A Guardian Deed is a legal document used for the sale or transfer of real estate by a person appointed by a court to manage the personal affairs or property of an individual who is not capable of such duties.
A habendum clause is a section of a deed that specifies the rights and interests being granted to the grantee, beginning with the words 'to have and to hold.'
Learn about head leases, a primary lease from which sub-leases can be generated. Understand its implications, examples, and frequently asked questions.
A high rise is generally defined as a building that exceeds six stories in height and is appropriately equipped with elevators to accommodate vertical transportation.
In real estate, a holdback refers to a portion of money that is not paid out until certain specified events or conditions have been met. These events could include the completion of a floor loan, the fulfillment of a loan commitment, or retainage on a construction contract.
A holdout is an individual or entity that refuses to sell an asset or agree to terms in the early stages of negotiation, typically in an attempt to realize a higher price or more favorable conditions.
A home loan, also known as a mortgage, is a financing arrangement in which an individual borrows money from a financial institution to purchase residential property.
A 'home office' can refer to either the headquarters of a company or an office within a personal residence used exclusively for business purposes. Each carries specific implications, particularly in terms of taxation and business operations.
A Home Price Index (HPI) is a measure that tracks the changes in residential properties' prices over time. It provides an overview of the housing market's price trends, pegged to a base value rather than indicating average or median home prices in dollar amounts.
The Homebuyer Tax Credit was a limited-time program enacted in 2009 to encourage first-time homebuyers to purchase homes by offering a tax credit of up to $8,000.
A homeowner's equity account is a credit line offered by banks and brokerage firms, allowing homeowners to access the equity built up in their homes. This type of account acts as a revolving credit second mortgage.
A Homeowners' Association (HOA) is an organization of homeowners in a particular subdivision, planned unit development, or condominium. It is generally formed for the purpose of enforcing deed restrictions and managing the common elements of the development.
Homeownership refers to the state of living in a structure that one owns, rather than renting or serving as a tenant. Owning a home provides financial stability and potential asset appreciation over time.
A homestead refers to a house and the surrounding land that is owned and used as a dwelling. Under modern homestead exemption laws enacted in most states, any property designated as a homestead is exempt from execution and sale by creditors in case of bankruptcy.
A homestead exemption is a legal provision that reduces the taxable value of a homeowner's primary residence, effectively decreasing the property tax burden.
In various contexts, the term 'house' can denote different meanings ranging from a dwelling for residence to a business establishment engaged in securities or investment banking.
An essential economic indicator that measures the capability of an average household to afford a home in a specific region. Primarily used to assess housing market conditions.
The Housing and Urban Development Department (HUD) is a U.S. government agency designed to ensure fair housing standards and affordable housing across the country.
An important economic indicator that offers an estimate of the number of dwelling units on which construction has begun during a stated period. The number of housing starts is closely related to interest rates and other basic economic factors.
A Guide to Understanding Hybrid ARMs: A mortgage offering both fixed and adjustable interest rate periods.
A Hypothetical Condition is a situation assumed to be true for the purposes of analysis or appraisal, even though it is contrary to known facts.
Implied Agency occurs when the words and actions of the parties indicate that there is an agency relationship, even if no formal agreement has been made.
An implied easement is a type of easement that is established by use and acceptance, rather than through a formal legal document. It is typically demonstrated through continuous and obvious use of the property, which is accepted by the property owner without objection.
Improved Land refers to a parcel of land that has been partially or fully developed for use. Development activities include landscaping, grading, installation of utilities, road construction, and building construction.
Any permanent, fixed development of land or buildings through expenditure of money or labor that more than merely replaces, repairs, or restores to original condition, and tends to increase the value of the property.
Industrial property refers to real estate used for industrial purposes. Common types include factory-office multiuse property, factory-warehouse multiuse property, heavy manufacturing buildings, industrial parks, light manufacturing buildings, and research and development parks.
An investment designed to protect against the loss of purchasing power resulting from inflation, allowing investors to maintain the value of their money over time.
