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Real Estate Glossary

Below are definitions relevant to the Real Estate Industry. Students and professionals may find this terminology useful. Each term was carefully researched, and sources can be found at the bottom of the page. 

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"As Is" Selling the property without warranties as to the condition and/or the fitness of the property for a particular use. Buyers are solely responsible for examining and judging the property for their own protection. Otherwise known as "As Is, Where Is" and "In its Present Condition."
AARE (Accredited Auctioneer, Real Estate) The professional designation awarded by the Auction Marketing Institute, Inc. to qualified real estate auctioneers who meet the educational and experiential requirements of the Institute and who adhere to a strict code of ethics and standards of practice.
Abandonment The relinquishing of all rights and interests in real property, including any fixtures, with no intention to reuse or reclaim.
Abatement (1) An official reduction or elimination of one’s assessed valuation after completion of the original assessment. (2) An official reduction or elimination of one’s tax liability after completion of the tax roll.
Absentee Bid A procedure which allows a bidder to participate in the bidding process without being physically present. Generally, a bidder submits an offer on an item prior to the auction. Absentee bids are usually handled under an established set of guidelines by the auctioneer or his representative. The particular rules and procedures of absentee bids are unique to each auction company.
Absolute Auction An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an auction without reserve.
Absolute Net A lease in which the tenant pays all expenses including structural maintenance repairs; usually a long-term lease to a credit tenant.
Absorption Rate The amount of space of a particular property type that is leased compared to the amount of that same type of space available for lease within a certain geographic area over a given period of time, accounting for both construction of new space and demolition or removal from the market of existing space. also used in reference to the rate at which a market can absorb space designed for a specific use (e.g., office space). absorption rate can be computed as follows: units or square feet vacant at the beginning of the period plus units or square feet constructed new during the period minusunits or square feet demolished during the period minusunits or square feet vacant at the end of the period equals units or square feet absorbed during the period.
Abstract of Title An abstract is a complete summary of all recorded documents affecting the title to a property. These documents include all conveyances, such as deeds or wills, and all legal proceedings relating to ownership of the property. Abstracts are arranged to show the history of ownership, describe the land and improvements, and give the name(s) of past and present owner(s).
Acceleration Clause A condition in a mortgage note or loan contract that allows the lender to demand immediate repayment of the entire balance if the contract is breached or other repayment conditions occur.
Accessory Building Building used for a purpose incidental and subordinate to that for which a main building is used.
Accounting of Sale A report issued to the seller by the auctioneer detailing the financial aspects of the auction.
Accrued The gain or loss due to all causes.
Acquisition Cost The cost used in accounting to represent the purchase price of an asset. If installation and other associated costs are included, the term “total acquisition cost” should be used.
Acre A land measure equal to 43,560 square feet, or 160 square rods.
Acreage Unsubdivided land that is customarily measured in terms of acres rather than front feet or square feet.
Ad Valorem According to value.
Ad Valorem Tax A tax levied on the basis of the value of the object taxed. most often refers to taxes levied by municipalities and counties against real property and personal property.
ADA Americans with Disabilities Act (1990).
Addendum A list or additional material added to a letter, document, contractual agreement, or the like.
Addition (1) A term sometimes used to denote a subdivision. (2) An increase in the value of fixed assets due to the acquisition of a new property or the enlargement of an old one.
Advertising Non-personal, paid communication such as newspaper, radio, direct mail and TV directed toward the general public or, in some cases, specific prospective client groups to provide information about the time, place, contents, and arrangements of an auction.
After-Tax Cash Flow Before-tax cash flow less income tax liabilities.
Agent A person (or business entity) who enters a legal, fiduciary, and confidential arrangement with a second party (the principal) and is authorized to act on behalf of that party. see also fiduciary; leasing agent; managing agent.
Air Rights The right to use space above real estate.
Airport Retail Consolidation of retail stores located within a commercial airport. No anchors; retail includes specialty retail and restaurants. 75,000 to 300,000 square feet.
Amendment A change correcting an error or altering part of an agreement without changing the principal idea.
Amenities Tangible and intangible features that enhance and add to a property’s desirability and perceived value. amenities at an apartment building might include a swimming pool or a fitness center. an office building might offer indoor parking, a conference room, or a cafeteria. such amenities can result in higher rents than those at comparable properties and thus also increase property value.
Amnesty, Tax An act of pardon of tax liability by a legislative body.
Amortization Gradual reduction of a debt by periodic payments which include interest and a portion of the principal over the term of the loan.
Amortize The process of repaying a loan or recovering a capital investment by means of a series of scheduled payments; typically includes interest charges and principal repayment in each of the scheduled payments.
Appraisal An opinion or estimate of the value of a property at a specific point in time. an estimate of value that is (usually) prepared by a certified or accredited appraiser and submitted as a written report. a real estate appraisal is based on information that includes data about competitive properties, market conditions, the national and local economies, and observed economic trends as well as an in-depth analysis of the property being appraised. four methods of appraisal are common—the cost approach, based on the estimated value of the land plus the estimated cost of replacing the improvements on it less depreciation; the market approach, based on a comparison to similar properties in the market that have been sold recently; the income capitalization approach, based on the net operating income of the property; and the discounted cash flow method, which discounts all future fiscal benefits of an investment property over a predetermined holding period. all four are used to estimate value if sufficient information is gathered in each approach to do so.
Appraised Value An evaluation of a property's value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower.
Appreciation An increase in exchangeable value, as of money, goods, or property. compare depreciation.
Arbitration A process of dispute resolution in which a neutral third party (arbitrator) renders a decision after a hearing at which both parties have an opportunity to be heard, often employed as a means of avoiding litigation. arbitration provisions are common in collective bargaining (union) agreements and often required in commercial contracts. when arbitration is voluntary, the parties to the dispute select the arbitrator who has the power to render a decision, called an award, that is binding on the parties. compare mediation.
As Is Condition The owner is selling the home in its current condition, and will make no repairs or improvements (or give the buyer any credits to fund these fix-its).
Asking Price The amount a home seller wants a buyer to pay to purchase his home. The asking price is generally part of the property listing and is not the final price paid by the borrower.
Assessed Value The value of real property established by the local authority as the basis for taxation. the tax rate is applied to the assessed value to determine the amount of real estate tax.
Assessment The imposition of a tax, charge, or levy, usually according to established rates; used in referring to local (municipal) taxes. in common interest real estate (e.g., condominium), an amount charged against each owner to fund its operation. see also special assessment.
Asset Any owned physical object (tangible) or right (intangible) having value; a source of wealth, expressed in terms of its cost, depreciated cost or, less frequently, some other value.
Attachment Property seizure by a court order.
Attornment Expressed or implied consent to a transfer of right, such as where a tenant accepts to be a tenant of a new landlord by continuing to occupy the leased or rented property after its sale.
Auction A method of selling real estate in a public forum through open and competitive bidding. Also referred to as: public auction, auction sale or sale.
Auctioneer The person whom the seller engages to direct, conduct, or be responsible for a sale by auction. This person may or may not actually call or cry the auction.
Audit A systematic investigation or appraisal of procedures or operations for the purpose of determining conformity with specifically prescribed criteria.


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Balloon Mortgage A mortgage not fully amortized at maturity and requiring a lump sum (or balloon) payment.
Base Line A survey line running due east and west through the initial point of a principal meridian, from which township lines are established by the government survey.
Basement Portion of a building where the majority of the wall area between the floor and the ceiling is below ground.
Basis point One one-hundredth (1/100th) of 1 percent. For example, 25 basis points are one-quarter of 1 percent, and so on. Thus, to impress you, your client will crow about saving 100 basis points on a new loan when the client might simply have said 1 percent. Basis points are often called bips.
Before-Tax Cash Flow Amount of income remaining after deducting for operating expenses and debt service, but before income tax on operations is deducted.
Best management practice or BMP A practice that is determined by a state or designated area-wide planning agency, or director of environmental engineering, to be the most effective, practical means of preventing or reducing the amount of pollution generated by nonpoint-sources to a level compatible with water quality goals. A BMP includes, but is not limited to, detention or retention basins.
Bid A prospective buyer's indication or offer of a price he or she will pay to purchase property at auction. Bids are usually in standardized increments established by the auctioneer.
Blanket Mortgage A mortgage covering more than one property; used in, for example, subdivision development and cooperative apartment ownership.
Block Set of adjacent lots or parcels bounded by roads, or by a combination of roads and public parks, cemeteries, railroad rights-of-way, shorelines of waterways, or boundary lines of the county.
Blockbusting Attempting to persuade a person into selling or renting a dwelling in a neighborhood containing people of a particular race, color, nationality, disability, familial status, sex or religion.
Bondsman Person or establishment, other than a guaranty, indemnity or fidelity and surety company, doing business in the state pursuant to Code of Virginia who is in the business of entering into or offering to enter into bonds for others, for compensation, whether as principal or surety.
Boundaries The physical and/or man-made lines that define a parcel, subdivision, neighborhood, or district.
Breach of contract The failure to perform any term of a contract, written or oral, without a legitimate legal excuse. This may include not completing a job, not paying in full or on time, failure to deliver all the goods, substituting inferior or significantly different goods, not providing a bond when required, being late without excuse, or any act which shows the party will not complete the work ("anticipatory breach"). Breach of contract is one of the most common causes of lawsuits for damages and/or court-ordered "specific performance" of the contract.
Broker An agent with a real estate license who acts as a representative for an owner or tenant, within specific limits of authority. also, an agent who buys, sells, or leases for a principal on a commission basis without having title to the property.
Building Structure, including a manufactured home, having a roof supported by columns or walls built for the support, shelter or enclosure of persons, animals, chattels or property of any kind. The word building does not include a tent or temporary manufactured home. The word building includes structure.
Building Capitalization Rate A building capitalization rate is the sum of the recapture and return rates on an income-producing property. The rate applies only to the improved portion of a property.
Building Cost Schedule A table giving approximate reproduction costs per cubic foot, per square foot of floor area, or per square foot of ground area for each of the standard buildings in the building classification schedule. Note: The building cost schedule must be supplemented by cost schedules for parts of a building, such as an oil heating system or air-conditioning system, to take care of situations in which a building has specifications differing in some detail from those of the standard building.
Building Setback Line, Front Line within a lot that defines the front building envelope limits. This line shall be the greater of the following distances: minimum front yard building setback of the district; setback as designated on a recorded plat; or location where the lot achieves the minimum lot width requirement.
Bullet Loan Gap financing offered when a construction loan has expired but permanent financing has not yet been found.
Bundle of Rights A set of legal rights afforded to the real estate title holder. It can include the right of possession, the right of control, the right of exclusion, the right of enjoyment and the right of disposition. Real estate ownership carries with it a complex set of rights, and the bundle of rights concept has traditionally been the way in which those rights are assigned.
Buyer's Market A situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. The term "buyer's market" is commonly used to describe real estate markets, but it applies to any type of market in which there is more product available than there are people who want to buy it. The opposite of a buyer's market is a seller's market, a situation in which demand exceeds supply and owners have an advantage over buyers in price negotiations.


