Terms Starting with F

Fair Market Value

The price that a willing buyer and a willing seller would agree upon in an open market, with no undue pressure on either party.

Fannie Mae (FNMA)

The Federal National Mortgage Association, a government-sponsored entity that buys mortgages from lenders to ensure liquidity in the mortgage market.

Federal Housing Administration (FHA)

A U.S. government agency that provides mortgage insurance on loans made by approved lenders to increase homeownership accessibility.

Fee Simple

The most complete form of property ownership, granting the owner full rights and control over the property indefinitely.

Fiduciary

A person or entity legally obligated to act in the best interest of another party, such as a real estate agent representing a buyer or seller.

Final Walk-Through

An inspection performed by the buyer just before closing to ensure the property’s condition matches the agreed-upon terms in the contract.

First Mortgage

The primary mortgage on a property, which takes precedence over any other liens or claims.

Fixed-Rate Mortgage

A mortgage loan where the interest rate remains the same for the entire term of the loan, resulting in consistent monthly payments.

Fixture

An item of personal property that becomes permanently attached to real property, such as lighting or built-in appliances.

Foreclosure

The legal process by which a lender takes possession of a property due to the borrower’s failure to make mortgage payments.

For Sale by Owner (FSBO)

A property that is being sold by the owner without the assistance of a real estate agent.

Forced Sale

A sale of property ordered by a court to satisfy debt obligations, often conducted through foreclosure or tax sale.

Forbearance

An agreement between a lender and borrower to temporarily suspend or reduce mortgage payments to avoid foreclosure.

Freddie Mac (FHLMC)

The Federal Home Loan Mortgage Corporation, a government-sponsored entity that purchases mortgages from lenders to increase the availability of loans to homebuyers.

Functional Obsolescence

A reduction in a property’s value due to outdated features, design, or technology that do not meet current market preferences.

Funding Fee

A fee paid by borrowers of VA loans, used to help offset the costs of the loan program for the government.

Front-End Ratio

A ratio that compares a borrower’s monthly housing expenses, including mortgage payments, to their gross monthly income.

Fair Housing Act

A federal law that prohibits discrimination in the sale, rental, and financing of housing based on race, color, national origin, religion, sex, familial status, or disability.

Foreclosure Auction

A public sale of a property that has been foreclosed upon, where the highest bidder takes ownership of the property.

Final Inspection

A last examination of a property by a lender or buyer before closing to ensure it meets the terms and conditions of the contract.

Freehold Estate

A type of real property ownership that is indefinite in duration, such as fee simple or life estate ownership.

Financing Contingency

A clause in a purchase agreement that makes the sale contingent on the buyer securing financing.

Foreclosure Deed

A legal document transferring ownership of a foreclosed property to the successful bidder at a foreclosure auction.

Fixed Expenses

Regular, recurring property expenses that do not fluctuate with changes in occupancy, such as insurance and property taxes.

Fair Rent

The market rent that a landlord can reasonably charge a tenant, based on similar properties in the area.

Foreclosure Prevention

Strategies and programs aimed at helping homeowners avoid foreclosure, such as loan modifications, forbearance, or repayment plans.

FHA Loan

A mortgage insured by the Federal Housing Administration, typically aimed at first-time homebuyers and borrowers with low to moderate incomes.

Fair Housing Act of 1968

A law that expanded upon previous legislation to provide greater protection against discrimination in housing-related transactions.

Foreclosure Property

A property that is being repossessed by the lender after the borrower has failed to meet mortgage obligations.

Floor Area Ratio (FAR)

The ratio of a building’s total floor area to the size of the lot it sits on, used in zoning to regulate building density.

Fee Simple Absolute

A type of freehold ownership that grants the owner complete and unrestricted rights to the property.

Fractional Ownership

A form of property ownership where multiple buyers purchase shares in a property, each receiving partial rights and usage.

Freddie Mac Loan

A mortgage loan purchased by Freddie Mac from lenders to increase the liquidity of the mortgage market.

Federal Home Loan Bank (FHLB)

A system of regional banks that provide liquidity to member institutions for mortgage lending and community investments.

Form 1004

A standard form used for a full appraisal of single-family residential properties, also known as the Uniform Residential Appraisal Report (URAR).

Fair Value

The estimated worth of a property, considering the potential selling price in an open market.

Foreclosure Sale

A public auction of a property that has been foreclosed upon, where the highest bidder acquires ownership.

Financial Leverage

The use of borrowed capital to finance an investment, with the expectation that the property’s income will cover debt payments and generate profit.

First Refusal Right

A contractual right that gives an individual the opportunity to purchase a property before it is sold to another buyer.

Full-Service Lease

A lease agreement in which the landlord covers all property-related expenses, including utilities, maintenance, and insurance.

Functional Utility

The ability of a property to meet the needs and preferences of potential buyers or tenants, often used in appraisals to assess marketability.

FEMA Flood Zone

An area designated by the Federal Emergency Management Agency (FEMA) as being at high risk of flooding, which may require flood insurance.

Flipping

The process of purchasing a property, making improvements, and quickly reselling it for a profit.

Fee Simple Defeasible

A form of property ownership where the owner’s rights can be terminated if certain conditions are not met.

Fiduciary Responsibility

The legal duty of a real estate agent or broker to act in the best interest of their client.

Federal Reserve System

The central banking system of the United States, which regulates monetary policy and influences interest rates.

Fluctuating Interest Rate

An interest rate that changes over time based on market conditions, often tied to a financial index.

Foreclosure Redemption Period

The period during which a borrower can reclaim a foreclosed property by paying off the mortgage debt in full.

Fair Issac Corporation (FICO) Score

A credit score used by lenders to evaluate a borrower’s creditworthiness, based on payment history, amounts owed, length of credit history, and other factors.

Fair Return

A reasonable return on investment, based on the market conditions and the property’s performance.

Terms Starting with G

General Contractor

A professional responsible for managing the overall construction of a building, including hiring subcontractors and ensuring the project meets specifications.

Gentrification

The process of renovating a neighborhood to attract wealthier residents, which can increase property values and often displace lower-income residents.

Geographic Information System (GIS)

A computer system used to capture, store, analyze, and manage geographic data related to property, often used in urban planning and real estate development.

Graduated Payment Mortgage (GPM)

A type of mortgage where initial payments are lower and gradually increase over time, often used by borrowers expecting future income growth.

Grant

A legal transfer of property ownership, typically through a deed.

Grant Deed

A type of deed in which the grantor guarantees that they hold title to the property and that there are no undisclosed encumbrances.

Grantee

The person receiving ownership of a property in a real estate transaction.

Grantor

The person transferring ownership of a property in a real estate transaction.

Gross Income

The total income generated by a property before any expenses, such as taxes or maintenance, are deducted.

Gross Lease

A lease agreement in which the landlord is responsible for all property-related expenses, such as taxes, insurance, and maintenance.

Gross Rent Multiplier (GRM)

A ratio used to estimate the value of rental properties, calculated by dividing the property’s price by its annual rental income.

Ground Lease

A long-term lease of land, where the tenant is allowed to develop and use the land, but the land itself is still owned by the landlord.

Guaranteed Loan

A loan backed by a government agency or other entity that guarantees repayment to the lender in case of borrower default.

Good Faith Estimate (GFE)

A document provided by a lender outlining the estimated costs and terms of a mortgage loan, required by law for all federally related mortgage loans.

General Lien

A claim on all property owned by a debtor, not limited to a specific property, such as a judgment lien or tax lien.

Gap Financing

Short-term financing used to cover the period between the end of one loan and the start of another, often used in real estate development.

Green Building

A structure that is environmentally responsible and resource-efficient throughout its life cycle, from planning to design, construction, operation, and maintenance.

General Warranty Deed

A deed that provides the greatest protection to the buyer, as it guarantees the seller holds clear title to the property and has the right to sell it.

Gift of Equity

A transaction where the seller gives the buyer a portion of the property’s equity as part of the purchase price, often used in family sales.

Governing Documents

The legal documents that establish and regulate a homeowners’ association or condominium association, including bylaws and covenants.

Gross Area

The total floor area of a building, measured from the exterior walls, including common areas and non-rentable spaces.

Good Faith Deposit

A deposit made by a buyer to demonstrate their commitment to purchasing a property, often applied toward the purchase price at closing.

Government-Sponsored Enterprise (GSE)

A financial services corporation created by the U.S. Congress to improve the flow of credit in specific sectors of the economy, such as Fannie Mae and Freddie Mac.

Graduated Lease

A lease in which the rental payments increase at specific intervals, often based on a pre-agreed schedule or index.

Gross Operating Income (GOI)

The total income generated by a property, including rent and other revenue sources, before expenses are deducted.

Grantor Retained Annuity Trust (GRAT)

An estate planning tool that allows the grantor to transfer assets to beneficiaries while minimizing estate and gift taxes, often used for real estate.

Gross Square Footage

The total area of a building, including all floors, measured from the outside walls, and often used to calculate the rentable space in commercial properties.

Graduated Rent

A type of rent agreement where the rental payments increase at pre-specified intervals or according to a set schedule.

General Partnership

A business arrangement where all partners share management responsibilities and liabilities, often used in real estate development projects.

Government Loan

A mortgage loan insured or guaranteed by a government agency, such as the FHA, VA, or USDA, to encourage homeownership.

Gap Period

The time between the completion of one loan and the commencement of another, often filled by short-term financing known as a “bridge loan.”

Graduated Mortgage

A mortgage with an initial low payment that gradually increases over time, designed for borrowers whose income is expected to rise.

Gravamen

The main point or essence of a legal complaint, often used in reference to real estate disputes.

Gravel Driveway

A type of driveway surface made from crushed gravel, often used in rural properties or where paved driveways are not necessary.

Gross Leaseable Area (GLA)

The total floor area that can be leased to tenants in a commercial property, excluding common areas.

Gross Absorption

The total amount of space leased or sold in a specific real estate market over a period of time, not accounting for vacancies.

Geotechnical Survey

An assessment of soil conditions and stability conducted before construction to determine the suitability of the land for development.

General Assessment

A tax levied on property to fund public services, such as schools, roads, and infrastructure improvements.

Geographic Farm

A specific neighborhood or area where a real estate agent focuses their marketing efforts to generate listings and sales.

General Real Estate Appraiser

An individual licensed or certified to appraise all types of real property, including residential, commercial, and industrial properties.

Ground Rent

The rent paid by a tenant to lease land on which they have constructed buildings or other improvements.

General Obligation Bond

A municipal bond backed by the full faith and credit of the issuing government, often used to fund public projects like infrastructure and schools.

Graduated Commission

A structure where the commission paid to a real estate agent increases as the sale price of the property increases.

Government Taking

The process by which the government exercises its power of eminent domain to acquire private property for public use.

Governing Authority

The body responsible for creating and enforcing laws and regulations within a specific jurisdiction, such as zoning or building codes.

Gross Effective Income

The total rental income from a property after accounting for vacancies and credit losses, often used in appraisals to calculate value.

General Ledger

A complete record of all financial transactions for a business or property, used in accounting to track income, expenses, assets, and liabilities.

Gap Analysis

An evaluation of the difference between current property performance and desired performance, often used in property management.

Gross Rental Income

The total income generated by a rental property before deducting operating expenses and other costs.

General Contractor’s License

A certification required by many jurisdictions for individuals or companies that perform construction work, ensuring compliance with building codes and regulations.

Terms Starting with H

Habendum Clause

A section of a deed or lease that defines the rights and interests being conveyed to the grantee or tenant.

Hard Money Loan

A short-term loan typically secured by real estate, often used by investors or borrowers with less-than-perfect credit.

Hazard Insurance

Insurance coverage that protects against damage to a property from natural disasters, such as fire, wind, and hail.

Highest and Best Use

The reasonably probable and legal use of a property that results in its highest value, often considered in appraisals and development planning.

Home Equity Line of Credit (HELOC)

A revolving line of credit secured by the equity in a homeowner’s property, allowing the homeowner to borrow as needed up to a certain limit.

Home Inspection

An evaluation of a property’s condition, performed by a professional inspector, to identify any issues or needed repairs before purchase.

Homeowners Association (HOA)

An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties and residents.

Homeowners Insurance

Insurance that covers a property owner against damages to the home, and often provides liability coverage in case of accidents on the property.

Housing Ratio

The percentage of a borrower’s gross monthly income that goes toward housing costs, including mortgage payments, taxes, and insurance.

HUD-1 Settlement Statement

A standard form used to itemize all charges imposed on a borrower and seller for a real estate transaction, required for most mortgage loans.

Holding Period

The length of time an investment is held before being sold, often considered in capital gains tax calculations.

Home Affordable Refinance Program (HARP)

A program created by the U.S. government to help homeowners with underwater mortgages refinance into more affordable loans.

Home Affordable Modification Program (HAMP)

A program that helps homeowners who are struggling to make their mortgage payments modify their loans to make them more affordable.

Housing and Urban Development (HUD)

A U.S. government agency that provides funding for housing assistance and community development programs.

Housing Bubble

A period of rapidly increasing real estate prices, often followed by a sharp decline, typically due to speculation and excessive demand.

HUD Code

A set of national building standards for manufactured homes, enforced by the U.S. Department of Housing and Urban Development (HUD).

Housing Market

The supply and demand dynamics of residential properties within a specific region, affecting home prices, sales, and rents.

Home Equity Conversion Mortgage (HECM)

A reverse mortgage program insured by the FHA, allowing homeowners aged 62 or older to convert their home equity into cash.

Hardship Letter

A letter written by a homeowner to their lender explaining the financial difficulties that have caused them to miss mortgage payments.

Hazardous Waste

Waste material that poses substantial or potential threats to public health or the environment, often considered in real estate development.

Historic Preservation Easement

An easement that protects a historic property’s character by restricting certain alterations or developments, often used for tax benefits.

Home Price Index (HPI)

A measure of the changes in residential property values over time, often used by investors, lenders, and real estate professionals.

Hard Costs

Tangible construction expenses, such as labor, materials, and equipment, involved in building or renovating a property.

House Flipping

The practice of purchasing a property, making improvements, and selling it quickly for a profit.

Homestead Exemption

A legal provision that helps protect a homeowner’s primary residence from certain creditors and may provide tax relief in some states.

Housing Co-op

A form of property ownership where residents own shares in a corporation that owns the building, rather than owning individual units.

House Rules

Regulations established by the governing board of a cooperative or condominium, dictating residents’ responsibilities and property use.

Home Improvement Loan

A loan used to finance renovations or repairs to a property, often secured by the property itself.

HUD Foreclosure

A property owned by the U.S. Department of Housing and Urban Development (HUD) as a result of foreclosure on an FHA-insured mortgage.

Half Bath

A bathroom that contains only a toilet and sink, without a bathtub or shower.

Housing Density

The number of housing units per acre of land, often used in urban planning and zoning regulations.

Hardship Withdrawal

A withdrawal from a retirement account due to financial hardship, often used to cover mortgage payments in times of crisis.

Holding Costs

Expenses incurred while holding a property, such as taxes, insurance, and maintenance, often considered in real estate investment.

Home Sale Contingency

A clause in a purchase agreement that makes the sale contingent on the buyer selling their current home.

HUD-Approved Lender

A lender who has been approved by the U.S. Department of Housing and Urban Development (HUD) to make FHA-insured loans.

