Common Glossary
A
Appreciation- value increase, improvement. Increase in value of the property.
(ARV (After repair value The value of the property after the renovation.
Assiment fee - brokerage fees paid to an agent or company for finding an asset.
Assessor - An appraiser on behalf of the district whose job it is to appraise the property for the purpose of calculating tax.
Annual net income Expected income from renting the property in cleaning expenses. This calculation does not weight taxation costs that will apply to the investor.
Appraisal - Valuation of the property determined by a certified appraiser (Appraiser) according to pre-determined criteria.
B
Broker - Owner of a licensed real estate office, where real estate agents are employed.
Bid - A quote submitted to the bank for a receivership property.
C
Cash Flow - Cash flow - Net income from an asset, on an annual or monthly basis. It is common to deduct from the income pre-determined costs, such as taxes, insurance, management fees, as well as additional costs, such as maintenance expenses.
Closing - The closing date of the transaction in which the transfer of ownership of the property takes place, usually takes place with the title company.
Closing Costs - Closing costs of the property purchase transaction. These costs include attorney's fees in the transaction, brokerage fees, and insurance premium for Title Insurance.
(CMA (Comparative Market Analysis) - A comparative analysis of market prices, performed for the property, designed to determine the market value of the property and / or the market value of the leased property. The CMA is executed by a broker and / or appraiser, based on data of parallel assets in which transactions were made in the period close to the date of its execution.
County Records Registration of the property in the district.
Capital rate Return on property rental in percent. Distribution of income in the price of the cost of the property.
Commission A commission paid to the real estate agent usually at the end of the transaction. The commission can be paid by the seller or the buyer.
Comparable sales Comparison of market prices of similar properties sold in recent months in the same area. Usually presented by a real estate agent before selling a home or before buying a home.
Condo - A type of common property in the US that corresponds to a floor-to-floor apartment sold in the country.
Contingency Terms or conditions that must be met before the contract becomes legally binding.
Contract - Contract / agreement in writing or according to the teacher which things will be done and which will not be done in the transaction.
D
Deed Property deed, corresponding to the taboo in Israel. Ownership document indicating who owns the current property and even who is the bank that provided the mortgage.
E
Earnest Money - Serious fees - sometimes also called - Deposit. Amount of money transferred to a trust account by the investor as a sign of seriousness. Upon confirmation notice, the buyer is entitled to a period of home inspection of the property during which he can cancel the purchase and get back the seriousness fee.
Equity - The difference between the market value of the property and the purchase price, in addition it is common in the US for property owners to calculate the value of their equity according to the property price less the loan on the property.
Escrow / Title company A trust company that is a third party in a real estate transaction. Among other things, its role is to ensure that all property documents are free of various claims before transferring it to the buyer, that the buyer deposited all the funds as agreed in the contract and of course the final transfer of ownership in the buyer's name.
F
Foreclosure Foreclosure - an asset that is foreclosed on by the bank in circumstances in which the borrower did not meet the repayment of the mortgage payments, and is offered for sale.
(FSBO (For Sale By Owner - Sale of property by the property owner directly without the use of an intermediary.
H
Home Inspection - Home inspection report - an engineering report that includes a review of the parts of the house and details defects in the parts of the house and / or its surroundings, sometimes after an inspection by an inspector, the purchase of a property can be denied and / or approved.
(HUD (Housing and Urban Development US Government Housing and Development.
HUD-1 / Settlement statement - The closing document given to both the buyer and the seller by the title company before the transfer of final ownership of the property and detailing all the charges and all credits related to the purchase / sale transaction. There is a separate column for the buyer and a separate column for the seller.
HVAC - Central heating system of the house.
I
Insurance - insurance of the property against fire, natural disasters, human damage, etc. Third party insurance is also provided to prevent claims against the property owner.
Inspection - A procedure in which the property is inspected by a certified inspector (Inspector), usually commissioned by the buyer, to find cosmetic damage, piping and systems, leaks and problems in the roof and sometimes in construction. The cost of repairs required to repair the damages.
L
Lease - Lease
(LLC (Limited liability cooperation - The most common form of business incorporation for the purpose of purchasing parallel real estate in Israel for a limited company. It is a separate legal entity that allows its owner limited personal responsibility for the company's debts and actions from a tax point of view, the LLC is "transparent", meaning that the income is directly attributed to the person behind it, unless he requests otherwise.
Lead based paint Lien - A lawsuit against the property that can prevent its sale until the claim is paid.
M
Management Fee - Monthly payment to the management company for handling the tenant's inquiries. The company accepts payment only when there is a tenant in the property. The payment does not include the cost of repairs if any.
Offer to purchase - A price offer for the purchase of a property, if the offer is submitted to a broker, even if the amount seems very low, he is obliged to transfer the offer to the seller.
(MLS (Multiple Listing Service) A database of properties for sale that is accessible only to brokers with a US brokerage license.
N
Note - A loan agreement or debt registered when purchasing a property, the property owner is obligated to pay the debt and without receiving the signature of the lender, it is not possible to sell the property.
P
Property Tax Property Tax - The equivalent of property tax, the annual payment collected by the local authority, is calculated according to a certain part of the value of the property valuation.
(POA (Power Of Attorney) - Power of Attorney. It is given to a person and / or someone on his behalf who makes the purchase for the investor, to the management company, to connect the infrastructure (gas, electricity, water) to the property and to rent the property on behalf of the investor.
(POF (Proof Of Funds) - A document produced by the bank and constitutes proof of economic ability and confirms that the investor has a credit balance in the bank that allows him to purchase the designated property. The certificate is presented to the seller together with the offer to purchase the property, so that the seller can see that the bidder does have the financial ability to realize the offer he is submitting.
Property manager - A management company in the USA that manages the property, including finding a tenant, repairs and the like.
Purchase Price The price for the purchase of the property. The price does not include additional costs such as closing costs, renovations, etc.
Purchase agreement - A purchase contract written and signed by the seller and the buyer in which all the conditions under which the property will be sold appear.
R
Real Estate Agent A realtor, an agent licensed to engage in real estate, is obligated to act in accordance with the real estate laws of the country in which he operates.
Realtor - A licensed real estate agent who is a member of the local and national realtors' organization.
Replacement Costs Establishment costs: The cost of re-establishing the conference, without the cost of land. This amount is determined by the insurance company according to the construction costs and additional costs, and forms the basis for collecting insurance premiums. From this amount it is even possible to deduce what the reasonable construction costs are for the property.
(REO (Real Estate Owned - Properties owned by the lender, bank, government body or insurance company of the lender, after failure of attempt to sell them at short sale or foreclosure. They are often managed by the body's REO asset managers, who try to sell them, themselves, through an auction or through brokers.
Recording - The final procedure in which the property is registered in the name of the buyer of the property (corresponding to what is called a registration in the "taboo" in Israel), the registration is usually done within a few hours of closing the transaction by the title company.
S
Single Family - A type of property common in the United States that corresponds in Israel to a land house.
Short sale - A property on which the mortgage is higher than its price, and the bank allows its sale by the owner to cover the mortgage.
Security deposit - An amount paid by the tenant to the owner of the property or the management company and held with them throughout the rental period for security (usually an amount of one month's rent).
T
Title Insurance Right Insurance - A procedure of insurance taken out in the United States when purchasing a property, in order to insure the buyer's rights. In the procedure, the title company checks the fabric of the property rights, Belongs to a seller and has no third party right, pledge or lien.
Transfer Tax Transfer tax usually paid to the local authority at the time of registration of the new ownership of the property. It is customary for the seller to pay this tax.
Turn Key - A renovated and managed property that is sold to an investor.