Conditions, Covenants, and Restrictions (CCRs) refer to the rules and regulations set forth in condominium or subdivision deeds or bylaws that dictate how properties can be used. These regulations ensure aesthetic and functional uniformity, preventing changes that could negatively impact the community.
A form of real estate ownership where individual residents hold a deed and title to their houses or apartments and share maintenance costs for common areas managed by a dedicated company.
The process of changing the ownership structure of a building from a single owner to multiple owners, each owning individual units, typically through a legal and regulatory framework.
A Condominium Declaration, also known simply as a "Declaration," is a legal document that formally establishes the existence of a condominium. It describes the property in detail, outlines the rules and restrictions governing the condominium units, and defines the rights and responsibilities of the unit owners and the condominium association.
A residential mortgage loan eligible for purchase by FNMA (Fannie Mae) or FHLMC (Freddie Mac). These loans typically offer lower interest rates and more favorable terms compared to nonconforming mortgage loans.
Consequential damages, in the context of property law, refer to the loss in value of a property caused by the taking of a nearby property or development on another property.
Constructive notice is a legal concept that presumes an individual has been given notice of a property or legal matter as a result of the information being publicly available or recorded, even if the individual has not been personally informed.
Contract Rent refers to the amount of rent that has been explicitly stipulated in a lease agreement between a tenant and a landlord.
A converter is an active real estate entrepreneur who changes the ownership and/or physical configuration of property.
Conveyance refers to the act of transferring the title of real estate property from one party to another. This term can also denote the medium or method used to effect such transfer.
Conveyancing is the legal process of transferring property ownership from one person to another. It involves a series of administrative and legal checks to ensure the transaction is legitimate and secure.
A cooperative, or co-op, is a real estate arrangement where tenants or members own shares in a corporation that owns the building, and often entails collaboration between agents in real estate transactions.
A corner lot is a parcel of land that is bounded on at least two sides by the intersection of two roads. Corner lots are often considered more valuable because they offer greater visibility and ease of access.
A counteroffer is the rejection of an original offer to buy or sell along with a simultaneous substitute offer. They are commonly encountered in various transactions, particularly in real estate, where factors other than price might be negotiated.
Any financing arrangement other than a traditional mortgage from a third-party lending institution. Creative financing devices include loans from seller, balloon-payment loans, wraparound mortgages, assumption of mortgage, sale and lease-backs, land contracts, and alternative mortgage instruments.
A shopping center or office building tenant that is large enough, old enough, and financially strong enough to be rated at least investment grade by one of the major credit rating services. A property leased to such a tenant may obtain mortgage financing underwritten on the basis of the tenant's likelihood of honoring its lease.
Curable Depreciation in appraisal refers to deterioration or depreciation that can be corrected at a cost less than the value that will be added.
An estimation of the financial worth of a property if it were to be sold in the present-day market, factoring in current economic conditions, comparable property sales, and general real estate trends.
Refers to the land and immediate surroundings of a dwelling house, regarded as legally attached to it under common law.
In finance, a dealer is an individual or entity involved in the buying and selling of financial securities or other commodities, often at their own risk, for personal sales or to customers.
Debt service coverage is a critical financial metric used in corporate, government, personal, and real estate finance to measure the availability of cash flow for meeting annual debt obligations.
Dedication of land, also known as conveyance, is the practice of a private landowner granting a piece of land to the public, typically represented by a governmental entity, which accepts ownership. This is often done to promote goodwill or fulfill legal requirements.
A legal document in writing that conveys an interest in land (real estate) from the grantor to the grantee, primarily functioning to transfer the title of the land.
A deed in lieu of foreclosure is a legal process where a borrower voluntarily transfers the ownership of property to a lender to satisfy a loan that is in default and avoid foreclosure proceedings.
A deferred charge is an intangible expenditure that is carried forward as an asset and amortized over the life of the benefit it represents. An example includes fees for arranging a 30-year mortgage on income-producing real estate.
Deleveraging is the process by which an entity reduces its level of debt by rapidly selling off assets or paying down loans, often in response to financial stress or in pursuit of a stronger balance sheet.
Demised Premises refers to the property or section of property that is subject to a lease agreement. This term is commonly used in real estate and rental contracts, identifying the specifics of the leased property.
Density in real estate refers to the intensity of land use, often measured in terms of dwelling units or population per acre. It provides a way to quantify how densely populated or developed a particular area is.
Depreciable real estate refers to property used in trade, business, or investment that is subject to depreciation deductions under Section 167 of the Internal Revenue Code. Land itself is generally not depreciable.
In real estate, a formal depiction of the dimensions and location of a property, generally included in deeds, leases, sales contracts, and mortgage contracts for real property.
A Discharge of Lien is a legal instrument issued by the appropriate authorities or courts that effectively release a lien on property once the underlying debt or claim has been paid or resolved to the satisfaction of the lienholder.
A brokerage house that executes orders to buy and sell securities at rates lower than those charged by a full-service broker. In real estate, provides fewer services at reduced commissions.