Home Staging

The process of decorating and arranging a property to make it more appealing to potential buyers, often used to sell homes quickly.

Housing Starts

The number of new residential construction projects that have begun during a specific period, often used as an economic indicator.

Hardship Deferment

A temporary postponement of mortgage payments granted to borrowers facing financial hardship.

Home Affordable Foreclosure Alternatives (HAFA)

A program that provides homeowners with options to avoid foreclosure, such as a short sale or deed-in-lieu of foreclosure.

Habitable Condition

The state of a property being safe, livable, and meeting local health and safety codes, often required in rental agreements.

Housing Trust Fund

A government program that provides funding for affordable housing development and preservation, often used to support low-income housing initiatives.

Housing Voucher

A government subsidy that helps low-income individuals and families afford rental housing, often referred to as Section 8 vouchers.

Home Warranty

A service contract that covers the repair or replacement of major home systems and appliances, often offered to buyers during a home sale.

House Poor

A situation where a homeowner spends a large portion of their income on housing expenses, leaving little for other needs or savings.

Historic District

An area designated by local, state, or federal authorities as having historical significance, often subject to special preservation laws and guidelines.

Home Ownership and Equity Protection Act (HOEPA)

A federal law that provides protections for consumers from predatory mortgage lending practices, particularly for high-cost loans.

Holding Title

The legal manner in which ownership of a property is held, such as joint tenancy, tenancy in common, or sole ownership.

Habitable

A term used to describe a property that is suitable for living, often required for residential properties being sold or rented.

Hard Inquiry

A credit check performed by lenders when a consumer applies for credit, often impacting the consumer’s credit score.

Homebuyer Assistance Program

A government or non-profit program that provides financial help, such as down payment assistance or grants, to first-time homebuyers.

Terms Starting with I

Income Approach

A method of appraising property based on the income it generates, often used for commercial or rental properties.

Interest Rate

The percentage of a loan amount charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage.

Inspection

A detailed examination of a property’s condition, typically conducted before a sale, to identify any necessary repairs or concerns.

Investment Property

Real estate purchased to generate income or profit through renting, leasing, or price appreciation.

Improvement

A permanent structure or addition to property that enhances its value, such as a building or road.

Incurable Depreciation

Depreciation that cannot be corrected or is financially infeasible to correct, such as structural obsolescence or a poor location.

In Escrow

A status where a third party temporarily holds money or property until certain conditions are met in a transaction.

Initial Rate

The starting interest rate on an adjustable-rate mortgage (ARM), which is subject to change after a specified period.

Insurance Binder

A temporary document provided by an insurance company that serves as proof of coverage until a formal policy is issued.

Inspection Contingency

A clause in a real estate contract that allows the buyer to back out or negotiate terms based on the findings of a property inspection.

Index

A published interest rate used to determine changes in adjustable-rate mortgages, typically tied to financial markets.

Interim Financing

A short-term loan used until permanent financing is arranged, typically used in construction or to bridge the gap between buying and selling a property.

Installment Loan

A loan repaid over time with a set number of scheduled payments, often used for mortgages or car loans.

Ingress

The legal right to enter a property, often used in conjunction with the term “egress” for exiting the property.

Interest-Only Loan

A loan in which the borrower pays only the interest for a specified period, after which principal payments begin.

Irrevocable Trust

A type of trust that cannot be altered, amended, or terminated without the permission of the beneficiary, often used in estate planning.

Intestate

When a person dies without leaving a valid will, their estate is distributed according to state law.

Income Property

Real estate owned or developed to generate rental income or resale profits.

Internal Rate of Return (IRR)

A metric used in real estate investing to calculate the profitability of an investment, based on expected future cash flows and time value of money.

Implied Warranty of Habitability

An unwritten guarantee that rental property is in livable condition and meets all local building and housing codes.

Insurable Title

A title to property that an insurance company is willing to insure against potential future claims or disputes.

Inventory Home

A newly constructed home that is completed and available for immediate sale or occupancy.

Initial Public Offering (IPO)

The first sale of stock by a private company to the public, often used by real estate investment trusts (REITs) to raise capital.

Incidental Beneficiary

A person who benefits from a contract, even though it was not specifically intended for their benefit, often in real estate transactions.

Income Capitalization

A method used in appraising income-producing properties by dividing the property’s annual net operating income by the capitalization rate.

Investment Trust

A company that pools investors’ money to purchase, manage, and sell real estate or other income-generating assets.

Involuntary Lien

A legal claim on property without the owner’s consent, typically due to unpaid taxes, assessments, or judgments.

Improvements

Permanently affixed structures or additions to land, such as buildings, fences, or roads, which enhance the property’s value.

Indemnity

Protection or security against financial loss or legal responsibility, often included in real estate contracts or insurance policies.

Ingress and Egress Easement

A legal right allowing access to and from a property over adjacent land, often critical for landlocked parcels.

Installment Sale

A sale of property where the buyer pays the purchase price in periodic installments over time, often used in seller financing arrangements.

Internal Obsolescence

The depreciation of a property due to factors within the property itself, such as outdated design or inefficient layout.

Independent Appraisal

An objective, third-party evaluation of a property’s value, typically conducted by a certified appraiser.

Incentive Zoning

Regulations that provide incentives, such as increased building density, in exchange for certain public benefits, such as affordable housing.

Institutional Investor

A large organization, such as a bank, pension fund, or insurance company, that invests substantial sums in real estate or other assets.

Inspection Period

The time during which a buyer can inspect a property and raise concerns, often included as a contingency in purchase contracts.

Income Statement

A financial document that shows the revenue, expenses, and profits for a property or business over a specific period.

Imminent Domain

A legal error term for “eminent domain,” the right of the government to take private property for public use with compensation to the owner.

Indemnification Clause

A clause in a contract that requires one party to compensate the other for any losses, damages, or claims arising from the contract.

Inflation

An economic condition where the price of goods and services rises, often increasing the value of real estate.

Installment Note

A promissory note that specifies regular installment payments toward a loan, often used in real estate transactions with seller financing.

Income Stream

The flow of income generated by a property, such as rental payments, which is often used to assess the property’s value.

Intangible Property

Assets that do not have a physical form, such as intellectual property or financial assets, which may affect the value of real estate transactions.

Intent to Sell

A formal notice given by a property owner that they plan to sell their property, often used in pre-sale negotiations.

Initial Escrow Deposit

The amount of money a borrower deposits with a lender at the beginning of a mortgage to cover future property taxes and insurance.

Ingress and Egress

The legal rights to enter and exit a property, often involving easements for landlocked properties.

Infill Development

New construction or redevelopment on vacant or underutilized land within existing urban areas, often used to reduce urban sprawl.

Inspection Contingency Period

A specified timeframe during which a buyer can conduct property inspections and terminate the contract if significant issues are found.

Infrastructure

The basic physical systems of a property or area, such as roads, utilities, and sewage, which are essential for development and property use.

Incumbency Certificate

A legal document certifying the identity of individuals who hold corporate positions, often required in real estate transactions involving corporations.

Terms Starting with J

Joint Tenancy

A form of co-ownership where two or more individuals hold equal shares in a property, with the right of survivorship, meaning the surviving owners inherit the share of a deceased co-owner.

Judgment Lien

A court-ordered lien placed on a debtor’s property to secure payment of a judgment debt.

Jumbo Loan

A mortgage that exceeds the conforming loan limits set by government-sponsored entities like Fannie Mae and Freddie Mac.

Just Compensation

Payment required by the government when it exercises its power of eminent domain to take private property for public use.

Judicial Foreclosure

A foreclosure process that involves court action and results in the property being sold at a public auction to satisfy the mortgage debt.

Joint and Several Liability

A legal principle in which all parties in a contract are equally responsible for the full amount of the obligation.

Judgment

A formal decision by a court regarding the rights and obligations of parties in a lawsuit, often resulting in a monetary award or specific performance.

Judicial Sale

A sale conducted under the supervision of a court, typically following a foreclosure or bankruptcy proceeding.

Joint Venture

A business arrangement where two or more parties agree to pool their resources to develop or invest in real estate projects.

Jurisdiction

The legal authority of a court or government entity to regulate or make decisions regarding a specific area or subject matter, often related to property laws.

Judgment Creditor

A party that has been awarded a monetary judgment against a debtor and holds a lien on the debtor’s property until the debt is paid.

Judgment Debtor

A party who has lost a lawsuit and is required to pay a monetary judgment to the judgment creditor.

Jointly Owned Property

Property that is owned by two or more people, often through joint tenancy or tenancy in common.

Judicial Partition

A legal process by which co-owners of property seek to divide the property, often resulting in a sale if physical division is not possible.

Juristic Person

An entity, such as a corporation, that has legal rights and obligations similar to those of a natural person, often involved in real estate transactions.

Judgment Proof

A situation where a debtor has no assets that a creditor can legally claim or seize to satisfy a judgment.

Joint Liability

A legal obligation where multiple parties are equally responsible for fulfilling a debt or obligation.

Junior Lien

A lien that is subordinate to other liens on a property, meaning it will only be paid after higher-priority liens are satisfied in the event of foreclosure.

Jointly and Severally

A legal term indicating that all parties are individually and collectively responsible for fulfilling an obligation or debt.

Jurat

A clause included at the end of an affidavit, showing when, where, and before whom the affidavit was sworn.

Judicial Review

The power of a court to review and possibly overturn laws or government actions that are inconsistent with the constitution or other laws, often related to property disputes.

Joint Tenancy with Right of Survivorship (JTWROS)

A form of co-ownership where property is automatically transferred to the surviving co-owners upon the death of a joint tenant.

Judicial Lien

A lien placed on a debtor’s property as a result of a court judgment, typically involving the sale of property to satisfy the debt.

Jumbo Mortgage

A mortgage loan that exceeds the conforming loan limits established by the Federal Housing Finance Agency (FHFA).

Joint Appraisal

An appraisal conducted by multiple appraisers, often used in litigation or partnership dissolutions to ensure fairness and accuracy in the valuation.

Joint Ownership

When two or more parties hold legal title to a property together, often through joint tenancy or tenancy in common.

Judicial Auction

An auction ordered by a court to sell property, often as part of a foreclosure or bankruptcy proceeding to settle debts.

Judgment Satisfaction

A formal document filed with the court indicating that a judgment debt has been paid in full by the debtor.

Judicial Notice

A doctrine allowing a court to recognize certain facts as true without requiring formal evidence, often used in property disputes involving public records.

Judgment Roll

A record of all the documents filed and proceedings held in a court case, often used to verify the validity of a judgment in real estate cases.

Judgment Assignment

A transfer of rights from a judgment creditor to another party, giving the assignee the right to collect the judgment debt.

Juristic Act

An action taken by an individual or legal entity that creates, modifies, or terminates legal rights, often used in real estate transactions involving contracts or deeds.

Joint Broker

A real estate broker who shares the listing or sale of a property with another broker, often splitting the commission.

Judgment Default

A failure to fulfill the obligations set by a court judgment, often leading to further legal action or property liens.

Judgment Execution

The process of enforcing a court judgment by seizing and selling a debtor’s property to satisfy the debt.

Joint Venture Agreement

A contract between two or more parties outlining the terms of a joint venture, often used in real estate development projects.

Joint Use Agreement

An agreement between two or more parties to share the use of property or facilities, often used in public-private partnerships.

Jurisdictional Exception

A provision in the Uniform Standards of Professional Appraisal Practice (USPAP) that allows appraisers to deviate from USPAP guidelines when they conflict with legal requirements in a specific jurisdiction.

Joint Underwriting

A situation where multiple parties share the risk and responsibility of insuring a property or providing a loan, often seen in large commercial real estate transactions.

Judicial Enforcement

The use of court proceedings to enforce legal rights or obligations, often seen in real estate foreclosure cases or contract disputes.

Joint Property Ownership

A form of ownership where multiple individuals share legal title to a property, often through joint tenancy or tenancy in common.

Judgment Assignment Document

A legal document that transfers the rights to collect a judgment debt from the original creditor to another party.

Judgment Enforcement

The legal process of collecting a debt awarded by a court judgment, often involving property liens or wage garnishments.

Junior Mortgage

A mortgage that is subordinate to a first mortgage, meaning it will only be paid after the first mortgage in the event of foreclosure.

Judgment Enforcement Order

A court order that directs the enforcement of a judgment, often involving the seizure or sale of property to satisfy the debt.

Jurat Notary

A type of notary public service that verifies the identity of the signer and witnesses the signing of legal documents, often used in real estate transactions.

Judgment Foreclosure

The process of foreclosing on a property as a result of a judgment lien, typically involving the sale of the property to satisfy the judgment debt.

Junior Lienholder

A creditor who holds a lien on a property that is subordinate to a senior lien, often in the form of a second mortgage or home equity loan.

Joint Life Estate

A form of property ownership where two or more individuals share a life estate, meaning they have the right to occupy and use the property during their lifetime.

Judgment Execution Sale

A sale of property ordered by a court to enforce a judgment, often used to satisfy unpaid debts or tax liens.

Terms Starting with K

Kick-Out Clause

A provision in a real estate contract that allows the seller to continue marketing the property and accept other offers if certain conditions are not met by the current buyer.

Kiosk Lease

A lease agreement for a small, temporary structure used for retail sales, typically located in malls or public spaces.

Key Lot

A lot that is strategically located, often at an intersection or corner, making it more valuable or desirable.

Knockdown Rebuild

A development strategy where an existing building is demolished, and a new one is constructed on the same site.

Kitchen Work Triangle

A design principle that improves kitchen efficiency by placing the stove, sink, and refrigerator in a triangular layout.

Kiosk Space

A small, standalone retail space, often found in shopping malls, airports, or public areas, leased for short-term use.

Key Control

A system of managing the distribution and use of keys in a multi-unit property, ensuring security and accountability.

Kennel Zoning

Specific zoning regulations that dictate where kennels can be established, usually to minimize disturbance to residential areas.

Key Money

A payment made to secure a lease, typically in commercial real estate, often non-refundable and separate from rent.

Knockdown Price

The price at which a property is sold at auction, often lower than market value due to the urgency of the sale.

Kingpost Truss

A structural component used in roofs, characterized by a central vertical post and two sloping rafters, common in older homes.

Kitchenette

A small kitchen space with minimal appliances and counter space, often found in studio apartments or hotel rooms.

Key Tenant

A major tenant in a commercial property, often used as an anchor to attract other tenants and drive foot traffic.

Kicker Clause

A clause in a loan agreement that provides for additional compensation to the lender or investor, such as a share in the property’s appreciation.

Keystone

The central stone of an arch, used in architecture and often symbolizing structural integrity.

Known Defect

A problem with a property that is known to the seller and must be disclosed to the buyer under real estate law.

Kitchen Island

A freestanding counter in a kitchen, often used for additional workspace, storage, or dining.

Kilowatt Hour (kWh)

A measure of energy consumption, commonly used in utility billing for homes and commercial properties.

Key Performance Indicator (KPI)

A measurable value used to evaluate the success of a real estate investment, such as occupancy rates, rental income, or return on investment.

Keystone Pricing

A retail pricing strategy where the sale price is set at twice the wholesale cost, ensuring a profit margin.

Kicker

An additional financial incentive or bonus in a loan or investment, such as an equity share or bonus interest rate.

