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What is Disposition Real Estate?

Jerry Norton

Apr 10, 2024

aerial view of green trees and white flowers

One of the biggest challenges as a beginner real estate investor is understanding the complex vocabulary: leasehold estate, OPM, capital gains, BRRRR and more.  

The truth is that your success as a real estate investor depends upon your education and mastery of these terms. 

Why?

By not understanding them, you can lose money on your next deal — or even the deal altogether. 

Another complex real estate term is real estate disposition. 

So, what is real estate disposition, and more importantly, how does it affect your deals, whether you are wholesaling, fixing and flipping a house or landlording?

Keep reading to find out! 

What is Disposition in Real Estate?

Disposition in real estate is the act of selling, donating, or transferring property ownership to a new party. 

It encompasses the entire real estate transaction, from preparing the property for sale, finding potential buyers, negotiating contracts, and finishing the transfer. 

The overall goal of real estate disposition is to ensure a smooth and efficient process that benefits both the seller and the buyer.

Real Estate Disposition Process

So, how does the real estate disposition process work? 

Step 1: Preparing and Marketing the Property

For the seller, this includes fixing up any issues with the property, and listing it with an agent or selling it on their own, which may include putting a “For Sale” sign in the yard, or notifying local wholesalers of the property’s availability. 

Step 2: Buyer Inquiries

Once buyers show their interest through an offer (which may include an escalation clause), it’s up to the property owner to choose the best deal. 

Step 3: Closing

Once the final offer is chosen and the transaction goes through smoothly, real estate disposition is complete. 

Types of Real Estate Disposition

There are different types of real estate disposition to be aware of.

These include:

Sale of Property

The most common type of real estate disposition is through — you guessed it— the sale of the property. 

Inheritance and Estate Planning

Real estate disposition can also occur as part of inheritance or estate planning, where the ownership of the property is transferred to heirs or beneficiaries after the original owner's passing. 

Donation of Property

If you didn’t know you could donate a property, now you do!

In certain cases, property owners may choose to donate their property to a charitable organization or a non-profit entity, providing  tax benefits and contributing to a greater cause.

This too is a form of real estate disposition. 

The Bottom Line: Real Estate Disposition

There you have it: real estate disposition. 

By knowing this term, as well as growing your real estate vocabulary, you will be better prepared for your first or next real estate deal.