Definitions

Aerial Photography
A photograph taken of land and its improvements from high above the earth's surface in an airplane.
Air Right
(1) the right to occupy air space in a specified location; (2) the right to construct a building in the air space another land improvement.
Allocation Approach
An approach used when recent land sales data are hand to acquire. The land-to-total-value ratios from recently sold comparable properties may be used for the allocation of the total value of the subject between the land and the improvements.
Amenities
The landscaping, entertainment facilities, and other development features, beyond the structural accommodations of each individual building unit, that make a residential development conducive to good living conditions.
Amenity, Project
The landscaping, entertainment facilities, and other development features, beyond the structural accommodations of each individual building unit, that make a development conducive to good living or working conditions.
Amortization Plan
The plan under which the mortgagee will receive from the mortager the complete repayment of the loan principal borrowed. During the term of the loan, all or only a part of the principal may be repaid. A balloon payment may be required at the end of the loan.
Annual Mortgage Constant
The decimal amount that is multiplied by the original loan amount in order to find the annual debt service payment.
Annual Repayment Schedule
A schedule of repayment of a borrowed amount that calls for annual payments rather than monthly, quarterly, of semiannual payments.
Apartment Project Mortgage
The multifamily residential mortgage.
Appraisal Process
The professional system of analysis that uses an orderly progression of steps to estimate the value of an asset.
Appraising
Estimating the value of an asset as of a given date.
Appreciation
(1) Increase in value; (2) recognition of the value of a phenomenon.
Appreciation of a Property Value
An increase in property value from its original value.
Arteries, Major Secondary
Transportation routes that are secondary or less important than the primary transportation routes. Secondary streets, for example, are usually narrower in dimension than primary streets of main thoroughfares.
Cash Flow After Taxes
The cash flow resulting from the subtraction of federal income taxes and net cash outflows of other types from net cash inflows from the asset.
Cash Flow Analysis
The detailed study of actual or estimated cash inflows and outflows associated with specific time periods of property owndership by an investor. Cash flow analysis is usually expected to reveal total net cash benefits to the investor by time period, tax savings per time period, and the investor's total cash return on cash investment by time period.
Certificate of Deposit
The time deposit of a thrift institution or a commercial bank that usually takes the form of a negotiable instrument. An evidence of a deposit where the full interest will be paid by the issuing financial institution only when the full deposit remains with the institution a given period of time.
City Plan
A design of the land use proposed for the future development of an urban area.
City Planning
The future geographical design for an urban area to be implemented by public and private real estate investors. The development of desired centers of activity, such as office centers, medical centers, financial centers, recreational centers, and residential centers may be encouraged by the “design for the future.”
Clear Title
The title, free of all defects, to an asset. The current owner has a fully defined ownership with no outstanding liens, illegal encumbrances, or challenge from a distant relative to any portion of the ownership. The property is completely and immediately marketable. Title insurance companies will insure the title with no objections.
Code of Ethics
The ethical concerns and requirements of members of an industry group. Usually the leadership of an industry trade association draws up a code of ethics for the membership. To become a member, the person must subscribe to the code of ethics and then live up to those standards of performance.
Collateral
The assets pledged to the lender for the acquisition of a loan by the borrower. The collateral title will be transferred to the lender if the borrower defaults on any terms of the loan. The lender may sell the assets to gain the amount of principal and interest unpaid by the borrower.
Commercial Bank
The private financial institution that is regulated by the Federal Reserve and that creates money through loan underwriting under the reserve system for deposits and aids the Federal reserve and the U.S. Treasury in their monetary and fiscal polity administration. Demand deposits are important liabilities of this private financial company as well as other types of savings and time deposits. Bank stockholders are the owners of the financial entity.
Commercial Market
The demand and supply conditions associated with commercial enterprise or commercial space availability.
Commercial Paper
(1) Short-term debt sold by commercial paper dealers of the issuers themselves who are usually corporations with high credit ratings; (2) the form of the short-term debt obligation often issues by a business organization in order to raise funds at a reasonably low rate. The rate of interest on commercial paper is often lower than the bank short-term rate to prime commercial loan customers. The commercial paper rate is usually above that of the U.S. Treasury bills.
Common Area Maintenance Allowance
The expense required for the maintenance of common areas of an income property and prorationed on some equitable basis among the tenants of the building.
Community Market Analysis
A study of the community from the viewpoint of the market of demand for a good or service. The good may be an existing or proposed real estate development.
Community Property
The form of joint ownership of assets, including real property, that exists between a husband and wife in a state whose statutes provide for community property. The husband and wife hold the assets acquired during the marriage under an undivided interest.