King Size

A larger-than-standard size used to describe rooms or fixtures, such as king-size bedrooms or beds.

Kiting

An illegal financial practice where funds are temporarily withdrawn to take advantage of a lag in processing time, often used to cover short-term shortages.

Key Fee

A payment made to secure a lease or rental agreement, often considered a form of security deposit.

Key Rate

A central interest rate set by a financial institution that influences other interest rates, such as mortgage rates.

Knockdown Value

The value of a property when sold under distress, often at auction, typically lower than its market value.

Kennel License

A license required to operate a kennel, often involving adherence to specific zoning laws and building codes.

Keyless Entry

An electronic system that allows access to a building or property without a physical key, often using a code or keycard.

Keepsake Value

The sentimental value of a property or asset, often considered in estate planning or appraisals for family-owned properties.

Killer Deal

A slang term used to describe a highly advantageous real estate transaction, often well below market value.

Kicker Interest

Additional interest paid to a lender or investor, often in variable-rate loans or investments with shared appreciation.

Knockdown Construction

The process of demolishing an existing structure to build a new one on the same site.

Keyed Alike

A security system where multiple locks can be opened using the same key, often used in apartment buildings or gated communities.

Kitchen Renovation

The process of upgrading or remodeling a kitchen to improve functionality, aesthetics, or value.

Known Encumbrance

A legal claim or restriction on a property, such as a lien or easement, that the property owner must disclose to potential buyers.

Keystone Project

A major real estate development that serves as the cornerstone of a larger community or redevelopment initiative.

Kiosk Sales

Sales conducted through small, temporary retail structures often located in high-traffic areas such as shopping malls or airports.

Kitchen Expansion

An improvement made to a property by enlarging the kitchen, often increasing the home’s market value and appeal.

Knob-and-Tube Wiring

An older method of electrical wiring found in homes built before the 1950s, often replaced for safety reasons during home renovations.

Kite Financing

An informal or illegal method of covering checks or loans with insufficient funds, often involving a delay in processing to gain temporary credit.

Key Bank

A major financial institution that provides loans, mortgages, and other services, often involved in real estate transactions.

Key Man Insurance

An insurance policy that compensates a business for the loss of a key employee or partner, often used in real estate firms to protect against financial losses.

Kitchen Refacing

A cost-effective renovation method where cabinet doors and drawer fronts are replaced without altering the underlying structure.

Keyless Security System

A security system that allows entry without a physical key, often using electronic or biometric access methods.

Knockdown Auction

An auction where a property is sold to the highest bidder, often under distress, resulting in a below-market sale price.

Kiosk Permit

A legal document required to operate a kiosk or temporary retail structure in public or commercial spaces.

Knockdown Bid

The winning bid at an auction, typically below market value, for a property or asset sold under distress or time-sensitive circumstances.

Key Principal

The primary individual or entity responsible for managing and overseeing a real estate transaction or development project.

Kingpin Lot

A highly desirable piece of real estate, often centrally located or with unique features, making it valuable for development or investment.

Keystone Loan

A loan offered to first-time homebuyers or those purchasing in designated development areas, often with favorable terms or lower interest rates.

Terms Starting with L

Landlord

The owner of a property that is rented or leased to a tenant.

Lease

A legal contract that allows one party to use another party’s property for a specified period in exchange for payment.

Leasehold

An interest in land or property for a specific period under the terms of a lease.

Lease Option

A lease agreement that gives the tenant the right to purchase the leased property during or at the end of the lease term.

Leverage

The use of borrowed capital to increase the potential return on an investment.

Legal Description

A precise description of a property used in legal documents to identify the property’s exact location and boundaries.

Lien

A legal claim against a property as security for a debt or obligation, typically paid off during a property sale.

Listing Agent

The real estate agent who represents the seller and lists the property for sale.

Loan-to-Value Ratio (LTV)

The ratio of a loan to the appraised value or purchase price of the property, expressed as a percentage.

Lot

A parcel of land owned or meant to be developed.

Loan Estimate

A document provided by a lender that outlines the estimated costs associated with a mortgage loan.

Land Use

The management and regulation of the use of land resources, including zoning regulations.

Leaseback

An arrangement where the seller of a property leases it back from the buyer, usually for a short-term period.

Limited Partnership

A partnership in which some owners have limited liability and no managerial authority, while others have full liability and management control.

Listing Price

The price at which a property is offered for sale, as determined by the seller and their agent.

Leasehold Estate

An interest in real property that involves the right to occupy and use the property for a specified period under a lease agreement.

Legal Title

Full and absolute ownership of property, including the right to control and dispose of it.

Land Contract

A contract for the sale of real property in which the buyer makes payments over time while the seller retains legal title until full payment is made.

Living Trust

A trust established during a person’s lifetime to hold and manage property for the benefit of another person or entity.

Loan Servicing

The management of a loan after it is issued, including collecting payments and managing escrow accounts.

Lis Pendens

A legal notice indicating that there is a pending lawsuit involving the property, which may affect its sale.

Lump-Sum Payment

A one-time payment of the total amount due, as opposed to multiple installments, often used to pay off a mortgage or loan.

Lot Line

The boundary line that separates one parcel of land from another.

Landlord-Tenant Law

Regulations that govern the relationship between landlords and tenants, including lease agreements, rent control, and eviction procedures.

Letter of Intent (LOI)

A non-binding document outlining the proposed terms of a real estate transaction before formal contracts are executed.

Local Improvement District (LID)

A public financing mechanism used by local governments to fund infrastructure improvements in a specific area, repaid by property owners through assessments.

Legal Description of Property

A formal and precise description of a property that uniquely identifies its boundaries and location.

Lender’s Title Insurance

Insurance that protects a lender against claims that challenge the validity of a property title during the mortgage term.

Listing Agreement

A contract between a property owner and a real estate broker authorizing the broker to sell or lease the property.

Lease Renewal Option

A clause in a lease agreement that gives the tenant the option to extend the lease for an additional term under specified conditions.

Land Use Permit

A legal document required for the development or use of land in accordance with zoning laws and regulations.

Loan Origination Fee

A fee charged by a lender for processing a new loan application, typically calculated as a percentage of the loan amount.

Lien Holder

The person or entity that holds a lien on a property, typically a lender who is owed money by the property owner.

Low-Rise

A building with few stories, typically no more than four floors, commonly found in residential or office spaces.

Lot Premium

An additional cost added to a lot’s price due to its desirability, such as a better view or location within a development.

Land Assembly

The process of combining multiple parcels of land into a single, larger piece of property for development purposes.

Letter of Commitment

A formal letter from a lender stating that a loan application has been approved and outlining the terms and conditions of the loan.

Legal Non-Conforming Use

A use of property that was legally established under previous zoning regulations but does not conform to current zoning laws.

Land Planner

A professional who designs land use and development plans for residential, commercial, or mixed-use projects.

Letter of Credit

A financial document issued by a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.

Land Improvement

Enhancements made to a parcel of land, such as grading, infrastructure, and landscaping, to prepare it for development or sale.

Lease Rate

The amount of rent charged for the use of a property, typically expressed in terms of price per square foot.

Listing Broker

The real estate broker who represents the seller and is responsible for listing the property for sale.

Life Estate

A form of property ownership where an individual has the right to use and occupy the property for their lifetime, but the ownership reverts to another party upon their death.

Living Area

The portion of a home or building intended for human habitation, excluding non-living spaces like garages or basements.

Land Acquisition

The process of purchasing land for development, investment, or other uses.

Loan Default

Failure to meet the legal obligations of a loan agreement, typically due to missed payments.

Letter of Authorization

A document granting someone the authority to act on behalf of the property owner in real estate transactions or legal matters.

Luxury Property

A high-end residential or commercial property that typically has premium features, a desirable location, and a higher price point.

Leasehold Improvement

Improvements made by a tenant to leased space, often with the landlord’s permission, to suit the tenant’s business needs or personal preferences.

Terms Starting with M

Market Value

The estimated price at which a property would sell in an open market under normal conditions, based on comparable properties.

Mortgage

A loan secured by real property, which the borrower is required to repay with interest over a specified period.

Mortgage Insurance

Insurance that protects the lender in case the borrower defaults on the loan, often required for loans with low down payments.

Multiple Listing Service (MLS)

A database used by real estate agents to list properties for sale and share information with other agents.

Market Rent

The rental income a property would generate if it were available for lease in the current open market.

Market Approach

A real estate appraisal method that compares the property being appraised with similar properties that have been recently sold.

Mortgage Broker

An intermediary who helps borrowers find lenders and secure a mortgage, typically earning a commission for their services.

Maintenance Fee

A fee paid by property owners in a community or condominium association to cover shared expenses such as landscaping, security, and repairs.

Mortgage-Backed Security (MBS)

A type of investment where a pool of mortgages is bundled together and sold as a security to investors.

Market Conditions

The overall state of the real estate market, influenced by factors such as supply and demand, interest rates, and economic trends.

Mortgage Default

When a borrower fails to meet the terms of a mortgage agreement, typically by not making timely payments.

Modular Home

A prefabricated house that is built in sections in a factory and assembled on-site.

Mill Rate

A tax rate used to calculate property taxes, expressed in mills per dollar of assessed value.

Mortgage Note

A legal document that outlines the terms of a mortgage loan, including the amount borrowed, interest rate, and repayment schedule.

Mechanic’s Lien

A legal claim against a property for unpaid work or materials provided during construction or improvements.

Market Exposure

The amount of time a property is listed for sale before it is sold, often influenced by market conditions and pricing.

Mortgage Term

The length of time over which the borrower agrees to repay the mortgage loan, typically ranging from 15 to 30 years.

Mixed-Use Development

A real estate project that combines residential, commercial, and/or industrial uses in a single property or complex.

Marketability

The ease with which a property can be sold, based on its condition, location, and market conditions.

Mortgage Pre-Approval

A lender’s evaluation of a borrower’s creditworthiness and ability to repay a mortgage, resulting in a conditional approval of the loan amount.

Market Price

The actual selling price of a property in the current market, which may differ from its market value.

Mortgage Underwriting

The process by which a lender assesses the risk of offering a mortgage loan, based on the borrower’s financial information and property appraisal.

Market Timing

The strategy of buying or selling real estate based on predictions of future market conditions.

Mortgage Principal

The original loan amount borrowed by the borrower, excluding interest and fees.

Maintenance Reserve

A fund set aside by property owners or associations to cover the cost of future repairs and maintenance.

Master Plan

A comprehensive plan that outlines the long-term development and use of land in a community, including zoning, infrastructure, and housing needs.

Median Price

The middle price of all properties sold in a specific area during a specific time period, with half of the properties selling for more and half for less.

Mortgage Insurance Premium (MIP)

A fee paid by the borrower to insure the lender against default, typically required for FHA loans.

Metes and Bounds

A method of describing property boundaries using physical landmarks and measurements.

Mortgage Interest Deduction

A tax deduction that allows homeowners to deduct the interest paid on their mortgage from their taxable income.

Mineral Rights

The legal rights to extract minerals, such as oil, gas, or coal, from beneath a property’s surface.

Market Adjustment

A change in the value of a property due to shifting market conditions, such as supply and demand or economic trends.

Mortgage Banker

A company or individual that originates and services mortgage loans, often selling them to investors.

Market Absorption

The rate at which available properties in a specific market are sold or leased during a given time period.

Mortgagee

The lender in a mortgage agreement who provides the loan to the borrower (the mortgagor).

Monument

A fixed landmark, such as a stone or metal post, used in surveying to establish property boundaries.

Mortgage Interest Rate

The percentage charged on a mortgage loan, usually calculated annually, representing the cost of borrowing.

Market Rent Survey

A survey of rental rates in a specific market area, used to establish competitive pricing for rental properties.

Mortgage Assumption

The transfer of an existing mortgage from the seller to the buyer, with the buyer assuming responsibility for the remaining loan balance.

Market Demand

The desire and ability of buyers to purchase real estate in a particular market, influenced by factors such as population growth and economic conditions.

Mortgage Refinancing

The process of replacing an existing mortgage with a new loan, often to secure better interest rates or change loan terms.

Mortgage Holder

The individual or institution that owns the mortgage loan and has the right to collect payments from the borrower.

Mortgage Term

The length of time, usually expressed in years, that a borrower agrees to repay a mortgage loan.

Maintenance Reserve Fund

A fund established by a property owner or association to cover future maintenance and repair costs.

Monthly Payment

The amount a borrower must pay each month to cover the cost of a mortgage loan, including principal, interest, taxes, and insurance.

Market Penetration

The extent to which a product or service, such as real estate, has entered a particular market, often measured by sales or market share.

Mortgage Loan Originator

An individual or institution that assists borrowers in obtaining a mortgage loan, often working with multiple lenders to find the best terms.

Mortgage Processing

The steps taken by a lender to complete a mortgage transaction, including verifying the borrower’s financial information and the property’s value.

Mortgage Rate Lock

An agreement between a borrower and a lender that guarantees a specific mortgage interest rate for a set period, protecting the borrower from rate fluctuations.

Mortgage Forbearance

A temporary suspension or reduction of mortgage payments granted by the lender to help the borrower avoid default during financial hardship.

Terms Starting with N

Net Operating Income (NOI)

The total income generated by an income-producing property after operating expenses are deducted, but before taxes and debt service.

Net Lease

A lease agreement where the tenant is responsible for paying not only rent but also some or all of the property’s operating expenses, such as taxes, insurance, and maintenance.

Net Present Value (NPV)

The current value of a series of future cash flows generated by a property, discounted to reflect the time value of money.

Negative Amortization

A situation where the loan balance increases over time due to insufficient payments to cover the interest, causing unpaid interest to be added to the principal balance.

Non-Conforming Loan

A loan that does not meet the standards set by Fannie Mae or Freddie Mac, often because it exceeds the maximum loan limits or has less favorable borrower criteria.

Notice of Default

A formal notice filed by a lender stating that the borrower has failed to meet the terms of the mortgage agreement, usually due to missed payments.

Non-Recourse Loan

A loan in which the borrower is not personally liable for repayment beyond the collateral pledged, meaning the lender cannot pursue the borrower’s other assets.

Net Sales Price

The total amount received from the sale of a property after deducting all costs, commissions, and expenses associated with the sale.

Notice to Vacate

A written notice given by a landlord or tenant to end a lease agreement, typically stating when the tenant must move out of the property.

Non-Performing Loan (NPL)

A loan on which the borrower has defaulted or is not making payments, usually defined as being 90 or more days delinquent.

Neighborhood

A geographic area within a city or town, often defined by physical boundaries, social factors, or zoning regulations, that affects property values.

Non-Owner Occupied

A property that is owned by someone who does not live in it, typically used for rental or investment purposes.

Non-Compete Clause

A clause in a contract that prevents one party from entering into a similar profession or trade in competition against another party, often used in commercial real estate leases.

Net Absorption

The net change in the amount of occupied space in a real estate market over a specific period, often used to gauge demand for commercial properties.

Non-Disturbance Agreement

An agreement between a tenant and the landlord’s lender that ensures the tenant’s lease will remain intact in the event of foreclosure, provided the tenant is not in default.

Net Cash Flow

The total amount of cash remaining after all operating expenses, debt service, and taxes have been paid on a property.

Non-Judicial Foreclosure

A foreclosure process that does not involve court action, typically handled through a power of sale clause in the mortgage contract.

