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Real Estate Terms You Need to Know

A Sign That Reads Sold with Multiple OffersKnowing the most recent real estate jargon is crucial as a Daly City rental property owner. The real estate market is changing significantly, and staying ahead of these changes can assist you in safeguarding your investments and expanding your portfolio. It can also assist you in making informed decisions during negotiations with prospective purchasers or tenants. The next six terms should be understood in order to succeed in a competitive market. Let’s view each in greater detail.


Real estate companies are called “iBuyers” when they utilize technology to make immediate offers on houses. In recent years, these companies have grown in popularity as they offer a convenient and quick way to sell your home. iBuyers have greatly changed how people sell and buy residential properties in many ways, since homeowners are provided with much more convenience.


“Days on market” is what DOM stands for. How long a property has been up for sale is gauged by this metric. DOM is computed from the date a property is registered on the MLS (multiple listing service) to the date a contract is signed by a seller to sell it. A high DOM could be a warning sign, but it could also be a sign of seasonal changes in the housing market (homes are bought faster during spring than in the winter). Furthermore, by inspecting the average DOM for a specific location, you can establish whether the market is strong (low average DOM) or weak (high average DOM). Buyers typically gain from a weak market.


“Real estate owned” is known as REO. This phrase pertains to a home that has undergone foreclosure and has now been acquired by the lender, usually as a result that the home did not sell at the foreclosure auction. Although most banks and lenders might rather sell a property than hold it, REO properties present an opportunity for investors to purchase below market value. It is worth noting that these sales are usually “as-is,” making financing tricky.

FHA 203k Rehab Loan

A government-backed loan known as an FHA 203k rehab loan enables buyers to fund the purchase of a fixer-upper. Considering that this kind of loan can be used to pay for renovations and repairs, it appeals to investors looking to buy properties that need work. Updates to older homes’ energy efficiency can also be made using it. It is not designed to include “luxury” additions, such as a swimming pool.


“Debt-to-income” ratio is called DTI. This metric is used by lenders to determine how much of your income goes toward debt payments. DTI is determined by adding your monthly housing payment and total debt expenses, dividing that number by your monthly gross income, and multiplying that by 100. It is designed to determine how much mortgage you can comfortably afford. A high DTI can make it hard to qualify for a loan, so it is essential to keep this number low. An ideal borrower for a lender is one who pays no more than 36% of their monthly income on debt and no more than 28% of their income on housing.


EMD is abbreviated as “earnest money deposit.” Often referred to as a “good faith deposit,” this is a deposit that buyers must make when submitting an offer on a property. A seller might be persuaded to accept an offer by an EMD, which can show how serious and willing a buyer is. The percentage of EMD offered ranges from 1 to 5% in the majority of cases, but it can be higher or lower depending on the circumstance and the level of market competition. If the deal closes, the EMD is typically kept in escrow and used to reduce the cost of the house.

Daly City property managers need to be knowledgeable about a wide range of real estate terms, as you can see. In a market that is competitive, knowledge is power.

Expertise is your most valuable asset in a rental property market that is constantly shifting. Contact us online to learn how you can gain access to insider knowledge and the best asset management services available.

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