Vocabulary

Question 1

The portion of a property that belongs to the owner. So if you wanted to buy a $200,000 house and got a mortgage for $50,000
What is your portion of it called?

Answer 1

Equity, in this example you would have $150,000 in equity.

Question 2

Allows you to buy a home without paying the full purchase price upfront, making homeownership more accessible to many people.

Answer 2

Mortgage

Question 3

A legal process that allows lenders to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.

Answer 3

Foreclosure

Question 4

What does it mean to have failure to meet the legal obligations of a loan, for example when a home buyer fails to make a mortgage payment.

Answer 4

Default

Question 5

The process of thoroughly researching and investigating a property before entering into a wholesale deal.

Answer 5

Due Diligence

Question 6

Two separate real estate transactions, where you first purchase the property and then sell it on the same day to another buyer.

Answer 6

Double Closing

Question 7

A legal agreement that allows you to transfer your rights and obligations as the buyer to another party, typically an investor.

Answer 7

Assignment Contract

Question 8

Similar properties in the same area that have recently sold and are used to determine the potential value of a property.

Answer 8

Comps

Question 9

What is it called when you buy a house and pay a percentage of the home’s purchase price. The remainder is covered by the mortgage loan.

Answer 9

Down Payment

Question 10

Expenses incurred during the real estate transaction, such as legal fees, title insurance, and other fees paid at the closing.

Answer 10

Closing Costs

Question 11

A deposit made by the buyer to demonstrate their serious intent to purchase the property, typically held in escrow.

Answer 11

Earnest Money

Question 12

The legal process of validating a will and settling the estate of a deceased person, often involving the sale of real estate.

Answer 12

Probate

Question 13

A right to keep possession of property belonging to another person until a debt owed by that person is discharged.

Answer 13

Lien

Question 14

An individual or entity that can purchase a property with cash, often preferred in wholesale transactions for a quicker closing.

Answer 14

Cash Buyer

Question 15

An examination of public records to ensure that the seller has legal ownership of the property and there are no outstanding liens or claims.

Answer 15

Title Search

Question 16

The amount a wholesaler charges for assigning their contract to another buyer. This fee is the wholesaler’s profit.

Answer 16

Assignment Fee

Question 17

A partnership between two or more parties to invest in real estate, often used to pool resources and share profits or losses.

Answer 17

Joint Venture (JV)

Question 18

A provision in a mortgage or deed of trust that allows the lender to demand the full repayment of the loan if the property is sold or transferred.

Answer 18

Due-on-Sale Claus

Question 19

A company that ensures a property has a clear title and handles the closing process in a real estate transaction.

Answer 19

Title Company

Question 20

The increase in a property’s value due to improvements made by the owner’s labor and effort.

Answer 20

Sweat Equity