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CAI Certified Auctioneers Institute. The professional designation awarded to practicing auctioneers who meet the experiential, educational and ethical standards set by the Auction Marketing Institute, Inc.
Capital (1) A stock of wealth. (2) A stock of wealth other than land. (3) A stock of wealth set aside for the production of additional wealth. (4) The assets of a business, both tangible and intangible. (5) The total equity of the owners in the assets of a business. (6) That portion of the equity of the owners in the assets of a business concern that represents the money or money’s worth invested by the owners with the express intention that it should remain permanently in the business (preferably “capital stock” if a corporation). Note: This term should not be used without qualification unless it be defined or its meaning made clear by the context.
Capital Expenditure Cash investments to acquire or improve an asset that will have a life of more than one year; as distinguished from cash outflows for expense items normally considered as part of the current operations.
Capital Gain The profit realized through the sale of a property if the sale price of that property exceeds the cost of acquisition and of any improvements the seller has added.
Capital Reserves Money set aside to pay for the cost of a major improvement to real estate or to fund replacement of major building components or equipment (e.g., a roof or hvac system).
Capitalization The phenomenon whereby one or more events of economic consequence expected to happen in the future exert an economic effect on values, processes, and decisions in the present. Specifically, the conversion of expected income and rate of return into an estimated present value in the income approach to value. Property taxes, anticipated changes, and land-related government services may also be capitalized.
Capitalization Rate Any rate used to convert an estimate of future income to an estimate of market value; the ratio of net operating income to market value.
Cash Flow The amount of spendable income from a real estate investment. the amount of cash available after all payments have been made for operating expenses, debt service (mortgage principal and interest), and capital reserve funds; also called pre-tax cash flow to indicate that income taxes have not been deducted.
Cash Flow Analysis A study of the anticipated movement of cash into or out of an investment.
Cash-on-Cash Return An investment performance measurement that compares the cash received in each period against the original cash invested. It can be further separated into before-tax and after-tax returns.
Caveat Emptor ”Let the buyer beware.” A common maxim stating that the buyer purchases at his or her own risk.
Certificate of Occupancy A document issued by an appropriate governmental agency certifying that the premises (new construction, rehabilitation, alterations) complies with local building codes and/or zoning ordinances. some jurisdictions require a certificate of occupancy for apartments based on inspection of units between each tenancy.
Certificate of Sale A certificate, issued to the buyer at a judicial sale, that entitles the buyer to a deed upon confirmation of the sale by the court or if the property is not redeemed within a specified time.
Certificate of Title A state or municipal-issued document that identifies the owner or owners of personal or real property. A certificate of title provides documentary evidence of the right of ownership. When issued for real property (such as land or a house) by a title insurance company, the certificate of title is a statement of opinion on the status of the title, based on a thorough examination of specified public records.
Certified Commercial Investment Member (CCIM) A professional designation awarded by the Certified Commercial Investment Member (CCIM) Institute which signifies that an individual is versed in the commercial and investment real estate industry. CCIM designations can be earned by candidates in a number of ways depending on geography, status as a student or non-student or a government employee. The common path to earning the designation is through completing the designation curriculum, earning two elective credits from other sources, submitting a portfolio of experience and passing the comprehensive exam.
Chain of Title the official ownership record of a property or asset. Chain of ownership gets its name from its sequential nature; a chain of title traces historical title transfers from the current owner back to the original owner. Due to their critical importance in establishing ownership of a property or asset, rigorous and accurate title records are generally maintained by a centralized registry or system.
Chattel Tangible personal property.
Civil Rights Act of 1991 the federal law that provides for monetary damages in cases of intentional employment discrimination.
Class A Most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
Class B Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price.
Class C Buildings competing for tenants requiring functional space at rents below the average for the area.
Clear Title A title without any kind of lien or levy from creditors or other parties and poses no question as to legal ownership. For example, an owner of a car with a clear title is the sole undisputed owner, and no other party can make any kind of legal claim to its ownership.
Clerk The person employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.
Client Any party for whom a fee appraiser performs a service.
Closing The act of finalizing a real estate transaction that executes and delivers mortgage or property title documents.
Closing Costs Settlement fees and expenses incurred in transferring property ownership that are paid at the real estate closing.
Collusion The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when the auctioneer accepts a fictitious bid on behalf of the seller so as to manipulate or inflate the price of the property.
Commercial Property Real property developed or acquired for investment and designed for use by business entities such as retail, wholesale, office, industrial, hotel, or service users, as differentiated from residential property or housing. (technically, all income-producing property is commercial property; however, residential rental property is not usually referred to in this category.) also, real property used for the conduct of business that invites public patronage, as by advertising, merchandising, and display of signs.
Commission The fee charged to the seller by the auctioneer for providing services, usually a percentage of the gross selling price of the property established by contract (the listing agreement) prior to the auction.
Common Area A space on a piece of property which is owned by all owners on the property on a percentage basis, or to spaces owned by an overall management structure which charges each tenant for maintenance and upkeep. Most frequently, the designation of common area is applied to spaces in condominium and cooperative housing projects. These spaces include areas such as parking lots, laundry facilities, fences and all parts of the property which are available to use for all residents.
Community Any apartment community or real estate development and its surroundings.
Community Center ("Large Neighborhood Center") General merchandise or convenience-oriented offerings. Wider range of apparel and other soft goods offerings than neighborhood centers. The center is usually configured in a straight line as a strip, or may be laid out in an L or U shape, depending on the site and design. Discount store, supermarket, drug, large-specialty discount (toys, books, electronics, home improvement/furnishings or sporting goods, etc.) Typical square footage of 125,000 to 400,000.
Community Property A U.S. state-level legal distinction of a married individual's assets. Property acquired by either spouse during a marriage is considered community property, belonging to both partners of the marriage. Community property is also known as marital property.
Community, Mixed Use Development containing a mixture of residential and nonresidential uses.
Community, Nonresidential Group of buildings or uses containing three or more nonresidential establishments that are planned, developed or managed as a unit.
Community, Residential Recorded subdivision or multi-family project.
Comparable Sales; Comparables (1) Recently sold properties that are similar in important respects to a property being appraised. The sale price and the physical, functional, and locational characteristics of each of the properties are compared to those of the property being appraised in order to arrive at an estimate of value. (2) By extension, the term “comparables” is sometimes used to refer to properties with rent or income patterns comparable to those of a property being appraised.
Comparative Market Analysis An examination of the prices at which similar properties in the same area recently sold. Real estate agents perform a comparative market analysis for their clients to help them determine a price to list when selling a home or a price to offer when buying a home. Since no two properties are identical, agents make adjustments for the differences between the sold properties and the one that is about to be purchased or listed to determine a fair offer or sale price. Essentially, a comparative market analysis is a less-sophisticated version of a formal, professional appraisal.
Comparative Unit Method (1) A method of appraising land parcels in which an average or typical value is estimated for each stratum of land. (2) A method of estimating replacement cost in which all the direct and indirect costs of a structure (except perhaps architect’s fees) are aggregated and specified with reference to a unit of comparison such as square feet of ground area or floor area, or cubic content. Separate factors are commonly specified for different intervals of the unit of comparison and for different story heights, and separate schedules are commonly used for different building types and quality classes.
Competent An individual legally fit and able to undertake an activity or function.
Competition (1) The attempt by two or more buyers or sellers to buy or sell similar commodities in the same market. (2) Principle of value that states that when the amount of a property of a certain type offered for sale is large in relation to demand, prices will fall; prices will rise when the opposite situation prevails.
Concession An economic incentive granted by an owner to encourage the leasing of space or the renewal of a lease. concessions are usually related specifically to the rental rate (e.g., a month’s free rent). in office buildings, shopping centers, and industrial properties, they may also relate to the tenant improvement allowance. for retail tenants, a concession may be a lower percentage-of-sales requirement. concessions usually affect the total economic value of a lease and, therefore, are subject to negotiation.
Condemnation (1) The exercise of the right of eminent domain to secure legal title to private property required for a public use. (2) A declaration by a constituted authority to the effect that a structure is unfit for occupancy or dangerous to persons or other property, often accompanied by exercise of the police power to limit or prohibit occupancy or to require demolition of the structure. Note: The term “expropriation” is also used to convey the first of these meanings.
Conditional Use Use that may be permitted in a district by the board of supervisors with or without conditions based upon the guidelines for acting on conditional uses.
Conditional Zoning Classifying of land into districts by legislative action, including reasonable conditions governing the use of the property, such conditions being in addition to the regulations for the zoning district in which the property is located.
Conditions of Sale The legal terms that govern the conduct of an auction, including acceptable methods of payment, terms, buyer's premiums, possession, reserves and any other limiting factors of an auction. Usually included in published advertisements or announced by the auctioneer prior to the start of the auction.
Condominium A multiple-unit structure in which the units and pro rata shares of the common areas are owned individually; a unit in a condominium property. also, the absolute ownership of an apartment or unit, generally in a multi-unit building, which is defined by a legal description of the air space the unit actually occupies plus an undivided interest in the common elements that are owned jointly with the other condominium unit owners. in mobile home parks or manufactured housing communities, outright ownership of an individual lot (including pad, utility connection, parking space, etc.) within a multiple lot park or community along with a prorated shared ownership of the common areas and common facilities.
Conforming Loan A mortgage loan is a "conforming loan" if it satisfies government loan guidelines that make it eligible to be purchased by Fannie Mae or Freddie Mac. Because lenders know they can sell a conforming loan on the secondary mortgage market to Fannie Mae and Freddie Mac, lenders are usually willing to offer lower interest rates and lower fees on conforming loans.
Consideration something of value exchanged for a promise or for performance of a service that makes an exchange legally binding, such as paying rent in exchange for use of a property.
Constant The fixed payment of both principal and interest that is due under an amortizing loan. It is expressed as a percentage of the outstanding loan balance. In other words, the constant is determined by taking the total monthly debt service, multiplying it by 12, and then dividing that sum by the outstanding loan balance. The greater (or swifter) the principal amortization, the larger the constant. Older loans may have an attractive interest rate, but because so much of the fixed payment is principal, the cash-flow conscious buyer will object to the constant. Example: A $1 million loan payable in 30 years with interest at 8 percent has a constant of 8.8 percent in the first year. In the 15th year of the same loan, the constant has risen to 11.5 percent (the payments are unchanged, but are higher in proportion to the then remaining loan balance of $767,700).
Construction Cost The sum of direct costs of materials and labor plus contractor’s indirect costs to build an improvement.
Construction Loan A short-term, usually interest-only loan made to finance the cost of new construction or rehabilitation (as opposed to permanent financing on a completed building), that may be funded by one or more commercial banks or other sources of capital (e.g., institutional investors such as insurance companies) or by the permanent lender. money is normally released to the builder or borrower in stages as costs are incurred during construction.
Consulting The act or process of providing information, analysis of real estate data, and recommendations or conclusions on diversified problems in real estate, other than an estimate of value.
Contiguous Sharing a property boundary; adjacent.
Contingency An event that may or may not occur within a designated time period or at all. in construction estimating, a contingency factor is commonly included to cover unexpected costs that arise as the job is in progress.
Contingent Fee A fee determined by the results of the services to be performed or by other future events.
Contract An agreement entered into by two or more persons which creates an obligation to do (or not do) a particular thing. the document that serves as proof of such an obligation. the essentials of a contract are legally competent parties, the obligation created between them, consideration or compensation (e.g., a fee), and mutuality of agreement. examples in real estate management include management agreements, leases, and maintenance service agreements related to building systems and equipment.
Contract An agreement between two or more persons or entities which creates or modifies a legal relationship.
Contractor An individual or company providing materials and/or service. Also a separate business entity that provides specialized skills and or products that agrees to furnish materials or perform services at a specified price.
Conventional Loan A real estate bank loan that is not insured (fha) or guaranteed (va) by a governmental agency; also a conventional mortgage.
Conveyance The instrument or document by which a transfer is made or title passed from one person to another.
Coordinate One of a set of N numbers designating the location of a point in N-dimensional space. Coordinates are almost always associated with coordinate systems. A coordinate system provides an easy way for finding the point designated by the set of coordinates, or for assigning a set of coordinates to a point. The coordinates are said to be “in” the associated coordinate system. It is also common to speak of the associated point as being “in” that coordinate system.
Corporation A legal entity (business organization form) operating under a grant of authority from a state in the form of a charter and articles of incorporation.
Cost The money expended in obtaining an object or attaining an objective; generally used in appraisal to mean the expense, direct and indirect, of constructing an improvement.
Cost Approach (1) One of the three approaches to value, the cost approach is based on the principle of substitution—that a rational, informed purchaser would pay no more for a property than the cost of building an acceptable substitute with like utility. The cost approach seeks to determine the replacement cost new of an improvement less depreciation plus land value. (2) The method of estimating the value of property by: (a) estimating the cost of construction based on replacement or reproduction cost new or trended historic cost (often adjusted by a local multiplier); (b) subtracting depreciation; and, (c) adding the estimated land value. The land value is most frequently determined by the sales comparison approach.
Cost of Capital The opportunity cost of capital.
Cost of Goods Sold (Cost of Sales) (1) Retail: The total cost of goods sold during a given accounting period is determined by ascertaining the invoice costs of the materials purchased; adding the value of the inventory on hand at the start of the fiscal period, and subtracting the value of the inventory remaining on hand at the end of the fiscal period. (2) Manufacturing: The cost of production of the items sold, such as raw materials, direct labor, and overhead.
Counteroffer A proposal that is made as a result of an undesirable offer. A counteroffer revises the initial offer and makes it more desirable for the person making the new offer. This type of offer permits a person to decline a previous offer and allows offer negotiations to continue.
Covenants, Conditions, and Restrictions Limits and rules placed on a group of homes or condominium complex by a builder, developer, neighborhood association, or homeowners association.
Current Liability A short-term debt regardless of its sources, including any liability accrued and defined, and unearned revenue that is paid out of current assets or is transferred to income within a relatively short period, usually one year or less.