Net Rentable Area

The portion of a commercial building that can be rented to tenants, excluding common areas such as lobbies, hallways, and mechanical rooms.

Notice to Quit

A formal notice issued by a landlord to a tenant to vacate the property, often due to non-payment of rent or lease violations.

Net Income Multiplier (NIM)

A property valuation metric that compares the property’s net operating income to its price, used to estimate the investment return.

Net Income

The total income from a property after all operating expenses have been deducted, but before taxes and debt service.

Negative Cash Flow

A situation where a property’s expenses exceed the rental income, resulting in a loss for the owner.

Net Worth

The total value of an individual’s or business’s assets, minus liabilities, often used in financial evaluations for real estate investments.

Nominal Interest Rate

The stated interest rate on a mortgage or loan, not adjusted for inflation or compounding periods.

Non-Amortizing Loan

A loan that does not require principal payments during its term, with the full amount due at maturity.

Non-Warranty Deed

A type of deed in which the seller does not guarantee the title, often used in tax sales or distressed property transactions.

Notice of Sale

A public notice issued by a lender stating that a property will be sold at auction due to the borrower’s default on the mortgage.

Non-Conforming Use

A use of land or property that does not comply with current zoning regulations but is legally permitted because it existed before the regulations were enacted.

Net Leaseable Area

The portion of a building that can be leased to tenants, excluding common areas, stairwells, and mechanical rooms.

Negotiated Sale

A real estate sale that is negotiated directly between the buyer and seller, without the involvement of an auction or multiple offers.

Negative Equity

A situation where the value of a property is less than the outstanding mortgage, also known as being “underwater” on a loan.

Non-Exclusive Listing

A property listing where multiple real estate agents can market the property, with only the agent who sells the property earning a commission.

Notice of Lis Pendens

A public notice filed in the land records indicating that there is a pending lawsuit involving the property.

Non-Disclosure State

A state where real estate transaction sale prices are not required to be publicly disclosed, making it more difficult to obtain property sale data.

Net Yield

The total income generated by a property or investment, after all expenses, expressed as a percentage of the property’s value or purchase price.

Non-Resident Alien

An individual who is not a U.S. citizen or resident and is subject to special tax rules when purchasing or selling real estate in the U.S.

Notice to Terminate

A formal notice issued by either party in a lease agreement to end the contract, typically with a specified notice period.

Non-Taxable Exchange

A real estate transaction in which properties are exchanged without triggering a taxable event, often under Section 1031 of the IRS code.

Net Book Value

The value of a property on a company’s balance sheet, calculated as the original cost minus accumulated depreciation and impairments.

Notice of Trustee Sale

A public notice issued by a trustee announcing the sale of a property at auction due to the borrower’s default on the mortgage.

Non-Encumbered Property

A property that is free of any liens, mortgages, or other claims against it, meaning the owner has clear title.

Non-Assignable Lease

A lease agreement that prohibits the tenant from transferring the lease to another party without the landlord’s consent.

Negotiable Instruments

Financial instruments such as promissory notes or checks that are transferable from one party to another.

Net Income Ratio

A ratio that compares a property’s net operating income to its total income, used to evaluate profitability.

Non-Accredited Investor

An individual who does not meet the financial thresholds required to invest in certain types of real estate investments, such as private equity or hedge funds.

Negative Loan Amortization

A situation where monthly payments are not sufficient to cover the interest due on a loan, causing the loan balance to increase over time.

Net Proceeds

The amount of money received from the sale of a property after all costs, such as closing costs, taxes, and liens, have been paid.

Non-Warrantable Condo

A condominium that does not meet the lending criteria set by Fannie Mae or Freddie Mac, making it more difficult to obtain financing.

Non-Fungible Asset

An asset that is unique and cannot be easily replaced or exchanged for something of equal value, such as real estate or artwork.

Non-Refundable Deposit

A deposit that is not returned to the buyer or tenant if they decide not to proceed with the transaction, typically used in high-demand real estate markets.

Terms Starting with O

Open House

A scheduled period during which a property for sale is available for public viewing without an appointment.

Owner Financing

A situation in which the seller of a property provides financing to the buyer, often bypassing traditional lenders.

Origination Fee

A fee charged by a lender for processing a new loan application, typically a percentage of the loan amount.

Option to Purchase

A legal contract giving the buyer the exclusive right to purchase a property within a specific time frame at agreed-upon terms.

Occupancy Permit

A legal document issued by a local government certifying that a building complies with applicable building codes and is suitable for occupancy.

Operating Expenses

The costs associated with maintaining and managing a property, including taxes, insurance, maintenance, and utilities.

Outparcel

A plot of land within a shopping center or commercial area that is designated for separate development, often for a restaurant or retail store.

Overimprovement

A situation in which the improvements made to a property exceed the value that the market is willing to pay for them.

Overhead

The ongoing administrative expenses associated with the management and operation of a business or property, excluding direct costs.

Owner’s Equity

The portion of a property’s value owned outright by the owner, calculated as the property’s market value minus any outstanding loans or liens.

Open-End Mortgage

A type of mortgage that allows the borrower to increase the loan amount without refinancing, typically up to a pre-approved limit.

Option Agreement

A contract granting a party the exclusive right to buy or lease a property at an agreed price within a specified period.

Offer

A proposal by a buyer to purchase a property at a specific price, subject to the seller’s acceptance.

Open Listing

A non-exclusive property listing where multiple agents can represent the seller, with only the agent who finds a buyer receiving a commission.

Owner’s Title Insurance

Insurance that protects the buyer’s financial interest in a property against title defects, liens, or other legal issues.

Obsolescence

A decrease in the value of a property due to outdated features or changes in market preferences.

Outbuilding

A secondary structure on a property, such as a garage, shed, or barn, separate from the main building.

Offset Clause
A provision in a contract that allows for deductions or offsets against amounts due, often used in leases or loan agreements.

Owner-Occupied Property

A property where the owner resides as their primary or secondary residence, as opposed to renting it out to tenants.

Occupancy Rate

The percentage of available units in a building or property that are currently occupied.

Open Space

An undeveloped area of land within a property or development, often used for recreational purposes or conservation.

Option to Lease

A contract granting a party the right to lease a property at a future date, under specified terms and conditions.

Operating Income

The total income generated by a property from rents and other sources before deducting operating expenses.

Open-End Loan

A loan that allows the borrower to borrow additional funds without refinancing, typically up to a certain limit.

Option Money

A non-refundable deposit paid by a buyer to the seller in exchange for the right to purchase a property within a specified time period.

Open Mortgage

A mortgage that can be repaid in full at any time without penalty, offering flexibility to the borrower.

Option Period

The specified time during which a buyer has the exclusive right to purchase or lease a property under an option agreement.

Overhead Costs

Ongoing expenses incurred in the operation of a business or property, including administrative costs, utilities, and maintenance.

Offer to Purchase

A formal document outlining a buyer’s proposal to purchase a property, including price, terms, and conditions.

Operating Lease

A lease agreement where the property owner retains ownership, and the lessee has the right to use the property for a specified period.

Owner’s Estimate

An estimate of the value of a property provided by the owner, often used in negotiations or appraisals.

Owner-Builder

A property owner who acts as the general contractor for the construction or renovation of their own property.

Option Fee

A fee paid to the seller in an option agreement, giving the buyer the right to purchase the property within a certain period.

Operating Ratio

A financial metric used to evaluate the efficiency of a property’s management by comparing operating expenses to operating income.

Operating Statement

A financial report that shows the income, expenses, and net operating income of a property over a specific period.

Offer and Acceptance

The process by which a buyer’s offer to purchase a property is accepted by the seller, forming a binding contract.

Owner-Developer

A property owner who undertakes the development of their own land, either for personal use or as an investment.

On-Site Management

Property management services that are provided by staff who are physically present on the property, often in large residential or commercial complexes.

Option Contract

A contract in which the seller grants the buyer the exclusive right to purchase or lease a property within a specified period, often for a non-refundable fee.

Off-Market Property

A property that is not actively listed for sale but may be available for purchase through private negotiations.

Owner-Occupied Loan

A mortgage loan secured by a property that is the borrower’s primary or secondary residence, as opposed to an investment property.

Out of Pocket Costs

Expenses that are directly paid by the property owner, not covered by financing or reimbursement.

Obligor

A person or entity that is legally obligated to repay a loan or fulfill a contractual obligation.

Option to Renew

A clause in a lease that gives the tenant the right to renew the lease for an additional term under agreed-upon conditions.

Open-Book Estimate

An estimate of construction or renovation costs that is based on actual expenses and is open for review by both parties in a contract.

Over-Leveraging

A situation in which a property owner takes on too much debt, resulting in financial strain and the inability to meet payment obligations.

Overdue Payment

A payment that has not been made by its due date, often resulting in late fees or penalties.

Occupancy Certificate

A document issued by a local authority certifying that a building complies with applicable building codes and is safe for occupancy.

Operating Profit

The profit generated by a property after all operating expenses, including maintenance and management fees, have been deducted from the revenue.

Option to Buy

A contract granting a party the right to purchase a property within a specified period, often in exchange for a non-refundable option fee.

Terms Starting with P

Principal

The original loan amount borrowed, excluding interest.

Pre-Approval

A lender’s conditional agreement to lend a certain amount of money to a borrower based on their creditworthiness.

Private Mortgage Insurance (PMI)

Insurance required by lenders for borrowers who make a down payment of less than 20% of the home’s purchase price, protecting the lender against loss if the borrower defaults.

Property Tax

A tax levied by a local government on the value of a property, typically used to fund public services such as schools and roads.

Purchase Agreement

A contract between a buyer and a seller outlining the terms and conditions of the sale of a property.

Pre-Qualification

A preliminary assessment by a lender to estimate how much a potential borrower might be able to borrow based on their financial information.

Probate Sale

The sale of a property that is part of a deceased person’s estate, often overseen by a probate court.

Points

Upfront fees paid to the lender at closing, often to reduce the interest rate. One point is typically 1% of the loan amount.

Plat

A detailed map that shows the divisions of a piece of land, often used to define property boundaries in a subdivision.

Per Diem Interest

Daily interest charges accrued between the loan closing date and the first mortgage payment due date.

Principal Residence

The main home where an individual resides, as opposed to investment or vacation properties.

Prepayment Penalty

A fee charged by a lender when a borrower pays off a loan before the scheduled maturity date.

Property Disclosure

A document provided by the seller that outlines known defects or issues with the property that could affect its value or desirability.

Personal Property

Movable items or belongings that are not attached to or part of the real estate, such as furniture or appliances.

Public Records

Official documents filed with government agencies, including property deeds, mortgages, liens, and court judgments.

Partial Payment

A payment made that is less than the full amount due on a loan or mortgage, often resulting in additional interest or penalties.

Purchase Money Mortgage

A mortgage issued to the buyer by the seller of a home as part of the purchase transaction, typically when the buyer cannot secure financing through a traditional lender.

Property Appraisal

An evaluation of a property’s value conducted by a licensed appraiser, based on factors such as location, condition, and comparable sales.

Price-to-Rent Ratio

A metric used to compare the cost of owning a home versus renting, calculated by dividing the median home price by the annual rent for a similar property.

Property Management

The oversight and management of residential or commercial real estate, including tasks such as rent collection, maintenance, and tenant relations.

Principal and Interest

The components of a mortgage payment that go toward repaying the loan balance (principal) and covering the cost of borrowing (interest).

Power of Attorney

A legal document that gives one person the authority to act on behalf of another in financial or legal matters, often used in real estate transactions.

Property Lien

A legal claim against a property that must be paid off before the property can be sold, often resulting from unpaid debts, taxes, or judgments.

Pre-Sale

The marketing or sale of a property before it is built or completed, often used in new construction or development projects.

Principal Reduction

Any payment made on a loan that reduces the outstanding loan balance (principal), as opposed to interest or fees.

Public Auction

A sale of property in which buyers bid competitively, often used in foreclosure or distressed property situations.

Payment Shock

A sudden and significant increase in a borrower’s mortgage payment, often due to an adjustable-rate mortgage resetting or the expiration of a fixed-rate period.

Pro Forma

A financial statement that projects the future income, expenses, and cash flow of a property based on hypothetical scenarios.

Property Line

The defined boundary of a property as described in legal documents such as a deed or survey.

Prescriptive Easement

A legal right to use someone else’s property, acquired through continuous and open use over a specified period, typically without the owner’s permission.

Public Utility Easement

An easement that allows utility companies access to install and maintain infrastructure, such as power lines or water pipes, on private property.

Percolation Test

A test performed on soil to determine its ability to absorb and drain water, often required for the installation of a septic system.

Partial Release

A release of a portion of a property from the lien of a mortgage, often used when subdividing or selling part of the property.

Possession Date

The date on which the buyer or tenant takes legal possession of a property, often coinciding with the closing or lease commencement date.

Planned Unit Development (PUD)

A type of development that integrates residential, commercial, and recreational uses in one area, often with shared open spaces and amenities.

Preliminary Title Report

A report issued by a title company that discloses any liens, encumbrances, or defects affecting the title of a property before the closing.

Property Assessment

An evaluation of a property’s value conducted by a government assessor for the purpose of determining property taxes.

Par Rate

The interest rate that a lender offers a borrower without charging discount points or providing credits.

Power of Sale Clause

A provision in a mortgage or deed of trust that allows the lender to sell the property without court involvement if the borrower defaults on the loan.

Price Range

The range of prices for similar properties in a specific area, often used by buyers to define their budget and search criteria.

Permanent Loan

A long-term loan used to finance the purchase of real estate, typically after the completion of construction or renovation.

Principal Balance

The outstanding balance on a loan, excluding interest and fees, that remains to be repaid.

Parcel Number

A unique identifier assigned to a piece of land by the local property tax authority, used to track ownership and property tax obligations.

Preliminary Closing Statement

A document prepared before the closing of a real estate transaction, detailing all costs and financial adjustments related to the sale or purchase of a property.

Principal Loan Reduction

The amount by which the principal balance of a loan is reduced with each mortgage payment.

Payment Schedule

A timeline that outlines the due dates and amounts for each payment on a loan or mortgage.

Promissory Note

A written promise to repay a specified amount of money, typically in installments, often used in real estate transactions to document loan terms.

Property Condition Assessment (PCA)

An evaluation of the physical condition of a property, often performed as part of the due diligence process in a real estate transaction.

Planned Community

A residential development that is planned and built as a single entity, often featuring shared amenities and design guidelines for homes and landscaping.

Payment Cap

A limit on how much a borrower’s monthly payment can increase, even if the interest rate on an adjustable-rate mortgage rises.

Terms Starting with Q

Quitclaim Deed

A legal instrument used to transfer a property’s ownership with no guarantees about the title, often used between family members or in divorce settlements.

Qualified Mortgage (QM)

A category of loans that meets certain criteria established by the Consumer Financial Protection Bureau (CFPB), ensuring that borrowers have the ability to repay the loan.

Qualified Intermediary

A third-party facilitator required in 1031 exchange transactions to hold the proceeds from the sale of a property until the purchase of a replacement property is completed.

Qualifying Ratio

The ratio used by lenders to determine how much a borrower can afford to borrow, typically expressed as a percentage of income.

