Frequently Asked Questions for Selling, buying, Investing and mortgages
These FAQs cover a broad range of topics that buyers, sellers, borrowers and investors commonly inquire about. Feel free to ask for more detailed information on any of these points!
Borrow
General Loan Process
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral.
Anyone with a stable income, good credit history, and the ability to make a down payment can apply for a mortgage.
Mortgages enable individuals to buy homes without paying the full price upfront, spreading the cost over many years.
Start the mortgage process before you begin house hunting to understand your budget and get pre-approved.
A pre-approval is a lender’s conditional commitment to lend you a certain amount, based on a preliminary review of your financial information.
Pre-approval gives you a clear idea of your budget and strengthens your offer when buying a home.
The amount you can borrow depends on your income, credit score, and the lender’s policies.
You can apply for a mortgage through banks, credit unions, mortgage brokers, or online lenders.
A mortgage broker is an intermediary who helps borrowers find and secure a mortgage.
Mortgage brokers can offer access to multiple lenders and help find the best rates and terms.
Mortgage brokers are typically paid a commission by the lender or borrower.
The process can take anywhere from a few weeks to a couple of months.
Terms and Explanation
A mortgage term is the length of time you have to repay your loan, commonly 15 or 30 years.
Shorter terms generally have lower interest rates and result in less interest paid over the life of the loan.
A fixed-rate mortgage has a constant interest rate, while an adjustable-rate mortgage (ARM) has an interest rate that can change periodically.
A down payment is the upfront amount you pay when purchasing a home, typically a percentage of the home’s price.
An interest rate is the cost of borrowing money, expressed as a percentage of the loan amount.
Interest rates fluctuate based on economic factors, such as inflation, employment, and the Federal Reserve’s policies.
A rate lock guarantees a specific interest rate for a set period, protecting you from rate increases during the mortgage process.
Lock your rate when you’re comfortable with the current rates and ready to move forward with your mortgage.
You can lock in an interest rate with your lender once your mortgage application is submitted.
Some lenders offer a float-down option, allowing you to take advantage of lower rates, but terms vary.
Mortgage payments typically include principal, interest, taxes, and insurance (PITI).
An interest-only mortgage allows you to pay only the interest for a certain period, with principal payments starting later.
Interest-only mortgages can lower initial payments but may lead to higher payments later.
Borrowers with less than 20% down payment typically need mortgage insurance.
An escrow account is used by the lender to hold funds for property taxes and insurance.
Escrow accounts ensure that property taxes and insurance premiums are paid on time.
An appraisal is an assessment of a property’s value conducted by a licensed appraiser.
Lenders require an appraisal to ensure the property’s value supports the loan amount.
An appraisal estimates property value, while an inspection evaluates the condition of the property.
You may need to renegotiate the price, pay the difference, or cancel the deal.
A mortgage payoff is the full repayment of your loan balance, ending the mortgage agreement.
Request a payoff statement from your lender to determine the exact amount needed to pay off your mortgage.
You can pay off your mortgage faster by making extra payments, biweekly payments, or increasing your monthly payment.
Qualification
A higher credit score can lead to better mortgage terms and lower interest rates.
Paying bills on time, reducing debt, and correcting errors on your credit report can improve your score.
The DTI ratio is your monthly debt payments divided by your gross monthly income, expressed as a percentage.
Lenders use the DTI ratio to evaluate your ability to manage monthly payments and repay the loan.
Lower your DTI by paying down debt or increasing your income.
The LTV ratio is the loan amount divided by the property’s appraised value, expressed as a percentage.
Lenders use the LTV ratio to assess risk; a lower LTV often results in better loan terms.
Making a larger down payment or paying down your mortgage can lower your LTV ratio.
Fee and Disclosure
Closing costs are fees paid at the closing of a real estate transaction, including loan origination, appraisal, and title fees.
Closing costs typically range from 2% to 5% of the loan amount.
Some lenders allow closing costs to be rolled into the mortgage, increasing the loan amount.