Ingress and egress refer to the rights and means of entering and leaving a property. These terms are crucial in real estate, law, and property management, as they dictate the accessibility and usability of properties.
An innocent purchaser is an individual or entity that buys an asset without knowledge of any defect in the title or property.
An inside lot, located within a subdivision, is characterized by being surrounded by other lots on each side. This is in contrast to a corner lot, which has road frontage on at least two sides.
Inspection refers to the physical scrutinizing review of goods, property, or documents. It is commonly required in various domains such as real estate, customs, and quality control to ensure compliance, assess conditions, and verify legal documents.
An Installment Land Sales Contract, also known as a land contract, is a type of seller financing where the buyer agrees to pay the purchase price in installments over time while taking possession of the property.
An installment sale is a sales arrangement where the buyer agrees to make payments over time rather than paying the full amount upfront. This type of sale is commonly used in real estate transactions and for higher-priced goods or services.
An insurable title is a type of title to real estate that a title insurance company deems acceptable for insurance, ensuring the buyer is protected against potential defects or issues with the property title.
An insurable title is a title to real estate that a title insurance company agrees to insure, signifying it is free from significant defects that could result in financial losses to the owner or lender.
Interim Financing, also known as bridge financing or a bridge loan, is a short-term loan arrangement, generally spanning less than three years, utilized when a borrower is unable or unwilling to secure long-term or permanent financing. It often serves to provide temporary funding while waiting for financial or market conditions to improve.
A federal law, administered by the U.S. Department of Housing and Urban Development (HUD), which mandates specific disclosures and advertising procedures for the sale of land to purchasers in different states to protect consumers from fraud and abuse.
Investment Management involves the selection and overseeing of various financial assets to meet specified investment goals for the benefit of investors.
An investment portfolio is a collection of various assets such as stocks, bonds, real estate, and other investment instruments owned by an individual or an organization to achieve financial goals.
An involuntary lien is a legal claim against a property that is imposed without the owner's consent to secure the payment of debts such as unpaid taxes, special assessments, or other obligations.
Joint Tenancy refers to the ownership of an asset by two or more persons, each with an undivided interest in the asset and the right of survivorship, which results in the entire value passing to the surviving tenants upon the death of one tenant.
A junior mortgage, also known as a second mortgage or subordinate mortgage, is a mortgage loan that is subordinate to another loan against the same property. In the event of default and foreclosure, the holder of the junior mortgage is only repaid after the senior mortgage and any other prior liens have been settled.
Justified price refers to the fair market price that an informed buyer is willing to pay for an asset, whether it be in the form of stocks, bonds, commodities, or real estate.
Land refers to the earth's surface, encompassing areas that can be owned, developed or transferred through legal means. It is a fundamental component in real estate and economic interests, often including all permanent structures affixed to it.
A land contract, also known as a contract for deed or installment land contract, is a real estate installment selling arrangement where the buyer can use, occupy, and enjoy the land, but the deed is not delivered by the seller until all or a specified part of the sale price is paid.
A land lease, also known as a ground lease, is an agreement in which a tenant rents land for a specified period of time and has the option to construct buildings or other improvements on it. Unlike typical property leases, in a ground lease, the tenant usually gains control of the land and any developments for the lease term.
A financial transaction where one party sells a piece of land to another party and then leases it back for a long-term period. This arrangement allows the seller to continue using the land while freeing up capital.
Land-use intensity refers to a measure of the extent to which a land parcel is developed in conformity with zoning ordinances. It reflects how comprehensively a property is utilized within the parameters established by local zoning regulations.
Government ordinances, codes, and permit requirements intended to make the private use of land and natural resources conform to policy standards. Common regulations include building codes, curb-cut permit systems, historic preservation laws, housing codes, subdivision regulations, tree-cutting laws, and zoning.
A phrase used in early English law to encapsulate all types of real estate, encompassing land and other properties inheritable by heirs.
A landlocked condition pertains to a property or a country that has no direct access to public thoroughfares or oceans.