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Debt In general usage, debt is money owed.
Debt Capitalization Rate Debt component of an overall direct capitalization rate. Computed by dividing annual interest payments by the market value of debt.
Debt Coverage Ratio A measure of the cash flow available to pay current debt obligations. The ratio states net operating income as a multiple of debt obligations due within one year, including interest, principal, sinking-fund and lease payments.
Debt service The periodic payment that covers the interest on and retirement of the outstanding principal on a mortgage loan.
Deed A document (or written legal instrument) which, when executed and delivered, conveys an interest in or legal title to a property.
Deed In Lieu of Forclosure A potential option taken by a mortgagor (a borrower) to avoid foreclosure under which the mortgagor deeds the collateral property (the home) back to the mortgagee (the lender) in exchange for the release of all obligations under the mortgage. Both sides must enter into the agreement voluntarily and in good faith.
Deed of Trust The document used in some states in place of a mortgage. an instrument by which legal title to real property is held by a third party (trustee) as collateral to secure the repayment of a loan. title is conveyed by the borrower (mortgagor) to the trustee to hold for the benefit of the lender (mortgagee) with the condition that title shall be reconveyed upon payment of the debt. the trustee is also empowered to sell the land and pay the debt in the event of a default by the debtor. (a deed of trust does not require a court order for foreclosure; a mortgage does.) in simpler terms, the deed pledges the property as collateral; title to the property is held by the buyer as a “warranty deed,” and a note is executed as evidence of the debt.
Default Failure to fulfill an obligation (as a mortgage or other contracted payment) when it is due. the nonperformance of a duty, such as those required in a lease or other contract. sometimes called breach of contract.
Delinquency Failure to make payment on a debt or obligation when due. a state of being overdue. a debt on which payment is in arrears, as of mortgage principal or interest or rent under a lease.
Demand The amount of a good or service that would be purchased at various prices during a given period.
Demographics Characteristics of human populations, for example, size, density, and distribution.
Density Number of dwelling units or the square footage per gross acre.
Depreciation Loss of value. In real estate, decline in value of a property resulting from physical deterioration (ordinary wear and tear), functional obsolescence (out-of-date systems and/or equipment), and/or economic obsolescence (market changes). In accounting, the gradual process of converting a fixed asset into an expense. also, the tax deduction that allows for recovery of the investment in certain types of property by allocation of the cost over the estimated useful life of the property; also called cost recovery. In real estate, depreciation (and cost recovery) applies to the cost of improvements to land; the land itself is not depreciated.
Design Districts Areas shown on the zoning maps as having different development standards, such as setbacks, landscaping and architecture.
Detention Basin Stormwater management facility which temporarily impounds run-off and discharges it through a hydraulic outlet structure to a downstream conveyance system. Such facilities are often dry between storms and therefore may be referred to as dry ponds.
Development Tract of land developed, or proposed to be developed, as a unit under single ownership or unified control which is to be used for any business or industrial purpose or is to contain more than one residential dwelling unit. For purposes of the floodplain management ordinance, the term development means any manmade change to improved or unimproved real estate, including, but not limited to, buildings or other structures, mining, dredging, filling, grading, paving, excavation or drilling operations or storage of equipment or materials.
Development Approval The term development approval includes development standards modification; schematic plan; site plan; improvement sketch; and subdivision preliminary, final and construction plan or plat approval.
Development, Planned One or more contiguous lots zoned as a conditional use planned development or one or more contiguous lots under single ownership or unified control, planned as a whole for development in a single or scheduled series of phases, in accordance with an approved master plan, which may include multiple land uses.
Discount Point An amount equal to one percent of a loan charged by a lender for the use of capital in order to balance (offset) a submarket interest rate. also, the discount on a loan that is bought or sold.
Discount Rate (1) The rate of return on investment; the rate an investor requires to discount future income to its present worth. The discount rate is made up of an interest rate and an equity yield rate. Theoretical factors considered in setting a discount rate are the safe rate earned from a completely riskless investment (this rate may reflect anticipated loss of purchasing power due to inflation) and compensation for risk, lack of liquidity, and investment management expenses. The discount rate is most often estimated by band-of-investment analysis or sales comparison analysis that estimates typical internal rates of return. (2) In monetary policy, the rate that the Federal Reserve Bank charges member banks to borrow.
Distressed Property Income property that is in foreclosure or for which foreclosure is imminent due to a lack of sufficient income. also, real estate that yields an insufficient return.
Distressed Sale When property, stocks or other assets are sold in an urgent manner, often at a loss. Distressed sales often occur at a loss because funds tied up in the asset are needed within a short period of time. The funds from these assets are most often used to pay for debts, medical expenses or other emergencies.
District A portion of the county within which certain uniform regulations and requirements or various combinations apply under the provisions of this chapter.
Dual Agency A situation in which a single agent, with disclosure to each party, represents both parties to a transaction (e.g., buyer and seller in real estate sales).
Due Diligence The process of gathering information about the condition and legal status of assets to be sold.
Due-On-Sale Clause Provision in a mortgage contract that requires the mortgage to be repaid in full upon a sale or conveyance of partial or full interest in the property that secures the mortgage. This provision as also sometimes referred to as an acceleration clause. Mortgages with a due-on-sale clause are not assumable. This clause helps protect lenders against below-market interest rates.
Dwelling or Dwelling Unit Building or portion thereof which provides complete independent permanent facilities for living, sleeping, eating and sanitation and is designed for or used exclusively as living quarters by 1 family, but not including a tent, cabin, travel trailer or room in a hotel or motel. A manufactured home or temporary family health care unit shall not be considered a dwelling or dwelling unit.


