Abandonment involves the voluntary and intentional surrender of property or rights to property without naming a successor as owner or tenant. The property will typically revert to someone with a prior interest or, if no owner is apparent, to the state.
An absentee owner is an individual or entity that owns real estate but does not personally manage or reside at the owned property. Such ownership requires the delegation of management tasks and often involves the hiring of property managers.
An absolute auction is a type of auction where the property is sold to the highest bidder without any reserve price, meaning that the highest bid will win regardless of its amount.
An absolute sale is a transaction where the ownership of property is transferred to the buyer immediately upon the completion of an agreement between the seller and the buyer.
An Abstract of Title is a condensed history of the legal ownership of a piece of land, including all conveyances, transfers, grants, wills, judicial proceedings, encumbrances, and liens, as well as evidence of satisfaction and other facts affecting the title.
The term 'abut' or 'abutting,' frequently used in real estate and property law, refers to properties or parcels of land that adjoin or meet each other, sharing a common boundary.
Access Right refers to the legal ability of a property owner to enter and exit their property, ensuring unobstructed access to and from a public road or path.
The total amount required to purchase a property, including the price and all associated fees such as closing costs, attorney's fees, loan fees, appraisal costs, title insurance, and discount points.
An acre is a unit of land measurement used primarily in the United States and Imperial customary systems, primarily to describe large plots of land.
Acreage refers to land measured in acres. It is commonly used in real estate and agriculture to denote property size.
An ad valorem tax is a tax based on the assessed value of an item, such as real estate or personal property. The term 'ad valorem' is Latin for 'according to value.'
An addendum is a document that is attached to an existing contract to modify, clarify, or add terms to the original agreement. Commonly used in various fields, an addendum can provide additional information or conditions without altering the main body of the contract.
The term 'adjoining' refers to properties or parcels of land that are contiguous, attaching, or sharing a common border. This is a fundamental term in real estate, urban planning, and property law.
An adjustable-rate mortgage (ARM) is a type of mortgage loan that allows the interest rate to be changed at specific intervals over the maturity of the loan, enabling borrowers to benefit from potentially lower interest rates initially compared to fixed-rate mortgages.
Dollar value or percentage amounts that, when added to or subtracted from the sales price of a comparable property, provide an indication of the value of a subject property. Adjustments are necessary to compensate for variation in the features of the comparable relative to the subject.
A clause in a mortgage agreement providing that any additional mortgageable property acquired by the borrower after the mortgage is signed will be additional security for the obligation.
After-tax cash flow in real estate refers to the net cash flow from an income-producing property after accounting for income taxes. It includes the tax savings from any losses that can be offset against other income.
After-tax proceeds from resale refer to the amount of money left for the investor after accounting for all transaction obligations and personal income taxes on the transaction.
A written explanation, to be signed by a prospective buyer or seller of real estate, explaining the role of the broker in the transaction, helping the client understand to which party the broker owes loyalty.
Air rights refer to the right to use, control, or occupy the vertical space above a designated piece of property. These rights can often be leased, sold, or donated to another party, making them a valuable asset in urban development and real estate transactions.
Allodial refers to a system of land ownership where the property is owned freely and absolutely, without any obligation to a superior authority, nor subject to restrictions on alienation that existed under feudal law.
Alternative investments refer to financial assets that fall outside the traditional categories of stocks, bonds, and cash. These can include tangible assets like art and real estate, as well as financial instruments like hedge funds and private equity.
In the field of real estate appraisal, amenities refer to the nonmonetary benefits that a property offers to its owner. These benefits can enhance the property's appeal and value without having a direct financial impact. Examples include pride in home ownership, scenic views, and accessibility to cultural or recreational activities.
An Annual Mortgage Constant is a measurement used in real estate to compare the annual debt service to the original loan principal amount. It is used to determine the efficiency of a mortgage from a borrower's perspective.
The anticipated holding period is the duration during which an investment is expected to be held before being sold or liquidated. In real estate limited partnerships, sponsors often define this period for properties in the prospectus.
