How to Become a Debt Free Millionaire Just By Buying Your Own Homes - (W5:D1) Debt Free Millionaire Podcast

NEW DEBT (HOME OWNERSHIP) (W5:D1)

Let's try some vocabulary today. Do you know these words?

Before we teach you about homeownership, let’s talk about a few vocabulary words having to do with real estate, both for personal and commercial use:

Closing – This is the day that you sign the contract to buy the house, the previous owners are paid by the lender, and around that date, you will receive the keys.

Commission – When you close on your house, your agent receives a percentage of the asking price (1-6%). They then share that amount with the other agent.

DOM - Days on Market – This is a calculation of how many days a house was on the market, starting the day they listed it, until the day the contract is signed.

Deed – When you close on a house, and you were the seller, this document is passed over to the new owners, giving them ownership, free and clear of anyone else.

Disclosures – When you list your house for sale, you are legally obligated to report any issues you have had with the house. Potential buyers get to see it before making an offer.

Distressed – When a house is in disrepair, or the previous owners were not able to pay the mortgage, it is given this distinction; these normally sell for less than their value.

Due Diligence – This is your obligation, when you buy a house, to do your due diligence by looking at and inspecting everything, with the help of professionals. The seller also promises to complete their due diligence, by disclosing issues with the house.

Easement - When you own a piece of property, you should know that, although you own up to the property line, government and semi-government organizations have access to a portion of the land to make modifications. This is an easement.

Foreclosed – When someone buys a house, owes money on it, and doesn’t pay, the owner is removed and the house is given to the lender, who will try to sell it. While sad for those who lost their home, it is an opportunity to get a less expensive home. It may be distressed.

FSBO (For Sale By Owner) – Normally, a seller will use a professional real estate agent to handle the transaction. Some people try to sell the house on their own, to remove commission. The owner has the responsibility of doing all the paperwork on their own, though.

Investment Property – When you make money by selling or renting your properties, the real estate is considered an investment, and you will be taxed on that income.

Landscaping – Outside your house, all flowers, plants, and materials that organize the exterior are collectively called landscaping. It is made to beautify and increase value.

Lease – When you do not own a house, but instead pay a monthly fee to stay in it, this is considered a lease. You sign a contract for a specific time, and the owner allows you to live in it, until the contract is complete.

Listings – When an agent promotes your house, the first thing they do is to list it on the MLS, which allows all agents in the area to set up appointments to see it.

MLS – Multi-Listing Service – This is a program online that allows real estate agents to share information about houses they have for sale, and the commission offered.

Offer / Counter-Offer – When you sign a contract to buy a house, you offer an amount of money. The owner will accept or counter with a new offer; you can then counter that counter-offer with a new one of your own.

Purchase – This is the process of selling or buying a home. When it is all done - all the contracts are signed and funds transferred - it is considered purchased, or sold.

Remodel/Renovate – When you own a house, or when you buy a distressed house and it needs work, a remodel or renovation is when you or your contractor put in the effort to fix that house. It’s basically when you fix up a house.

Utilities – These are what make the house work properly, as a dwelling for you. These include power (electricity), gas, water, sewer, and internet. You pay for these each month.

Zoning – A city is broken into certain areas: housing areas, retail, industrial, agricultural, and mixed use. These are set up by the government to keep certain real estate in specific areas, for effectiveness and beauty.