Skip to Content

Real Estate Terms You Need to Know

A Sign That Reads Sold with Multiple OffersWhen you’re a Paramus rental property owner, it is essential to be familiar with the newest real estate terms. As the real estate market undergoes significant changes, maintaining awareness of these changes can help you secure your investments and expand your portfolio. It can also assist you in making informed decisions during negotiations with prospective purchasers or tenants. In a competitive marketplace, it is essential to understand the following six terms. 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 gained popularity as they provide a fast and accessible way to sell a home. Since they provide much more accessibility to homeowners, iBuyers have fundamentally changed how people buy and sell residential properties.


DOM means “days on market.” This metric measures the length of time a property has been on the market. The property’s DOM is determined by calculating from the day it is put on the MLS (multiple listing service) to the day a seller who desires to sell signs a contract. A high DOM may be a red flag, but it may also be caused by seasonal fluctuations in the housing market (homes are usually bought faster in the spring than in the winter). You can also tell if a market is strong (a low average DOM) or weak (a high average DOM), by looking at the average DOM for a specific area. Normally, a weak market favors purchasers.


REO is an acronym for “real estate owned.” This term refers to a property that has been foreclosed upon and is now in the possession of the lender, typically because it failed to sell at the foreclosure auction. Given the fact that many banks and lenders would prefer to sell a property than hold it, REO properties can offer investors the option to purchase below market value. It is vital to recognize that these sales are often “as-is,” which makes financing hard.

FHA 203k Rehab Loan

The FHA 203k rehab loan is a government-backed loan that enables buyers to finance the acquisition of a home in need of repair. This kind of loan is an appealing choice for investors looking to buy properties that need repairs because it can be used to pay for repairs and renovations. Updates to older homes’ energy efficiency can also be made using it. However, the addition of a swimming pool or other “luxury” upgrades are not intended for this loan.


“Debt-to-income” ratio is called DTI. This metric is used by lenders to determine how much of your income goes toward debt payments. The DTI is computed by adding your monthly housing payment and your overall debt expenses, dividing by your monthly gross income, and multiplying 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. A lender favors borrowers who spend 36% or less on monthly debt payments and 28% or less of their monthly 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. An EMD can demonstrate a buyer’s seriousness and eagerness, thereby encouraging a seller to accept an offer. 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. Typically, the EMD is held in escrow and applied to the home’s purchase price if the transaction closes.

Paramus property managers need to be knowledgeable about a wide range of real estate terms, as you can see. Knowledge is power in a fiercely competitive market.

In a fluctuating rental property market, your greatest asset is your team of experts. Contact us online to learn how you can gain access to insider knowledge and the best asset management services available.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details