An apartment building is a structure with multiple individual apartment units accessed through a common entrance and hallway. It may also contain commercial spaces, such as stores, typically on the ground floor.
Apportionment refers to the distribution or allocation of income, expenses, property, or tax liability among different entities, individuals, or states. It is a concept widely used in fields such as accounting, taxation, and real estate.
An organization that was established in 1989 to promote uniform standards for appraisal qualifications and reporting, notably through the publication of the Uniform Standards of Professional Appraisal Practice (USPAP).
An appraisal report documents the findings of an appraisal engagement, summarizing the valuation of a property or asset. Different report formats include restricted, summary, and self-contained reports, compliant with the Uniform Standards of Professional Appraisal Practice (USPAP).
A commentary by one appraiser on the appraisal report prepared by another appraiser, often completed to ensure accuracy and compliance with relevant standards.
The process of estimating the value of a property, often required for various financial, legal, and business purposes.
The term 'appreciate' carries dual meanings in various contexts. Firstly, it refers to an increase in value over time. Secondly, it describes understanding or recognizing the significance of something.
In property law, the term 'appurtenant' refers to the attachment of a restriction, such as an easement or covenant, to a piece of land, which benefits or restricts the owner of such land in his use and enjoyment.
An arrangement pertains to various structured agreements or settlements in financial, legal, and real estate contexts, where an intermediary plays a significant role.
The 'Asked Price' is the price a property owner sets for their property when they intend to sell it. It represents the amount they are seeking from buyers. The term 'Asked Price' is commonly used in real estate transactions and is often seen as the initial price point which may be negotiated.
Asking price refers to the initial price at which an investment or property is offered for sale. It is a key term in real estate, finance, and investments, marking the starting point for negotiations.
The process of combining two or more adjoining parcels of land into one larger tract, often increasing its total value.
To evaluate or appraise the value of an asset or property for various purposes, such as taxation, sale, or insurance.
Assessed valuation refers to the dollar value assigned to a property by a municipality for the purpose of assessing property taxes. The property tax is calculated based on the number of mills per dollar of assessed valuation.
The Assessment Ratio is the ratio of the assessed value of a property to its market value, often used to determine property taxes. It is a vital aspect in the evaluation of real estate for taxation purposes.
A public record of the assessed value of property within a taxing jurisdiction, known as an assessment roll, lists individual tracts of land and their assessed values.
The assumption fee is a charge levied by a lender to a buyer who assumes the existing loan on the subject property. It compensates the lender for administrative costs associated with transferring the loan.
In the context of investments, 'at risk' refers to being exposed to the danger of a financial loss. Specifically, for investors in a limited partnership, they can claim tax deductions only if they can demonstrate a possibility of losing their invested capital.
At-risk rules are tax laws designed to limit the amount of tax losses an investor can claim from certain industries, including oil and gas, movie production, farming, and real estate. These rules ensure that losses are deductible only to the extent of money the equity investor stands to lose.
Attornment refers to a tenant's formal agreement to acknowledge a new owner or landlord of the property as their landlord.
An auction, also known as an auction sale, is a method of marketing property without a set price wherein bids are taken and the property is sold to the highest bidder.
A computerized method for estimating the value of a property. Often used for mass appraisal purposes, such as the reassessment of a city's property tax base.
Avulsion refers to the sudden removal of land from one parcel to another, typically caused by the abrupt change of a watercourse such as a river.
A bad title is a purported title that is legally insufficient to convey property to the purchaser. While a title that is not marketable isn't necessarily a bad title, a bad title is inherently unmarketable and purchasers are generally not compelled to accept it.
A legal document used to transfer title to property without providing guarantees from the seller on the validity of the title.
A binder is a written memorandum of the essential terms of a preliminary contract that gives temporary protection while further investigation or formalization of the contract is performed. It is commonly used in insurance and real estate transactions.
Blockbusting is a racially discriminatory and illegal practice wherein a party coerces a homeowner to sell their property to someone of a minority race or ethnic background, and then uses scare tactics to cause other homeowners in the neighborhood to sell at depressed prices.