Comparable Property
A recently sold property that is very similar in physical, functional, and environmental characteristics to the subject.
Condominium
A housing unit whose air space may be purchased. Common-area maintenance allowances are paid for the condominium purchaser periodically in order to maintain the areas of the condominium development that are used in common by the condominium owners. The condominium may be a single-unit structure or a multi-tenant structure used for residential, commercial, institutional or industrial purposes.
Condominium Building
A land improvement whose individual units of space are owned by real property investors. Each unit of air space is owned by a legal entity who may be a person or a business entity. The buyer of each unit finances the unit in any way desired. The condominium unit owners share the common areas, and each pays monthly maintenance charges to cover the maintenance of the common areas.
Corporation
A form of business organization that has an infinite life, at least one type of stockholder—common stockholders—a board of directors, and a management group. The single entity is subject to federal and state income taxation on its net profits. When dividends are distributed to its shareholders, the amount is taxed as part of the person incomes of the stockholders. Therefore, there corporate stockholders are subject to double taxation. The financial liability of the stockholders is limited to their individual investments in the corporate stock.
Cost
The dollar amount required for the acquisition of a property or the construction of an improvement.
Cost Approach
One of the three general approaches to the estimation of real property interests. In using the cost approach, the appraiser seeks the depreciated cost new of the subject property.
Cost-Benefit Study
A study of the costs associated with a property and of the benefits to be derived from the expenditure of those funds.
Debt Service Charge
The factor calculated by dividing the annual debt service requirement into the earnings available to meet the annual debt service requirement. The debt service factor usually ranges from barely in excess of 1.0 to approximately 1.5.
Debt Service Payments
Periodic payments required by the mortgage contract that are made by the mortgager and represent payment of interest and repayment of the loan principal.
Debt Service Requirement
The periodic financial payment required of the mortgager for the benefit of the mortgagee, covering the repayment of principal and the payment of interest over the terms of the loan.
Deed
The contract with which the grantor conveys title to real property to the grantee.
Deed of Trust
A three party two-part financing agreement in which the trustor pledges to the beneficiary the title to the real property that the beneficiary is financing. The trustee holds the title which the financing terms are met over the life of the financing agreement. A promissory note must accompany the deed of trust, which is the contract pledging the collateral for the loan.
Deed Recording Fee
The fee required by the appropriate county, parish, or township office, where the property is located, for the office’s recording of the deed.
Deed Restrictions
Restrictions on land use of development established in the deed.
Depreciation
The loss in value of an asset from physical deterioration of functional obsolescence.
Depreciation Allowance
The tax-deductible expense calculated by a method approved by the Internal Revenue Service for the Particular asset class.
Depreciation Expense
A decline in property value from its original value.
Depreciation Write-off
The use of the depreciation charge against a real property as a tax deduction and not as a reflection of the decreased value of the property or the need for monies to rehabilitate the building. The term “write-off” implies tax deduction of a permissible expense that will reduce the taxable income of the taxpayer.
Depression
The lowest period of economic activity of the general business and economic cycle. Demand is extremely low; level of productive capacity is low; supply of funds is abundant, though there is little loan demand incomes are low; and interest rates tend to be low.
Direct Capitalization
Conversion of net operation income into value using a capitalization rate that does not explicitly consider capital recapture. The built-up and market comparison methods of deriving the capital rate are used in direct capitalization.
Direct Cost
Costs of construction or production that are associated with labor and material directly applied to the constriction or production of the product.
Discount Rate
The rate that is used to discount to present value the sums of monies expected to be received within future periods.
Easement
The right given to a party other than the property owner to enter the property for specified purposes, such as the installment and maintenance of a large highway billboard on a portion of the property. An easement may be given informally through oral permission of formally through a written legal document.
Facsimile
(1) A close likeness of the original object or asset; (2) a replacement that is almost the same; (3) the closest to an exact duplicate that is possible.
Fair Market Value
(1) A value for an asset that is considered reasonable in the current market conditions and circumstances; (2) the value indicated by current market transactions in comparable assets. Recent arm’s length dealings in the marketplace indicate the value of the subject.
Fee Simple
Or Fee Simple Absolute. The real property estate that grants to the possessor the completely bundle of property ownership rights. Only the government may restrict these rights and only on condition that the public good is benefited.
Financial Institutions
The privately owned organizations that receive deposits, insurance premiums, or pension-fund contributions from individuals, businesses, and government agencies and, after paying the operating costs of the organizations, invest the remaining finds in the loans and negotiable securities subject to reserve requirements set by the appropriate regulators.
Fireplace, Metal Flue
A non-traditional fireplace whose flue lining is metal and is manufactured at the plant and shipped to the site. The exterior and interior of the fireplace may or may not be brick.
