Resources · Wholesaling and investing with motivated-seller data
Real estate investing glossary: 59 terms for finding, pricing and closing below-market deals
Updated · by the LowBaller team
This real estate investing glossary defines the 59 terms that come up most when you find motivated sellers, price an offer and close a wholesale deal. Each definition is one or two plain sentences, with the full list A to Z at the bottom of the page.
The sections first group the most important terms by theme, so you can see how they connect: a distress signal makes a seller motivated, offer math sets your price, a deal structure gets it closed, and foreclosure and tax sale rules set the deadline. Where a term has its own guide, the definition links to it.
Distress and motivated seller terms
A motivated seller is an owner with a documented, time-bound reason to sell. The reason is usually a distress signal on the public record. LowBaller's model weights each signal by how much pressure it puts on the owner, then multiplies by equity to get the Deal Score. The chart shows the weights, which double as a ranking of the terms below.
Hard distress (auction scheduled, pre-foreclosure, tax lien) means a forced outcome if the owner does nothing. Soft distress (absentee owner, tired landlord, long ownership) means inconvenience. For the full explanation, read what is a motivated seller.
Motivation weight by distress signal (LowBaller model)
Offer math terms
Four numbers decide most investor offers. ARV sets the ceiling, repairs come off the top, the factor reserves room for costs and profit, and the seller's payoff sets the floor. The table shows each formula with one worked example.
| Term | Formula | Worked example |
|---|---|---|
| ARV (after repair value) | Average of adjusted renovated sold comps | $301,000, $303,500 and $302,500 average to about $302,000 |
| 70% rule | ARV x 0.70 - repairs | $250,000 x 0.70 - $40,000 = $135,000 |
| MAO (maximum allowable offer) | ARV x factor - repairs - fee | $300,000 x 0.70 - $45,000 - $10,000 = $155,000 |
| Equity | Value - mortgages - liens | $300,000 - $120,000 = $180,000 |
| Equity cap | Offer must exceed payoff + seller closing costs | A $140,000 mortgage + 4% costs needs at least about $146,000 |
| Assignment fee | Buyer's price - your contract price | $152,000 - $140,000 = $12,000 |
Wholesaling and deal structure terms
Wholesaling means putting a property under contract and assigning the contract to a cash buyer for a fee. The vocabulary describes who holds what: the equitable interest you gain when you sign, the assignment of contract that transfers it, the earnest money that shows good faith, and the double close you use when an assignment will not work.
Creative structures change who pays the old loan. In seller financing the seller becomes the lender. In subject-to the seller's loan stays in place and you make the payments, which runs into the due-on-sale clause. Read is wholesaling legal before you market your first contract, because several states now license or regulate it.
Foreclosure and tax sale terms
Foreclosure words depend on the state's process. Nonjudicial states use a deed of trust, a trustee and often a recorded notice of default. Judicial states use a lawsuit and a lis pendens. Our comparison of notice of default vs lis pendens covers the timelines, and the foreclosure laws by state pages cover each process.
Tax sale words depend on whether the state sells liens or deeds. In a tax lien state, investors buy the debt and earn interest unless the owner redeems. In a tax deed state, the county sells the property itself. See tax lien vs tax deed states for which system your state uses.
| Term | Where it appears | What it means for a buyer |
|---|---|---|
| Notice of default | County recorder, nonjudicial states | Pre-foreclosure has started; the owner can still sell |
| Lis pendens | Court docket and county records, judicial states | A foreclosure suit (or other title case) is pending |
| Notice of sale | Recorded, posted or published | An auction date is set; urgency peaks |
| REO | Lender's books after a failed auction | Buy from the bank, usually as-is through an agent |
| Tax lien | County tax records | Unpaid taxes; interest and penalties keep growing |
| Tax deed | Issued after a tax deed sale | Ownership transfers to the winning bidder |
| Redemption period | Set by state law | The former owner may be able to buy the property back |
Outreach and compliance terms
Skip tracing finds an owner's phone or email. The DNC (Do Not Call) lists say which numbers you may not call for marketing. The TCPA sets the federal rules for calls and texts, with statutory damages of $500 to $1,500 per violation. Together they explain the safe outreach rule: mail is always fine, calls are manual to Do-Not-Call-filtered numbers between 8am and 9pm local time, and cold texting is out.
