Real Estate Terms You Should Know
- Zikan Realtors
- Oct 27
- 4 min read
Navigating the world of property, investments and home ownership can feel like learning a new language—full of acronyms, legal jargon and industry-specific phrases. To help you make confident decisions, we’ve assembled real estate terms you should know—especially if you’re buying, investing or evaluating opportunities in Lagos or anywhere in Nigeria.
Why Knowing Real Estate Terms Matters
Understanding key real estate vocabulary gives you clarity, confidence and control. It helps you spot red flags, negotiate better, and avoid being misled. For Zikan Prop Solutions, our clients trust us not just to find properties but to guide them through every nuance in the deal. In this post, we unpack terms often glossed over but which carry serious financial or legal weight.
Core Ownership & Legal Terms
Title & Conveyance
Title refers to the legal ownership of a property. Without clean title, a buyer cannot secure full rights over a property. Conveyance is the act of legally transferring that title from seller to buyer—usually via documents such as deeds or transfer instruments. (See also “Habendum clause” below.) (Investopedia)
Habendum Clause
A habendum clause is a clause in a deed (or lease) that clarifies what interest the grantee (buyer or lessee) holds. It often begins “to have and to hold,” defining both how the property is held and under what conditions. (Wikipedia)
Encumbrance & Easement
An encumbrance is any claim, lien, restriction or burden on a property that diminishes its value or impedes free use. Common examples include liens, restrictive covenants, or easements. An easement gives someone the right to use part of the property (e.g. a right-of-way) without owning it.
Financing & Valuation Terms
Appraisal & Assessed Value
An appraisal is a professional estimate of a property’s fair market value, often required by lenders to ensure the property can collateralise the loan. Assessed value is the valuation placed by government or tax authorities for the purpose of levying property tax.
Annual Percentage Rate (APR)
APR is the annualised cost of a loan (interest plus fees) expressed as a percentage. It gives a more holistic view than just the nominal interest rate.
Equity & Appreciation
Equity is the portion of the property’s value you actually “own” (i.e. current market value minus outstanding mortgage or debts). Appreciation refers to the increase in property value over time, driven by factors like location, development, and demand. (Quicken Loans)
Bridge Loan / Floor Loan
A bridge loan is short-term financing used to “bridge” the time gap between purchasing a new property and selling an existing one—or to cover interim costs. A floor loan is more common in development finance: the minimum amount a lender will disburse to kickstart construction projects.
Transaction Process Terms
Offer, Counter-offer & Addendum
An offer is the formal bid a buyer makes to purchase a property. If the seller does not accept outright, they may issue a counter-offer, altering terms. An addendum is an addition or amendment attached to the primary contract (e.g. extra conditions, timelines).
Closing / Settlement
Closing (or settlement) is the final stage of a transaction: the buyer pays, legal documents are signed, title is transferred, and possession is delivered. (Wikipedia)
Contingency & Due Diligence
A contingency is a clause that makes completion conditional (e.g. “subject to financing OK, subject to inspection”). Due diligence is the period when a buyer inspects, audits, surveys and verifies all legal and physical aspects before final commitment.
Earnest Money Deposit (EMD)
Earnest money is the “goodfaith” deposit a buyer places to signal serious intent during a contract. It is generally held in escrow until closing.
Market Metrics & Risk Terms
Days on Market (DOM)
DOM captures how many days a property remains listed before sale. A low DOM often signals strong demand or effective pricing.
Mortgage Pre-approval
A pre-approval is a lender’s preliminary assessment of how much you can borrow, based on your finances. It strengthens your negotiating position.
As-Is
If a property is sold “as-is,” the seller may refuse to complete repairs or warranties. Buyers must accept current condition or negotiate accordingly.
How These Terms Apply in Nigeria & Lagos
While many of these concepts are global, their application in Nigeria often involves additional considerations:
Title & encumbrance checks are critical: many Lagos properties have multiple encumbrances or disputed claims, so insisting on a clear PA survey, deed of assignment, and a lawyer’s title opinion is non-negotiable.
Valuation vs appraisal distinctions matter: local “valuation certificates” may not follow rigorous appraiser standards used by global lenders—use independent valuers.
Financing structures differ: interest rates are high, approval timelines are longer, and conditions stricter—so contingencies like “subject to loan approval” must be well-drafted.
Closing in Nigeria may involve extra administrative steps: stamp duty, consent from state government, registration with Land Registry, and possible delays in documentation—so your closing timeline should include buffer time.
Final Thoughts
Mastering real estate terms you should know gives you a sharper lens through which to evaluate every property opportunity. When you understand what you're signing, you're less likely to be taken advantage of—and more likely to negotiate with confidence.
If you're ready to take the next step—whether that’s interpreting complex contracts, doing title audits, or exploring high-potential Lagos properties—let Zikan Prop Solutions guide you. Contact us today for a strategic consultation tailored to your goals.
🏢 Zikan Prop Solutions
🥇 Certified Real Estate Consultant | Multi Award-Winning Realtor
Helping you make the best real estate purchase & investment decisions.
📱 +234 703 000 3514
📲 IG: @zikanpropsolutions
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