A loan estimate is a document that provides details about the mortgage, including the interest rate, monthly payment, and closing costs.
A loan estimate helps you compare different mortgage offers.
Compare interest rates, loan terms, fees, and the overall cost of each mortgage offer.
Avoid mortgage scams by working with reputable lenders, reading all documents carefully, and being wary of offers that seem too good to be true.
Loan Types
A conventional loan is a mortgage not insured or guaranteed by the federal government.
Conventional loans can offer better terms and lower costs for borrowers with good credit and a significant down payment.
A jumbo loan is a mortgage that exceeds conforming loan limits set by Fannie Mae and Freddie Mac.
Borrowers purchasing high-value properties often need jumbo loans.
Jumbo loans typically require higher credit scores, larger down payments, and more extensive documentation.
An FHA loan is a mortgage insured by the Federal Housing Administration, designed for low-to-moderate-income borrowers.
FHA loans have lower down payment requirements and more flexible credit criteria.
The buyer will typically conduA VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans, active-duty service members, and their families.ct inspections, secure financing, and the sale will move towards closing.
VA loans offer benefits such as no down payment, no PMI, and competitive interest rates.
A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture, for eligible rural and suburban homebuyers.
USDA loans offer no down payment options and competitive interest rates.
A bridge loan is a short-term loan used to bridge the gap between buying a new home and selling your current one.
A bridge loan Bridge loans can provide temporary financing but typically have higher interest rates and fees.is a short-term loan used to bridge the gap between buying a new home and selling your current one.
Qualification depends on your credit, income, and the equity in your current home.
A reverse mortgage allows homeowners aged 62 or older to convert home equity into cash, with no monthly payments required.
A reverse mortgage can provide additional income for retirees but reduces home equity.
Risks include reduced inheritance for heirs and the requirement to maintain the home and pay property taxes and insurance.
Refinance and Home Equity
Refinancing is the process of replacing an existing mortgage with a new one, often to get a better interest rate or change the loan term.
Refinancing can lower your monthly payments, reduce your interest rate, or shorten your loan term.
You need a good credit score, sufficient equity in your home, and a steady income to qualify for refinancing.
You need a good credit score, sufficient equity in your home, and a steady income to qualify for refinancing.
The best time to refinance is when interest rates are lower than your current rate and you plan to stay in your home for several years.
A cash-out refinance replaces your existing mortgage with a new, larger loan, allowing you to take out the difference in cash.
A cash-out refinance can provide funds for home improvements, debt consolidation, or other expenses.
Risks include higher monthly payments, increased debt, and potential loss of your home if you can’t make payments.
A home equity loan allows you to borrow against the equity in your home, receiving a lump sum that you repay with fixed payments.
Home equity loans can be used for major expenses, such as home improvements or education costs.
A HELOC provides a revolving credit line, allowing you to borrow as needed, while a home equity loan gives a lump sum.
A second mortgage is an additional loan taken out on a property that already has a primary mortgage.
Second mortgages can provide funds for large expenses, but they add another monthly payment and increase your total debt.
Financial hardship
Mortgage forbearance is a temporary suspension or reduction of mortgage payments, typically granted during financial hardship.
Forbearance can provide short-term relief during financial difficulties but may result in higher payments later.
Contact your lender to discuss forbearance options and submit any required documentation.
A mortgage modification involves changing the terms of your loan, such as extending the term or reducing the interest rate, to make payments more affordable.
Modification can help avoid foreclosure and make your mortgage more manageable during financial hardship.
Qualification depends on your financial situation, loan type, and lender’s policies.
Foreclosure is the legal process where a lender takes possession of a property due to the borrower’s failure to make mortgage payments.
Avoid foreclosure by communicating with your lender, seeking forbearance, or exploring modification and refinance options.
A short sale occurs when a homeowner sells their property for less than the mortgage balance, with lender approval.
A short sale can prevent foreclosure and minimize damage to your credit.