A landlord is a property owner who rents out their property to another party, known as the tenant, in exchange for rent. The landlord retains ownership of the property while granting the tenant the right to use it as specified in a lease agreement.
A latent defect is a defect that is hidden from knowledge as well as from sight and one that would not be discovered even by the exercise of ordinary and reasonable care. One who sells a house with knowledge of a latent defect must disclose the defect to the buyer or the buyer may later claim misrepresentation.
Considered a hazardous material, lead-based paint is potentially poisonous, and its presence in a property must be disclosed by law.
A leaseback transaction involves a property owner selling the property and then leasing it back from the buyer. This allows the original owner to continue using the property while receiving an influx of capital from the sale.
The landlord's ownership interest in a property that is under lease. The value of a leased fee interest is based on the anticipated income from rent and the reversionary property value upon lease expiration.
Leasehold refers to the right acquired under a lease to use land and buildings for a specified period in return for the payment of a specific rental. Understanding leasehold agreements is crucial for both residential and commercial tenants, as it determines the terms and conditions under which they can use the leased property.
Costs incurred in purchasing and maintaining a lease, which are capitalized as part of the basis of the property.
Leasehold Improvements are fixtures attached to real estate that are generally acquired or installed by the tenant. Upon expiration of the lease, the tenant can generally remove them, provided such action does not damage the property or conflict with the lease agreement.
A leasehold mortgage is a type of lien placed on the tenant's interest in real estate, which is generally subordinate to other liens on the property.
The value of a tenant's interest in real estate, particularly under a long-term lease at below-market rental rates.
A legal description is a detailed way of describing a piece of real estate that is accepted legally and used for property-specific documentation. It identifies the property through various surveying methods such as government rectangular survey, metes and bounds, or recorded plat (lot and block number).
A lessor is an individual or entity that grants a lease to another party, allowing them to use an asset for a specified period in exchange for periodic payments. Lessors are commonly involved in real estate, equipment leases, and other forms of property or assets.
In real estate, 'let' refers to granting the use of realty (real estate) for compensation. The term does not always imply the act of leasing but can also refer to the granting of a license.
Lien-theory states are states in which the laws give a lien on property to secure debt, as opposed to title-theory states where the lender becomes the title owner of the property.
A life estate is an interest in property that lasts for the duration of a person's life, providing certain rights and responsibilities for the life tenant.
Like-kind property refers to properties that are of the same nature or character but may differ in grade or quality. In terms of taxation, like-kind properties can be exchanged without triggering immediate tax liabilities, typically under IRS Section 1031.
A Limited Occupancy Agreement allows a prospective buyer to take possession of real estate before official closing and transfer of ownership.
A Lineal Foot, also known as a Linear Foot, is a measure of length equivalent to one foot, measured in a straight line along the ground. It is commonly used in construction, real estate, and various fields requiring precise measurement of distance or length of materials. Unlike square feet or cubic feet, a lineal foot is a single dimension length measurement.
Liquidating value refers to the projected price for an asset of a company that is going out of business, such as a real estate holding or office equipment. This value is often distinguished from the going-concern value, which may be higher due to factors such as organization value or goodwill.
The act of placing real estate for sale with a broker or entering a security to be traded on a stock exchange.
A listing refers to a written engagement contract between a principal and an agent, authorizing the agent to perform services for the principal involving the latter's property. It is also the record of property for sale by a broker who has been authorized by the owner to sell.
A licensed real estate professional who secures a listing of the property and is responsible for marketing and selling it. They are employed by the seller and contrast with the selling agent, who represents the buyer.
The price a seller puts on a home when it is placed on the market. The listing price, also known as the asking price, is generally considered a starting point for negotiations between the seller and a prospective buyer.
Loan Closing refers to the final step in the process of securing a loan, particularly in real estate transactions. It encompasses all activities that transpire when the borrower and lender settle the terms and conditions of the loan agreement.
