Real Estate Glossary: Terms & Abbreviations A–Z

After Repair Value is an estimate of what a property could sell for after planned renovations are completed. Investors typically estimate ARV from comparable closed sales and then work backward to determine an acceptable purchase price.

Use the Deal Analyzer & MAO Calculator to see how ARV affects an investor offer ceiling.

An assignment transfers a buyer’s contractual rights to another party when the contract and applicable law allow it. In wholesaling, an investor may contract to purchase a property and then assign that contract to an end buyer for an agreed fee.

Important: wholesaling, assignment disclosures, licensing, and marketing rules vary by jurisdiction.

As-is means a property is being offered in its present condition rather than being renovated or improved first. It does not automatically eliminate every disclosure duty, inspection right, or contract condition.

For a distressed home, an as-is cash-buyer route may reduce the need for pre-sale repairs. See how the seller process works.

A Broker Price Opinion is a real-estate broker’s estimate of a property’s likely market value or selling range. Lenders and servicers may use BPOs in situations such as default servicing, short-sale review, or portfolio valuation.

A buyer’s market generally means available housing supply is relatively strong compared with buyer demand, giving purchasers more negotiating leverage. Distressed homes can face additional pressure when buyers have many move-in-ready alternatives.

Cap rate compares a property’s annual net operating income with its value or acquisition price. Investors use it as one way to compare income-producing properties, but it does not capture financing structure, appreciation, or every future expense.

A cash buyer purchases without making the transaction dependent on conventional mortgage financing. Cash transactions can sometimes move faster, but title work, inspections, probate, liens, occupancy, and other issues can still affect closing time.

A Comparative Market Analysis estimates a likely listing or sale range by comparing a property with relevant recent sales and active competition. Condition adjustments matter: a heavily damaged home should not be treated as identical to a renovated comparable.

Closing costs are transaction expenses associated with transferring real estate. Depending on the location and deal, they may include title or attorney fees, recording charges, transfer taxes, brokerage compensation, loan charges, prorations, and other settlement items.

Always review the purchase agreement and final settlement statement rather than assuming a direct cash sale has zero costs.

Comps are similar properties used to help estimate market value. Useful comparisons typically consider location, size, age, features, lot, condition, sale date, and whether the transaction was truly comparable.

A contingency is a contract condition that can affect whether a buyer or seller must proceed. Common examples involve financing, inspections, appraisal, title, due diligence, or the sale of another property.

A distressed property is a broad term for real estate affected by physical condition, financial pressure, legal complications, ownership issues, or difficult occupancy. Examples include major repair needs, fire or water damage, foreclosure risk, probate, liens, or long-term vacancy.

Days on Market measures how long a listing has been exposed to the market under the data rules used by the applicable listing service or platform. High DOM can sometimes affect buyer perception or negotiating leverage.

A double close uses two separate transactions, commonly seller → intermediary buyer and intermediary buyer → end buyer. Funding, disclosure, title-company practices, costs, and legal requirements can make the structure more complex than an assignment.

Due diligence is the buyer’s investigation of a property and transaction before becoming fully committed under the contract. It can include inspections, title review, repair estimates, zoning, leases, utilities, insurance, environmental issues, and financial analysis.

An Earnest Money Deposit is money a buyer deposits under a purchase contract to demonstrate commitment to the transaction. Whether it is refundable depends on the agreement, contingencies, deadlines, and applicable law.

Equity is the portion of a property’s value not offset by debt secured against it. A simple starting estimate is property value minus mortgage balances and other liens, although actual sale proceeds also depend on transaction costs and payoff figures.

An equity split describes how ownership, sale proceeds, or profits are divided among partners or capital participants. The exact split should be documented rather than assumed from who contributed money, labor, or the deal.

Escrow generally refers to money, documents, or transaction items held by a neutral third party until agreed conditions are satisfied. The specific closing process and terminology vary by state.

Fair Market Value generally describes the price a knowledgeable, willing buyer and seller might agree to under ordinary market conditions without unusual pressure. A distressed or off-market transaction can sell above or below an estimated FMV depending on the facts.

A fix-and-flip strategy involves acquiring a property, improving it, and reselling it for a profit. Returns depend on acquisition price, ARV accuracy, renovation costs, financing, holding time, selling costs, taxes, and execution.

Foreclosure is the legal process a secured lender may use after a borrower defaults, subject to the loan documents and state law. Deadlines and homeowner rights are jurisdiction-specific, so anyone facing foreclosure should pay close attention to official notices and qualified legal or housing guidance.

FSBO means an owner markets a property without hiring a traditional listing agent to represent the sale. The owner is still responsible for contracts, disclosures, negotiations, and transaction coordination unless professionals are separately engaged.

Gross Rent Multiplier compares property price with gross rental income. It is a quick screening metric, not a full profitability analysis because it ignores operating expenses, vacancy, financing, repairs, and capital expenditures.