Qualification typically requires financial hardship and lender approval.
A deed in lieu of foreclosure is when the homeowner voluntarily transfers ownership to the lender to avoid foreclosure.
This option can be less damaging to your credit than foreclosure.
Contact your lender to discuss eligibility and submit the necessary documentation.
Buy
General Buying Process
Determine your budget, saving, allocating funds and start researching neighborhoods.
Present a written offer to the seller through your real estate agent
A buyer’s agent represents the buyer’s interests in a real estate transaction.
While not required, a real estate agent can provide expertise and negotiate on your behalf.
Typically, 3-20% of the home’s purchase price.
Proof of funds, purchase agreement, and identification.
A deposit made to show the seller you are serious about purchasing the home.
Fees and expenses you pay when you close on your home, typically 2-5% of the loan amount.
Buying a home with cash means paying the entire purchase price upfront without borrowing any money.
Taxes paid by property owners, typically used to fund local services like schools and roads.
No monthly mortgage payments, quicker closing, and potential seller discounts.
A document that provides an estimate of the costs you will incur at closing.
Yes, it’s wise to keep an emergency fund for unexpected expenses.
Yes, it protects your investment from damage and liability.
You won’t have mortgage interest deductions, but property taxes and other deductions still apply.
Yes, but consult with an attorney regarding visa and tax implications.
Property Selection, Legal and Inspection
Use wire transfers, certified checks, or bank transfers with safeguards.
Yes, but be aware of potential penalties and tax implications.
Verify the seller, use escrow services, and consult with professionals.
Yes, it identifies potential issues with the property.
It protects against legal issues with the property’s ownership history.
Usually 1-2 weeks, compared to 30-45 days with a mortgage.
Yes, sellers may be more willing to negotiate for a quick, guaranteed sale.
Yes, but the process can be more complicated and take longer.
Yes, but be aware of potential risks and necessary repairs.
Yes, but be prepared to pay immediately or within a short timeframe.
Location, condition, price, and resale value.
Research the local market, inspect the property, and consider future resale potential.
Only if you have additional funds for renovations and understand the risks.
A short sale is when a home is sold for less than the mortgage owed, and yes, you can buy one.
Yes, but ensure the builder is reputable and the property is inspected.
Market Conditions and Resources
Lower interest rates may reduce competition from mortgage buyers, while high demand can increase prices.
Yes, it may offer opportunities for lower prices and less competition.
Real estate can be a hedge against inflation, but consider long-term value.
Timing the market is difficult; focus on your personal financial readiness.
Real estate agents, online guides, and financial advisors.
A buyer’s agent represents your interests; it can be helpful but is not required.
Look for experience, reputation, and specialization in real estate law.
Property search websites, mortgage calculators, and real estate apps.
They can help assess your financial situation and plan for the purchase.
It depends on the market, property value, and your financial goals.
Negotiation and Offers
Offer a competitive price, provide proof of funds, and be flexible with closing dates.
Yes, such as inspection and appraisal contingencies.
A deposit to show your commitment, typically 1-2% of the purchase price.
Yes, sellers can choose any offer they prefer.
Be prepared to share documentation showing your available funds.
Yes, if contingencies aren’t met or other legal reasons arise.
Research the market, get an appraisal, and negotiate.
It’s not required, but it’s a good idea to ensure you’re paying a fair price.
Yes, it can reveal property boundaries and potential issues.
Overpaying, not getting an inspection, and not keeping enough cash reserves.
Closing Process
Finalizing the sale, signing documents, and transferring funds.
It’s recommended to ensure all legal aspects are covered.
A deed is the legal document transferring ownership, signed at closing.
Typically, you receive the keys after closing when the sale is final.
Yes, through mail-away or online closing services.
Final walkthrough, verifying repairs, and reviewing closing documents.
Shop for homeowners insurance and choose a policy that fits your needs.
Damage to the home, personal property, and liability.
Depends on your location; assess the risks and purchase if needed.