The Loan-to-Value (LTV) ratio is a financial metric used by lenders to evaluate the risk involved in lending a borrower against the value of the asset being purchased.
A popular real estate mantra emphasizing the paramount importance of location in determining the value of urban real estate. While crucial, several other factors interact with location to influence property value.
A locked-in interest rate is a rate promised by a lender at the time of loan application. The promise is a legal commitment of the lender, though there may be qualifications or contingencies that allow the lender to charge a higher rate. On home loans, the lock-in is customarily provided for 1% of the amount borrowed, though often it is free of charge. However, many prospective lenders find ways to renege on commitments when interest rates rise.
A loft apartment is a large, adaptable open space, often industrial or warehouse spaces, which have been converted into residential use. Recently, new loft constructions have also been designed for residential purposes.
A long-term lease generally refers to a commercial lease of five years or longer, or a residential lease longer than one year. It involves a contractual agreement between a landlord and tenant for the use of a property for a prolonged period.
The lot and block method is a system used for locating and identifying parcels of land based on a designated lot number and block number as assigned on a plat map of a subdivision.
A lot line is a boundary line that defines the perimeter of a piece of property as described in a survey.
A low-ball offer is a significantly lower bid than the listing price, often suggesting that the buyer believes the property is overvalued or is seeking a bargain deal.
An MAI Appraisal refers to a real estate appraisal conducted by a person who holds the MAI designation, granted by the Appraisal Institute, signifying a high level of experience and expertise in commercial real estate valuation.
A management fee is a charge against assets for the administration and management of portfolios, funds, or real estate properties. It encompasses services such as investment management, shareholder relations, administration, rent collection, maintenance, and bookkeeping.
A subdivision of plots designed for siting manufactured homes. Plots are generally leased to manufactured home owners and include utilities, parking space, and access to utility roads. Many parks include amenities like swimming pools and clubhouses.
Manufactured housing refers to dwelling units or modules manufactured in a factory and designed for transport to a site where they are semipermanently attached. This category includes mobile homes as well as factory-built modules that are assembled onsite into complex residential structures.
Marginal property refers to real estate that is barely profitable to use. The concept often applies to land that can produce income, but only by the smallest of margins when comparing production costs to revenue.
The market approach, also known as the sales comparison approach, is a method used to value an asset based on the selling price of similar assets in the marketplace. This valuation technique is widely used in real estate and business valuation.
Market Rent is the amount of rent a comparable unit would command if offered in a competitive market. It reflects the going rate in the open market based on various influencing factors including location, property condition, and current demand and supply.
A provision in property insurance that determines the reimbursement amount for damaged or destroyed property based on the price a willing buyer would pay to a willing seller, rather than the property's actual cash value.
Market value is the price a willing buyer would pay for property purchased from a willing seller, while actual cash value is the replacement cost of damaged or destroyed property minus depreciation and obsolescence.
Marketable title refers to a good or clear title reasonably free from the risk of litigation over possible defects, that a well-informed purchaser, in the use of ordinary business prudence, would be willing to accept.
A marketable title, also known as a merchantable title, is a property title that is free from significant defects, claims, or liens and is acceptable for purchase.
Marriage Value is the latent value released by the merger of two or more interests in land, often involving the union of the freehold and a long leasehold on the same property.
A Master Lease is a primary lease agreement in which the lessee (tenant) holds significant control over the leased property, and it sets the terms under which the lessee can sublease the property to a subtenant.
Metes and bounds is a system used for describing the territorial limits of property based on measurements of distance, angles, and landmarks.
An individual whose overall assets exceed $1 million but are not liquid cash. These assets could be in the form of securities, real estate, or other investments.
A mini-warehouse, also known as a self-storage facility, comprises numerous small, lockable units designed for the storage of personal and business items. These units are typically rented on a month-to-month basis and vary in size from 5′ × 5′ to 25′ × 25′. A standard 10′ × 20′ unit often rents for $150 per month.
Minimum lot area refers to the smallest building lot area allowed in a subdivision, generally specified by a zoning ordinance.