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Earnest Money A deposit made to a seller indicating the buyer's good faith in an arrangement. Often used in real estate transactions, earnest money allows the buyer additional time when seeking financing. Earnest money is typically held jointly by the seller and buyer in a trust or escrow account.
Earnings Statement An accounting statement of income and expense (or profit and loss).
Easement An interest in or right to land that is owned by another person. a legal right to use land owned by another person or business for a specific purpose. an easement may be granted by a deed or created as a result of actual use that was not prohibited (easement by prescription). see also adverse possession.
Easement by Necessity Arises when an owner divides his or her property, sells part of it, and the purchaser cannot get to the part he or she bought without crossing the seller’s property. The purchaser acquires an easement over the seller’s property.
Easement by Prescription Arises when a non-owner continuously and openly uses property over a period of time and is not impeded by the property owner.
Easement in Gross A right to use another’s property, usually for a specified purpose. Utility easements and railroad rights-of-way are examples of easements in gross.
Easement, Appurtenant Gives one person the right to use another’s land so long as the first person owns a specified piece of property. The easement attaches to the specified property, not to the person who owns it; when the title transfers, the easement also transfers.
Effective Gross Income (EGI) The potential gross rent, less vacancy and collection loss, plus miscellaneous income.
Effective Yield The actual return on an investment rather than the yield anticipated or promised when the investment is made. For example, when a bond sells for more than its face value, the effective yield will be below the coupon rate.
Egress An outlet or exit or means of exiting.
Electric Power Wind Energy System (WES) System, consisting of a wind turbine, tower, and associated control or conversion electronics, which is used primarily to reduce on site consumption of utility power. Excess power generated by the WES and not presently needed for on site consumption may be used by the utility (i.e. net metering).
Elevation Certificate For purposes of the floodplain management ordinance, a document prepared in accordance with FEMA regulations which is used to provide the elevation information necessary to: ensure compliance with the county’s floodplain management ordinance, determine the proper flood insurance premium rate, and support a request for a letter of map amendment and certain letters of map revision.
Elevation, Base Flood The Federal Emergency Management Agency designated 1 percent annual chance water surface elevation. The water surface elevation of the base flood in relation to the datum specified on the county’s flood insurance rate map. The 100 year flood or 1 percent annual chance flood.
Emblements Annual crops cultivated by a tenant that are treated as the tenant's property rather than the landowner's. If a tenant loses possession of the land on which the crops grow, he or she is still entitled to finish raising the crops and harvest them. If the land passes to someone else because of the tenant's death, the crops pass to the tenant's heirs. If the crops are annual but did not require labor by the tenant, they are not considered emblements.
Eminent Domain The right of a government or municipal quasi-public body to acquire private property for public use through a court action called condemnation in which the court determines that the use is a public use and determines the price or compensation to be paid to the owner. (the owner of the property must be fairly compensated, usually based on an appraisal of the fair market value.) see also condemnation.
Encroachment The unauthorized trespassing of an improvement on the domain of another person’s land.
Encumbrance Any limitation that affects property rights and value.
Entrepreneur One who assumes the risks and management of an enterprise or business.
Environmental Assessment A report showing the results of investigation into environmental contamination. This report is often required by the EPA and other regulatory agencies to establish the extent of contamination. Depending on the type and extent of contamination suspected, “Phase I” or more extensive “Phase II” assessments may be required.
EPA The United States Environmental Protection Agency.
Equity The value of real property in excess of debt. the interest or value that an owner has in real estate over and above the mortgage and other financial liens against it; outright ownership. in accounting, the excess of a firm’s assets over its liabilities. see also balance sheet.
Escalation Clause A clause in an agreement that allows for an increase.
Escheat The right to have property revert to the state for nonpayment of taxes or when there are no legal heirs of someone who dies without leaving a will.
Escrow An agreement that something (a deed or bond, money) should be held in trust by a third party until certain conditions are met. the transfer is effected by one party to a contract, and the money or other item in escrow is returned upon fulfillment of the specified conditions. also, the process of handling these types of agreements.
Estate (1) The interest which a person possesses in a single concrete article of property. (2) The aggregate interests of any person in articles of property of all descriptions. (3) The aggregate property of all descriptions left by a decedent.
Estate Sale The sale of property left by a person at his or her death. An estate auction can involve the sale of personal and/or real property.
Estopple Certificate A signed statement of facts that cannot later be contradicted by the signer. It is used in mortgage negotiations to establish facts and financial obligations, such as outstanding amounts due that can affect the settlement of a loan. The assessments and payments outlined in the estoppel certificate are incorporated into the amounts due at closing.
Eviction A legal process to reclaim real estate from a tenant or someone holding a mortgage who has not performed under the agreed-upon terms of the lease or mortgage.
Excess Condemnation The taking of more property, by right of eminent domain, than is necessary for the intended purpose.
Exclusive Agency an agreement between a seller and a real estate firm or agent granting the firm or agent the right to be the only firm or agent to market and sell a property, except the seller retains the right to market and sell the home to a buyer without having to pay a commission to the listing agent, if the seller finds the buyer independently of the agent or firm.
Exclusive Listing A real estate sale transaction in which a specified real estate agent stands to gain a commission if a property sells within a specified number of months, no matter how a buyer is found. The purpose of an exclusive listing is to motivate the agent to sell the property quickly and at the highest price possible. However, if a homeowner signed an exclusive listing agreement with an agent and also placed an ad for the property, and if the buyer found out about the property from the ad, the real estate agent would still earn a commission unless the seller has also established exclusive agency (the right of the seller to sell the property himself and avoid paying a commission despite the exclusive listing agreement).
Exclusive Right to Sell The appointment of a broker as the exclusive agent for the sale of a property for a specified period of time. the broker receives a commission whether the property is sold by the owner, the broker, or any other agent during the specific period. the management contract for a rental property may guarantee the managing agent the exclusive right to sell, but a separate listing agreement should always be used when the property is placed on the market.
Expense Stop, or Stated Expense Stop A variation to the base-year approach found in office leasing in which the tenant pays the building costs over an agreed-upon maximum level (e.g., if the expense stop were $10 per square foot and if the building expenses rose to $12, the tenant would pay $2 per square foot as its share of building expenses).


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Factory Outlet Manufacturers' and retailers' outlet stores selling brand-name goods at a discount. 50,000 to 400,000 square feet.
Fair Market Value The price paid, or one that might be anticipated as necessarily payable, by a willing and informed buyer to a willing and informed seller (neither of whom is under any compulsion to act), if the object sold has been reasonably exposed to the market. in real estate, the price at which a property is sold to a willing buyer by a willing seller.
Farm Tract of land used for raising agricultural products, but excluding farm winery; or tract of land on which is kept 1 or more cows, sheep, goats, horses, chickens, other fowl, rabbits, other farm animals, or other small domesticated livestock. Greenhouses, hothouses or plant nurseries are permitted for the purpose of starting seedlings to be planted for farm use, but not for direct sale. On site sale of products produced or raised on the tract is permitted to include the construction of a stand or shelter for the sale of the goods. A farm shall not include commercial plant nurseries, commercial greenhouses, commercial hatcheries or other commercial retail or agriculture-related industrial use.
Fascia Flat horizontal band located at the base of a pitched roof, between architectural moldings near or at the top of a wall, extending out from a building wall as a separate wall panel, or as the outside edge of a canopy, which provides a visible location to mount signage.
Federal Home Loan Mortgage Corporation (FHLMC) (Freddie Mac) An organization that facilitates secondary residential mortgages, for savings and loan associations, to increase availability of residential mortgage financing.
Federal National Mortgage Association (FNMA) (Fannie Mae) A quasi-governmental agency that purchases mortgages from originators; intended to increase liquidity in the home mortgage market.
Fee (1) A charge imposed by a government for the performance of a specific nonproprietary act that is made in recognition of the special benefit conferred by such act, or the special cost incurred thereby, and in an amount intended to be substantially equal to or less than the incurred cost. (2) A form of compensation for occasional personal services, especially of public officers or professional persons, measured in terms of services performed rather than in terms of time required for their performance. (3) An estate in fee simple or a corresponding personal property interest.
Fee Appraisal Appraisal of properties one at a time for pay.
Fee Simple In land ownership, complete interest in a property, subject only to governmental powers such as eminent domain. Also fee simple absolute.
Fee Simple Defeasible A conveyance of property that has conditions placed on it. The holder of a fee simple defeasible possesses the property as a fee simple subject to that condition. If the condition is violated or not met, then the property will either go back to the original grantor or a specified third party.
Fiduciary One charged with a relationship of trust and confidence, as between a principal and agent, trustee and beneficiary, or attorney and client, when one party is legally empowered to act on behalf of another.
Fiscal Year The period covering a full year (not necessarily a calendar year) to which the annual budget and accounts apply. At the end of the fiscal year, the books of account of a government, person, firm, or association are closed in order to determine financial condition and the results of current operations.
Fixed Assets (1) Personal property that has been brought to the point of highest and best use, that is, fully installed and used to produce income in an economically feasible manner. (2) In a business, permanent assets required for the normal conduct of a business.
Fixed Cost A cost that is more or less inevitable and continuous; that does not vary with production levels; and that cannot be changed in the short run.
Fixed Operating Expenses Fixed operating expenses are those costs of doing business that do not vary with occupancy or output and that have to be paid whether the property is occupied or vacant. Fire insurance and property taxes are examples.
Fixtures All things that are attached to property, such as ceiling lights, awnings, window shades and doorknobs. Fixtures are automatically included in a sale, unless specifically mentioned in the contract as going to the seller.
Flood or Flooding A general or temporary condition of partial or complete inundation of normally dry land areas from: (a) the overflow of inland or tidal waters or (b) the unusual and rapid accumulation or runoff of surface waters from any source or (c) mudflows which are proximately caused by flooding as defined by clause (b) of this definition and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current. The terms flood or flooding also include the collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion, or undermining caused by waves or currents of water exceeding anticipated cyclical levels or suddenly caused by an unusually high water level in a natural body of water, accompanied by a severe storm, or by an unanticipated force of nature such as flash flood or an abnormal tidal surge, or by some similarly unusual and unforeseeable event which results in flooding from the overflow of inland or tidal waters.
Flood, Base A flood having a 1 percent chance of being equaled or exceeded in any given year. Also known as a 100 year flood.
Floodplain or Flood-Prone Area Land area susceptible to being inundated by water from any source.
Floor Area of Building The total area of all floors within the finished portion of a building, measured to the center of party walls and to the outside surfaces of other exterior walls.
Floor Area, Gross Sum of the horizontal area of all floors of a building measured from the exterior faces of the exterior walls or from the center line of walls separating two buildings, but not including outside storage areas, attached garages or carports, enclosed porches or rooftop enclosures housing mechanical equipment. Also referred to as “gfa”.
Foreclosure A court action initiated by the mortgagee, or a lienor, for the purpose of having the court order the debtor’s real estate sold to pay the mortgage or lien (e.g., a mechanic’s lien or court judgment).
Forfeiture Reversion of property (to the state) based on a violation of a law or a stipulated restriction by the owner.
Frontage Continuous length of the property line of a lot measured along a single road, against which the land abuts. Access easements shall not be considered frontage.
Full Service, or Gross A lease under which the landlord pays all costs (including janitorial and utilities) without reimbursement from the tenant.