A hard money loan is typically a short-term, asset-focused loan used for real-estate investments such as acquisitions or renovations. Rates, points, fees, draw procedures, collateral requirements, and personal guarantees can differ substantially by lender.

Holding costs are expenses that continue while an investor owns a property, such as interest, taxes, insurance, utilities, lawn care, HOA charges, security, and maintenance. Longer renovation or resale timelines increase carrying risk.

An investment property is real estate acquired primarily to generate rental income, appreciation, resale profit, or another investment return rather than serving as the purchaser’s primary residence.

An inspection contingency can give a buyer defined rights after inspecting the property, such as negotiating, terminating, or proceeding as written. The exact rights depend on the contract language and applicable law.

A Joint Venture is an arrangement in which two or more parties collaborate on a specific real-estate activity or deal, with responsibilities, capital, risk, and profit sharing defined by their agreement.

A lien is a legal claim or encumbrance tied to property, often connected with a mortgage, judgment, tax obligation, contractor claim, or other debt. A lien does not automatically make a sale impossible, but it may need to be resolved or paid through closing.

Loan-to-Value compares a loan amount with the lender’s recognized property value. Higher LTV means the loan represents a larger share of that value and generally leaves the lender with less equity cushion.

Maximum Allowable Offer is an investor’s chosen purchase-price ceiling after considering resale value, repair costs, financing, holding costs, selling expenses, risk, and desired profit. There is no single MAO formula that fits every deal.

Compare a rule-of-thumb MAO with a cost-based MAO in the free Deal Analyzer.

Market conditions describe the forces affecting real-estate activity, including inventory, buyer demand, affordability, financing costs, sales pace, price trends, construction, employment, and local economic conditions.

An MLS is a cooperative real-estate listing database used by participating real-estate professionals under the rules of the particular service. MLS data often feeds consumer-facing listing websites, but access and fields vary.

Net Operating Income is property operating income minus qualifying operating expenses before items such as debt service and income taxes. Investors commonly use NOI when analyzing income-producing real estate.

An off-market property is not being publicly marketed through the usual listing channels at that time. Sellers may choose an off-market approach for privacy, speed, convenience, property condition, tenant issues, or because they already have a potential buyer.

PITI stands for Principal, Interest, Taxes, and Insurance. It is commonly used to describe the main components included in or associated with a monthly mortgage housing payment.

Pre-foreclosure generally refers to the period after serious mortgage default but before a completed foreclosure sale. The exact timeline, notices, reinstatement rights, and alternatives depend on the loan and state law.

Probate is a court-supervised process that may be required to administer a deceased person’s estate. A property sale can depend on ownership, estate authority, heirs, liens, court requirements, and local probate law.

A Purchase & Sale Agreement is the contract setting the terms of a real-estate transaction. It can address price, earnest money, due diligence, contingencies, closing, possession, included property, defaults, and other obligations.

A rent roll summarizes rental units, occupants, lease terms, rents, and often payment or vacancy information. Buyers use it as part of rental-property due diligence and should verify it against leases and actual collections.

REO commonly means real estate owned by a lender or financial institution after foreclosure or another transfer of ownership. REO properties are typically sold under the institution’s own procedures and contract terms.

Repairs can range from cosmetic work to major structural, mechanical, water, fire, mold, electrical, roofing, or safety issues. For investors, repair estimates materially affect MAO and profit. For sellers, an as-is route may avoid completing the work before a sale.

Seller financing is a transaction in which the seller finances some or all of the buyer’s purchase obligation instead of receiving the entire purchase price through cash or third-party financing at closing. Terms, documentation, servicing, taxes, and legal requirements matter.

A seller’s market generally exists when buyer demand is strong relative to available inventory, which can improve seller negotiating leverage. Property condition and price still matter even in a strong market.

The Housing Choice Voucher Program, often called Section 8, is a federal rental-assistance program administered through public housing agencies. Owners participating in the program must follow applicable program, inspection, rent, and lease requirements.

A short sale is a sale in which the available proceeds are insufficient to fully satisfy one or more secured debts and the affected creditor agrees to the proposed resolution. Approval, deficiency treatment, taxes, and credit effects can be complicated.

Title refers to legal ownership rights in real property. A deed is an instrument used to transfer an interest, while title describes the underlying ownership status and associated rights or encumbrances.

A title search reviews public records and other relevant information to identify ownership, liens, judgments, easements, restrictions, or other matters affecting title. Problems discovered during title work can delay or change a closing.

Vacancy rate measures the share of rental units or rentable time that is unoccupied. Investors account for vacancy because projected gross rent is not the same as rent actually collected over time.

Wholesaling commonly involves obtaining contractual rights to buy a property and then assigning those rights, or otherwise structuring a transaction, for compensation. Practices that are legal, licensed, or reportable vary by jurisdiction and by what the wholesaler is actually doing.

Investors evaluating a wholesale deal can use the Deal Analyzer and include an assignment fee in the actual cost basis.