Reach rates are lower than most beginners expect. In a July 2026 LowBaller measurement of one hard-distress list, 100 distressed properties yielded about 26 individual owners, about 23 emails and about 15 callable phones. Read skip tracing 101 for the details.
Never cold text owners
Texting owners who did not give you consent can violate the TCPA, at $500 to $1,500 per message. Use mail, email and manual calls to Do-Not-Call-filtered numbers instead.
Lowballer and lowball offer
A lowball offer is a bid well below market value or the asking price. A lowballer is the buyer who makes it. On a listed home in a busy market, a lowball usually fails. On an off-market property whose owner faces a foreclosure, a tax sale or an estate to settle, it can be the fair answer, because the owner is buying speed and certainty.
LowBaller is built on that idea: it finds motivated sellers from public county records across 160M+ US properties and suggests an offer for each, capped so it still clears the owner's mortgage. Read what is a lowballer for the word's history, or run your market through the free scan.
Every term, A to Z
- 70% rule
- A house-flipping rule of thumb: pay no more than 70 percent of after repair value minus repairs. On a $250,000 ARV with $40,000 of work, that is $135,000. See the 70% rule.
- Absentee owner
- An owner who does not live at the property, shown by a tax-bill mailing address that differs from the property address. Out-of-state owners tend to be more motivated than local ones.
- Amount in default
- The past-due payments, late fees and costs a borrower owes once a loan is in default. Paying it before the deadline can reinstate the loan and stop the foreclosure.
- ARV (after repair value)
- The estimated market value of a property after planned repairs, based on recent sales of similar renovated homes nearby. See how to calculate ARV.
- Assignment fee
- What a wholesaler earns by assigning a purchase contract to an end buyer, paid at closing. It equals the buyer's price minus the original contract price.
- Assignment of contract
- A document that transfers a buyer's rights under a purchase contract to a new buyer. The contract must allow assignment, and some states require written disclosure.
- Auction
- The public sale of a property at the end of a foreclosure or tax sale process, run by a trustee, sheriff, court officer or county. Winning bidders usually must pay quickly in certified funds.
- Balloon payment
- A large final payment of the remaining loan balance due on a set date, common in seller financing. Buyers usually make it by refinancing or selling.
- BPO (broker price opinion)
- A real estate agent's or broker's estimate of what a property would sell for. It is faster and cheaper than an appraisal and is often used to price short sales and REO.
- Buy box
- The criteria a cash buyer uses to decide what to purchase: area, price range, property type, condition and minimum discount. Wholesalers match each deal to buyers' buy boxes.
- Cash buyer
- An investor who can close without a mortgage, using their own money or private funds. Wholesalers assign contracts to cash buyers because they close fast and as-is.
- Closing costs
- The fees paid to complete a sale, such as title insurance, settlement or attorney fees, recording fees and transfer taxes. The contract and local custom decide which side pays each one.
- Comps (comparable sales)
- Recently sold properties similar to the subject in size, age, style and location, used to estimate value. For ARV, comps should be renovated and sold, not merely listed.
- Deal Score
- LowBaller's ranking of how likely an owner is to accept a lowball offer, calculated as pressure (documented distress, weighted by signal) times equity.
- Deed in lieu of foreclosure
- An owner voluntarily deeds the property to the lender to avoid a foreclosure sale. The lender must agree, and other liens on title usually block it.
- Deed of trust
- A security instrument used in many states instead of a mortgage. It names a trustee who can sell the property without a court case if the borrower defaults.
- Distressed property
- A property under financial, legal or physical stress, such as a foreclosure filing, a tax lien, vacancy or major disrepair. Distress often, but not always, means a motivated seller.
- DNC (Do Not Call)
- The National Do Not Call Registry and state lists of phone numbers that marketers may not call. Investors scrub every phone list against them before calling owners.
