The Ultimate Real Estate Glossary: Letter N
If you’re an average person just coming into real estate, it can be challenging to understand the industry’s jargon. That is why we’ve come back with the next installment of the Ultimate Real Estate Glossary series. We’ll run down the basic list of real estate terms you should know to find your footing in real estate and property management.
For this edition, we’ll go through the real estate terms that start with the letter N.
Real estate terms: The letter N
National Association of Realtors (NAR): A trade association of real estate professionals, represented by 1,200 local associations and 54 state and territory associations. They hold a US trademark on the title of ‘Realtor’, allowing only their members to use the title. They regulate real estate brokerage and keep their members to standards of professional behavior and their code of ethics.
Net sales price: The amount a seller makes after deducting closing costs.
See also: Gross sale price, list price
Niche: An area of interest or specialization. Some real estate professionals choose specific niches as their main business areas, like relocation, green properties, investment properties, and so on.
No-documentation (no doc) loan: A type of loan with fewer requirements for verification from the borrower. Some borrowers may have difficulty providing proof of income or have no regular source of income, like self-employed workers. A no-doc loan relies on other records to verify a borrower’s repayment capability, and even then, no-doc loans typically require higher down payments.
Non-assumption clause: A statement in a mortgage contract. A non-assumption clause forbids a borrower from transferring the mortgage to another person without the lender’s approval. This means that a lessor can transfer the mortgage, but they still need approval from the lender.
Non-institutional lender: A lender that is not a state- or federally-regulated financial or banking institution. Non-institutional lenders include credit unions, mortgage companies, pension funds, among others.
Non-liquid asset: An asset that cannot be quickly converted into cash. Real estate properties and land are non-liquid assets, as it generally takes a long time for a sale to go through. Attempting to sell a non-liquid asset to immediately gain funds usually incurs a loss of the asset’s market value.
Notice of default: A public notice filed with a court stating that a borrower is late on payments. Upon receipt of a notice of default, the borrower must start making payments before a specified deadline. They must also pay for the costs of preparing the notice. Only after they’ve initiated payments will the foreclosure process stop. Filing a notice of default is usually the first step towards a foreclosure if not halted. A notice of default may go on a borrower’s credit report and harm their credit score.
See also: Mortgage
Normal wear and tear: Physical deterioration to a property resulting from a tenant. Normal wear and tear encompass things like carpets wearing out, paint peeling, doorknobs going wobbly, walls or floors getting scratched, and so on. Since it’s unavoidable, tenants generally cannot be held responsible for damages that are normal wear and tear. A landlord can make deductions for property damage but not for normal wear and tear.
Don’t worry if it feels overwhelming. There’s always more to learn, no matter if you’re new to real estate or if you’re an experienced landlord, so don’t sweat the small things. Remember to check back on the blog to catch the next installment of the Ultimate Real Estate Glossary! The other letters will come in time.
Is there a word in this series that we’ve missed? Comment down below and tell us what you think of the Glossary!
Image courtesy of Christina Morillo