Conduct a title search or hire a title company.
Notify the postal service, banks, utilities, and other relevant entities.
Hire movers, pack efficiently, and plan your move-in date.
Post-Purchase Considerations
Change the locks, set up utilities, and update your address.
Yes, to legally establish your ownership.
Contact each utility company to set up new accounts.
Only if you have a clear plan and budget for renovations.
Regularly inspect and repair to keep it in good condition.
Property taxes are based on the home’s assessed value and local tax rates.
Address issues with the seller if covered by contingencies or seek legal advice.
Yes, large cash transactions must be reported to the IRS.
Yes, ensure you comply with local rental laws and regulations.
Consider rental income, appreciation, and costs.
Future Planning
Yes, but consider market conditions and any capital gains taxes.
Set aside a portion of your budget for ongoing repairs and improvements.
It’s an option if you need liquidity, but weigh the pros and cons.
Keep detailed records and consult with a tax advisor.
Home equity loan, line of credit, or selling other assets.
Sell
General Selling Process
The first step is to contact a real estate agent to get a market analysis of your home and understand the selling process.
A professional appraisal, a comparative market analysis (CMA) from a real estate agent, and looking at recent sales in your area can help determine your home’s value.
A Comparative Market Analysis compares your home to similar homes in your area that have recently sold, are currently for sale, or were recently listed but did not sell.
Yes, making necessary repairs can increase your home’s value and attractiveness to buyers.
Very important. First impressions matter, and good curb appeal can attract more potential buyers.
Property deed, past utility bills, property tax information, mortgage information, and any repair receipts.
It depends on the market, condition of the home, and pricing, but typically it can take anywhere from a few weeks to several months.
While it’s possible to sell without one, a real estate agent can provide expertise, marketing, and negotiation skills.
Commissions vary, but typically they are about 5-6% of the sale price, split between the buyer’s and seller’s agents.
Spring and summer are generally the best times to sell, but this can vary depending on your local market.
Pricing and Offers
Overpricing can lead to longer time on the market and may result in price reductions and lower final offers.
Yes, you can reject any offer if it doesn’t meet your needs or expectations.
A counteroffer is a response to an offer, where you change terms such as price or contingencies.
Your agent will help you review and compare offers to choose the best one or negotiate further.
Earnest money is a deposit made by the buyer to show their serious intent to purchase the property.
It depends on the market, condition of the home, and pricing, but typically it can take anywhere from a few weeks to several months.
Contingencies are conditions that must be met for the sale to proceed, like home inspections or financing.
It allows the buyer to have the home professionally inspected and negotiate repairs or credits based on findings.
If financing is a contingency and it falls through, the buyer can back out, and the earnest money may be returned.
Preparing Your Home
Clean, declutter, depersonalize, and arrange furniture to showcase your home’s best features.
A professional stager can enhance your home’s appeal, potentially leading to a quicker sale and higher offers.
Use neutral colors, enhance lighting, remove personal items, and ensure the home is clean and well-maintained.
Very important, as high-quality photos attract more buyers and can significantly impact online interest.
Open houses can increase exposure, but they are not always necessary. Discuss with your agent if it’s right for your property.
Disclose any known defects, past repairs, and issues like mold, pests, or water damage, as required by law.
Yes, but you need to follow local laws regarding tenant rights and lease agreements.
It’s best to remove pets from the home or secure them in a designated area to ensure safety and avoid distractions.
No, it’s better to leave so potential buyers can freely explore the home and discuss it with their agent.
Fresh paint, updated fixtures, landscaping, and thorough cleaning can make a big difference.
Legal and Financial Considerations
It depends on the state. Some require an attorney for real estate transactions, while others do not.
A document where you disclose known issues with the property to potential buyers.
You may need to pay capital gains tax, transfer tax, and prorated property taxes.
Yes, the mortgage will be paid off from the proceeds of the sale at closing.
A short sale occurs when the proceeds from the sale are less than the balance owed on the mortgage, and the lender agrees to accept less.
