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Real estate investment glossary

Understand the key concepts of real estate investing —NPL, REO, auctions, yield and financing— explained in plain language.

FinancingLegal concepts
Appraisal
An appraisal is the official valuation of a property's price carried out by an accredited professional.
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AuctionsLegal concepts
Auction assignment
An auction assignment is the transaction by which the winner of a court auction transfers their right to be awarded the property to a third party.
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AuctionsLegal concepts
Award of property
The award is the act by which ownership of an auctioned property is granted to the best bidder or to the creditor.
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TaxationLegal concepts
Cadastral reference value
The value the Cadastre assigns to every property, and since 2022 the minimum taxable base when buying it.
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AuctionsLegal concepts
Court auction
A court auction is the procedure by which a court sells a property to pay off its owner's debts.
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Legal conceptsNPL
Dation in payment
Dation in payment is the handover of the property to the bank to settle the outstanding mortgage debt and cancel the loan.
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Legal conceptsReal estate investment
Deposit contract (arras)
The agreement before the deed in which buyer and seller reserve the deal by handing over a deposit.
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Legal conceptsAuctions
Eviction date (lanzamiento)
The date the court sets to hand possession of the property over to its new owner.
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Legal conceptsNPL
Foreclosure (ejecución hipotecaria)
The court procedure through which a lender recovers an unpaid mortgage by taking the property to public auction.
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Yield
Gross yield
Gross yield is the percentage that relates a property's annual income to its purchase price, before deducting expenses.
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Taxation
ITP (property transfer tax)
The tax paid by the buyer of a second-hand home in Spain, at a rate set by each autonomous region.
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Legal concepts
Land registry extract (nota simple)
The Land Registry summary that states who owns a property and what charges are registered against it.
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Financing
LTV (Loan to Value)
LTV, or loan-to-value ratio, indicates what percentage of a property's value the bank finances with the mortgage.
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YieldTaxation
Net yield
Net yield is the real return of a real estate investment once all expenses and taxes have been deducted.
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NPLReal estate investment
NPL (Non-Performing Loans)
An NPL, or non-performing loan, is a mortgage-backed loan that the borrower has stopped paying and that banks sell at a steep discount.
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Legal conceptsReal estate investment
Occupied property
A home lived in by someone with no legal title, which lowers its price and stretches out the recovery of possession.
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Legal conceptsAuctions
Registered charge
Any encumbrance registered against a property — mortgages, seizures, liens — that may survive the purchase.
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REOReal estate investment
REO (Real Estate Owned)
An REO is a property that the bank already owns after a default and sells at a discount to remove it from its balance sheet.
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Real estate investmentREO
Sareb
The company created in 2012 to absorb the toxic assets of Spain's rescued savings banks, now majority state-owned.
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Real estate investmentNPL
Servicer
The company that manages and sells non-performing debt and repossessed property on behalf of banks and funds.
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