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Gantt Chart A form of bar chart used in project management. Each element (task) of a project is represented by a horizontal bar. The bars are placed on the chart according to a time scale. The left end of each bar indicates when the task is to begin. The length of each bar indicates the duration of the task. The right end of each bar indicates when the task is to be completed.
Geographic Information System (GIS) (1) A database management system used to store, retrieve, manipulate, analyze, and display spatial information. (2) One type of computerized mapping system capable of integrating spatial data (land information) and attribute data among different layers on a base map.
Goodwill The economic advantage over competitors that a business has acquired by virtue of habitual patronage of customers.
Government National Mortgage Association (GNMA) (Ginnie Mae) A government-owned and government-financed agency that subsidizes mortgages through its secondary mortgage market and issues federally insured mortgage-backed securities. This agency falls within the Department of Housing and Urban Development.
Government Survey A ground survey authorized by the Continental Congress in 1775 and by subsequent acts; conducted in Florida, Alabama, Mississippi, and all states (except Texas) north of the Ohio or west of the Mississippi, in which the land was divided into townships approximately six miles square, each township normally containing thirty-six sections and each section normally containing 640 acres.
Grade Average of the finished ground level measured at the center of all walls of a building. Where walls are parallel to, and within five feet of, a sidewalk, the grade (ground level) may be measured at the sidewalk.
Graduated Lease A type of long-term, typically for commercial property, lease in which the payments are variable and adjusted periodically to reflect changes in the property's appraised value or changes in a certain publicized benchmark rate, such as the Consumer Price Index (CPI). A graduated lease provides for periodic changes in the payments rather than employing a fixed payment throughout the life of the lease. In addition to basing payments on current and changing market conditions, the terms of a graduate lease can state that the payments automatically increase by a specified percentage or dollar amount at regularly specified time intervals.
Grantee A grantee is the recipient of a grant, scholarship, or some type of property. In real estate, the grantee is the one taking title to a purchased property. The grantee is named in the legal document used to transfer the real estate. The person who is relinquishing the property is called the grantor. Recipients of stock options may also be referred to as grantees.
Grantor One who voluntarily conveys property, whether by sale, gift, lease, or otherwise.
Green Buildings Buildings that incorporate practices said to help the environment, reduce energy use and costs by energy-efficient design, contribute to a healthier and more pleasant environment for occupants, contribute to increased productivity, and experience faster leasing at more favorable rates for the lessor.
Grid (1) A network composed of two families of lines such that a pair of lines, one from each family, intersects in no more than two points. (2) In geodesy, a grid composed of two sets of uniformly spaced straight lines intersecting at right angles (derived from a square Cartesian coordinate system).
Gross leasable area, or GLA The standard for retail leasing that, as often as not, connotes “outside wall to outside wall,” which means that the GLA is the entire building or space with no deductions. Occasionally, the measurements are from the inside—and sometimes the midpoint—of the perimeter walls. Industrial buildings are also often leased on a gross square footage basis.
Gross Lease A lease under which the tenant (lessee) pays a fixed rent. the landlord (lessor) is responsible for paying all property expenses (e.g., taxes, insurance, utilities, repairs, etc.), and these costs are factored into the rent paid by the tenant. compare net lease.
Ground Area of Building The total area included at mean grade level within the outside surfaces of the exterior walls and the center lines of party walls, not including the area under open porches or steps or in courts or shafts.
Ground Lease A lease for land only, it gives the tenant the right to use and occupy the land under a property. under a subordinated ground lease, the owner offers the land as collateral for the mortgage commitment on the property. if the ground lease is unsubordinated, the land will not become collateral for the mortgage, and the lender will be in a second lien position.
Ground Rent Rent that is paid for the right to use and occupy the land under a building. (the building is called a leasehold improvement.)
Guarantor One who acts as a surety or gives security, as for payment of a debt. in real estate management, one who agrees to assume responsibility for a financial obligation of another in the event the other person cannot perform (e.g., payment of rent under a lease)


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Hectare Unit of land measure equal to 100 meters square. Equivalent to 2,471 acres.
Hedonic Model Hedonic pricing attempts to take observations of the overall goods or services and obtain implicit prices for the goods and services. Prices are measured in terms of quantity and quality. When valuing real property, the spatial attributes and property-specific attributes are valued in a single model. Calibration of the attribute components is performed statistically by regressing the overall price onto the characteristics.
Histogram A bar chart or graph of a frequency distribution in which the frequencies of the various classes are indicated by horizontal or vertical bars whose lengths are proportional to the number or percentage of observations in each class.
Holdover Tenant A holdover tenant is a renter who remains in a property after the expiration of the lease. If the landlord continues to accept rent payments, the holdover tenant can continue to legally occupy the property, and state laws and court rulings determine the length of the holdover tenant's new rental term. If the landlord does not accept further rent payments, the tenant is considered to be trespassing, and if he does not promptly move out, an eviction may be necessary.
HUD Acronym for the U. S. Department of Housing and Urban Development, a cabinet-level federal agency responsible for fair housing compliance and government assisted housing programs including Section 8.


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IAAO International Association of Assessing Officers.
Impervious Cover Surface composed of any material that significantly impedes or prevents natural infiltration of water into the soil. Impervious surfaces include, but are not limited to, roofs, buildings, roads, parking areas and any concrete, asphalt or compacted gravel surface.
Income The payments to its owner that a property is able to produce in a given time span, usually a year, and usually net of certain expenses of the property.
Income Approach One of the three approaches to value, based on the concept that current value is the present worth of future benefits to be derived through income production by an asset over the remainder of its economic life. The income approach uses capitalization to convert the anticipated benefits of the ownership of property into an estimate of present value.
Income Capitalization The process of dividing a property’s net annual income by a capitalization rate in order to arrive at an estimated value.
Indirect Costs (1) Overhead costs. (2) Costs incurred in construction away from the site. For example: fees, permits, insurance, and loans.
Industrial Park A controlled park-like development designed to accommodate specific types of industry (e.g., manufacturing) and usually located at a distance from the center of a city. often such properties are also specially zoned for heavy manufacturing or for light manufacturing and warehouse operations.
Industrial Property Generally any property used in a manufacturing activity, including a factory, wholesale bakery, dairy plant, food processing plant, mill, mine, quarry, all locally assessed utility property, and the like.
Inspection An inspection is a thorough investigation of a home by a licensed inspector. Once an offer is accepted (mutual acceptance), the buyer's agent will usually provide the buyer with a list of recommended inspectors and then facilitate scheduling the inspection. A thorough inspection is necessary to discover any material defects or necessary repairs before buying the home. The inspector may also recommend an additional inspection of the roof, sewage system, or other part of the house by a specialist.
Interest Only Loan an adjustable-rate mortgage that allows the borrower to pay just the interest rate for the first few years. That's often a low "teaser" rate. The payment rises and falls with the Libor rate. Libor stands for the London Interbank Offering Rate. It's the rate banks charge each other for short-term loans.
Interest Rate The percentage of an amount of money charged for its use, as of a loan. also, the rate of return on an investment, as of capital.
Inventory (1) The group of personal property items whose value is exhibited by value in exchange, that is, ownership is solely for the purpose of sale rather than use. (2) In general, any detailed list showing quantities and descriptions, and usually values or prices, of property. (3) Frequently used in the plural form to designate all types of current, physical assets that are customarily listed by quantities, descriptions, and values or prices for regular accounting purposes; for example, raw materials, goods in process, finished goods, office supplies, stores. (4) Occasionally (for example, in Vermont), a tax list.
Investment Trust A type of investment company that sells its stock and invests the money received in stocks and bonds of other companies, real estate, or other investments. Investment trusts can be open-end or closed-end.


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Joint Tenancy A state of tenancy involving two or more persons owning undivided possessory interests which have arisen out of a single conveyance, no one of the tenants being free to create interests in the estate without the consent of the others, and the surviving tenants acquiring the interest of any tenant who may die.


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Land (1) In economics, the surface of the earth and all the natural resources and natural productive powers over which possession of the earth’s surface gives man control. (2) In law, a portion of the earth’s surface, together with the earth below it, the space above it, and all things annexed thereto by nature or by man.
Land Contract An executory contract for the purchase of real property under the terms of which legal title to the property is retained by the vendor until such time as all conditions stated in the contract have been fulfilled; commonly used for installment purchase of real property.
Land Grant A legal document in which the federal government conveys land title to an individual.
Landlord One who owns real property that is leased to a tenant; see also lessor.
Latitude The angular distance north or south of the equator, measured in degrees along a meridian, as on a map or globe.
Lease A written contract by which the lessor (owner) transfers the rights to occupy and use real or personal property to another (lessee) for a specified time in return for a specified payment (rent).
Lease Buyout An agreement where the lease of an existing tenant is given up for its remaining term. The agreement makes the existing lease null and void at the point the agreement is signed. Lease buyout could be undertaken by the landlord, the tenant, or a third party. The term is commonly used in commercial real estate transactions.
Legal Description The description of real property by metes and bounds, lot and block numbers of a recorded plat, or government survey, including any easement or reservation, used to locate and identify a particular parcel of land in legal instruments (e.g., leases, sale/purchase contracts, management agreements).
Lessee The person receiving a possessory interest in property by lease, that is, the owner of a leasehold estate.
Lessor The person granting a possessory interest in property by lease, that is, the conveyor of a leasehold estate, the holder of a leased fee estate.
Letter of Intent A letter or document stating the intention of the parties to take (or not take) a particular action, sometimes contingent on certain other action(s) being taken. in commercial leasing, a preliminary step to finalizing specific lease terms.
Leverage A term meaning that a property is leveraged when it has debt on it. A 50 percent leverage means a property is encumbered with a loan for 50 percent of its value; being completely leveraged means the owner has no cash investment in the property.
Liability Any legally enforceable obligation, including probable future financial obligations. Add liability insurance after this.
License Permission granted by a government or other authority to engage in a business, profession, or other activity that is regulated by law. freedom to act or express oneself. also, the revocable permission for a temporary use (a personal right that cannot be sold).
Lien A claim against property by a creditor under which the property becomes security for the debt owed to the creditor. the legal right of a creditor to have his/her debt paid out of the property of the debtor. mortgages, mechanic’s liens, and tax liens are monetary liens against a property for the satisfaction of debt. see also mechanic’s lien.
Lien Waiver A voluntary relinquishing of a subcontractors’ right to make a claim (mechanic’s lien) against a property for payment of labor or materials already provided. such waivers are required for release of construction loan funds from the lender. also, an agreement between management, contractor, and subcontractor that no liens will be placed against the property for failure to meet the contract terms.
Lifestyle Center Upscale national-chain specialty stores with dining and entertainment in an outdoor setting. Large-format upscale specialty. 150,000 to 500,000 square feet.
Limited Partnership


An article which was once a chattel but which has now become a part of the real estate because the article is permanently attached to the soil or to something attached to the soil. All things that are attached to property, such as ceiling lights, awnings, window shades and doorknobs. Fixtures are automatically included in a sale, unless specifically mentioned in the contract as going to the seller.


Liquid Assets Assets that can quickly be converted into cash.
Liquidity The ease with which an asset may be converted into cash.
Lis Pendens "A suit pending," a written notice that a lawsuit has beenfiled which concerns the title to real property or some interest in that real property. Thelis pendens (or notice of pending action) is filed with the clerk of the court, certified thatit has been filed, and then recorded with the county recorder. This gives notice to thedefendant who owns real estate that there is a claim on the property, and the recordinginforms the general public (and particularly anyone interested in buying or financing theproperty) that there is this potential claim against it. The lis pendens must include alegal description of the real property, and the lawsuit must involve the property.Otherwise, if there is a petition to remove the lis pendens from real property notinvolved in the lawsuit, the plaintiff who originally recorded a false lis pendens will besubject to payment of attorneys fees as a penalty.
Listing The process by which the assessor ensures that records for the taxable property identified during discovery are preserved with integrity, available for use in valuation activities, and ultimately reflected in the assessment roll.
Loan-to-Value Ratio (M) The relationship (usually as a percentage) between the amount of a mortgage and the value of the security pledged as security for the mortgage.
Longitude A linear or angular distance measured east or west from a reference meridian (usually Greenwich) on a sphere or spheroid.
Lot Any one of the marketable parcels into which a tract of land is divided upon platting; applied especially to urban land. Note: A lot may or may not be coterminous with a parcel of land.
Lot Area Area of a horizontal plane bounded by the front, side, and rear lot lines, but not including any area occupied by the waters of a lake or river.
Lot Depth Shortest horizontal distance between front and rear lines of a lot measured perpendicular to the road.
Lot Width Horizontal distance between the side lines of a lot measured along the minimum front yard building setback line. If the width required by the district is not met at the minimum front yard setback line, then the width shall by met by increasing the front yard setback to a line where the minimum width for the district is achieved. Lot width shall be measured between the side lines at generally equal angles created by the intersection of the setback line and each side line.
Low Impact Development (LID) Design strategy with the goal of maintaining or replicating the predevelopment hydrologic regime through the use of design techniques to create a functionally equivalent hydrologic site design. Hydrologic functions of storage, infiltration and groundwater recharge, as well as the volume and frequency of discharges are maintained through the use of integrated and distributed micro-scale stormwater retention and detention areas, reduction of impervious surfaces, and the lengthening of runoff flow paths and flow time. Other strategies include the preservation/protection of environmentally sensitive site features such as riparian buffers, wetlands, steep slopes, valuable (mature) trees, floodplains, woodlands, and highly permeable soils.


