Understanding Real-Estate Investing

Land, Housing, Commercial, or REITs?

The real estate game can seem a little overwhelming when you are just getting used to the industry's terminology.

Let's explore some you're most likely to encounter when you start shopping for a property or are about to make your first offer!

Offer / Purchase Agreement

An offer or purchase agreement is a document you as the buyer give to the seller, which expresses the amount you are offering to pay and the terms of your offer.

Technically the term “escrow” refers to money being held by a third party until specific conditions are met or so that a particular party can fulfill certain financial obligations.

Escrow / Title

Earnest Money / Deposit

Your “deposit” or “earnest money” is an agreed-upon sum that you put down to secure the sales contract and open escrow.

You must do title research to ensure the property is clear of any outstanding obligations and ready to be sold. A lien, for example, could be discovered during this process and delay the finalization of the sale.

Title Company / Title Insurance

“Due diligence” is the steps you take to ensure the property you are buying meets your expectations.

Due Diligence

These are conditions that need to be satisfied before the sale is completed. One commonly seen contingency is when a buyer's loan must be approved before the sale of the home takes place.


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