40 Real Estate Terms Every Investor Should Know

Kamlesh Yadav K

As a beginner, when you are in real estate, you come across many real estate terms which are difficult to understand. Some terms you might have heard and some terms may be completely new to you.

Below 40 terms are commonly used in the real estate sector which can guide you when you are dealing with real estate

1. Abstract of Title – Abstract of title means details of previous owners of a property. It consists summary of original grants and subsequent encumbrances of the property. 

2. Acknowledgement – It is a declaration made to public officials to take notice that a sale agreement was executed in a voluntary act. 

3. Administrator – It is a public official elected by the district court. The administrator settles the estate of the person who is deceased without leaving a will. 

4. Air Rights – It is a right of open space above the property of an owner. The owner can sell this space to a company that wants to use this space for cable wires or skywalks. 

5. Amenities – These are services or facilities around the property which can increase the value of the property. For example, swimming pool, gym, basketball, tennis court, playhouse, etc. 

6. Bilateral Contract – It is a contract between two parties where each party is legally bound to do acts promised to each other.  

7. Broker – Person who buys and sells properties for a commission. 

8. Buydown – A payment is done by the seller to aid the buyer eligible for a loan. 

9. Cash Flow – A net income from a property after deducing all expenses from total income. 

10. Collateral – Something of value given to a lender as a security for debt or loan. 

11. Commission – This is a percentage of the price of property sold given to the broker for the services offered by him/her. 

12. Depreciation – An expense deduction taken over a while from income property for tax purposes. 

13. Encroachment – Constructing structures like fences, and walls that invade the property of another person.  

14. Equity – An interest or part of the value of a property owned by an owner of the property. 

15. Erosion – Gradual decaying of land by wind, water, and weather is called erosion. It decreases the quality of the soil land by decaying the elements in the soil. 

16. Eviction – It is a legal process when the person is expelled from possession of the property. 

17. Expenses – It includes repairs and other costs deducted from the income of the property. 

18. Fixture – It is a personal property that has been so affixed that became real estate property. 

19. Governmental Lots – Fractional areas in the government survey method that are less than a quarter of an area. 

20. Grant – Action of transferring ownership or title to real property. 

21. Grantee – A person to whom property has been transferred. The buyer is called a Grantee. 

22. Grantor – A person who transfers the property. The seller is called a Grantor. 

23. Implied Grant – It is a method when one party uses the property of another party which gives benefits to both parties.  

24. Index Lease – It is a type of lease that permits to increase or decrease of rent according to market situations.  

25. Joint Tenancy – It is the right by which two or more parties co-own the property. When one party dies, ownership of the property goes to the surviving party by the right of survivorship. 

26. Land Tax – It is a tax paid on the value of property to the state. 

27. Liquidity – It is the ability to sell a property and convert it into cash. 

28. Listing Agreement – It is a contract between owner and broker which allows the broker to sell the property of the owner on the terms of the owner at a particular time. 

29. Money Market – Institutions that supply money and credit to borrowers are known as money markets. It includes banks, savings – loan associations, etc. 

30. Mortgage – It includes a conditional transfer of the property for a loan. 

31. Net worth – Total value of a person’s assets without the liabilities. 

32. Notary Public – These are officials which carry out actions like certifying documents, accepting affidavits, etc. 

33. Open-end Mortgage – It is a mortgage amount that can be expanded by the maximum amount. 

34. Principal – It’s the original amount of the total due loan. 

35. Real Estate Investment Trusts – These trusts invest in real estate properties. Investors which invest in Real Estate Investment Trusts i.e., REITs get the profit earned by REITs. 

36. Recission – It is an end of an agreement between two parties. 

37. Stamp Duty – It is a tax paid on a legal document of property transfer.  

38. Subletting – When a tenant is already renting a property, rent some part of the apartment to another tenant. If the tenancy agreement prohibits the tenant from subletting, then the tenant has to take permission from the owner of the property. 

39. Unilateral Contract – In this contract one party promises to act if the second party acts as what is written in the contract. Here, the second party is not obliged to act as a contract. 

40. Zoning – It is a method of dividing a city into zones to apply regulations. Each zone has its designated structure and buildings. 


If you think this list is exhaustive, you are wrong. As you get deeper into the industry, you will come across many more terms which are must-knows to perform better in the industry. After going through this listicle, you now may have an idea about terms of real estate with which you were not very much familiar.

There will be many terms you may come across that you have to search again for their meaning. To be clear about those terms, to get a clear view and perspective you should always consider a professional agency, Roodland has plenty of experience in this business and can provide you best professional services. Drop a mail at info@roodland.com to connect with us.


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