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Main Building Building in which the principal use on a lot is conducted. In any residential or agricultural district, any dwelling shall be deemed to be a main building on the lot.
Manufactured Home A structure subject to federal regulation which is transportable in one or more sections and conforms to the following:  8 feet or more in width and 40 feet or more in length, or is 320 or more square feet when erected on site;  built on a permanent chassis;  designed to be used as a single-family dwelling, with or without a permanent foundation, when connected to required utilities; and  includes plumbing, heating, air conditioning and electrical systems. The term manufactured home shall include mobile home.
Marginal Cost The change in a firm’s total costs per unit change in its output level.
Market (1) The topical area of common interest in which buyers and sellers interact. (2) The collective body of buyers and sellers for a particular product.
Market Analysis A study of real estate market conditions for a specific type of property.
Market Approach A valuation term with several meanings. In its broadest use, it might denote any valuation procedure intended to produce an estimate of market value, or any valuation procedure that incorporates market-derived data, such as the stock and debt technique, gross rent multiplier method, and allocation by ratio. In its narrowest use, it might denote the sales comparison approach.
Market Price The price a particular buyer and seller agree to in a particular transaction; the amount actually paid.
Market Rent The rent currently prevailing in the market for properties comparable to the subject property. Market rent is capitalized into an estimate of value in the income approach.
Market Value The highest price in terms of money which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.
Meridian (1) An imaginary line on the earth’s surface running due north and south from which differences of longitude (or departures) and azimuths are reckoned. (2) A principal north-south line in the rectangular land survey system.
Metes and Bounds Measurement of angles and distances; a description of a parcel of land accomplished by beginning at a known reference point, proceeding to a point on the perimeter of the property being described, and then tracing the boundaries until one returns to the first point on the perimeter, usually a corner. The angles are described by reference to points of the compass, and the distances are described in feet or chains; curves are treated as arcs on a circle.
Minimum Bid An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum price is always stated in the brochure and advertisements and is announced at the auctions.
Mortgage an interest in land or real property conveyed by a written instrument as security for the payment of a debt. often used in referring to the loan itself, the debt instrument usually creates a lien against the property until the debt has been paid in full. a conditional transfer or pledge of real property as security for the payment of a debt; see also collateral. the document used to create a mortgage loan.
Mortgagee The person who lends money in a mortgage transaction.
Mortgagor The person who borrows money in a mortgage transaction.
Multiple Listing Service (MLS) A computerized database subscription service used by real estate brokers and agents to share information about properties for sale. Hundreds of systems are located throughout the U.S. and Canada to serve local market areas.


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NAA National Apartment Association.
National Association of Appraisers Unite those engaged in the appraisal profession for the purpose of exerting a beneficial influence upon the profession and to advocate appraiser interests. Promote member awareness through education and information services.Provide services as may be beneficial to the membership at a reasonable fee structure. Promote high standards of conduct of members.
National Assosiation of Realtors (NAR) America's largest trade association, representing 1.3 million members, including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. Membership is composed of residential and commercial brokers, salespeople, property managers, appraisers, counselors, and others engaged in the real estate industry. Members belong to one or more of approximately 1,200 local associations/boards and 54 state and territory associations of REALTORS®.
National Auctioneers Association An association of individual auctioneers united to promote the mutual interests of its members; formulate and maintain ethical standards for the auction profession; promote the enactment of just and reasonable laws, ordinances and regulations affecting auction selling; make the public more aware of the advantages of auction selling; and generally improve the business conditions affecting the auction profession.
National Real Estate Auction Committee A national committee developed by the National Association of REALTOR®s in April, 1990 to provide education to members concerning real estate auctions, identify issues and monitor, review and analyze trends affecting the real estate auction industry. The Committee was sunset in November, 1999. All auction activities hosted by NAR now fall under the purview of the Auction Forum.
Neighborhood An area within which there are common characteristics of population and land use. a district or locality, often defined by referring to its character or inhabitants. an area limited as to size and used for residential, commercial, or other purposes or a combination of such uses integrated into an accepted pattern. in real estate market analysis, a section of a larger region or market area, within which buildings generally compete with one another for tenants. the area surrounding and adjacent to a property, especially as it is characterized by similarity of demographic, economic, and other parameters.
Neighborhood Analysis A study of the relevant forces that influence property values within the boundaries of a homogenous area.
Neighborhood Center Convenience-oriented, Supermarket. Typical square footage of 30,000 to 125,000.
Net Lease A lease under which the tenant pays a prorated share of some or all operating expenses in addition to base or minimum rent. the terms net-net (or double-net) and net-net-net (or triple-net) are also used, depending on the extent of the costs that are passed through to the tenant. used most often for commercial tenants, the definitions of the terms vary with location and type of property (e.g., office, retail, industrial). in retail leasing, the tenant pays a prorated share of property taxes under a net lease, prorated shares of both property taxes and insurance under a net-net (or double-net) lease, and prorated shares of all operating expenses (including common area maintenance) under a net-net-net (or triple-net) lease. compare gross lease.
Net Operating Income (NOI) Annual net income after operating expenses are subtracted from effective gross income. Does not include payments for interest or principal.
Net Rentable Area An office leasing term that—assuming one were leasing an entire floor of a building—would be the standard for the leased premises. It is generally understood to be the total floor area less “vertical penetrations. ” Elevators, utility ducts, and staircases are the most readily agreed-upon verticals, while the janitor’s closet and light wells are sometimes debated as being in that category. Net rentable area includes all of what would be the floor’s common areas if the floor contained more than one tenant. Such common areas would include the elevator lobby, the hallways, and the restrooms.
Net Usable Area A calculation usually applied to multitenant floors in an office building. Net useable area is the net rentable area minus the common areas. Each tenant leases its pro rata share of the net useable area and a pro rata share of the deducted common areas. This calculation is called a load factor. Depending on the efficiency of the floor plate (in English, the floor) and the relative bargaining strength of landlord and tenant, the load factor can vary wildly, but an average load seems to be about 10–12 percent. Above 15 percent and tenants scream; below 5 percent is unheard of.
NN (Net Net Lease) Generally a lease in which the tenant pays for utilities, property taxes, and insurance in addition to the rent, and the landlord pays for maintenance and repairs. Also referred to as a double net lease, NN and modified gross lease.
NNN (Net Net Net Lease or Triple Net Lease) A net lease under which the lessee assumes all expenses of operating a property, including both fixed and variable expenses and any common area maintenance that might apply. However, the landlord is responsible for structural repairs. Referred to as a triple net lease or NNN and stated as a fully net lease.
No-Sale Fee A charge paid by the owner of property offered at a reserve auction when the property does not sell.
Note An agreement acknowledging and promising to repay a debt.


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Occupancy The act of taking or holding possession of property.
Occupancy Ratio (1) The ratio of the occupied units (for example, square feet of floor space, living units, or rooms) of a property to the total available units. (2) The ratio of the actual gross income from leased units of a property to the total gross income that would be obtained if all units were leased at standard rates.
Opening Bid The first bid offered by a bidder at an auction.
Operating Expenses All expenditures made in the course of operating an apartment community with the exception of debt service and capital expenditures (or replacement reserve payments). Fixed expenses include real estate taxes and insurance. Variable expenses, often associated with occupancy, include utilities, contract services, administrative expense, management fee, payroll, and maintenance and repairs.
Opportunity Cost The principle that the cost of a resource for one use is the value of the resource in its best alternative use.
Option The right to purchase or lease something at a future date for a specified price and terms. the right may or may not be exercised at the option holder’s (optionee’s) discretion. options may be received, negotiated, or purchased. in a lease, the right to obtain a specific condition within a specified time (e.g., to renew at the same or a pre-agreed rate when the lease term expires; to expand into adjacent space at a pre-agreed time when that space is expected to be available; to cancel the lease). options are often incorporated in the lease as an addendum.
Other and Unallocable Property Includes any property not classified within any of the preceding groups. Examples are mineral rights, timber rights, and oil rights, if they are separately assessed as real estate.
Outparcel Site for a freestanding building or use within a nonresidential community.
Overhead Cost A cost that is not directly traceable to any given unit of output, for example, salaries of managers, interest on funded debt, and property taxes. Sometimes referred to as “indirect cost.” Note: An overhead cost does not ordinarily vary with any close relationship to units of output. It is impossible to draw a sharp line of demarcation between overhead and direct costs; the difference is purely one of degree, and any classification of costs into these two groups is necessarily somewhat arbitrary.


