The Ultimate Real Estate Glossary: Letter O
Real estate can be a bit confusing when you’re new to the industry. Fortunately, you don’t have to go it alone. The latest installment of our Ultimate Real Estate Glossary is here to guide you through real estate terminology. This non-exhaustive list of words is intended for landlords, property managers, and interested tenants to know what you’re dealing with when talking about the real estate industry.
We’ve gone through the previous fifteen letters of the alphabet, so for this edition, we’ll cover the real estate terms that start with the letter O.
Real estate terms: The letter O
Off market: A house that is for sale but not publicly marketed, and is not listed on a Multiple Listing Service or similar home-browsing website. The seller instead advertises the home on their own initiative to potential buyers, or negotiates directly with the buyer without advertising that the property is for sale.
Offer: A proposal made by a party to buy or sell an asset, which becomes legally binding if accepted. In real estate, this is typically an “offer to purchase” that is made by the buyer. An offer to purchase lays out certain terms, typically including the price the buyer is willing to pay, how they intend to finance the home, what the down payment amount will be, and closing costs. If a seller accepts an offer, it becomes a binding contract, which is legally enforceable should one party fail to meet its obligations.
Office tour/caravan: This is when a real estate agent invites several other agents to tour a home or several homes listed for sale. This is intended to give visibility to the houses and keep them fresh in the agents’ minds. They can then easily recommend that house to potential buyers. Since there are several agents visiting, this increases the chances of selling the house.
Open house: A scheduled time when a property for sale is made available for viewing. The residents, if any, typically leave the house during this time. While the open house is ongoing, anyone may visit and view the house with no need for an appointment. This lets potential buyers look around the property, perhaps with an agent’s guidance, and gives them time to examine the house.
Option: A contract to purchase real estate. Unlike a standard real estate offer, an option does not oblige the buyer to make the purchase. Options come with a fee and last only for a specified amount of time. During this time, the owner cannot sell the property to anyone else. However, should the buyer decide not to purchase within the timeframe, the seller keeps the fee and can then sell to another buyer.
Owner financing: A transaction where a seller provides financing for the purchase of their property. This works the same way as a loan and has similar paperwork and terms that are agreed upon before the sale closes. With owner financing, however, the buyer makes their payments to the seller instead of their bank. The seller retains the title until the property is paid off and retains the same right to foreclose in case of default.
See also: Mortgage
Conclusion
Whether you’re just joining us or if you’ve been here since the initial installments, congratulations! Learning industry jargon is almost like learning a whole second language, so pat yourself on the back for staying with us.
Check back regularly for the next installment of the Ultimate Real Estate Glossary, because we’re going all the way to the end of the alphabet!
Do you know a word that we missed? Comment it down below!
Image courtesy of Andrea Piacquadio