Fireplace, Standard
A traditional site-built fireplace with a clay flue, fire bricks, brick exterior chimney, and brick hearth and fireplace front.
Flat Lease
A lease agreement for income property space that requires a dollar amount per month or year or a dollar amount per year per square foot of net leasable area.
Flood Hazard Map
A map that shows flood-prone areas, categorized by the probable frequency of flooding. For example, the flood-prone land may be subject to flooding once every 100 years of perhaps once every five years.
Flood Plain
A low-lying parcel of land that periodically is totally or partially covered with water from the overflowing of a nearby body of water.
Floor Plan
The sketch of one floor of a building that shows the relative location of each of the rooms and its shape and measurements.
Foliage
The shrubs, trees, and other ground cover of land.
Fully Amortized Loan
The loan whose total principal repayment and interest payments are scheduled through level-payment periodic mortgage payments.
Garden Apartment
The apartment unit in a two-or-three-story walkup multifamily building. Often several garden apartment buildings will be clustered in an apartment project so that green space may be left between the buildings for the visual benefit and outside entertainment of the building occupants.
General Business Cycle
The fluctuating pattern of general business activity over a number of years within a given country. The four phases of the general business cycle are sometimes called expansion, prosperity, recession, and depression.
General Contractor
The person specializing in building construction who contracts with the owner to construct a building or a number of buildings in a real estate project. The general contractor subcontracts the specialized areas on construction work that need to be performed in order to complete the structure.
General Partner
The partner in the general or limited partnership who has full managerial, financial, and legal liability for his or her decisions related to the operation of the business or investment property.
General Partnership
A partnership of equally liable partners. They hold equal financial and legal liability for the partnership operation and financing. Each partner may make decisions in the name of the general partnership and hold the other general partners responsible for those decisions.
General Warranty Deed
The type of deed that conveys all warranties and guarantees by the grantor to the grantee. All of the possible property rights are held by the grantor when they are totally conveyed to the grantee. Depending upon the state of domicile, the general warranty need usually contains five or six general warranties that protect the grantee against future loss of ownership.
Governmental Services
The personal and business services offered by governmental offices on the federal, state, and local level.
Government Housing Programs
The mortgage insurance and financial programs related to housing that are promulgated and administratively supported by government agencies on the federal, state, and local levels. Government housing programs usually concern housing and low- and moderate-income people.
Grace Period for Late Payments
A period of time for the investigation by the mortgage lender of the reasons for the late payment of the mortgagor. During this time, the mortgagor may make full payment of the amounts due, and the late-payment penalty may not be activated or foreclosure proceedings instituted.
Graduated Lease
A lease whose payments are gradually increased of decreased over the term of the lease.
Green Space
Open area where green vegetation exists in the form of trees, shrubs, and perhaps flowers. Often these open areas lie between real estate developments devoted to industry, commercial business, or residences. The open areas may be available for recreational uses and nature study. The city planners may believe that the “green space” relieves the monotony caused by concrete and other developments that harm the natural balance of nature.
Gross Living Area
The total living area under roof that includes the portions heated and cooled and the portions unheated and uncooled.
Gross Monthly Income
The total monthly income, without any deductions that is generated by the members of the prospective mortgagor’s household.
Gross Rentable Area
All area within outside walls less stairs, elevator shafts, flues, pipe shafts, vertical ducts, and balconies, according to the Institute of Real Estate Management.
Gross Rent Multiplier
The factor derived from recent comparable sales data, which is multiplied by the monthly estimated rent for the subject in order to find the value of the subject from the income approach. The multiplier for each of the recent comparable property sales is found by dividing the gross monthly income for the comparable property at the time of the sale into the sale price. An appraiser may use annual rent estimates instead of monthly rent estimates. In this case, the gross income multiplier is used instead of the gross rent multiplier.
Ground Lease
The agreement between the landowner and the tenant that grants land use to the tenant in return for periodic rental or lease payments to the landowner.
Ground Lessor
The owner of land who rents the land to another, or the ranking lessee who may lease the land yet to another lessee.
Hand-held calculator
A small calculator that is easily transportable by hand. The calculator registers a very light weight.
Hazard Insurance Policy
An insurance policy underwritten by an insurance company to cover certain possible hazards that may cause financial loss to the insured property.
Hedge Against Inflation
An investment that rises in value with the rate of inflation.
Highest and Best Use
The use of an asset s that it will reach its highest possible appraised value.
Highest and Best Use, Principal of
The principal that the land value will reach its highest attainable level if the land is developed to its highest and best use. Also, the property will reflect its highest present value as the estimated future cash flows from the property are discounted to the present.