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Par Value The face value of an item of intangible property that has both a stated face value and a fluctuating market value; applied especially to corporate stocks.
Parapet Wall Wall that extends above the top of a flat roof.
Parcel A contiguous area of land described in a single legal description or as one of a number of lots on a plat; separately owned, either publicly or privately; and capable of being separately conveyed.
Parcel Identification Number A numeric or alphanumeric description of a parcel that identifies it uniquely. Assessors use various systems, many with common features. A growing number of these systems include geocoding. In the thirty states where it exists, the Public Land Survey System, authorized by the United States government in 1785, is often a basis for parcel identification.
Park, Commercial Development that contains 3 or more business establishments that are planned, developed or managed as a unit, related in location, size and type of uses to the area that the park serves, and that provides on site parking based on the size and types of businesses.
Park, Industrial Development that contains 3 or more industrial establishments that are planned, developed or managed as a unit and related in location, size and type of uses to the area that the park serves and that provides on site parking based on the size and types of industrial uses.
Park, Office Development that contains 3 or more separate office buildings that are planned, developed or managed as a unit, related in location, size and type of uses to the area that the park serves, and that provides on site parking based on the types and sizes of offices.
Percentage Rent In retail leasing, rent that is based on a percentage of a tenant’s gross sales (or sometimes net income or profits), often compared to the guaranteed minimum or base rent under the lease and paid as overage (i.e., the amount of percentage rent in excess of the minimum or base rent due). see also breakpoint. a percentage rent provision may also be written such that the tenant in a shopping center is required to pay a percentage of gross sales in lieu of minimum rent under certain circumstances (e.g., loss of an anchor tenant).
Perfect Competition The requirements of pure competition plus an additional condition of perfect knowledge on the part of buyers and sellers about all activity in the marketplace.
Perfect Market In economics, a market in which neither sellers nor buyers individually or collectively have a competitive advantage and in which the things traded are homogenous. The stock market is a more nearly perfect market than a real estate market.
Personal Property Movable property belonging to an individual, family, or other entity that is not permanently affixed to real property, such as clothing, fixtures, and furnishings; distinguished from real property; also called personalty or chattel. in real estate, the furniture, blinds and drapes, office equipment, appliances, and other items that belong to the property owner apart from the land and the improvements to it. also, the items owned outright by the tenant in leased premises. in states in which mobile homes are considered personal property, no property taxes are levied on individual mobile homes (only the land they stand on).
Plat A survey plan or map and descriptions of a tract of land showing property lines, easements, and other appropriate features.
Plat, Township A plat of a survey township prepared by, or under the direction of, the United States General Land Office.
Police Power The right of a governmental agency to enact and enforce regulations regarding the health, safety, and general welfare of the population within its jurisdiction.
Pollution, Nonpoint Source Pollution consisting of constituents such as sediment, nutrients and organic and toxic substances from diffuse sources, such as runoff from agriculture and urban land development and use.
Population All the items of interest, for example, all the properties in a jurisdiction or neighborhood; all the observations in a data set from which a sample may be drawn.
Possession Physical control of personal or real property.
Potential Gross Income (PGI) The sum of potential gross rent and miscellaneous income, that is, the income from rent and other sources that a property could generate with normal management, before allowing for vacancies, collection losses, and normal operating expenses.
Power Center Category-dominant anchors, including discount department stores, off-price stores, wholesale clubs, with only a few small tenants. Category killers, such as home improvement, discount department, warehouse club and off-price stores. 250,000 to 600,000 square feet.
Premises The term premises includes a lot, parcel, tract or plot of land, together with all buildings and structures thereon.
Prepayment Penalty An extra stipulated charge for paying off all or part of a loan on real property in advance. a cash penalty for paying off a mortgage loan before its date of maturity.
Preview Specified date and time property is available for prospective buyer viewing and audits. Also known as Open House or Inspection.
Principal In real estate, one who owns property. in real estate management, the property owner who contracts for the services of an agent. in finance, the amount of money that is borrowed in a loan as distinct from the interest on such loan; the original amount or remaining balance of a loan. also, the original amount of capital invested. in law, the individual being represented in a business transaction by an agent authorized to do so.
Private Encumbrances Private hindrances that affect value and sale price such as easements, condominium controls, and deed or subdivision restrictions.
Pro Forma “For the sake of form” or “as a matter of form.” In the world of investing, pro forma refers to a method by which financial results are calculated. This method of calculation places emphasis on present or projected figures.
Project Development that is planned, developed or managed as a unit.
Property (1) An aggregate of things or rights to things. These rights are protected by law. There are two basic types of property: real and personal. (2) The legal interest of an owner in a parcel or thing.
Property Line The boundary line that defines a parcel of land.
Property Tax A tax levied on various kinds of real and personal property by state and local governments based on the nature of improvements to the land, fair market value, and assessed valuation.
Property Tax Credit An offset against the property tax payment or another tax payment for taxpayers who meet certain criteria (for example, renters), or whose properties have certain characteristics or are used for specified purposes (for example, pollution abatement); a direct reduction in a tax payment rather than in a tax base.


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Quitclaim Deed A deed in which the grantor conveys or relinquishes all interests that he or she may have in a property, without warrant as to the extent or validity of such interests.


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Range (1) The maximum value of a sample, minus the minimum value. (2) The difference between the maximum and minimum values that a variable may assume.
Real Estate The physical parcel of land and all improvements permanently attached.
Real Estate Investment Trust (REIT) A corporation or trust that combines the capital of many investors to own and manage or provide financing for all forms of real estate.
Real Property Consists of the interests, benefits, and rights inherent in the ownership of land plus anything permanently attached to the land or legally defined as immovable; the bundle of rights with which ownership of real estate is endowed. To the extent that “real estate” commonly includes land and any permanent improvements, the two terms can be understood to have the same meaning. Also called “realty.”
Realty (1) Any tangible thing whose fee ownership constitutes real property, that is, land or improvements. (2) A synonym for real estate.
Reassessment (1) The relisting and revaluation of all property, or all property of a given class, within an assessment district by order of an authorized officer or body after a finding by such an officer or body that the original assessment is too faulty for correction through the usual procedures of review and equalization. (2) The Glossary for Property Appraisal and Assessment 139 Return to Table of Contents revaluation of all real property by the regularly constituted assessing authorities, as distinguished from assessment on the basis of valuations most or all of which were established in some prior year.
Reclamation The process of physically changing economically unusable land to be suitable for use.
Redevelopment Process of developing land that is, or has been, previously developed.
Referring Broker A real estate broker who does not have a listing on a property, but refers the auction company to a potential seller for an auction. Usually earns a flat fee commission for referring product to an auction company.
Refinancing Obtaining a new loan to pay off an existing loan, using the same property as collateral.
Regional Mall General merchandise or fashion-oriented offerings. Typically, enclosed with inward-facing stores connected by a common walkway. Parking surrounds the outside perimeter. Full-line department store, mass merchant, discount department store, fashion apparel store, mini-anchor, cineplex or other large-scale entertainment attraction, and food-and beverage service cluster. Typical square footge of 400,000 to 800,000.
REIT Real estate investment trust; combines capital of many investors to acquire or finance real estate through formation of a corporation whose shares are traded in a market.
Remodel To improve a structure by changing its floor plan, functions, or characteristics.
Remote Sensing Collecting information about an object without being in physical contact with the object.
Rent The amount, which would be paid for rental of similar property in the same condition in the same area. Evidence of rental value becomes important in lawsuits in which loss of use of real property or equipment is an issue, and the rental value is the "measure of damages."
Rentable Area A specified unit area of leasable space.
Residence (1) A domicile. (2) A domicile at which a person is actually dwelling. (3) A dwelling place, whether or not it constitutes a domicile (preferred). Note: Ordinarily, in the law of taxation, “residence” means “domicile” unless a contrary meaning is specified or is indicated by the context.
Resident A person who occupies real property owned by another based upon an agreement between the person and the landlord/owner, almost always for rental payments.
Residential (Nonfarm) Single-Family Property Includes each detached, semidetached, or attached house, if separately assessed and not on a farm, that is a residence for one family only. For detached houses, this would include one-family rural properties or suburban estates not used primarily for farming, and mobile homes assessed as real property. This category includes each condominium unit in a multiunit dwelling structure, plus each condominium’s share of the common area, unless the common area is separately assessed.
Residential (Nonfarm), Multifamily Property Includes each residential property that contains two or more living units, including duplexes, apartment houses, and cooperatives that are assessed as a single entity. The category encompasses street level stores and doctors’ offices in apartment buildings, but excludes motels or hotels.
Residential Property Real property that might be vacant land or an improved parcel of land devoted to or available for residential use.
Retail Commercial establishments offering for sale to the public goods such as, but not limited to: antiques, artist materials and supplies, baked goods, books, cameras, candy, clothing, pharmaceuticals, flowers, groceries, gifts, hardware, hobby supplies, jewelry, magazines, motor vehicle accessories, musical instruments, newspapers, office supplies, pets, sporting goods, stationary, telephones, toys, videos , and other uses of similar intensity and nature, as determined by the director of planning.
Return on investment The ratio of the net operating income to the total investment (equity) in an apartment community over a given period of time. It is a financial performance measurement. It is calculated as follows: NOI/equity= % ROI. It does not take into account the time value of money, but helps the owner/investor measure management performance at the property.
Right, Riparian Any right attaching to a parcel of land that appertains to running water bordering on or flowing over such parcel; for example, the right to natural flow unobstructed by artificial checks or barriers, to freedom from unreasonable pollution, of access to the water, of accretion.
Right, Water The right to a supply of water.
Road Unless otherwise specified, a public right-of-way which provides vehicular access to properties, or provides for through traffic.
Roofline Top edge of a roof or building parapet, whichever is higher, excluding any mansards, cupolas, pylons, chimneys or minor projections.


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Sale Terms The amount of down payment, the interest on the mortgage, and information on points and other fees involved in a real estate sale. Also called “terms of financing” or “financing terms.”
Sales Comparison Approach One of three approaches to value, the sales comparison approach estimates a property’s value (or some other characteristic, such as its depreciation) by reference to comparable sales.
Seller Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.
Seller Disclosure A set of documents completed by the seller of a home, listing any known issues with the property and any remodel projects completed during the time they owned the home. In most states, the seller is required to provide this disclosure within a few days of mutual acceptance. In turn, the buyer has a certain number of days to review the disclosures. This information is useful but is no substitute for an inspection by a licensed inspector.
Shopping Center Development that contains three or more commercial establishments that are planned developed or managed as a unit, and related in location, size and type of shops to the area that the unit serves, and that provides on site parking based on the types and sizes of stores.
Site The location of a person, thing, or event.
Site Characteristics (1) Characteristics of (and data that describe) a particular property, especially land size, shape, topography, drainage, and so on, as opposed to location and external economic forces. (2) By extension, any characteristics of either the site or the improvement.
Site Development Improvements made to a land site (for example, grading, utility installation, roadways, and curbs) before a building is constructed.
Site Plan A less-formal document that is sometimes simply sketched by the project architect. It shows the proposed layout of the new building and the site improvements (the parking lot and landscaping). The site plan is often, but not always, based on a boundary survey (it can be prepared from the assessor’s map that is attached to the preliminary title report), and it is used for initial presentation to planning staffs, neighbors, and so on. Typically, site plans go through numerous revisions as comments are encountered. When the size, shape, and location of the buildings are finally agreed upon, the architect or civil engineer takes the site plan to use as the rough basis for the working drawings for site work. The term plot plan is a less frequently used synonym.
Special Flood Hazard Area (SFHA) Land in the floodplain subject to a 1 percent or greater chance of being flooded in any given year.
Square Foot A unit of area equal to a square one foot in length on each side.
Square Footage, Gross Sum of the horizontal area of all floors of a building measured from the exterior faces of the exterior walls or from the center line of walls separating two buildings. Unless revised by a condition of zoning approval, gross square footage shall include finished and unfinished areas, enclosed attached outside storage areas, attached garages, and enclosed porches. Gross square footage shall not include covered or uncovered open appurtenances such as unenclosed porches, breezeways or decks.
Stability The expression of the ability of a material to remain unchanged. For MSDS purposes, a material is stable if it remains in the same form under expected and reasonable conditions of storage or use.
Story That portion of a building, other than a cellar or basement, extending from the surface of any floor to the surface of the above floor, or, if there is no floor above, then the portion of a building extending from the floor to the ceiling above it.
Strip/Convenience Attached row of stores or service outlets managed as a coherent retail entity, with on-site parking usually located in front of the stores. Open canopies may connect the storefronts, but a strip center does not have enclosed walkways linking the stores. A strip center may be configured in a straight line, or have an "L" or "U" shape. A convenience center is among the smallest of the centers, whose tenants provide a narrow mix of goods and personal services to a very limited trade area. Convenience store, such as a mini-mart. Typical square footage is less than 30,000.
Structure Anything constructed or erected which has a permanent location on the ground or which is attached to something having a permanent location on the ground. For purposes of the floodplain management ordinance, a walled and roofed building, including a gas or liquid storage tank, that is principally above ground, as well as a manufactured home.
Subdivision A tract of land that has been divided into marketable building lots and such public and private ways as are required for access to those lots, and that is covered by a recorded plat.
Subject Property The property being appraised. Everything used or useful to the ongoing economic operation of the business (property). Includes tangible and intangible property.
Sublease A lease in which the lessor is a lessee in a prior lease.
Subordination Clause A lease covenant in which the tenant agrees to take any action required to subordinate his/her claims against the property to the rights of the lender under a first mortgage or deed of trust, so long as it does not affect his/her right to possession.
Super-Regional Mall Similar in concept to regional malls, but offering more variety and assortment. Full-line department store, mass merchant, discount department store, fashion apparel store, mini-anchor, cineplex or other large-scale entertainment attraction, and food-and beverage service cluster. Typical square footge of 800,000 or more.
Surface Treatment Treatment of parking area with tar and gravel.
Survey The use of linear and angular measures and applied principles of geometry and trigonometry to determine the size, shape, and location of a tract of land or a specific feature of land, such as a harbor or coastline. in marketing and market research, to conduct a generalized examination and study of the market, especially to identify characteristics of likely consumers of a product or service.