If you’ve lived in the home for at least two of the last five years, you can exclude up to $250,000 (or $500,000 for married couples) of profit from capital gains tax.
It allows you to defer capital gains tax by reinvesting the proceeds into a similar property within a certain time frame.
Closing costs are fees associated with finalizing the sale, typically paid at closing and can include title insurance, escrow fees, and attorney fees.
Yes, you can negotiate with the buyer on who pays for certain closing costs.
An escrow is a neutral third party that holds funds and documents until all conditions of the sale are met.
Marketing and Exposure
Your agent will list it on MLS, advertise online, use social media, and possibly hold open houses or virtual tours.
The Multiple Listing Service (MLS) is a database used by real estate agents to share listings and find buyers.
Yes, social media can reach a wide audience and increase visibility.
Virtual tours allow buyers to explore your home online through 360-degree images or videos.
Use professional photos, write a compelling description, highlight unique features, and price it competitively.
Websites like Zillow, Realtor.com, and Redfin where your home can be listed for maximum exposure.
Yes, some agents have access to international listing services, and online platforms can reach global buyers.
They create a marketing plan, list your home, host showings, and use their network to attract buyers.
Reevaluate your pricing, marketing strategy, and condition of your home with your agent.
Look for experience, local market knowledge, a strong marketing plan, and good communication skills.
During the Sale
A home inspection is an examination of the property’s condition, typically requested by the buyer.
A pre-listing inspection can identify issues before listing, allowing you to address them proactively.
You can negotiate with the buyer to make repairs, offer a credit, or adjust the sale price.
The buyer will typically conduct inspections, secure financing, and the sale will move towards closing.
An appraiser provides an unbiased estimate of the home’s value for the buyer’s lender.
You may need to renegotiate the price, ask the buyer to cover the difference, or dispute the appraisal.
A title search ensures there are no legal issues, liens, or disputes over the property ownership.
The closing date is when the sale is finalized, and ownership is transferred to the buyer.
Closing typically takes 30-60 days from the acceptance of an offer.
You can negotiate a rent-back agreement if you need to stay after closing.
After the Sale
You’ll sign documents, the buyer’s funds will be transferred, and the deed will be recorded.
Typically, you’ll receive the funds shortly after closing, often on the same day.
If issues were undisclosed, the buyer may have legal recourse. Ensure all disclosures are complete and accurate.
Yes, unless otherwise negotiated, you should be prepared to move out by the closing date.
Leave any manuals, warranties, and keys. Some states also require you to leave certain fixtures and appliances.
Yes, but ensure all transactions are legally documented and follow fair market practices.
Contact your utility providers to schedule disconnection or transfer to the new owner.
You can make a contingent offer or bridge loan arrangements, but consult with your agent for the best strategy.
Update your address with the postal service, banks, insurance companies, and other important entities.
The final walk-through allows the buyer to inspect the home before closing to ensure it’s in agreed-upon condition.
Financial and Market Conditions
Be patient, consider adjusting your price, or improving your home’s condition and marketing.
Yes, but be prepared for potentially lower offers and longer time on the market.
A buyer’s market occurs when there are more homes for sale than buyers, giving buyers more negotiating power.
A seller’s market happens when there are more buyers than available homes, often leading to higher prices and quicker sales.
Lower interest rates can attract more buyers, while higher rates may slow down the market.
It varies, but typically homes are on the market for 30-90 days.
Price competitively, ensure good condition, and use effective marketing strategies.
Reevaluate your price, condition, and marketing. You may need to make changes or wait for a better market.
Renting can provide income but also comes with responsibilities. Consider your financial goals and market conditions.
Foreclosures can lower nearby property values, making it harder to sell your home at your desired price.
Specialized Situations
Yes, but it requires following specific legal procedures. Consult an attorney familiar with probate sales.
FSBO means selling your home without a real estate agent. It can save on commissions but requires more effort on your part.