Highway Right of Way
The land acquired by the highway department for the laying of a roadbed.
Homeowners’ Association
The organization of unit owners in a residential development where common areas must be maintained and financed and where minimal property standards for all homeowners must be maintained for the overall preservation and enhancement of property values.
Illiquidity
The holding of an asset for which there is an inactive market demand. It is difficult to turn the investment for cash, preferably for the original investment or more.
Income Capitalization Method
A method of converting annual operating income into overall present value of the income property.
Income Property
An investment property held for income-production purposes. It may be partially owner-occupied
Incurable Depreciation
The defect in a structure or its environment causing loss in property value that cannot be cured or, at least, cannot be cured on an economical basis. The term “incurable” in appraising as applied to depreciation often means that the cost required to sure the defect surpasses the resulting rise in the market value of the property.
Incurable Physical Deterioration
Physical deterioration whose cure is not economical. For example, the cracking of the concrete foundation caused by the sinking of the property into the ground from inadequate building lot fill or the existence of a prior coal mine shaft.
Independent Fee Appraiser
An appraiser who does appraisals for a fee and has no continuing financial association with any particular financial or government institution.
Index
A single account that shows the relationship between two numerical factors from two different time periods when a base number of 100 is assigned to a given base period.
Indirect Costs
The costs not directly associated with the construction or operation of a building or an enterprise. Indirect costs include provisions for coverage of overhead and profit for the subcontractor and contractor.
Inflation
The increases in price beyond increases in productivity.
Inflationary Risk
The risk of loss due to inadequate financial protection against inflation. Inflation protection of a lessoning of the inflationary risk may be derived from a mortgage yield based at least partially on a percentage of gross revenue from the income property.
Inflationary Trend
The pattern over time of increasing inflation or declining value of the United States dollar.
Information System
A system for the processing of information. Information may be stored in a facility and then retrieved when desired.
Installment Contract
A contract to sell an asset with periodic payments required by the lender-seller toward the principal being borrowed and the interest. Installment contracts may permit low or no downpayments on the purchase of real property, and capital gains taxation may be partially deferred.
Institutional Affiliation
Direct financial connection with a public agency or private financial or philanthropic enterprise.
Institutional Appraiser
An appraiser who works for a public or private institution full-time of part-time. For example, a savings and loan association appraiser may also act as a gee appraiser during the time not required for savings and loan appraisal work.
Insurable Value
Reproduction cost of the insurable property, less the depreciation for insurance purposes.
Insurance Adjuster
The person who must assess the damage that is covered by the insurance polity. The amount of the insured loss must be assessed, and then the appropriate payment to the insured must be determined.
Insured Party
The person or business entity whose possible financial loss of a specified character is insured by an insurance carrier.
Internal Revenue Service
(1) The federal agency in charge of promulgation of tax regulation and collection of federal income taxes. (2) The federal agency that revises, administers, and enforces the tax code of the United States. The agency collects federal income taxes from individuals, households, and businesses.
Joint Ownership of Property
The ownership of a single property by two or more parties, who may be individual persons or business entities.
Joint Tenancy
The joint ownership form in which two or ore partners fold an undivided interest in a property and agree to survivorship rights for the remaining partners at the death of a partner. Four unities are also required for the establishment of a joint tenancy agreement: the unities of time, possession, interest, and title.
Labor Supply
The total number of skilled and unskilled workers, professional and nonprofessional, who are available for various types of employment.
Land
The earth in its natural state with no improvements such as utility lines and streets.
Land Improvement
The improvements made to land that convert the land to a site or a site with permanent improvements such as buildings. Examples of land improvements are buildings, sidewalks, utility lines underground, streets, curbs, gutters, light poles for street and property lighting, and newly planted trees.
Landlord’s Responsibilities and Obligations
The responsibilities and obligations of the landlord prescribed by the landlord-tenant laws. Remedy may be sought by the tenant if these responsibilities and obligations are not met.
Land Use Patterns
(1) The clustering of similar or complementary land uses in an overall urban design; (2) an abstract way of conceiving of the residential, commercial, industrial, and institutional land uses of an urban, semirural, or rural area.
Land Use Zones
Zoning ordinances passed by local government officials, prescribing permitted land use in designated zones or areas.
Lease
The contract in oral or written form, recorded or unrecorded, that specifies the approval of the landlord to the possession of the landlord’s property by the tenant for a specific or indefinite period of time. For the rights of property possession, the tenant of lessee usually pays the landlord—the lessor—rent on an established, periodic basis.
Lease Deductions
The expense deductible for federal income tax purposes that is derived from he lease payment. The complete lease payment is tax-deductible.