A local group of real estate licensees who are members of the state and national associations of REALTORS®.
Bona fide refers to actions done in good faith, honestly, and without collusion or fraud. In legal contexts, a bona fide purchaser for value is someone who buys property without knowledge of any prior claims on it.
A Bona Fide Purchaser (BFP) is an individual or entity that buys property in good faith and without knowledge of any existing claims or rights of others on the property. This legal concept is essential in real estate and commercial law to protect the rights of an innocent party acquiring a property.
Bona vacantia refers to goods or property without an apparent owner, typically reverting to the state or Crown under legal doctrines.
A boundary is an officially recognized and defined line that indicates the limits of a piece of property. It is often synonymous with the term 'property line' and is essential in real estate for establishing ownership, resolving disputes, and creating legal descriptions of land parcels.
A bridge loan, also known as a swing loan, is a short-term loan used to bridge the gap between the need for immediate cash flow and the securing of intermediate or long-term financing.
A bridging loan is a short-term loan taken to bridge the gap between the purchase of one asset and the sale of another. It is commonly used in the property and housing market.
An agent who brings two parties together, enabling them to enter into a contract to which the broker is not a principal.
Brokerage refers to the business or activity of a broker, which involves facilitating transactions between buyers and sellers in exchange for a commission. This term also refers to the commission earned from such transactions.
A budget mortgage is a type of mortgage that necessitates monthly payments covering property taxes and insurance alongside principal and interest.
An arrangement where a landowner funds the construction of a building tailored to a tenant's specifications on their land, subsequently leasing the land and building to the tenant.
A building line is a line fixed at a designated distance from the front and/or sides of a lot, beyond which a building or structure may not extend. It is a regulatory boundary ensuring orderly development, promoting safety, and mandating aesthetic consistency.
A Building Loan Agreement is a contract where the lender advances funds to the property owner at specific construction milestones, ensuring continuous cash flow during various construction stages such as foundation completion and framing.
An in-depth exploration of how business assets are treated under capital gains tax, specifically in relation to entrepreneurs' relief and the historical context of taper relief.
A buyer's market is an economic situation where the supply of goods or assets exceeds demand, giving buyers an upper hand in negotiations over sellers. This term is widely used in the real estate sector to describe conditions where property buyers have an abundance of choices and leverage to negotiate lower prices.
A cadastre is a comprehensive register of the real property in a jurisdiction, which includes detailed information about property boundaries, land ownership, and the value of the land and its improvements. It is commonly used to determine the amount of tax assessed on each parcel of land.
A cancellation clause is a contract provision that grants the right to terminate obligations upon the occurrence of specified conditions or events. For example, a cancellation clause in a lease might permit the landlord to break the lease upon the sale of a building.
Capital gains refer to the profit realized from the sale of assets or investments, which exceeds the purchase price. They can apply to stocks, bonds, real estate, and other types of investments.
A carrying charge is a fee associated with holding an investment or conducting business that includes costs such as interest, storage, and insurance across various sectors like commodities, real estate, retailing, and securities.
The term 'carve out' refers to the separation of a specific interest, such as the current income stream of a property, from the property itself. For instance, an owner might sell a portion of future mineral production from a property for a set number of years, creating a carved-out interest in that mineral property.
Cash Equivalence refers to the market value of an item if it were to be sold for cash. In real estate, this often represents the true value of a property, which can differ from the stated selling price due to various financial arrangements.
Caveat Emptor, a Latin term meaning 'Let the Buyer Beware,' is a doctrine of law indicating that the buyer assumes the risk in a transaction. Although traditionally buyers were solely responsible for due diligence, modern legal frameworks have incorporated requirements for sellers to disclose known defects.
The Central Business District (CBD) refers to the downtown section of a city, generally consisting of retail, office, hotel, entertainment, and governmental land uses with some high-density housing. It is often considered the heart of economic and commercial activities.
A Certificate of Occupancy (CO) is an official document issued by a local government agency or building department signifying that a building conforms to local building code regulations and is safe for occupancy. Generally, initial occupancy of a building or the transfer of title requires a valid Certificate of Occupancy.