It’s a process where you voluntarily transfer ownership to the lender to avoid foreclosure.
Yes, you may need to negotiate with your lender or consider a short sale.
A home warranty covers repairs or replacements of major home systems and appliances for a specified period.
Offering a home warranty can make your home more attractive to buyers by providing peace of mind.
Liens must be resolved before or at closing. This may involve paying off debts or negotiating with lienholders.
Highlight its unique features, ensure compliance with preservation regulations, and market to the right audience.
Yes, but it requires subdividing the land, which involves legal, zoning, and surveying processes.
Dual agency occurs when one agent represents both the buyer and seller in the same transaction. It’s legal in some states but can pose conflicts of interest.
Practical Tips and Final Thoughts
Regular cleaning, decluttering, and having a quick cleanup routine can help maintain a presentable home.
Consider the offer as a starting point for negotiations and respond with a counteroffer.
Remove personal items and sensitive information, and limit the information shared about your situation.
Local agents have knowledge of the area, market conditions, and a network of potential buyers.
Yes, but it may have legal and financial consequences, including loss of earnest money or being sued by the buyer.
Start planning early, declutter, hire movers if needed, and notify relevant parties of your move.
Highlight these features in your marketing materials and work with your agent to find the right buyers.
Evaluate the price, contingencies, buyer’s financial strength, and closing timeline.
An as-is sale means selling the property in its current condition without making any repairs or improvements.
Yes, through off-market sales, but it may limit your exposure and potential buyer pool.
Invest
General Real Estate Investing
Real estate investing involves purchasing property to generate income or profit through renting, selling, or holding properties for value appreciation.
Anyone with the financial capacity, long-term investment goals, and willingness to learn about the market can invest in real estate.
Start by educating yourself, assessing your financial situation, setting investment goals, and exploring financing options. Begin with smaller properties and gradually expand.
The best time to invest is when you have a solid financial foundation, understand the market, and can capitalize on opportunities, regardless of market cycles.
Choose locations with strong economic growth, job opportunities, and population increase. Research local market trends and property values.
Residential properties, commercial properties, industrial properties, real estate investment trusts (REITs), and land.
A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate, offering investors a way to invest in large-scale properties.
A wholesaler contracts a property with the intent to sell the contract to another investor at a higher price.
Financial Aspects
Cash flow is the net income from a property after deducting operating expenses, mortgage payments, and taxes.
Appreciation is the increase in a property’s value over time due to market demand, improvements, and inflation.
Financing options include conventional loans, FHA loans, VA loans, hard money loans, private money lenders, and partnerships.
Leverage involves using borrowed money to increase the potential return on investment.
Risks include market fluctuations, property damage, vacancies, legal issues, and changes in interest rates.
Mitigate risks by conducting thorough research, diversifying your portfolio, maintaining properties, and securing insurance.
Property insurance provides financial protection against damage or loss to real estate due to events like fire, theft, or natural disasters.
Liability insurance covers legal and medical costs if someone is injured on your property.
A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a sold property into a similar property.
Depreciation is the gradual reduction of a property’s value over time for tax purposes, reflecting wear and tear.
Syndication involves pooling funds from multiple investors to purchase larger properties or projects.
A partnership is a collaborative investment where two or more parties share the ownership, responsibilities, and profits of a property.
Equity is the difference between a property’s market value and the outstanding mortgage balance.
Legal Aspects
An escrow account is a third-party account holding funds or property until contractual obligations are met.
Zoning regulations determine how properties in specific areas can be used, such as residential, commercial, or industrial.
A real estate attorney specializes in legal matters related to real estate transactions, contracts, and disputes.
A lien is a legal claim against a property as security for a debt or obligation.
A tax lien is a claim by the government on a property due to unpaid taxes, which must be paid before the property can be sold.
A deed is a legal document that transfers ownership of real estate from one party to another.
A title is the legal ownership of a property, confirmed by a deed and recorded in public records.
A title search is an investigation of property records to ensure clear ownership and identify any liens or encumbrances.