- Double close
- Two back-to-back closings in which you buy from the seller and resell to your end buyer, often the same day. It needs funding for the first purchase but keeps your spread off the buyer's settlement statement.
- Driving for dollars
- Driving neighborhoods to spot vacant or neglected houses, then looking up the owners in county records. It costs time and fuel instead of list fees.
- Due-on-sale clause
- A mortgage term that lets the lender demand the full balance when the property is sold or transferred. It is the main risk in subject-to and wraparound deals.
- Earnest money
- A good-faith deposit a buyer puts down when signing a purchase contract, held by a title company or attorney. Whether it is refundable depends on the contract's contingencies.
- Equitable interest
- The rights a buyer holds under a signed purchase contract before closing. Wholesalers assign this interest, not the property itself.
- Equity
- A property's market value minus everything owed against it, including mortgages, liens and back taxes. A $300,000 house with a $120,000 mortgage has $180,000 of equity.
- Equity cap
- LowBaller's rule that every suggested offer must still clear the owner's estimated mortgage and closing costs, so the seller can actually accept it.
- Foreclosure
- The legal process a lender uses to sell a property after the borrower defaults. It is judicial or nonjudicial depending on the state and the loan documents.
- FSBO (for sale by owner)
- A property the owner is selling without a listing agent. FSBO sellers save the commission and often negotiate directly with investors.
- Hard money loan
- A short-term loan from a private lender, secured by the property and typically used to buy and renovate flips. Rates and points are higher than on a bank mortgage.
- Inherited property
- A property that passed to heirs after the owner's death, through probate, a trust or a transfer on death. Heirs who live elsewhere often prefer a fast cash sale.
- Judicial foreclosure
- A foreclosure that runs through a court lawsuit, usually starting with a lis pendens and ending in a court-ordered sale. It is generally slower than nonjudicial foreclosure.
- Lien
- A legal claim against a property for an unpaid debt, such as a mortgage, property taxes, a contractor's bill or a court judgment. Liens are usually paid from the sale proceeds at closing.
- Lis pendens
- A recorded notice that a lawsuit affecting the property's title has been filed, used to start a judicial foreclosure and in other title disputes. See notice of default vs lis pendens.
- Lowball offer
- An offer well below market value or the asking price. On an off-market distressed property it can be fair when it solves the owner's problem and still clears their mortgage.
- Lowballer
- A buyer who offers far below the asking price. In investing, a lowballer targets owners under real pressure who value speed over top dollar. See what is a lowballer.
- MAO (maximum allowable offer)
- The highest price you can pay and still hit your profit target: ARV times a factor, minus repairs, minus your fee. See the MAO formula.
- Motivated seller
- A property owner with a documented, time-bound reason to sell who will accept less than full value for speed and certainty. See what is a motivated seller.
- Nonjudicial foreclosure
- A foreclosure without a court case, allowed when the loan documents include a power of sale, usually in a deed of trust. A trustee gives the notices state law requires and holds the sale.
- Notice of default (NOD)
- A recorded notice, used in many nonjudicial states, that a borrower is behind on the loan and that foreclosure has begun. It starts a waiting period before a notice of sale.
- Notice of sale
- A notice that sets the date, time and place of a foreclosure auction, posted, published or recorded as state law requires. In Texas it must be filed at least 21 days before the sale.
- Off-market property
- A property that is for sale, or could be, without being listed on the MLS. Most motivated seller deals are off-market.
- Pre-foreclosure
- The stage between the first foreclosure filing and the auction, when the owner can still cure the default or sell. It is the best window for a negotiated purchase.
- Probate
- The court process that validates a will, appoints a personal representative and distributes a deceased person's property. Probate dockets are a public source of inherited-property leads.
- Quitclaim deed
- A deed that transfers whatever interest the grantor has, with no promise that the title is good. It is common between family members and risky for a buyer without title insurance.
- Redemption period
- A window set by state law in which a former owner can reclaim a property after a foreclosure or tax sale by paying what is owed plus costs. Some states have none.