A Certified General Appraiser is a professional authorized to appraise any type of property under the appraiser certification laws adopted by most states in the early 1990s.
The Chain of Title is a chronological history of all conveyances and encumbrances affecting a land title.
A clear title signifies that a property is free from any encumbrance, obstruction, burden, or limitation that questions its legal validity or ownership.
Closing encompasses the completion of a transaction involving real estate or the final steps in accounting at the end of a fiscal period.
Various fees and expenses payable by the seller and buyer at the time of a real estate closing; also termed transaction cost. Some closing costs include brokerage commissions, lender discount points and other fees, title insurance premiums, deed recording fees, loan prepayment penalties, inspection and appraisal fees, and attorney's fees.
The closing date is the specified date on which the seller delivers the deed and the buyer completes payment for the property, finalizing the transfer of ownership.
A cloud on title refers to any matter appearing in the record of a title to real estate that appears to reflect the existence of an outstanding claim or encumbrance which, if valid, would defeat or impair the title. This could, however, be proven invalid by evidence outside the title record.
A co-mortgagor is an individual who signs a mortgage contract with another party and is jointly obligated to repay the loan. This person typically helps in meeting the loan requirements and gains a share of ownership in the property.
The possession of and holding of rights in a unit of property by two or more persons simultaneously. The term does not describe the estate, but the relationship between persons who share the property.
A collateralized mortgage obligation (CMO) is a type of mortgage-backed security that combines multiple mortgage loans and separates them into tranches based on maturity and risk.
A commercial broker is a real estate professional who specializes in listing and selling commercial properties including shopping centers, office buildings, industrial properties, and apartment projects.
Commercial property refers to real estate intended for use by retail, wholesale, office, hotel, or service users, or for manufacturing or other industrial purposes. Examples include shopping centers, office buildings, hotels and motels, resorts, and restaurants.
A commission is a fee paid to an intermediary for facilitating a transaction, typically calculated as a percentage of the sale value. It can be paid by the seller, buyer, or shared between them, and finds applications across various markets such as real estate, commodities, and advertising.
A common area is a portion of a property that is used and enjoyed by all owners or tenants within that property. Typical examples include clubhouses and pools in condominium developments, hallways and stairs in apartment buildings, elevators in office buildings, and the central mall area in shopping centers.
Common elements in a condominium refer to those portions of the property not owned individually by unit owners but held in an indivisible interest by all unit owners. These typically include the grounds, parking areas, recreational facilities, and the external structure of the building.
Comparables, often abbreviated as COMPS, are an essential element in real estate appraisal and valuation processes. They refer to the comparability of properties with similar characteristics, used primarily to determine the market value of a subject property.
Composite depreciation is a method where a single depreciation rate is applied to an entire asset, despite its components having varying useful lives.
Computer-Assisted Mass Appraisal (CAMA) refers to proprietary software used to make fast valuations of one or more real properties. This software ranges from simple tools that apply a fixed percentage increase to property values, to highly sophisticated systems that utilize complex statistical techniques to compare and consider other properties.
Computerized Loan Origination (CLO) refers to the process of initiating a mortgage loan using specialized computer software that connects the originator with one or more mortgage lenders. This system allows real estate brokers to offer a wider range of services.
The term 'concession' can refer to various business arrangements, such as small shops in lobbies, government-granted rights, rent reductions, or compensation in corporate underwriting.
Condemnation is the legal process by which a government or private entity with governmental powers takes private property for public use, with compensation to the owner. This is commonly associated with eminent domain.
The process by which private property is taken for public use with compensation to the owner, under eminent domain, and declarations of structures being unfit for use.
A Condemnation Award refers to the monetary compensation or value of other property received by an entity or individual for property that has been condemned by a government authority for public use, or from the sale of property under threat of condemnation.
In various fields such as law, real estate, and general business, the term 'condition' has multiple meanings. It can refer to a prerequisite or requirement, a potential future event that influences legal obligations or real estate interests, and the physical quality or wear of something.