Leasehold Estate
The real property estate held by the lessee of real property.
Leasehold Estate at Will
The right of property possession that may be terminated at the will of the tenant or the landlord with reasonable notice to the other party of the proposed vacancy of the premises.
Leasehold Estate from Period to Period
The real property estate that conveys the right of possession of property spanning the initial contract time period and that may be extended automatically to an additional time period the same duration as the original lease period. Any number of extensions of the contract may be approved, but the additional time period is the same as the original time period.
Lease Memorandum
A brief notice of the presence of a lease on a property that may be recorded in lieu of the complete lease. The recording of a lease memorandum may satisfy the state requirement for recording all lease agreements. The majority of the terms of the lease are kept private (that is, not made available to the public).
Lease Payment
The periodic payment due to the lessor under the provisions of the lease.
Lease Renewal
The extension of the lease period by the lessor after a lease has run for the initial period and the lease payments have been paid by the lessee according to the terms of the lease. The lease may be extended for a stated period of time called the renewal period.
Legal Description
(1) A formal description of land location that is acceptable by the courts for legal purposes. (2) The engineer-surveyor’s description of the location of the boundary lines of a parcel of land; the description can be used for legal purposes.
Lessee
(1) Tenant; (2) the one who rents space in a building from the lessor, the owner or holder of the superior rights to the property.
Lessor
(1) One who rents his or her space to another in return for rent; (2) the owner of rented property.
Leverage
The use of borrowed money to supplement equity in the purchase of an asset.
Leverage, Degrees of
The use of leverage may result in very negative returns to equity or, at the other extreme, very positive returns to equity. The leverage results for an particular situation vary through a range from one extremity to the other.
Leverage, Favorable
The use of borrowed funds at an interest cost less than the overall return on the income property.
Lien Theory State
When the mortgagor gives a mortgage lien to the mortgagee, the borrower keeps the title to the financed property and approves title transfer to the mortgagee only upon default on the mortgage terms by the mortgagor. Normally, the state provides for equity of redemption or statutory redemption at the time of mortgage default. Foreclosure proceedings instituted by the lender bring about the conveyance of property title to the mortgagee after the redemption period.
Life Insurance Company
A private financial institution, stock- or mutually owned, that underwrites life insurance policies primarily. The private institution is regulated by the state insurance commission of its place of domicile and the states in which policies are written.
Life-Style
The living patterns of an individual that are influenced by the individualÕs social and economic preferences.
Limited Partner
The partner of a limited partnership who does not actively engage in the management of the organization and contributes money or other assets to the limited partnership. The limited partner’s financial liability is usually limited to her or his financial contribution to the partnership.
Limited Partnership
The form of business organization in which two or more owners assume either general-partner of limited-partner status.
Listing Agreement
The contract between the seller and the real estate broker that gives the broke a special agency right to procure a ready, willing, and able buyer for the listed real property.
Litigation
Legal actions brought by aggravated parties—the plaintiffs—against the parties allegedly committing the wrongdoings—the defendants. The filing of law suits by the plaintiffs, followed by court hearings and the rendering of a verdict by a judge and/or jury.
Livable space
The area of a building, under the roof, that is heated and cooled.
Loan Constant
The decimal percentage of the total original loan amount that is multiplied by the original loan amount to find the annual level loan payment that includes the payment of interest and the repayment of principal.
Loan-to-Value Ratio
The quotient calculated by dividing the appraised value or sale price into the loan amount. Lenders often determine the loan amount that they will extend to a prospective borrower by multiplying the typical loan-to-value ratio for the particular credit and real estate situation by the appraised value or sale price, whichever is lower.
Local Government Economy and Efficiency
The balancing of possible cash outflows of the local government with the expected cash inflows primarily from taxation. The prudent use of available resources for needed expenditures of local government.
Lot Frontage
The side of a lot that faces on a street.
Lot, House
A defined building area within a subdivision of numerous building lots. Te area designed for a house has all utilities available at the site either underground or above ground so that the builder can merely hook up the utility lines when the appropriate time in construction comes. The lot is served by streets, curbs, and gutters.
Low-Density Standards
Zoning ordinances that specify relatively low-density development for a zoned area.
Marital Rights
The rights of each of the spouses o the marriage contract.
Marketability Study
The study of the degree of marketability of a site under each of several possible land uses.
Market Analysis
A study of potential market for a good or service.
Market Price
(1) The amount that has been paid for a good or service in a particular transaction; (2) the dollar price for an asset established by the seller of the good or service.
Market Rental Rates
The rental rates currently being paid by the tenants of competing structures.
Market Segment
The people who want to purchase or otherwise acquire a given asset.