Distressed property refers to real estate that is under foreclosure or impending foreclosure due to insufficient income production. Such properties often require unique strategies for recovery, including potential workouts.
Dominant Tenement refers to the parcel of land that benefits from an easement on another property, which is typically adjacent.
A downpayment is the initial upfront portion of the total amount due for the purchase of property or goods, generally paid in cash, with the remaining balance being financed through debt.
Downzoning refers to the act of rezoning a tract of land for a less intensive use than that which is currently existing or permitted. This change aims to reduce the density of development and often impacts property values and land use policies.
A dual contract is an illegal or unethical practice in which two different contracts are provided for the same transaction. One contract reflects a larger amount and is used to apply for a loan, while the real contract is for a lower amount.
A provision in a mortgage that mandates the loan be paid in full when the property is sold. This clause protects lenders by ensuring the loan is not assumed by a potentially less creditworthy buyer.
A duplex is a residential building that contains two separate dwelling units, each with its own entrance. The term can also refer to an apartment with rooms on two floors.
A dwelling refers to a place of residence where individuals or families live, such as houses, apartments, and other structures intended for habitation.
An earnest money deposit is a type of advance payment made by a purchaser of real estate to show their commitment and good faith during the home-buying process.
An easement is a limited right to use another's land for a specific purpose, like installing utility lines. This right does not infringe upon other existing uses of the land and is considered a privilege associated with the land, not a possessory interest.
Economic obsolescence in real estate refers to the loss of property value due to external factors outside the property itself. For instance, an expensive private home may lose value if an industrial plant is built nearby. This factor must be considered during the property's appraisal.
Effective Gross Income (EGI) represents the potential gross income generated from rental real estate, adjusted for a vacancy and collection allowance, plus any miscellaneous income.
Egress refers to the right or legal ability to exit or leave a property or premises. It is a common term in real estate and property law, often used in conjunction with 'ingress,' which refers to the right to enter a property.
Eminent Domain is the inherent right of the state to take private property for public use without the property owner's consent, typically requiring that just compensation be paid to the property owner.
Empty nesters are couples whose children have left the family household. This demographic forms an important segment of the housing market due to their tendency to downsize their living spaces. As a result, they drive demand for smaller housing units.
Encroachment refers to a building, part of a building, or obstruction that physically intrudes upon, overlaps, or trespasses upon the property of another; typically verified by a survey.
Equitable title represents the interest held by a prospective buyer who has agreed to purchase a property but has not yet completed the transaction.
Equity Buildup refers to the gradual increase in an owner's equity in mortgaged property, primarily caused by the amortization of the loan principal.
A comprehensive guide to understanding Escrow, its mechanism, and relevance in various fields such as real estate, finance, and more.
An escrow account is a financial arrangement where a third party holds and regulates payment of funds required for two parties involved in a transaction. In real estate, it typically manages property tax, homeowner's insurance, and mortgage insurance payments.
An escrow agent is a neutral third party responsible for holding and managing funds or assets until predetermined contractual conditions are met, commonly used in real estate transactions.
Escrow Closing is a term used to signify the finalization of real estate transactions, particularly in states where deeds of trust are used in place of traditional mortgages. This process involves an escrow agent ensuring that all documents and funds are properly managed and disbursed.
An Estate For Life, also known as a Life Estate, is a type of property ownership typically used in estate planning to allow someone to use and live in a property for the duration of their life.
An estate in reversion is a type of estate left by the grantor for themselves, beginning after the termination of a specific estate granted by them. For example, a landlord has an estate in reversion that becomes theirs to possess when the lease expires.
An estoppel certificate is a legal document by which the mortgagor (borrower) certifies that the mortgage debt is a lien for the amount stated. Subsequently, the debtor is prevented from claiming that the balance due differs from the amount stated.
Examination of Title is a crucial step in the process of buying and selling real estate. It involves investigating the ownership history and any encumbrances related to a specific property to ensure clear and marketable title.
An exclusive agency listing is a contract in real estate giving only one broker, for a specific time, the right to sell a property. It also allows the owner to sell the property independently without paying a commission.
An exclusive right to sell listing is a contract granting a broker the right to collect a commission if a property is sold by anyone, including the owner, during the term of the agreement.
Existing Use Value (EUV) refers to the price at which a property can be sold on the open market, assuming that it can only be used for its current use and that it is vacant.
The expense ratio is a financial metric that measures the ratio of operating expenses to gross income for real estate properties or the percentage of total investment paid by shareholders for mutual fund operating expenses and management fees.
An assumption within an appraisal that is so essential that the value opinion would be erroneous if the assumption proved to be false.
A facade refers to the outside front wall or face of a building, often highlighted for its architectural design and aesthetic appeal.
Fair Market Rent (FMR) is the estimated amount of money a given property would likely command if it were available for lease in the current open market.
An agency within the U.S. Department of Housing and Urban Development, founded in 1934, that administers various loan, loan guarantee, and loan insurance programs to increase housing availability.
The Federal National Mortgage Association, commonly known as Fannie Mae, is a government-sponsored enterprise (GSE) that enhances the availability of mortgage credit across the United States by purchasing and guaranteeing mortgages issued by lenders.
