Learning the 'Lingo'

Early on, when we're just getting interested in real estate investing, we're often blind sided by words or expressions tossed about by folks in the business. You know, words like land trust, escrow, title company or, in the construction business, liens, Contractor's Sworn Statement... Trust me, there are lots more.

Real estate has so many facets. The buying, the fixing, the selling. Each seems to have its
own vocabulary, and to some extent that's true. Some of the terms come out of real estate
law, developed over centuries, first in England and for hundreds of years now in this
country. Other terms develop out of the specialized agencies and service companies that
facilitate the transactions: banks, title companies, appraisal and survey firms, to name a
few.

The vocabulary of the business-
Call it "lingo", "legalese" or insider's jargon, it's the vocabulary of the business. And
behind this specialized vocabulary lie entire concepts important to our success. When my
daughter was studying for her real estate license, sure she read the books. But most
important to her were the "vocabulary cards" she made for herself and flipped through
many times a day. She believed then that if she understood the terms she'd have the
concepts. She proved her point when she passed the exam. with flying colors.

You can start now, learning this lingua franca of real estate. A few years ago my daughter
and I put together a "glossary of real estate terms" drawn from many sources and our
own experience. I've been including the glossary as an appendix to several of the
workshops we teach and students have found it useful as they get up to speed in this new
business.

Here's a sampling of what you'll find there:
assignee the recipient of the assignment of another (assignor).

assignor one who makes an assignment.(2)

basis the financial interest that the Internal Revenue Service attributes to an owner of an
investment property for the purpose of determining annual depreciation and gain or loss on the
sale of the asset. If a property was acquired by purchase, the owner's basis is the cost of the
property plus the value of any capital expenditures for the improvements to the property, minus
any depreciation allowable or actually taken. This new basis is called the "adjusted basis". (1)

consideration  1. That received by the grantor in exchange for his or her deed. 2. Something of
value that induces a person to enter into a contract.(1)

dealer, real estate one who buys and sells real estate as a business, as opposed to an investor.
The importance of the term is for tax purposes. If IRS determines that a taxpayer is a dealer,
"said tax payer is a dealer, said taxpayer will not..."

interim financing a short-term loan usually made during the construction phase of a building
project (in this case referred to as a construction loan).(1)

mechanic's lien a statutory lien created in favor of contractors, laborers and materialmen who
have performed work or furnished materials in the erection or repair of a building.(2)

There's more at the Urban Rehabber web site

Of course there's much more. A great resource when you're searching for "just the right
word". Or a vocabulary list to be mastered.  Maybe a bit of both? You will find the
Glossary on the Urban Rehabber web site: http://urbanrehabber.com/?s=glossary