- Reinstatement
- Bringing a defaulted loan current by paying the amount in default plus fees, which stops the foreclosure. State law and the loan documents set the deadline.
- REO (real estate owned)
- A property a lender took back at a foreclosure auction when no outside bidder paid enough. Banks sell REO through agents, usually as-is.
- Seller financing
- A sale in which the seller lends the buyer part of the price, secured by a mortgage or deed of trust on the property. See seller financing for motivated sellers.
- Short sale
- A sale for less than the mortgage balance, approved by the lender, which accepts the shortfall. It is the only discount path when an owner owes more than the house is worth.
- Skip tracing
- Finding a property owner's current phone number or email from public and commercial records. See skip tracing 101.
- Subject-to
- Buying a property subject to the existing mortgage: title transfers to you, the seller's loan stays in place, and you make the payments. The due-on-sale clause is the main risk.
- Tax deed
- A deed issued to the winning bidder at a tax deed sale, transferring ownership of a property sold for unpaid taxes. See tax lien vs tax deed states.
- Tax delinquency
- Property taxes that are past due. After a period set by state law, the county can sell a lien on the property or the property itself.
- Tax lien
- A legal claim the county places on a property for unpaid taxes. In tax lien states, investors can buy the lien and earn interest, or eventually the property, if it is not redeemed.
- Tax sale
- A public sale held by the county of tax liens or tax-delinquent properties to recover unpaid property taxes. See tax sales by state.
- TCPA (Telephone Consumer Protection Act)
- The federal law that restricts marketing calls and texts, including autodialed and prerecorded messages, with statutory damages of $500 to $1,500 per violation. It is why investors should never cold text owners.
- Tired landlord
- A rental owner worn out by tenants, repairs or distance, often with high equity and many years of ownership. A common soft-distress seller.
- Title search
- A review of public records to confirm who owns a property and which liens, judgments or claims are recorded against it, done before closing by a title company or attorney.
- Vacant property
- A property with no occupants, often shown by piled-up mail, an overgrown yard or shut-off utilities. The owner keeps paying taxes and insurance with no use or income.
- Wholesaling
- Contracting to buy a property at a discount and assigning the contract to an end buyer for a fee before closing, without taking title. See is wholesaling legal.
Frequently asked questions
What are the most important real estate investing terms for beginners?
Start with the offer math: ARV (after repair value), repairs, the 70% rule and MAO (maximum allowable offer). Then learn the distress terms that identify motivated sellers, such as pre-foreclosure, tax lien and probate, and the deal terms that close a contract, such as earnest money, assignment fee and title search.
What does wholesaling mean in real estate?
Wholesaling means signing a contract to buy a property at a discount, then assigning that contract to a cash buyer for a fee before closing. The wholesaler never takes title. It is generally legal when disclosed, but several states now require a license, a registration or written disclosures, so check your state first.
What is the difference between ARV and MAO?
ARV is what the property will be worth after repairs, estimated from renovated sold comps. MAO is the most you can pay for it: ARV times a factor such as 0.70, minus repairs, minus your fee. For a $300,000 ARV with $45,000 of repairs and a $10,000 fee, the MAO is $155,000.
What does REO mean in real estate?
REO stands for real estate owned: a property a lender took back after a foreclosure auction failed to draw a high enough bid. Banks sell REO properties through real estate agents, usually as-is. Buying REO means negotiating with an institution, not a motivated owner, so discounts depend on condition and the bank's policies.
What is a lowballer in real estate?
A lowballer is a buyer who makes offers far below the asking price or market value. In investing, lowballers target off-market owners under real pressure, such as a foreclosure or tax sale, where a fast cash offer that still clears the mortgage solves the seller's problem. On busy listed homes, lowball offers usually fail.
Put this to work in your market.
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Find motivated sellersKeep reading
- What is a motivated seller? Meaning, the 9 signals, and how to verify each one
- The 70% rule in real estate: the formula, worked examples, and when it fails
- How to calculate maximum allowable offer (MAO): the formula, worked examples, and the seller check
- Notice of default vs lis pendens: what each filing means for timing and your offer
- Real estate wholesaling for beginners (2026)