Quantity Survey Method

An appraisal technique used to estimate the cost of replacing a property by itemizing the cost of materials, labor, and indirect costs.

Quiet Enjoyment

A legal right of a property owner or tenant to use and enjoy their property without interference.

Quadplex

A residential building divided into four separate units, each with its own living space, often used for rental purposes.

Qualified Buyer

A potential buyer who meets the financial requirements to obtain a mortgage and purchase a home.

Quiet Title Action

A legal process used to resolve disputes over property ownership and clear up any claims or liens on the title.

Quota

A limit set on the number or amount of properties or loans that can be approved or processed, often used by government agencies.

Quasi-Judicial Body

An entity, such as a zoning board, that has powers similar to those of a court but operates in a specialized area of law, such as real estate disputes.

Qualified Domestic Trust (QDOT)

A trust designed to hold assets for a non-U.S. citizen surviving spouse, allowing the assets to qualify for the marital deduction for estate tax purposes.

Qualified Leasehold Interest

A leasehold interest that qualifies for certain tax advantages under U.S. law, typically involving long-term leases of property.

Quorum

The minimum number of members required to be present for a legal entity, such as a homeowners’ association or board, to conduct business or make decisions.

Qualified Opinion

An appraisal or inspection report that includes certain conditions or limitations, such as uncertainty about the property’s condition.

Quasi-Contract

A legal obligation imposed by a court in the absence of a formal contract, often to prevent unjust enrichment in real estate transactions.

Quick Sale

A sale of a property that occurs quickly, often at a price below market value, due to financial hardship or time constraints.

Quit Period

The time frame during which a tenant must vacate a rental property after receiving a notice to quit from the landlord.

Quarry

A location where stone, gravel, or other building materials are extracted, which may affect the value of nearby real estate due to noise or environmental factors.

Qualifying Asset

An asset that meets certain criteria for investment or lending purposes, such as income-producing real estate for mortgage-backed securities.

Quo Warranto

A legal proceeding in which an individual’s right to hold an office or real estate title is challenged.

Quality of Construction

An assessment of the materials, craftsmanship, and durability used in building a property, affecting its value and longevity.

Qualified Resident

An individual who meets specific residency requirements, often for tax or lending purposes.

Qualified Endorsement

An endorsement on a real estate contract that limits the liability of the endorser, often used in situations involving title transfers.

Quiet Title

A legal action used to remove a cloud on the title of a property, clearing up any disputes or claims that could affect ownership.

Qualified Terminable Interest Property (QTIP)

A type of trust that provides income to a surviving spouse, with the remaining assets going to other beneficiaries after the spouse’s death.

Quasi-Governmental Entity

An organization that operates independently but is backed by the government, such as Fannie Mae or Freddie Mac, often involved in real estate finance.

Quarterly Payment

A payment schedule in which mortgage or loan payments are made every three months.

Qualified Residential Mortgage (QRM)

A category of mortgage that meets certain underwriting standards designed to reduce default risk, including requirements for down payments and borrower creditworthiness.

Quota Share

A real estate insurance arrangement in which the risk of a property is shared among multiple insurers, each taking a percentage of the liability.

Quantitative Easing

A monetary policy used by central banks to increase the money supply by purchasing government securities, often affecting mortgage rates.

Qualified Investment

An investment in real estate or other assets that meets specific criteria for tax or legal purposes, often related to retirement accounts or capital gains.

Qualified Replacement Property

A property that qualifies as a replacement in a 1031 exchange, allowing the deferral of capital gains taxes on the sale of an investment property.

Qualified Retirement Plan

A retirement savings plan that meets IRS requirements, often used to invest in real estate through a self-directed IRA or other accounts.

Qualified Opportunity Zone

An economically distressed area designated by the government where investments may qualify for tax advantages, often used in real estate development.

Qualified Intermediary (QI)

A third-party facilitator used in 1031 exchanges to hold sale proceeds while the replacement property is identified and purchased, ensuring tax deferral.

Quasi-Public Property

A property that serves a public purpose but is owned or operated by a private entity, such as a shopping center or sports facility.

Qualified Rehabilitation Expenses (QRE)

The costs associated with restoring or improving a historic property, which may qualify for tax credits under certain programs.

Qualified Opinion

An appraisal or inspection report that includes certain conditions or limitations, often used when the appraiser has incomplete information.

Quaint Property

A term used to describe a small, charming, or historic property, often used in marketing real estate listings.

Quo Warranto Action

A legal proceeding in which an individual’s right to hold real estate title or office is challenged or questioned.

Quintile

A statistical value of a data set that divides the group into five equal parts, often used in real estate to analyze property sales or market trends.

Qualified Reinvestment Plan

A plan that allows for the reinvestment of funds from a property sale into new real estate assets while deferring capital gains taxes.

Quarter Section

A division of land, typically 160 acres, used in surveying and land measurement.

Qualified Default Investment Alternative (QDIA)

A default investment option in retirement plans that meets specific criteria, often used for real estate investment trusts (REITs).

Qualified Flood Zone

An area identified by FEMA as being at high risk for flooding, where properties may require flood insurance.

Qualified Entity

A company or trust that meets specific qualifications for owning or managing real estate, often for legal or tax purposes.

Quality Housing Standards

Federal or local guidelines that set minimum standards for the condition of rental properties, particularly in government housing programs.

Qualified Title

A title to property that includes certain limitations or qualifications, such as easements or restrictive covenants.

Qualified Residential Property

A property that meets specific criteria for residential use and is eligible for certain mortgage products or tax benefits.

Terms Starting with R

Real Estate Owned (REO)

A property owned by a lender, typically as a result of foreclosure, that has not been sold at auction.

Refinancing

The process of replacing an existing mortgage with a new loan, typically to obtain better terms, such as a lower interest rate.

Replacement Cost

The cost to replace a building or structure with a new one of equivalent utility, without considering depreciation.

Restrictive Covenant

A clause in a property deed or lease that restricts how the property can be used, such as limiting the type of structures that can be built.

Real Property

Land and any permanent structures attached to it, such as buildings, including rights to the land and natural resources.

Return on Investment (ROI)

A measure of the profitability of an investment, calculated as the net profit divided by the initial investment cost.

Real Estate Investment Trust (REIT)

A company that owns, operates, or finances income-generating real estate, offering investors the opportunity to own shares of real estate portfolios.

Rent Control

Government regulations that limit the amount landlords can increase rent for tenants, aimed at maintaining affordability in certain areas.

Recording Fee

A fee charged by a local government agency to officially record documents such as deeds and mortgages, making them part of public records.

Redemption Period

The time allowed for a homeowner to reclaim their foreclosed property by paying the outstanding mortgage debt.

Reconciliation

The process in an appraisal where the appraiser reviews the different approaches to value (cost, income, sales comparison) and reconciles them into a final opinion of value.

Real Estate Settlement Procedures Act (RESPA)

A federal law that requires lenders to provide borrowers with disclosures regarding closing costs and the real estate transaction process.

Right of First Refusal

A contractual right that gives a person or entity the opportunity to purchase a property before the owner accepts an offer from another buyer.

Realized Gain

The profit earned from the sale of a property, calculated as the difference between the sale price and the property’s original purchase price, after expenses.

Reversionary Interest

The interest that a person retains in a property after granting someone else an estate in the property, such as after a lease expires.

Raw Land

Land that is undeveloped or has no improvements, such as utilities or roads, typically sold for future development or investment purposes.

Rent-to-Own

A property arrangement in which a tenant agrees to purchase the property at a future date, with part of the rent payments going toward the purchase price.

Recourse Loan

A loan in which the lender can go after the borrower’s other assets, beyond the collateral property, if the loan is defaulted on.

Right of Survivorship

A legal right in joint tenancy where, upon the death of one owner, their share of the property automatically transfers to the surviving owners.

Real Estate Broker

A licensed professional who represents buyers or sellers in real estate transactions and is authorized to operate a real estate business.

Return on Equity (ROE)

A measure of the financial performance of a property, calculated as the net income divided by the owner’s equity in the property.

Resale Value

The expected selling price of a property in the future, often used by investors to evaluate the potential appreciation of a property.

Right of Way

The legal right for others to pass through or use a portion of property owned by someone else, often for transportation or utility purposes.

Real Estate Agent

A licensed professional who helps buyers and sellers navigate the process of purchasing, selling, or renting properties.

Residential Zoning

Local government regulations that dictate how land can be used for residential purposes, often specifying the types of structures allowed.

Reverse Mortgage

A loan available to homeowners aged 62 or older that allows them to convert home equity into cash, typically repaid when the home is sold or the borrower passes away.

Rent Roll

A list of all tenants in a property, showing the amount of rent they pay and the dates their leases expire, often used in property management.

Replacement Reserve

A fund set aside by property owners or managers for the purpose of replacing building components as they wear out over time.

Rural Development Loan

A government-backed loan program designed to help individuals purchase homes in rural areas, often with low down payments and favorable interest rates.

Real Estate Appraiser

A licensed professional who estimates the value of a property based on its condition, location, and recent comparable sales.

Rentable Square Footage

The total area of a property that is available for rent, including both usable space and a portion of shared common areas.

Reassessment

The periodic reevaluation of a property’s value by a government assessor to determine its current taxable value.

Real Estate Tax

A tax levied by local governments on the value of real property, often based on an assessment of the property’s market value.

Rent Escalation Clause

A provision in a lease agreement that allows the landlord to increase the rent at specified intervals, often based on inflation or operating costs.

Rehabilitation

The process of restoring a property to a good condition, often involving repairs, upgrades, and modernizations.

Rehabilitation Loan

A loan used to finance the renovation or improvement of an existing property, often for distressed or foreclosed homes.

Real Estate Investment

The purchase, ownership, management, or rental of real estate properties for the purpose of earning a return on investment.

Residential Real Estate

Properties designed for human habitation, including single-family homes, apartments, and condominiums.

Right to Cure

A legal right that allows a borrower or tenant to remedy a default or breach of contract, such as missed payments, before further legal action is taken.

Recording Statute

A law that requires certain legal documents related to real estate transactions to be recorded in the public record to be enforceable.

Rent Abatement

A temporary reduction or suspension of rent payments, often granted by landlords in cases of property damage or economic hardship.

Recapture Clause

A provision in a lease that allows the landlord to reclaim the property if the tenant fails to meet specific performance requirements.

Residential Mortgage

A loan secured by real estate for the purchase or refinancing of a home, typically repaid over a fixed term with interest.

Replacement Value

The amount it would cost to replace a property or structure with a new one of similar quality and utility, without depreciation.

Real Estate Agent Commission

A fee paid to real estate agents or brokers for their services in facilitating the sale or purchase of a property, typically a percentage of the sale price.

Rent Control Board

A government entity that oversees rent control laws and regulations, often setting limits on rent increases and ensuring tenant rights.

Rehab Property

A property that requires renovation or restoration, often sold at a lower price to investors or buyers willing to make repairs.

Right of Redemption

A borrower’s right to reclaim their property after foreclosure by paying off the full amount owed, including any legal fees or penalties.

Real Estate Syndication

A partnership formed to purchase, develop, or manage real estate investments, often involving multiple investors pooling their resources.

Reserves for Replacement

Funds set aside by property owners for future repairs and replacements of building systems or components.

Terms Starting with S

Sales Comparison Approach

An appraisal method that estimates the value of a property by comparing it to similar properties that have recently sold in the area.

Survey

A professional assessment of the boundaries, dimensions, and features of a property, used to determine legal property lines.

Setback

The minimum distance required by zoning regulations between a structure and the property line or road.

Subdivision

A tract of land divided into lots for development and sale, typically involving residential properties.

Second Mortgage

A loan that is secured by the equity in a property, subordinate to the first mortgage, often used for home improvements or debt consolidation.

Special Assessment

An additional property tax levied by local governments on property owners to pay for public projects such as road improvements or sewer lines.

Situs

The location or site of a property, which can affect its value due to factors such as accessibility, neighborhood, and zoning regulations.

Spec Home

A house built by a developer without a specific buyer in mind, intended to be sold after construction.

Security Deposit

A payment made by a tenant to a landlord to cover potential damage to the property or unpaid rent, typically refundable if no issues arise.

Seller’s Market

A market condition where demand for homes exceeds supply, often leading to higher prices and favorable conditions for sellers.

Specific Performance

A legal remedy in real estate contracts that forces a party to fulfill their obligations, such as completing the sale of a property.

Short Sale

A sale of a property in which the proceeds are less than the amount owed on the mortgage, typically requiring lender approval.

Superintendent

A person responsible for overseeing the daily operations and maintenance of a building or property, often employed in multifamily housing or commercial buildings.

Selling Agent

The real estate agent who represents the buyer in a transaction, often referred to as the buyer’s agent.

Shared Equity

An arrangement in which two or more parties share ownership of a property, typically with one party occupying the property and the other providing financial support.

Site Plan

A detailed drawing that shows the layout of a property, including buildings, parking, landscaping, and utility connections.

Statute of Frauds

A legal principle that requires certain contracts, including real estate transactions, to be in writing to be legally enforceable.

Surveyor

A professional who measures and maps the boundaries and features of land, often used in real estate transactions to establish legal property lines.

Seller Financing

A transaction in which the seller provides financing to the buyer, often in the form of a mortgage, instead of the buyer obtaining a loan from a bank.

Significant Change in Value

A substantial increase or decrease in a property’s market value due to external factors such as market conditions, economic shifts, or property improvements.

Shared Ownership

A type of homeownership where the buyer purchases a percentage of the property and pays rent on the remaining share, typically to a housing association.

Septic System

An underground wastewater treatment system commonly used in rural areas where homes are not connected to a public sewer system.

Settlement Statement

A document outlining all the costs and fees associated with the purchase or sale of a property, provided to both buyer and seller at closing.

Statutory Warranty Deed

A deed in which the seller guarantees that they have clear title to the property and have the legal right to sell it.

Standard of Value

The measure used in an appraisal to determine the worth of a property, often based on market value, replacement cost, or investment value.

Subdivision Plat

A map that shows the divisions of a large parcel of land into individual lots for development or sale.

Survey Map

A map produced by a licensed surveyor that shows the boundaries, dimensions, and features of a property, often used for legal purposes in real estate transactions.

Shelter Rent

The amount of rent that a tenant pays for housing, excluding utilities and other non-shelter costs.

Special Use Permit

A permit granted by a local government allowing a property to be used for a specific purpose that is otherwise not permitted under current zoning laws.

Sinking Fund

A fund established by property owners or a condominium association to save for major repairs or replacements, such as a new roof or heating system.

Severance Damage

The loss in value of a property when part of it is taken for public use, such as for a road or utility easement.

Seller’s Disclosure

A document in which the seller of a property discloses known defects or issues that could affect the property’s value or desirability.

Sale-Leaseback

A transaction in which the seller of a property leases it back from the buyer, allowing the seller to continue using the property while gaining capital from the sale.

Shared Driveway

A driveway that is jointly used and maintained by two or more property owners, often governed by an easement agreement.

Seller Carryback

When a seller provides financing for the buyer by carrying a portion of the loan, often used in situations where the buyer cannot obtain full traditional financing.

Second Lien

A loan or mortgage that is subordinate to the first mortgage, giving the lender second priority in the event of foreclosure or sale.

Subrogation

The right of an insurance company to recover money paid out in a claim from a third party responsible for the damage.