Property Management
Property management involves overseeing and managing rental properties, including maintenance, tenant relations, and rent collection.
A property management company handles the daily operations, maintenance, and tenant relations for rental properties.
An REIG is an organization that buys, manages, and sells properties on behalf of a group of investors.
A lease agreement is a contract between a landlord and tenant outlining the terms and conditions of renting a property.
A ground lease is a long-term lease agreement where the tenant rents land and may build on it, but the land remains the property of the landlord.
A landlord is an individual or entity that owns rental property and leases it to tenants.
An absentee landlord owns rental property but does not live near or manage it personally.
A tenant is an individual or entity that rents and occupies a property from a landlord.
A security deposit is a refundable amount paid by a tenant to cover potential damages or unpaid rent.
Eviction is the legal process of removing a tenant from a property due to lease violations or non-payment of rent.
Types of Properties
An investment property is purchased to generate income or profit, not for personal use.
An owner-occupied property is a home where the owner resides and does not rent out.
Commercial properties are used for business purposes, including office buildings, retail spaces, warehouses, and industrial properties.
An income property is a property bought or developed to earn income through renting or leasing.
A vacation rental is a short-term rental property used for holiday accommodations.
Airbnb is an online platform allowing property owners to rent out short-term accommodations to travelers.
Residential properties are used for living purposes, including single-family homes, apartments, condos, and townhouses.
A single-family home is a standalone residential property designed for one family.
Multifamily properties contain multiple separate housing units, such as duplexes, triplexes, and apartment buildings.
A cooperative (co-op) is a housing arrangement where residents own shares in a corporation that owns the property.
A townhouse is a multi-story residential property sharing one or more walls with adjacent units, typically with individual entrances.
A duplex is a residential building with two separate living units, either side-by-side or stacked.
A triplex is a residential building with three separate living units.
A quadplex is a residential building with four separate living units.
A distressed property is a property in poor condition or facing foreclosure, often sold below market value.
A turnkey investment involves purchasing a fully renovated and managed property that generates immediate rental income.
Investment Strategies
Fix-and-flip involves buying a property, renovating it, and selling it for a profit.
Rental property investing involves purchasing property to generate rental income from tenants.
House hacking involves living in a property while renting out portions to offset the mortgage and expenses.
A lease option allows a tenant to lease a property with the option to purchase it at a later date.
Rent-to-own is an agreement where tenants lease a property with the option or obligation to buy it after a specified period.
Passive income is earnings generated with minimal effort, such as rental income from investment properties.
Active income involves direct involvement, such as flipping houses or managing properties.
The BRRRR method involves Buying, Renovating, Renting, Refinancing, and Repeating the process with another property.
Forced appreciation is increasing a property’s value through improvements, renovations, or better management.
Market appreciation is the increase in property value due to favorable market conditions and demand.
Financing Options
A hard money loan is a short-term, high-interest loan secured by real estate, often used by investors.
A private money lender is an individual or entity that provides loans for real estate investments, usually with more flexible terms than traditional lenders.
A bridge loan is a short-term loan used to bridge the gap between buying a new property and selling an existing one.
A blanket loan is a single mortgage covering multiple properties, often used by investors with large portfolios.
A construction loan is a short-term loan used to finance the building or renovation of a property.
Market and Sales
Market cycles refer to the fluctuations in real estate markets, including expansion, peak, contraction, and trough phases.
An appraisal is an expert assessment of a property’s value, often required for financing or insurance purposes.
A CMA is a report comparing similar properties to estimate a property’s market value.
A real estate bubble occurs when property prices rise rapidly, driven by speculative demand, and eventually collapse.
A real estate auction is a public sale of property to the highest bidder, often used for foreclosures or distressed properties.
A seller’s market occurs when demand for properties exceeds supply, often leading to higher prices and faster sales.
A buyer’s market occurs when supply exceeds demand, leading to lower prices and more negotiating power for buyers.