Market Study
(1) The analysis of the demand for the subject property in light of the existing and proposed competitive properties the characteristics and amenities of the subject are compared to the characteristics and amenities of the competitive structures. (2) A study of the absorption rates, the rental rates, and the amenities associated with the rental rates of the existing and potential competition for a proposed or existing real estate development.
Market Value
The value in the marketplace of an asset. This value is usually determined by taking recent selling prices of comparable properties and by adjusting the price of each of the comparable properties to reflect the estimated value of the subject property. Market value is the dollar amount that a property should bring a competitive market under conditions requisite to a fair sale resulting from negotiations between a buyer and seller, each acting prudently with knowledge and without undue pressure.
Mass Transit Facilities
The station facilities and waiting platforms that accommodate rapid, public ground transportation such as subways, elevated trains, trolleys, and buses. Hundreds of thousands of riders may use the transportation facilities each day of the week.
Median
(1) The item value in the middle of the ranked distribution of data; (2) the central value of a distribution when the values are ranked in order from highest value to lowest value or from lowest value to highest value.
Metes and Bounds Description
The method of land description that utilizes directions and distances in coordination with governmental survey methods of land description when the parcel of land does not conform to the exact boundaries of a section.
Millage Rate
The tax rate per dollar, per hundred dollars, or per thousand dollars of assessed valuation of taxable property.
Mode
The most frequent appearing item in a series of data.
Money Market Certificate
The certificate of deposit approved by the Federal Reserve, the Federal Loan Bank Board, and the National Credit Union Administration for member sale, where the interest rate on a minimum deposit of $10,000 is based on the average discount yield on the newly issued six-month Treasury bills at the time of deposit. The money market certificates authorized in June of 1976 by the Federal Reserve and the Federal Home Loan Bank board and in November 1976 by the National Credit Union Administration mature six months from the date of deposit. Other types of money market certificates have longer maturities and different interest rates.
Money Market Yields
The current yields on short-term negotiable instruments in the money market.
Monthly Mortgage Constant
The decimal amount that is multiplied by the original loan amount to find the monthly debt service payment.
Mortgage
The financing agreement whereby the mortgagor pledges collateral to the lender in return for funds. The mortgage or mortgage deed is also one part of the two-part security called the mortgage; this part of the two-part security is a pledge of real property for the repayment of the borrowed funds. The other part is the promissory note.
Mortgage Amortization
The repayment of principal that has been borrowed from a lender.
Mortgage Amortization Term
The period of time over which the loan extends. During this period, the mortgagor makes payments to repay fully or partially the principal borrowed.
Mortgage-Backed Securities
Indenture agreements that are collateralized by a pool of mortgage loans whose mortgagors are currently repaying their mortgage debt. The repayment of security principal and interest may be guaranteed by an agency of the federal government—the Government National Mortgage Association—or it may be “guaranteed” by the issuer of the security. The “guarantee” of the issuer stems from the overall credit standing of the issuer and the extend to which mortgage income is pledged for the repayment of the security principal and interest. Most mortgage-backed securities resemble pass-through securities rather than bond-type securities.
Mortgage Balance, Current
The present unpaid balance on the mortgage loan as calculated by the lender of the money.
Mortgage Broker
The financial middleman who places mortgages with investors without retaining the loan servicing. The broker may or may not have originated the loan.
Mortgage Company
A company comprised of mortgage bankers who underwrite mortgage loans of predominately the FHA and VA types but who do not invest in the mortgage loans. The mortgage company usually sells its underwritten loans to investor-correspondents, such as life insurance companies, mutual savings banks, and distant savings and loan associations.
Mortgage Debt
The debt of a borrower, the mortgagor, in which real property is pledged for the repayment of the loan. The mortgagor gives a mortgage to the lender, the mortgagee, in order to borrow money for a legal purpose.
Mortgage Deed
One part of the two-part mortgage. The deed of the mortgage financing agreement conveys the title to the real property being financed to the mortgagee in order to acquire funds from the mortgagee. When the mortgage terms are completely met, the title to the property is transferred back to the mortgagor. The mortgage deed indicates that real property is pledges as security for the mortgage payment.
Mortgage Interest Rate
The rate of interest on a mortgage that the mortgagor is obligated to pay to the mortgagee over the term of the loan.
Mortgage Market
The market in which mortgages are sold and bought. The active mortgage market involves single-and multifamily mortgage loans.
Mortgage Market Conditions
Variables including the absence or presence of mortgage money, the relative level of the mortgage rates and relative number of discount points payable at closing, the prevailing loan-to-value ratios, and interest of lenders in particular types of property loans. The condition of the mortgage market is dependant upon the current status of these and other related variables.
