrees to pay the seller in installments instead of taking out a mortgage from a lender.

Single-source funding is a method to finance two or more transactions in a double closing using only an end buyer's purchase proceeds.

A surveyor is a professional who measures and documents the size, location, dimensions, and features of a property, such as land.

A title search is a comprehensive examination of public records on the history of a particular property to confirm its chain of title and discover encumbrances on it (if any).

A map that shows the relative elevation, depth, contour lines, and other physical characteristics of a parcel of land.

Transactional funding (also known as flash cash or same-day funding) is a creative financing strategy that involves a short-term loan borrowed and paid back quickly to conduct a double closing.

An interest rate that changes over a specified period in the life of the loan. Interest rates fluctuate due to market factors.

Real estate wholesaling is a business model that involves finding deeply discounted properties from motivated sellers and getting them under contract, with the intent of assigning the contract to another buyer while collecting an assignment fee or simply re-selling the property to another buyer at a higher price.

Zoning organizes land in a community and sets limits on how it can be used. It categorizes land into specified sectors for specific developmental or operational uses.