Subsidized Housing

Housing that is financially assisted by the government to make it affordable for low- and moderate-income individuals or families.

Storm Water Management

A system of managing the runoff from rain and snow to reduce flooding, erosion, and pollution, often required in new developments.

Statutory Lien

A lien imposed by law, such as a tax lien or a mechanic’s lien, giving the holder a legal right to the property until the debt is paid.

Subordinate Loan

A loan that is secondary to another loan, often with a higher interest rate, and is paid off only after the primary loan is satisfied in case of default.

Submarket

A segment of the larger real estate market, often defined by geographic location, property type, or price range.

Signage Rights

The legal right to place signs on a property, often negotiated in commercial real estate leases.

Standard Deviation

A statistical measure of the variation in property prices within a market, used to assess the risk of an investment.

Split-Level Home

A style of house with staggered levels, where part of the house is built at a higher level than the rest, often with short flights of stairs between them.

Security Instrument

A legal document, such as a mortgage or deed of trust, that secures a loan with collateral in the form of real property.

Seller’s Market Analysis

An analysis of the real estate market that favors sellers, where demand exceeds supply, leading to increased property prices and faster sales.

Supplemental Property Tax

A tax levied on new property owners based on the difference between the assessed value of the property and its current market value.

Short-Term Loan

A loan that is typically repaid within a few months to five years, often used for financing renovations, construction, or other short-term real estate projects.

Shared Wall

A wall that separates two adjacent properties, such as in townhouses or duplexes, often governed by a party wall agreement.

Terms Starting with T

Tax Assessment

The valuation placed on a property by a public tax assessor, used to calculate the property taxes owed by the owner.

Title

A legal document proving ownership of a property, listing any liens or encumbrances, and outlining the rights of the owner.

Trust Deed

A document that transfers legal title of a property to a trustee as security for the repayment of a loan, commonly used in some states instead of a mortgage.

Tenancy in Common

A form of ownership where two or more people hold individual interests in a property, with no right of survivorship.

Title Insurance

Insurance that protects the buyer and lender from financial loss due to defects in a property’s title.

Transfer Tax

A tax imposed by a state or local government on the transfer of property ownership from one party to another.

Trustee

An individual or entity that holds and manages property or assets on behalf of another, often in a trust arrangement.

Triple Net Lease (NNN)

A lease agreement where the tenant pays for property taxes, insurance, and maintenance in addition to rent.

Tax Lien

A legal claim placed on a property by the government for unpaid property taxes, allowing the government to seize the property if the debt is not paid.

Tax Sale

The sale of a property by a government authority due to the owner’s failure to pay property taxes.

Tax Shelter

A financial arrangement used to reduce or defer income taxes, often involving real estate investments.

Tenant Improvements (TI)

Modifications made to a rental property by a tenant, often paid for by the landlord as part of the lease agreement.

Title Search

A review of public records to verify the legal ownership of a property and identify any liens or claims on the title.

Time-Share

A form of property ownership where multiple parties own the right to use the property for a specific period each year, often in vacation destinations.

Townhouse

A type of residential property that shares one or more walls with neighboring units but has its own entrance and may have multiple floors.

Tax Basis

The original cost of a property, used to calculate capital gains or losses when the property is sold.

Trustor

The individual or entity that creates a trust and transfers property or assets to a trustee for the benefit of a third party.

Tax-Deferred Exchange

A transaction under IRS Section 1031 that allows an investor to defer paying capital gains taxes when selling a property and reinvesting the proceeds in a similar property.

Transfer Disclosure Statement (TDS)

A document required in some states where the seller discloses the condition of the property and any known defects to the buyer.

Taxpayer Relief Act

A federal law enacted in 1997 that included provisions to reduce capital gains taxes on the sale of real estate for qualified homeowners.

Title Theory

A legal theory of mortgage law where the lender holds the legal title to the property until the mortgage is fully paid.

Tax-Exempt Property

Property that is exempt from property taxes, often including government-owned land, nonprofit organizations, or religious institutions.

Tenant at Will

A tenant who occupies a rental property with the landlord’s permission but without a formal lease, allowing either party to terminate the tenancy at any time.

Tenant in Common (TIC)

A form of property ownership where two or more people hold shares of a property, but without the right of survivorship.

Tax Bracket

A range of income that is taxed at a particular rate, often used in real estate when calculating capital gains taxes on property sales.

Tax Credit

A financial incentive that reduces the amount of taxes owed, often used in real estate for investments in low-income housing or energy-efficient properties.

Taxable Value

The assessed value of a property on which taxes are calculated, often reduced by exemptions or credits.

Triple Net Lease

A lease agreement in which the tenant is responsible for paying property taxes, insurance, and maintenance costs in addition to rent.

Tenant-Occupied Property

A property that is currently rented to a tenant, often subject to rental agreements or lease terms.

Tax Increment Financing (TIF)

A method used by local governments to finance public infrastructure improvements by capturing the future increase in property taxes generated by the improvements.

Tenancy by the Entirety

A form of joint ownership of property by spouses, where each party has an equal interest in the property and right of survivorship.

Temporary Certificate of Occupancy

A certificate issued by a local government allowing occupancy of a building while minor construction or repairs are still being completed.

Tax Certificate

A document issued by a local government representing unpaid property taxes, which can be purchased by investors who earn interest or take ownership if the taxes remain unpaid.

Trade Fixtures

Items installed by a tenant for business use that can be removed at the end of the lease without damaging the property.

Transfer of Development Rights (TDR)

A government policy that allows property owners to sell development rights to other property owners, often used to preserve open space or historical sites.

Testamentary Trust

A trust established by a will that goes into effect after the death of the person who created it, often used to manage real estate assets for beneficiaries.

Tax Roll

A list of all properties within a taxing district that identifies the owner, assessed value, and amount of taxes due.

Title Commitment

A document issued by a title company indicating that it will issue title insurance for a property, subject to certain conditions being met.

Tax Rate

The percentage of a property’s assessed value that is used to calculate the property taxes owed by the owner.

Tax Grievance

A formal complaint filed by a property owner disputing the assessed value of their property, often seeking to reduce property taxes.

Timeshare Ownership

A form of property ownership where multiple buyers share ownership and the right to use the property for specific periods of time each year.

Title Defect

An issue with the legal ownership of a property, such as an unpaid lien or a claim to the property, that can prevent the transfer of clear title.

Tax Lien Sale

A public sale of property liens held by the government for unpaid property taxes, where the buyer can collect the debt or acquire the property.

Tax Levy

A government’s legal authority to collect taxes from property owners, often enforced through the sale of tax liens or property seizures.

Title Vesting

The manner in which an owner holds title to a property, such as joint tenancy, tenancy in common, or tenancy by the entirety.

Tenant Purchase

The process in which tenants of a property purchase the property from the owner, often as a cooperative or condominium conversion.

Title Abstract

A summary of the public records relating to a property’s title, including all legal transactions, liens, and encumbrances.

Tax Deed

A legal document issued to the buyer of a property sold at a tax lien sale, transferring ownership of the property.

Title Report

A document issued by a title company that details the current ownership, liens, and encumbrances on a property.

Tax Deduction

An expense that can be subtracted from taxable income, often used in real estate for mortgage interest, property taxes, and depreciation.

Terms Starting with U

Underwriting

The process by which a lender evaluates the risk of lending money to a borrower, often assessing the borrower’s credit, the property, and market conditions.

Usable Square Footage

The portion of a building that can be used exclusively by the tenant, excluding common areas such as hallways and restrooms.

Unencumbered Property

A property free of liens, claims, or any other encumbrances, meaning it is not used as collateral for a loan.

Uniform Standards of Professional Appraisal Practice (USPAP)

The quality control standards governing real estate appraisal and reporting in the United States, established by the Appraisal Foundation.

Utility Easement

A legal right that allows utility companies to install and maintain utility lines, such as gas, electricity, and water, on private property.

Umbrella Insurance Policy

An additional liability insurance policy that provides coverage beyond the limits of the homeowner’s standard insurance policy.

Unimproved Land

Land that has not been developed with buildings, utilities, or roads, often sold for future development.

Usury

Charging an interest rate on a loan that exceeds the legal maximum rate, regulated by state laws to protect consumers.

Urban Growth Boundary (UGB)

A regional boundary set by local governments to control urban sprawl by limiting where urban development can occur.

Undivided Interest

A form of co-ownership where each owner holds an equal right to the use and enjoyment of the entire property, without physically dividing it.

Underimprovement

A property that is below its highest and best use, often due to a lack of development or modernization, reducing its potential market value.

Uplift

An increase in property value due to improvements made to the surrounding area or other external factors.

Unit-in-Place Method

An appraisal method that estimates the cost of reproducing or replacing a structure by adding the costs of individual components, such as walls, roofs, and plumbing systems.

Up-Zoning

A change in zoning that increases the permissible density or intensity of use for a particular property or area, often allowing for higher buildings or more units.

Unlawful Detainer

A legal action taken by a landlord to evict a tenant who has unlawfully remained in possession of the property after the lease has expired.

Useful Life

The estimated period during which a property or a component of a property will remain functional and generate income.

Unsecured Loan

A loan that is not backed by any collateral, relying solely on the borrower’s creditworthiness and ability to repay.

Underground Storage Tank (UST)

A tank and any underground piping connected to it that has at least 10 percent of its volume underground, often used to store petroleum or hazardous substances.

Unsolicited Offer

An offer to purchase a property that is not currently for sale, often made directly to the property owner by a potential buyer.

Unilateral Contract

A contract in which one party makes a promise, but the other party is not obligated to perform, commonly seen in options or rewards agreements.

Underwater Mortgage

A situation in which the outstanding balance on a mortgage loan is greater than the current market value of the property.

Use Variance

A special permission granted by a local zoning authority that allows a property to be used in a way that is not permitted by the current zoning classification.

Undivided Loyalty

A fiduciary duty of a real estate agent to act solely in the best interests of the client, without any conflicts of interest.

UCC-1 Financing Statement

A legal document filed to provide notice that a lender has an interest in the personal property of a borrower as collateral for a loan.

Under-Occupied Property

A property where fewer occupants live than the number of bedrooms or square footage would typically accommodate, often used in public housing.

Uninhabitable

A condition in which a property is unsafe or unsuitable for living, often due to health or safety violations.

Usufruct

The legal right to use and enjoy the property of another, often for a limited period, without altering its substance.

Urban Renewal

A program initiated by governments to redevelop and revitalize deteriorated urban areas, often involving the demolition of blighted buildings and construction of new infrastructure.

Use and Occupancy Permit

A certificate issued by a local government that allows a property to be legally occupied, typically after an inspection ensures the property meets safety standards.

Unrestricted Land

Land that is not subject to zoning or deed restrictions, allowing the owner to develop or use the land as they choose, subject to local regulations.

Uniform Residential Loan Application (URLA)

A standard form used by lenders to collect information from borrowers when applying for a mortgage, also known as Form 1003.

Urbanization

The process of converting rural land into urban land for residential, commercial, or industrial use, often involving infrastructure development.

Usable Area

The amount of space within a building that a tenant can use exclusively, excluding common areas shared with other tenants.

Utility Costs

The expenses associated with using utilities such as water, electricity, gas, and sewage services, often paid by tenants or property owners.

Under Contract

A property that has a pending offer and is in the process of being sold, but the sale has not yet closed.

Unapproved Subdivision

A division of land that has not received the necessary government approvals, often illegal and subject to penalties.

Uniform Appraisal Dataset (UAD)

A set of standardized definitions and reporting requirements used by appraisers when completing residential appraisal forms for Fannie Mae and Freddie Mac loans.

Uniform Commercial Code (UCC)

A set of laws governing commercial transactions, including real estate, that provides guidelines for contracts, sales, and leasing agreements.

Undercapitalization

A financial situation where a business or property lacks sufficient capital to operate effectively or to invest in necessary improvements.

Use Clause

A provision in a lease that specifies how the tenant may use the rented property, often defining permissible activities or restricting certain uses.

Unlawful Entry

An illegal action in which someone enters a property without permission or legal right, often involving trespassing or squatting.

Uptick Rule

A trading rule that restricts short sales of a stock unless the sale is made at a higher price than the previous trade, often applied in real estate investment trusts (REITs).

Utility Corridor

A designated area or right-of-way where utility lines, such as electricity, gas, or water, are installed and maintained.

Usable Land

The portion of a parcel of land that can be developed or used for its intended purpose, excluding areas like wetlands or steep slopes.

Unimproved Property

A parcel of land that has not been developed or built upon, often purchased for future development or investment purposes.

Urban Density

The concentration of buildings and people in an urban area, often measured by the number of housing units or population per acre.

Undisclosed Principal

A person or entity involved in a transaction whose identity is not revealed, often using an agent to conduct the transaction on their behalf.

Unpermitted Construction

Building or renovation work that was completed without the necessary permits from local government authorities, often leading to fines or required demolition.

Usury Laws

Laws that limit the maximum interest rate that can be charged on a loan, intended to prevent predatory lending practices.

Utility Appraisal

An appraisal of public utility infrastructure, such as power lines or water treatment plants, often for taxation or condemnation purposes.

Terms Starting with V

Vacancy Rate

The percentage of all available rental units that are vacant or unoccupied at a given time, often used to gauge the health of a rental market.

VA Loan

A mortgage loan guaranteed by the U.S. Department of Veterans Affairs, available to veterans, active service members, and certain family members.

Variance

A legal exception to zoning regulations, allowing a property owner to use land in a way that is not typically permitted by current zoning laws.

Value in Use

The worth of a property based on its utility to a specific owner, often different from its market value or investment value.

Value-Added Property

A property that has been improved or enhanced to increase its value, often through renovations or new management strategies.

Variable Rate Mortgage

A mortgage with an interest rate that may fluctuate over time based on market conditions, also known as an adjustable-rate mortgage (ARM).

Verification of Deposit (VOD)

A document provided by a bank verifying a borrower’s account balance and history, often used by lenders to confirm assets during the mortgage approval process.

Vendor’s Lien

A lien that gives the seller of a property the right to reclaim the property if the buyer fails to fulfill the terms of the purchase contract.

Vertical Land Development

The process of constructing multi-story buildings on a parcel of land to maximize its use and increase property value.

View Easement

A legal agreement that prevents a property owner from obstructing the view of another property, often through landscaping or building restrictions.

Voluntary Conveyance

The transfer of property ownership from one party to another by mutual agreement, often in lieu of foreclosure or in a deed-in-lieu arrangement.

Vacant Land

Land that is not currently being used or developed, often purchased for future construction or investment.

Value Engineering

A method of improving the value of a construction project by optimizing materials, designs, and construction processes to achieve cost savings and efficiency.

Valuation Date

The specific date on which the value of a property is determined for appraisal or financial reporting purposes.

Vested Interest

The legal right to future possession or control of a property, often used in the context of inheritance or retirement accounts.

Vacancy Allowance

A budgeted percentage of rental income expected to be lost due to vacancies, used in property management and real estate investment analysis.

Variable Operating Expenses

Expenses that fluctuate based on the level of occupancy or use of a property, such as utilities, maintenance, and property management fees.

Variance Request

A formal application submitted to a zoning board requesting an exception to zoning regulations, often necessary for special property uses or developments.

Valuation Method

A specific approach used by appraisers to estimate the value of a property, such as the sales comparison, cost, or income approach.