Mortgage Market Prices
The current prices for the mortgage loans of the various types. The relative level of a price for the mortgage indicates the requires interest yield of the typical mortgage investor. Since the traditional mortgage carries a fixed rate of interest, the mortgage price adjusts upward or downward to give the investor the current required yield.
Mortgage Note
The evidence of indebtedness attached to the mortgage deed in order to form the complete mortgage document. The promissory note establishes the terms of repayment of the mortgage obligation.
Mortgage Payment
The periodic payment to the mortgage lender by the borrower of monies toward the amount due in the mortgage interest and mortgage principal repayment.
Mortgage Rates
The nominal interest rates on various types of mortgages.
Mortgage Yield
The effective yield on a mortgage to an investor. The yield may include the contract rate, the prepaid interest, the amortized discount on the discount price paid, and the variable returns from the mortgagor in the form of equity participation over the term of the mortgage.
Multiple Listing
A listing agreement between a property seller and the listing broker that is advertised among the members of the Multiple Listing Service of the locality.
Multiple Listing Service
The local real estate organization established so that its broker membership can benefit from increased information about each recent property sale. Often the Multiple Listing Service is a service affiliate of the local Board of Realtors. The majority of the realtors tend to subscribe to the useful service.
Municipal Bond
An indenture agreement, issued by a state or local government instrumentality, whose interest payment is tax-free for federal income tax purposes. In investor conversation, the debt obligation may be called a “tax-exempt muny.”
Mutual Savings Bank
The financial intermediary that is labeled a thrift institution because it, like the savings and loan association, accepts deposits for institutional investment in a large volume of residential mortgage loans. Unlike the other thrift institutions, the mutual savings bank also invests heavily in corporate bonds. The mutual savings bank usually insures its deposits through the FDIC of a state insurance association. Therefore, the mutual savings bank is usually regulated by the FDIC.
Natural Boundary
The side line or extreme point of a confined space that is noted by an object of nature that has not been created by human beings. Natural boundaries include high water lines of ocean shores, huge tress, boulders forced up to the earth’s surface, dry creek beds, and mountain peaks.
Neighborhood Analysis
The study of a neighborhood as it is at present and perhaps as it has changed over time.
Neighborhood Composition
The assorted characteristics of the residential, business, and institutional occupants of a neighborhood.
Neighborhood Shopping Center
A small, planned complex of retail stores offering primarily convenience goods and services for a five mile radius of customers. The key tenant is usually a supermarket, and the smaller store rooms may house a dry cleaner, a small fast-food outlet, a record shop, a florist shop, a small drug store, and a commercial bank branch. Only a few acres are absorbed by the eight to ten stores with parking facilities.
Net Cash Flow
The surplus or deficiency of gross cash inflow with regard to gross cash outflow.
Net Cash Flow Before Debt Service and Taxes
(1) Taxable income, plus depreciation and mortgage interest, before debt service and federal income taxes deducted; (2) net operating income before debt service and taxes are deducted.
Net Cash Flow Before Taxes
Rental income less cash operating expenses and mortgage debt service.
Net Leasable Area
The area of a commercial building that is subject to lease to a tenant. Usually the areas of the building commonly used by all tenants are not considered a part of the net leasable area. In other words, elevator space, public restrooms, maintenance rooms, stairwells, and the first floor lobby are not usually considered parts of the net leasable area. The Institution of Real Estate Management states that “Net Rentable Area shall include all area within the outside walls less stairs, elevator shafts, flues, pipe shafts, vertical ducts, balconies, air conditioning rooms, janitor closets, washrooms, public corridors and such other rooms not actually available to the tenant for his furnishings or personnel.”
Net Leasable Space
The gross leasable space less the unusable space for business activities of the typical space occupant.
Net Listing
The contract between the seller of the real property and the real estate broker that provides for a net dollar amount to be paid to the seller in the event of the property sale. The listing broker then earns the mount between the actual selling price and the net price promised to the property seller. The amount may or may not cover the transaction costs of the broker.
Net Operating Income
The income remaining after the operating expenses are subtracted from the effective gross income.
Net Price
The gross price less specified amounts, such as selling costs.
Net Profit
Gross revenue less bad debt loss, vacancy allowance, operating expenses, depreciation expense, and mortgage interest. It may be expressed on a before- or after-tax basis.
Net Sale Proceeds
The cash proceeds from the sale of an asset calculated by subtracting the payment of the remaining mortgage balance and selling costs from the gross sale price of the property. Taxes paid may also be subtracted to arrive at an after-tax net sale proceeds. Part of the cost of selling a property may be the taxes paid at the investor’s ordinary tax rates on the excess depreciation taken beyond the straight-line depreciation amount.
