Real estate investment glossary
Understand the key concepts of real estate investing —NPL, REO, auctions, yield and financing— explained in plain language.
- FinancingLegal concepts
Appraisal
An appraisal is the official valuation of a property's price carried out by an accredited professional.
Read definition - AuctionsLegal concepts
Auction assignment
An auction assignment is the transaction by which the winner of a court auction transfers their right to be awarded the property to a third party.
Read definition - AuctionsLegal concepts
Award of property
The award is the act by which ownership of an auctioned property is granted to the best bidder or to the creditor.
Read definition - AuctionsLegal concepts
Court auction
A court auction is the procedure by which a court sells a property to pay off its owner's debts.
Read definition - Legal conceptsNPL
Dation in payment
Dation in payment is the handover of the property to the bank to settle the outstanding mortgage debt and cancel the loan.
Read definition - Yield
Gross yield
Gross yield is the percentage that relates a property's annual income to its purchase price, before deducting expenses.
Read definition - Financing
LTV (Loan to Value)
LTV, or loan-to-value ratio, indicates what percentage of a property's value the bank finances with the mortgage.
Read definition - YieldTaxation
Net yield
Net yield is the real return of a real estate investment once all expenses and taxes have been deducted.
Read definition - NPLReal estate investment
NPL (Non-Performing Loans)
An NPL, or non-performing loan, is a mortgage-backed loan that the borrower has stopped paying and that banks sell at a steep discount.
Read definition - REOReal estate investment
REO (Real Estate Owned)
An REO is a property that the bank already owns after a default and sells at a discount to remove it from its balance sheet.
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