An FHA Mortgage Loan is a mortgage loan insured by the Federal Housing Administration (FHA). Section 203(b) is the most popular program under FHA.
The FHFA House Price Index (HPI) is a measure of the movement of single-family home prices in the United States, compiled by the Federal Housing Finance Agency (FHFA). The index is based on data from loans held by the home mortgage Government-Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac.
Filtering down is a process whereby, over time, a housing unit or neighborhood is occupied by progressively lower-income residents. This transition often involves older residences that were once occupied by the upper classes.
A first lien is a legal right or claim against a property that is recorded before other liens or claims. It takes precedence over any subsequent liens in the event of foreclosure.
A fixture is an item that was initially personal property but has become real property due to its attachment to a building or land in such a way that removal would damage the property.
A term with multiple definitions, spanning real estate, finance, bond trading, and general business contexts. The nuanced meanings can significantly impact various industries.
The term 'Fleet Factors' refers to a landmark 1990 court decision in the United States regarding a lender's potential exposure to liability for environmental cleanup if the lender acquires the property by foreclosure.
Flipping involves buying and then quickly reselling real estate, securities such as IPOs, or other assets for a profit. It relies on the volatility of prices and market efficiency.
A floor loan represents the minimum amount that a lender is willing to advance to a borrower, typically within real estate or construction financing.
A floor plan is an architectural drawing depicting the layout, dimensions, and arrangement of rooms, as well as other physical features at one plane level of a building. It serves as a crucial tool in planning, designing, and constructing buildings.
A forced sale is an urgent sale of assets, typically conducted under significant pressure or compulsion, where the seller has limited opportunity to obtain a fair market value. Examples include sales conducted through foreclosure, bankruptcy, or instances of duress.
An overview of the legal process where a lender seeks to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the property used as collateral for the loan.
Fractional interest involves ownership of some but not all of the rights in real estate, such as easements, hunting rights, and leasehold interests.
A type of estate in land where ownership is held in fee simple, giving the owner complete and indefinite ownership of the property.
A freehold estate is an estate in land of uncertain duration, encompassing both estate in fee and a life estate. This term describes rights in land ownership that are free from any rent or leasehold obligations.
A standard measurement of land, applied at the frontage of its street line. It is used for lots of generally uniform depth in downtown areas.
Cash necessary to start a project. Front money is generally required for purchasing a site, preparing plans and studies, obtaining permits, and securing loan commitments.
Frontage refers to the linear distance of a piece of land along a body of water, street, or highway. Properties with frontage are often valued based on the rate per front foot, which can significantly influence their market price.
Functional obsolescence refers to the decline in a property's value due to changes in design, style, or technology that make the property less desirable in the eyes of buyers or tenants.
Funds From Operations (FFO) is a key measure used to determine the profitability and performance of a Real Estate Investment Trust (REIT).
General property tax is a levy on property that the owner is required to pay. The tax is based on the value of the property, including land, buildings, and other improvements on the property.
The General Services Administration (GSA) is an independent agency of the United States federal government established in 1949 to help manage and support the basic functioning of federal agencies.
A General Warranty Deed is a legal document used in the transfer of ownership of real property, where the grantor guarantees the grantee a clear title free from any claims or encumbrances, both during and before the grantor's ownership.
Gentrification refers to the process by which higher-income individuals displace lower-income residents in a neighborhood, often occurring when an older area undergoes revitalization.
Ginnie Mae, commonly referred to as the Government National Mortgage Association (GNMA), is a government corporation within the U.S. Department of Housing and Urban Development (HUD). It guarantees the timely payment of principal and interest on mortgage-backed securities (MBS) issued by approved lenders.
A *Good Title* refers to a legal concept where a title is free from present litigation, obvious defects, and grave doubts concerning its validity or merchantability. This implies that such a title is marketable to a reasonable purchaser or can be used as security for a loan to a person of reasonable prudence.
A type of lease agreement that includes predetermined rent increases at specified intervals.
The grantee is the party to whom the title of real property is conveyed, effectively the buyer or recipient in a real estate transaction. This term is often used in legal documents such as deeds, contracts, and wills.
A grantor is an entity, often an individual or trustee, that transfers, or 'grants,' assets or rights to another party; in the context of investments and law.
Gross Leasable Area (GLA) is the total floor area of a building available for rental to tenants, usually measured from the outside walls without deducting for hallways, lobbies, or other common areas.
A gross lease is a rental agreement where the landlord is responsible for paying all property expenses, including taxes, insurance, utilities, and repairs. Under this lease, the landlord receives rent as a gross figure and covers the operating expenses.
Ground rent is the revenue generated by leasing out a piece of land. It is considered ordinary income for tax purposes but can be reclassified in some circumstances.
A Growing-Equity Mortgage (GEM) is a type of home loan where the monthly payments increase annually by a predetermined amount. These additional payments are applied directly to the loan's principal, thereby reducing the loan's maturity period faster compared to a standard Level-Payment Mortgage.