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Target Market The characteristics (some may include economic, location and amenity requirements) of the consumer to whom a community wants to focus their marketing and advertising efforts. Determining the correct targeted prospective residents is the greatest marketing challenging aspect to developing a marketing plan.
Tax Lien A monetary lien placed by federal, state, or local tax authorities for unpaid taxes.
Tax Sale Public sale of property at auction by governmental authority, due to nonpayment of property taxes.
Tax-Exempt Property Property entirely excluded from taxation because of its type or use. The most common examples are religious, charitable, educational, or governmental properties. This definition omits property for which the application of a partial exemption reduces net taxable value to zero.
Tenancy The act of using or occupying property, especially real property whose fee title is vested in someone other than the occupant.
Tenancy At Sufferance An agreement in which a property renter is permitted to live in a property after a lease term has expired, but before the landlord demands the tenant vacate the property. If a tenancy at sufferance occurs, the original lease conditions must be met, including the payment of any rents. Otherwise, the tenant can be evicted at any time without notice.
Tenancy at Will Tenancy at will, also known as estate at will, is a property tenure — without a lease or written agreement — that can be terminated at any time by either the tenant or the owner (landlord). It exists without a contract or lease and usually does not specify length of a tenant's duration or the exchange of payment. A tenancy at will arrangement is desirable to tenants and owners wishing to have the flexibility to change rental situations easily and without breaking a contract.
Tenancy by the Entirety A state of tenancy, recognized by some states, in which the husband and wife are considered as a single person, neither one being free to create interests in the estate without the consent of the other and the survivor acquiring the whole interest upon the death of either.
Tenancy in Common A state of tenancy involving two or more persons owning undivided possessory interests that have arisen out of separate and distinct conveyances, any one of the tenants being free to create interest in his portion of the estate and the heirs or devisees acquiring the interest of any tenant who may die.
Tenant A legal term for one who pays rent to occupy or gain possession of real estate; the lessee in a lease. real estate managers often limit the use of the term tenant to commercial tenants and refer to residential tenants as residents. see also lessee; resident.
Tenant Improvements Fixed improvements made to tenants’ office space, usually based on specific building standards determined in advance by ownership; specifics are often negotiable, especially in a slow market. in apartment rentals, additions or alterations to the leased premises for the use of the tenant, made at the cost and expense of the tenant and becoming a part of the realty unless otherwise agreed to in writing.
Term A limited or defined period of time. the duration of a tenant’s lease; the duration of a mortgage (e.g., a thirty-year term); the duration of a contract for services.
Terms The period of time that an agreement is in effect.
Terms and Conditions The printed rules of the auction and certain aspects of the Purchase & Sale Agreement that are read and/or distributed to potential bidders prior to an auction sale.
Theme/Festival Center Leisure, tourist, retail and service-oriented offerings with entertaiment as a unifying theme. Often in urban areas, they may be adapted from older—sometimes historic—buildings, and part of a mixed-use project. Restaurants, entertainment. 80,000 to 250,000 square feet.
Time Value of Money The principle that an amount of money anticipated as income in the future is always worth less than an equal amount in hand at the present time.
Time-Share Unit A residence, usually a condominium at a vacation or resort site, whose ownership is divided among the owners by weeks or months, giving each owner the right to occupancy for a specified time each year.
Title The union of all elements constituting proof of property ownership or the instrument that is evidence of ownership.
Title Insurance A policy insuring an owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters that are specifically excluded by the policy.
Topographic Map Refers to the basic description and elevation of a piece of land.
Topography The contour of land surface, for example, gently rolling, mountainous, or flat.
Town (1) A small incorporated or unincorporated political subdivision of a state. (2) A civil township. (3) A small urban area.
Township An approximately thirty-six-square mile division of land used in the Federal Rectangular Survey System. Townships are bounded by two successive range lines on the east and west and two successive township lines on the north and south.
Triple net Although the most basic of lease terms, a term that means many things to many people. It usually means that a tenant is required to pay its pro rata share of taxes, insurance, and maintenance and that the landlord is responsible for maintenance of the roof and bearing walls. The term leaves open for debate a host of lesser issues such as who pays for capital improvements or replacements (the parking lot), who pays the increase in property taxes on the building’s sale, or who pays for insurance that the tenant views as excessive or frivolous (a $25 million liability policy or earthquake insurance).
Trust An agreement whereby the owner of property (the settlor) transfers legal title to a second party (the trustee), such property to be held, managed, or disposed of for the benefit of a third party (the beneficiary) or the settlor, or both, as set forth in the trust agreement.
Trust Estate The aggregate interests of a trustee in property of all sorts held under a trust agreement.
Trustee One who holds legal title to property under a trust agreement.
Turnover A figure signifying a relationship between sales over a stated period (usually a year) and average inventories during such period, arrived at by dividing either (a) total cost of sales by total cost of the average inventory or (b) total sales receipts by total sale price of the average inventory.
Turnover Ratio A valuation guideline based on sales activity, the number of times per period (usually a year) a business sells the average sale value of its inventory during the same period.


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Underwriter Iin insurance, the party who assumes a risk in return for a premium payment; the insurer. also, one who assesses the potential risk of various casualties and liabilities and assigns a dollar value (premium) to be paid for insurance coverage.
Unit The property being appraised. Everything used or useful to the ongoing economic operation of the business (property). Includes tangible and intangible property.
Utility A public service such as gas, water, or electricity. telephone service is often considered a utility as well.


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Vacancy and Collection Loss The amount of money deducted from potential annual gross income to reflect the effect of probable vacancy and turnover, or nonpayment of rent by tenants. Vacancy and collection loss is commonly expressed as a percentage of potential annual gross income, and it should be based on market research, not actual rental history of a property.
Vacancy Rate The ratio of vacant space to total rentable area, expressed as a percentage; see also occupancy level. on a larger scale, the amount of vacant rental space available in the market expressed as a percentage of the total supply of rental space. for rental.
Valuation (1) The process of estimating the value—market, investment, insured, or other properly defined value—of a specific parcel or parcels of real estate or of an item or items of personal property as of a given date. (2) The process or business of appraising, of making estimates of the value of something. The value usually required to be estimated is market value.
Value (1) The relationship between an object desired and a potential owner; the characteristics of scarcity, utility, desirability, and transferability must be present for value to exist. (2) Value may also be described as the present worth of future benefits arising from the ownership of real or personal property. (3) The estimate sought in a valuation. (4) Any number between positive infinity and negative infinity.
Variable Costs The costs of the variable resources used by a firm in either the short run or the long run.


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Warranty Deed A deed that warrants or guarantees clear title to a property. see also general warranty deed.
Wealth Valuable material objects that are owned, either individually or collectively; that is, all tangible property. Note: In popular usage, the term “wealth” is synonymous with “property” and, as such, embraces intangibles as well as tangible property. This usage is considered incorrect by economists and is not recommended. Intangible property, with the possible exception of goodwill, patents, and the like, is not a real source of income, but only a means of distributing income derived from the two primary sources, tangible property and persons. The adding together of tangible property Glossary for Property Appraisal and Assessment 185 Return to Table of Contents and intangibles to secure total wealth results in multiple counting of the same values. Some authorities consider nonrepresentative intangible property as wealth, but this usage has received only limited acceptance.
Wetlands Areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions and over which the Commonwealth of Virginia or the U.S. Army Corps of Engineers exercises jurisdiction. Wetlands typically include swamps, marshes, bogs and similar areas.
Withdrawal Failure to reach the reserve price or insufficient bidding.


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Yard Open space at grade between a building or structure and the adjoining lot line unoccupied and unobstructed by any portion of a building or structure from the ground upward.
Yield The total economic return to an investor. the rate of return on a financial investment usually expressed as a percentage of the original amount invested. from a lender’s perspective, the amount of money paid back on a loan over a certain period of time. see also rate of return; return; revenue.
Yield to Maturity (YTM) The average rate of return on outstanding debt issues taking into consideration current price, interest payments, and capital gains or losses at maturity of the issue.


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Zoning A public regulation to control the character and intensity of land use by areas or zones. a legal mechanism whereby local (municipal) governments regulate the use of privately owned real property to prevent conflicting land uses, promote orderly development, and regulate such conditions as noise, safety, and density. zoning regulations are specified in zoning ordinances. see also downzoning; rezoning. establishment of independently controlled sections within an hvac system such that the temperature and other conditions in each zone (space or group of spaces) are regulated by a separate control.
Zoning Approval Includes conditional use, conditional use planned development, conditional zoning, variance, administrative variance, special exception, substantial accord, manufactured home permit and rezoning approvals.
Zoning Condition Condition of a zoning approval.


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Bishop-Favrao Hall at Virginia Tech
The Virginia Tech Program in Real Estate is a five-college collaboration to help students find their niche, while understanding the broad field of real estate.