Vacant Possession

A term in property transactions that means the property is unoccupied and free of tenants, giving the buyer immediate access upon purchase.

Voluntary Lien

A legal claim placed on a property with the consent of the owner, typically in the form of a mortgage or home equity loan.

Variable Rent

Rent that changes over time based on a formula or market conditions, often seen in commercial leases with terms linked to inflation or sales performance.

Valuable Consideration

Anything of value that is exchanged between parties in a contract, such as money, property, or services, required for a contract to be legally binding.

Verification of Employment (VOE)

A document provided by an employer that confirms an employee’s job status, income, and history, often required by lenders during the mortgage approval process.

Virtual Tour

An online or video-based walkthrough of a property, often used in real estate listings to give potential buyers a detailed view of the home remotely.

Voluntary Foreclosure

The process in which a homeowner willingly surrenders their property to the lender when they are unable to meet mortgage payments, typically to avoid further legal action.

Variable Payment Mortgage

A mortgage with payments that can change periodically based on interest rate fluctuations or other factors, often tied to an index.

Value Range Pricing

A pricing strategy in which a property is listed with a range of acceptable offer prices, rather than a fixed asking price, to encourage competitive bidding.

Vanilla Box

A commercial property delivered to the tenant with basic interior finishes, such as walls, ceilings, lighting, and HVAC, but without customizations or improvements.

Voidable Contract

A contract that is legally binding but can be voided by one of the parties due to certain conditions, such as fraud or misrepresentation.

Vendor Financing

A financing arrangement in which the seller provides a loan to the buyer to facilitate the purchase of the property, often used when traditional financing is not available.

Vacancy Clause

A provision in an insurance policy that limits or suspends coverage if a property remains vacant for a certain period, often 30 days or more.

Variable Price Lease

A lease agreement in which the rental amount can fluctuate based on external factors such as market conditions, sales volume, or inflation.

Virtual Staging

The use of digital images to furnish or enhance photos of a vacant property, helping potential buyers visualize the space without physical staging.

Valuation Report

A detailed document prepared by a professional appraiser that provides an estimate of a property’s value, often required for financing or legal purposes.

Vendor Take-Back Mortgage

A mortgage in which the seller of the property provides financing to the buyer, holding a second mortgage on the property as part of the purchase agreement.

Volatile Organic Compounds (VOCs)

Chemicals commonly found in building materials and household products that can evaporate into the air, potentially causing indoor air quality issues.

Vested Remainder

The legal right to inherit property in the future, often after the death of a life tenant, with no conditions attached to the inheritance.

Volume of Sales

The total number of real estate transactions completed within a specific market or period, often used to analyze market trends and demand.

Vacancy Loss

The income lost due to unoccupied rental units or properties, often factored into real estate investment calculations and property management budgets.

Value Proposition

A statement outlining the unique benefits and value that a real estate service or property offers to buyers or tenants, often used in marketing materials.

Voluntary Restriction

A limitation placed on the use of a property by the owner, often through deed restrictions or covenants, to maintain property values or aesthetics.

Verification of Mortgage (VOM)

A document provided by a lender that confirms a borrower’s mortgage payment history, often required by lenders for new loan applications.

Vacant Property Registration

A legal requirement in some cities or counties for property owners to register vacant or abandoned properties, often to monitor and address blight or safety concerns.

Vicarious Liability

A legal principle that holds one party responsible for the actions of another, often applied to employers for the actions of their employees in real estate transactions.

Voluntary Sale

A real estate transaction in which the property is sold by the owner willingly, as opposed to a foreclosure or forced sale.

Vacancy Control

A rent control policy that limits rent increases when a new tenant moves into a vacant rental unit, often used to prevent rapid rent inflation.

Valley

The internal angle formed by the intersection of two sloping roof planes, often requiring special roofing materials to ensure proper drainage.

Vendor’s Disclosure

A statement provided by the seller that discloses known defects or issues with the property, often required by law in real estate transactions.

Vacant Land Appraisal

An appraisal of land that is undeveloped or unoccupied, often used to determine its market value for future development or investment.

Terms Starting with W

Walk-Through

A final inspection of a property by the buyer before closing to ensure that the property’s condition matches the terms of the sale agreement.

Warranty Deed

A deed in which the seller guarantees that they hold clear title to a piece of real estate and have the right to sell it, protecting the buyer from any claims to the property.

Wear and Tear

The gradual deterioration of a property due to normal use, not considered damage or defect, and usually accounted for in property valuation.

Wetlands

Land areas that are saturated with water, either permanently or seasonally, and are protected by environmental regulations to prevent development.

Wraparound Mortgage

A type of financing where a new mortgage includes both the unpaid balance of the seller’s existing mortgage and the new mortgage amount provided to the buyer.

Work Letter

A document that outlines the responsibilities of the landlord and tenant in making improvements to leased space, often seen in commercial leases.

Waste

A legal term referring to damage caused by a tenant or property owner that reduces the property’s value, beyond normal wear and tear.

Writ of Execution

A court order granting a party the right to enforce a judgment, often used to seize property or assets to satisfy a legal debt.

Windfall

An unexpected gain or profit, often applied to a property owner receiving a large, unforeseen increase in property value due to external factors.

Warranty of Habitability

An implied guarantee that a rental property meets basic living and safety standards, requiring the landlord to maintain the property in livable condition.

Working Capital

The funds available to a real estate business to cover day-to-day operating expenses, calculated as current assets minus current liabilities.

Wraparound Loan

A loan arrangement in which a new loan wraps around an existing loan, allowing the borrower to make a single payment covering both.

Written Offer

A formal, documented proposal from a buyer to a seller, outlining the price and terms under which the buyer wishes to purchase a property.

Will

A legal document by which a person expresses their wishes as to how their property is to be distributed after death.

Wholesaling

A real estate strategy where an investor contracts a property at a lower price and then assigns the contract to another buyer at a higher price, often without taking ownership of the property.

Wet Signature

An original handwritten signature on a document, as opposed to an electronic or digital signature.

Withholding Tax

A portion of income withheld by an employer or payer to be sent to the government as a prepayment of tax obligations, sometimes applied to real estate transactions.

Walk Score

A numerical score assigned to a property based on its proximity to amenities such as schools, shops, and parks, often used by buyers to assess neighborhood walkability.

Warehouse Lending

A short-term funding arrangement that provides mortgage lenders with the capital to fund loans until they are sold to investors.

Windstorm Insurance

A type of insurance that covers damage to a property caused by high winds, hurricanes, and tornadoes, often required in areas prone to these weather events.

White Box

A commercial property delivered to a tenant with basic finishes, ready for tenant improvements, such as flooring and painting.

Wainscoting

Decorative paneling or woodwork installed on the lower portion of an interior wall, often used to enhance a room’s appearance or protect walls from damage.

Withdrawal

The act of removing a property from the real estate market, often done by sellers who no longer wish to sell or who are not receiving acceptable offers.

Written Agency Agreement

A formal contract between a real estate agent and a client that outlines the duties and responsibilities of the agent in representing the client’s interests.

Water Rights

The legal rights to use water from a body of water or watercourse, often associated with properties that border rivers, lakes, or streams.

Warranty Period

The period during which a builder or seller guarantees that certain repairs or replacements will be made to a property at no cost to the buyer.

Waiver

The voluntary relinquishment or surrender of a known right, often seen in real estate contracts where one party agrees to forego a specific term or condition.

Wraparound Loan

A secondary loan that includes the balance of a previous loan along with additional financing, allowing the borrower to make a single payment covering both loans.

Wild Deed

A deed that is recorded but not connected to the chain of title, often due to recording errors or omissions, which can create issues in establishing clear ownership.

Wood Frame Construction

A method of building construction using wood as the primary material for the structure’s framework, often used in residential construction.

Waterfront Property

A property that is adjacent to a body of water, such as a river, lake, or ocean, often considered more valuable due to its location and views.

Written Appraisal

A formal, written document prepared by a licensed appraiser that provides an estimate of a property’s market value based on comparable sales and other factors.

Walkable Neighborhood

A neighborhood where residents can walk to shops, restaurants, schools, and public transportation, often considered desirable for its convenience and community feel.

Weatherization

The process of protecting a property from the elements, often through insulation, sealing, and other energy efficiency improvements.

Wire Fraud

A fraudulent activity involving the transfer of funds through electronic means, often targeted at real estate transactions during the closing process.

Written Lease

A formal rental agreement between a landlord and tenant that outlines the terms of the lease, including rent, duration, and the rights and obligations of both parties.

Weighted Average Cost of Capital (WACC)

A calculation used to determine a real estate investor’s average cost of financing, factoring in the cost of both debt and equity financing sources.

Willing Buyer

A buyer who is ready and able to purchase a property at its market value, often used in appraisals to determine fair market value.

Willing Seller

A seller who is prepared to sell a property at its market value, often used in appraisals to determine fair market value.

Wetland Mitigation

The process of restoring or preserving wetlands to compensate for the environmental impact of development on other wetland areas.

Written Notice

A formal communication delivered in writing, often required by real estate contracts for actions such as terminating a lease or exercising an option.

Wholesaling

A real estate investment strategy where an investor contracts a property at a discounted price and then assigns the contract to another buyer for a profit.

Walkability Index

A metric that measures how easy it is to walk to various amenities from a property, often used by buyers and renters to assess the convenience of a neighborhood.

Workmanship Warranty

A warranty provided by contractors or builders that guarantees the quality of their work for a specified period after completion.

Water Table

The level below the ground where the soil is saturated with water, important in determining foundation depths and drainage requirements for building construction.

Wetland Delineation

A process that identifies and maps the boundaries of wetlands on a property, often required before development to ensure compliance with environmental regulations.

Window of Opportunity

A period during which a favorable real estate market or opportunity exists, allowing buyers or investors to act on potential deals.

Writ of Possession

A court order that grants a landlord the legal right to take possession of a property after a tenant has been evicted.

Wastewater System

A system for collecting and treating sewage and wastewater from buildings, often a factor in real estate development and environmental impact assessments.

Warranty

A guarantee made by the seller or builder of a property that certain aspects of the property will meet specified standards for a given period.

Terms Starting with X

Xeriscaping

A landscaping method designed to reduce water use by incorporating drought-tolerant plants and minimizing grass lawns, often used in arid regions.

X-Bench

A type of seating furniture often used in staging homes, featuring a criss-cross base resembling the letter X.

X-Exposure

Refers to the amount of exposure a property gets in relation to marketing or natural elements such as sunlight or wind, often considered in property valuation.

X-Bracing

A structural reinforcement using diagonal cross braces that form an X-shape, commonly used in buildings to resist lateral forces such as wind or earthquakes.

X-Factor

A unique feature or characteristic of a property that makes it stand out in the real estate market, often adding value or appeal to potential buyers.

X-Coordinate

A point on a property map or plot plan that indicates horizontal positioning, often used in site planning and development.

Xerox Architecture

Slang for the replication of architectural designs from one property to another without significant alterations, leading to similar-looking neighborhoods or developments.

X-Slope

The gradient or incline of land across the x-axis of a property, often used in land development to assess drainage or buildability.

Xenon Lighting

A type of lighting used in homes and commercial buildings that emits a bright white light, often used in high-end real estate for accent lighting or outdoor spaces.

X-Tower

A specific architectural design for tall buildings, often characterized by structural components that form an X-shape for aesthetic or support purposes.

X-Roof

A roofing design that incorporates intersecting slopes or gables that form an X-shape when viewed from above, often used for aesthetic appeal.

X-Lot

A property lot or parcel marked with an X to indicate it has been surveyed or designated for a specific purpose, such as development or conservation.

X-Bracket

A support bracket shaped like an X, commonly used in construction to provide stability to walls or beams, particularly in modern architectural designs.

X-Ray Survey

A non-invasive inspection method used to examine the structural integrity of buildings, particularly concrete or steel elements, without causing damage.

Xerophytic Garden

A garden composed of plants that require very little water, ideal for arid climates or properties aiming for sustainable landscaping practices.

X-Cut Stone

A type of stone cut at an angle to create a cross-sectional pattern, often used in high-end architectural finishes for both interior and exterior applications.

X-Floor

A floor level in a multi-story building denoted as “X” due to its unique characteristics, such as a mechanical floor or a level reserved for specific uses.

X-Ray Inspections

Used in high-rise buildings or older properties to assess the condition of internal structures without destructive testing, particularly in load-bearing elements.

Xeric Landscaping

A style of landscaping that focuses on water conservation by using plants adapted to dry environments, common in sustainable and eco-friendly developments.

X-Infill Development

New construction on vacant or underutilized land within an existing urban area, often used to increase housing density and revitalize neighborhoods.

X-Frame Construction

A method of building construction where the framework forms an X-shape for added strength and stability, often used in areas prone to natural disasters.

X-Beam

A structural beam shaped like an X, designed to distribute weight evenly across a structure, commonly used in modern architectural designs.

Xanadu Style

An extravagant or luxurious style of home or property, often characterized by elaborate designs, large sizes, and high-end finishes.

X-Insulation

A type of insulation material designed for extreme climates, often used in energy-efficient homes to reduce heating and cooling costs.

X-Gate

A decorative or functional gate that incorporates an X-shaped design, often used in ranch-style homes or properties with extensive land.

Xerothermic Climate

A hot, dry climate where xeric landscaping is commonly used to conserve water, often a factor in property development and landscaping decisions.

X-Lighting

A lighting design featuring fixtures arranged in an X-pattern, often used in contemporary homes for artistic or ambient lighting effects.

Xeriscape Lawns

A lawn designed with water-efficient plants and minimal turf, promoting water conservation, commonly used in regions experiencing drought.

X-Certificate

A special certification given to buildings that meet certain energy efficiency or sustainability standards, often a selling point for eco-conscious buyers.

X-Phase Electrical System

An electrical system with multiple phases for power distribution, often used in commercial or industrial properties for heavy equipment or machinery.

X-Shaped Lot

A property lot that forms an X-shape when viewed on a map, often creating unique challenges or opportunities for development.

X-Topography

The study of a property’s surface features, focusing on changes in elevation or slope, important in planning for construction or landscaping.

X-Beam Roof

A roofing structure supported by X-shaped beams for added strength, commonly used in modern architecture to create open interior spaces.

Xenoliths

Rocks embedded in a building’s stone facade, often used for decorative purposes in high-end properties or historic buildings.

X-Overlay Zoning

A zoning designation that adds additional requirements or restrictions on top of the base zoning code, often used for environmental protection or aesthetic control.

X-Dimension

A measurement of the horizontal length or width of a property, often used in plot plans and surveys for accurate land assessments.

X-Tread

The width of a stair’s step in a building, important in both residential and commercial construction for safety and accessibility compliance.

X-Laminate Flooring

A durable type of laminate flooring with a cross-laminated structure, often used in high-traffic areas of homes or commercial spaces.

X-Height Zoning

A zoning regulation that specifies maximum building heights within a certain area, often used to control urban density or preserve sightlines.

X-Shaped Drainage

A drainage system designed in an X-pattern to improve water runoff and prevent flooding, often used in large residential developments or commercial properties.

X-Ray Vision

In architecture, refers to designs that incorporate transparency or open floor plans, giving an unobstructed view through different parts of a building.

X-Section Survey

A cross-sectional survey of a property’s terrain, often used in planning for infrastructure, landscaping, or drainage solutions.

X-Plank Siding

Exterior siding arranged in an X-pattern for added structural integrity and aesthetic appeal, often used in rustic or contemporary homes.

X-Insulated Windows

Energy-efficient windows with special insulation to reduce heat transfer, often used in sustainable or high-end residential properties.

Xeroxed Deed

An unofficial copy of a deed or property document, often used for reference during real estate transactions but not legally binding until properly recorded.

X-Lot Layout

A property development layout that incorporates intersecting roads or pathways in an X-shape, often designed for improved traffic flow or aesthetic appeal.

X-Directional Wind Study

An environmental assessment of wind patterns across a property, often used to determine optimal building orientation or for wind energy installations.

X-Bridge Architecture

A modern architectural style that uses X-shaped support structures in bridges or elevated walkways, often for both aesthetic and structural purposes.

Xerophilous Plants

Plants that thrive in dry environments, often used in xeriscaping to create sustainable, low-water-use landscapes for residential and commercial properties.

X-Barrier

A protective barrier designed to prevent unwanted water, wind, or heat from entering a building, often used in sustainable construction to enhance energy efficiency.

Terms Starting with Y

Year Built

The year a property was originally constructed, often used in property appraisals to determine the age and historical context of a building.

Yield

The return on an investment, usually expressed as a percentage of the property’s income or value, often used in real estate to assess rental or investment properties.

Yield Capitalization

An appraisal method used to estimate the value of income-producing properties by converting future income into present value using a capitalization rate.

Yard

An open space surrounding a building, typically used for landscaping, recreation, or other purposes, often considered in property valuation for curb appeal.

Year-End Statement

A financial statement issued at the end of a fiscal year, showing a summary of income, expenses, and any outstanding debts or liabilities for a property.

Yield Maintenance

A prepayment penalty imposed on a borrower who pays off a loan early, intended to compensate the lender for lost interest income.

Yellow Pine

A type of softwood lumber commonly used in construction, known for its strength and durability in framing and structural applications.

Yield Spread Premium (YSP)

A fee paid by a lender to a mortgage broker for placing a borrower in a loan with a higher interest rate than they qualify for, often used to offset closing costs.

Yard Line

The boundary line that separates a yard or open space from neighboring properties, often a factor in zoning and land use regulations.

Yard Sale

A sale of used personal items held at a property, typically conducted by homeowners looking to clear out belongings, not directly related to real estate but sometimes used to gauge community activity.

Yield to Maturity

The total return expected on a bond if it is held until maturity, often used in real estate finance when analyzing long-term debt instruments.

Yearly Cap

The maximum annual increase or decrease allowed in the interest rate or payment amount of an adjustable-rate mortgage (ARM).

Yard Depth

The distance from the front or rear wall of a building to the edge of the property line, used in zoning regulations to determine buildable area.

Yield Loss

The reduction in the potential return on investment due to unforeseen factors, such as vacancy or unexpected maintenance costs.

Yurt

A portable, circular dwelling traditionally used by nomadic people in Central Asia, now sometimes seen in eco-friendly or sustainable real estate developments.

Yield Curve

A graph that plots interest rates of bonds having equal credit quality but differing maturity dates, often used to assess long-term real estate investments.

Yankee Bonds

Bonds issued in the U.S. market by foreign entities, often used by real estate investors to diversify international property holdings.

Yard Maintenance

The care and upkeep of a property’s outdoor spaces, often considered in property valuation as part of overall curb appeal.

Year-Round Occupancy

A designation for properties that are suitable for living throughout all seasons, often applied to vacation homes or rental properties.

Yield on Cost

A calculation that compares the annual income generated by a property to the total development or acquisition cost, often used to evaluate real estate investments.

Yard Access

The ability to enter and use the outdoor space of a property, often considered when assessing the functionality and value of a property.

Yield Enhancement

Strategies used by investors to increase the return on a property, such as improvements, rent increases, or refinancing at a lower interest rate.

Yoke

A connecting device used in plumbing systems, often found in older properties where renovations may require updating the yoke or pipe connections.

Yearly Rent

The total amount of rent paid by a tenant over the course of a year, often used in rental property analysis to determine income and value.

Yard Occupancy Ratio

A zoning metric that determines the percentage of a yard or open space that may be occupied by structures, such as decks or sheds.

Yield Threshold

The minimum acceptable return on a real estate investment, often used by investors to determine whether a property meets their financial criteria.

Yield Reduction

A decrease in the expected return on a property investment due to factors like higher expenses or lower-than-expected rental income.

Yard Ordinance

Local regulations governing the use and appearance of a property’s yard or outdoor space, often including rules about fences, landscaping, and structures.

Yield Trap

An investment that appears to offer a high yield but carries significant risks, often used in real estate to describe properties with hidden costs or low-quality tenants.

Yearly Depreciation

The amount by which a property decreases in value annually, often used for tax purposes or when calculating the long-term profitability of an investment.

Yard Setback

The minimum distance required between a building and the property line, regulated by zoning laws to ensure open space and privacy between properties.

Year-End Closeout

The final accounting of a property’s financial performance for the year, including income, expenses, and any capital improvements or losses.

Yearly Maintenance Cost

The total cost required to maintain a property over the course of a year, including repairs, landscaping, and routine maintenance tasks.

Yard Light

A light fixture installed outdoors to illuminate a yard or driveway, often used in real estate listings to highlight a property’s security features or nighttime appeal.

YTD (Year-to-Date)

A financial term referring to the period starting from the beginning of the year to the current date, often used to measure a property’s performance during that period.

Yield Spread

The difference in yields between two different investments, often used in real estate to compare the returns on various types of properties or financial instruments.

Yard Coverage

The portion of a yard that is covered by structures or other improvements, often regulated by zoning codes to ensure adequate open space.

Yardage

The area of a property measured in yards, often used in large real estate transactions where land size is a key factor in determining value.

Yield Spread Option

A financial option that allows an investor to profit from changes in the yield spread between two different investments, often used in real estate finance.

Yankee Bond

A bond issued in the U.S. by a foreign entity, often used by real estate investors to diversify their investment portfolios internationally.

Yard Square Footage

The total area of a yard measured in square feet, often used in property listings to indicate the size of outdoor spaces available to buyers.

Yearly Adjustment Cap

A limit on how much the interest rate or payment on an adjustable-rate mortgage can increase or decrease each year, providing protection for the borrower.

Yield on Cost (YOC)

The annual return on a property investment, calculated by dividing the net operating income by the total cost of the property, including acquisition and improvements.

Yield Variance

The difference between expected and actual yield on a property investment, often used to assess the performance of rental or commercial properties.

Yearly Percentage Rate

The annual interest rate charged on a mortgage or loan, often used to compare the cost of different financing options in real estate transactions.

Yard Irrigation System

A system for automatically watering a property’s landscaping, often included in high-end residential or commercial properties to maintain curb appeal.

Yield Floor

The minimum acceptable yield on an investment, often used in real estate finance to ensure that returns on a property meet investor expectations.

Yearly Lease

A rental agreement that lasts for one year, often used in residential leases to provide stability for both landlords and tenants.

Yield to Call

The return on a bond or loan if it is called (redeemed) before maturity, often considered in real estate finance when assessing long-term investments.

Yoke Wall

A structural wall that supports the roof or upper floors of a building, often requiring special engineering in older or historic properties.

Terms Starting with Z

Zoning

The regulation of land use by local government authorities to designate specific areas for residential, commercial, industrial, or agricultural purposes.

Zero Lot Line

A type of residential development where a house or building is constructed very close to or directly on the property line, maximizing usable space on smaller lots.

Zoning Ordinance

A law enacted by a city or municipality to control the use of land and the types of buildings allowed in specific areas, affecting real estate development.

Zone Variance

A permit that allows a property owner to use their land in a way that deviates from the zoning laws, typically granted by a zoning board or local government.

Zoning Map

A map that outlines the zoning districts of a city or municipality, indicating the land uses allowed in different areas and guiding development and construction.

Zoning Code

The set of rules and regulations that govern how land and buildings can be used in specific areas, established by local governments to control development.

Zoning Permit

A legal authorization required to use or develop land in a way that complies with zoning regulations, often necessary for new construction or significant renovations.

Zero Net Energy (ZNE)

A building that produces as much energy as it consumes over the course of a year, typically through renewable energy sources like solar panels.

Zoning Administrator

A government official responsible for overseeing and enforcing zoning regulations, often involved in granting permits or reviewing development proposals.

Zero Energy Building

A building that produces enough renewable energy on-site to meet its own energy needs, resulting in net-zero energy consumption over time.

Zone of Transition

An area between two zoning districts that may experience changes in land use or property value, often as one type of zoning gives way to another, such as residential to commercial.

Zoning Hearing

A public meeting where property owners and developers can present their case for a zoning variance or change, allowing the local zoning board to make a decision.

Zero Down Payment

A mortgage option where the buyer is not required to make a down payment, often available through specific government-backed loan programs.

Zero Financing

A financing option where no interest is charged on a loan for a specific period, often used in real estate as a promotional tool to attract buyers.

Zoning Appeal

A legal process by which a property owner can challenge a zoning decision, often seeking to overturn a denial for a permit or variance.

Zero Coupon Mortgage

A mortgage where no interest or principal payments are made during the loan term, but the entire balance is due at the end, often used in commercial real estate financing.

Zero-Lot-Line House

A home built on or very near the edge of the property line, often used in high-density residential developments to maximize land use.

Zero Energy Ready Home

A home designed to be highly energy efficient and equipped for future renewable energy systems, minimizing energy consumption and utility costs.

Zero Inflation Clause

A clause in a rental or mortgage agreement that prevents the cost from increasing over time due to inflation, often used to attract long-term tenants or buyers.

Zero-Emission Building

A building that generates no harmful emissions during its operation, typically achieved through renewable energy sources and sustainable construction practices.

Zone of Benefit

An area where property owners benefit from specific public improvements, such as road construction or utilities, often leading to increased property values.

Zero-Year Lease

A short-term lease agreement, often month-to-month, allowing flexibility for both tenant and landlord without the commitment of a longer lease.

Zoning Overlay

A special zoning district that is applied over existing zoning regulations, adding additional requirements or restrictions for development in certain areas.

Zero Vacancy Rate

The ideal scenario in rental property management where all units are occupied, resulting in maximum rental income for the property owner.

Zero Emission Property

A property that generates no harmful emissions or pollutants, often designed with sustainability and renewable energy in mind.

Zoning Envelope

The three-dimensional space within which a building can be constructed on a property, defined by zoning regulations such as setbacks, height limits, and floor area ratio.

Zoning Infill

The development of vacant or underused parcels of land within existing urban areas, often encouraged by local governments to reduce urban sprawl.

Zero-Lot Development

A type of residential development where homes are built close to the property line, often allowing for more houses to be constructed on smaller lots.

Zero-Energy Subdivision

A residential development where all homes are designed to produce as much energy as they consume, typically through solar panels and energy-efficient design.

Zero-Based Pricing

A pricing strategy where the cost of goods or services is set at the absolute minimum needed to cover expenses, often used in competitive real estate markets.

Zoning Administrator’s Interpretation

An official clarification of the zoning code provided by the zoning administrator, often used to resolve ambiguities in the law or guide development decisions.

Zero-Emission Vehicle Parking

Designated parking spaces for electric or other zero-emission vehicles, often included in new residential and commercial developments to encourage sustainable transportation.

Zero-Gap Financing

A financing option that covers 100% of a property’s cost, leaving no gap between the loan amount and the purchase price, often used in commercial real estate.

Zoning Relief

A waiver or modification granted by a zoning board that allows a property to be used in a way that deviates from the established zoning regulations.

Zoning Review

An evaluation conducted by a zoning board to ensure that proposed development complies with all applicable zoning regulations and land use plans.

Zero Cost Basis

A situation where an investor acquires a property without incurring any direct financial cost, often through inheritance or as a gift, impacting tax liability upon sale.

Zone Lot

A property lot that falls within a specific zoning district, subject to the land use and building regulations established for that zone.

Zero-Based Appraisal

An appraisal method that starts with the assumption that a property has no inherent value, with value being added based on specific improvements or market conditions.

Zero-Step Entry

An architectural feature where there are no steps at the entrance of a building, often used in accessible housing to accommodate individuals with mobility issues.

Zero Interest Mortgage

A mortgage that carries no interest, typically offered by charitable organizations or government programs to assist low-income homebuyers.

Zoning Setback

The required distance that a building must be set back from property lines, streets, or other structures, typically regulated by local zoning laws.

Zero-Lot Line Zoning

A zoning classification that allows buildings to be constructed on or very close to the property line, maximizing the use of available land.

Zero-Sum Lease

A lease agreement where the total cost of rent and other expenses is predetermined, leaving no room for changes based on market fluctuations or property performance.

Zoning Change

An alteration to the zoning classification of a property, often requested by developers or property owners to allow for different land uses or building types.

Zoning Commission

A local government body responsible for creating and enforcing zoning regulations, often tasked with reviewing development proposals and issuing permits.

Zero-Lot Line Construction

A building design where the structure is placed on or near the property line, often used in urban environments to maximize space.

Zoning Adjustment Board

A government panel that reviews requests for zoning variances and makes decisions on whether to approve or deny them based on local regulations and community input.

Zoning Study

An analysis conducted to evaluate the current and potential land use of a property, often used in urban planning to guide future development.

Zoning District

A specific geographic area within a city or municipality that is subject to particular zoning regulations, such as residential, commercial, or industrial zoning.

Zero Gravity Drainage

A drainage system designed to work without the need for significant slope, often used in flat terrains where natural water flow is limited.

Comprehensive Real Estate Appraisal Glossary | Capital Valuations

Real Estate Appraisal Glossary

Terms Starting with A

Absentee Owner

Absorption Rate

Abstract of Title

Acceleration Clause

Acceptance

Accrued Depreciation

Acknowledgment

Actual Cash Value

Adjustable-Rate Mortgage (ARM)

Administrator’s Deed

Ad Valorem Tax

Affidavit

Agency

Agent

Agreement of Sale

Air Rights

Alienation Clause

Amenity

Amortization

Amortization Schedule

Annual Percentage Rate (APR)

Appraisal

Appraisal Contingency

Appraisal Report

Appraised Value

Appraiser

Appreciation

As-Is

Assemblage

Assessed Value

Assessment

Assessor

Assignment

Assumable Mortgage

Assumption of Mortgage

Attest

Attorney-in-Fact

Average Price per Square Foot

Avulsion

Amenities

Appurtenance

Area Variance

Arrears

Attornment

Automated Valuation Model (AVM)

Adjustment Date

All-Inclusive Deed of Trust (AITD)

Abstract of Judgment

Accession

Acknowledgment of Satisfaction

Terms Starting with B

Balloon Mortgage

Balloon Payment

Bargain and Sale Deed

Basis

Basis Point

Before-Tax Cash Flow (BTCF)

Beneficiary

Bequeath

Betterment

Bill of Sale

Bilateral Contract

Binder

Biweekly Mortgage

Blanket Mortgage

Blockbusting

Bona Fide

Bond

Boot

Breach of Contract

Bridge Loan

Broker

Broker Price Opinion (BPO)

Building Code

Building Permit

Buydown

Buyer’s Agent