Nominal rate
The states rate of interest when the loan amount or debt obligation is quoted at par value.
Obsolescence
The decline in value from functional or environmental characteristics of property that are not presently favored by the typical property occupant because of recent changes in standard of living, development of new appliances or fixtures, and the general life or business style of the typical property occupant.
Offering Price
The price for which the owner of an asset offers to sell that asset.
Office Park
A planned development of office space within several buildings attractively located and economically built for efficient office operation. Any auxiliary space is usually devoted to land use that serves office operation and maintenance, such as motels, hotels, office machinery sale and service facilities, and automobile leasing and maintenance.
Open Listing
The contract of the seller of a real property with any number of real estate brokers to sell the subject property. The broker who first procures the ready, willing, and able buyer has earned the negotiated commission established in the open listing contract.
Operating conventions
The customary ways in which the various companies that make up an industry, line of business or profession operate.
Operating Ratio
The ratio derived by dividing effective gross income of total gross income into total operating expenses. The resulting fraction shows how much gross income is absorbed by operating expenses. The remaining portion will be used to meet the required debt service payments, income tax payments, and payments of dividends to stock-holders.
Option
A contract given by a landowner to a possible buyer or lessee when the opportunity to buy of least on specific conditions is given the option holder in return for a fee to the land owner. The option contract usually has a specific termination date by which time the contract must be exercised, renewed, or forfeited.
Overall Rate
The rate found by dividing net operating income by the sale price of the property.
Overimprovement
An improvement in a property that surpasses requirements of the typical occupant of owner.
Owner-Contractor
The person who contracts for the construction materials and labor for the building of a structure and who sometimes is the general contractor and the ultimate owner of the completed structure. Often the general contractor merely works for the owner or lessee of the land to complete the structure that is the property of the owner.
Partnership
A form of joint ownership where two or more parties agree to contract jointly in operation of a business or in the ownership of assets. This group of partners may organize as a general or as a limited partnership.
Pension Fund
A fund accumulated and invested by a company that may contribute sums for each individual employee covered and that may receive contributions from the employees covered by the fund. At retirement time, the employee covered by the fund receives the appropriate retirement income.
Personal Property
Assets that are not real properties, but are mobile and sometimes intangible, for example, furniture, other furnishings, office equipment, livestock, farm equipment, and stock and bond market securities.
Physical Deterioration
The loss in value of an asset from wear and tear and the natural elements, such as rain, snow, and ice.
Plaintiff
The party who files a complaint against the defendant.
Planned Industrial Parks
Industrial parks that are developed and leased under the control of a single developer. The park is planned specifically for the occupancy requirements of the industrial land user.
Planned Unit Development
A development primarily residential in nature that is planned in advance and developed by a single business entity. Commercial development is often integrated into the development as a minor land use. The commercial space tends to be occupied by those who serve the residential clientele of the planned unit development as well as persons living and working nearby.
Plat Book
A volume of plat maps. The plat maps have been recorded in the county, township, or parish in which the land is located.
Plot Land
The sketch of the land improvements on the building lot. The locations of the streets, alleys, and utility easements are usually shown.
Policy Premium
The periodic payment made by the insured party to the insuror for the particular insurance coverage of assets. An insurance policy premium may be due every week, every month, every quarter, every six months, or once a year. In some cases, the premium may be prepaid for two- or three-year insurance coverage.
Pollution, Air, Water, and Noise
The detrimental saturation of the air with harmful particles, spillage of chemicals and other waste materials into public water sources, emission of noise into the air, emission of vehicular exhaust fumes into the air, and other such harmful states of the environment.
Population
(1) The entire set of data from which ha statistical sample may be drawn for efficient and economical analysis. (2) The people who live in a defined area.
Power Line Right of Way
The easements and land acquired for the erection and maintenance of needed utility lines and towers.
Power of Eminent Domain
The power given by the federal government to state and local governments and their agencies, utility companies, and other such organizations to acquire title involuntarily from private and public owners of land and improvements to pass the title on to parties who develop the subject land in a manner beneficial to the public and in a manner approved by the local governing body.
Power Sources
Sources of energy for industrial production, business operation, institutional maintenance, and residential heating cooling, and cooking. The widely recognized energy sources include natural gas, oil, water, coal, and sun rays.
Prepayment Penalty
The financial amount required of the borrower by the lender when the mortgage obligation is paid in its entirety before the scheduled date of total loan repayment. When a mortgage loan is negotiated, the lender may or may not require this penalty for possible early repayment of the total obligation.
Present Value
(1) The discounted cash flow from an investment in which an appropriate discount rate reflects the investor’s required rate of return; (2) the present value of expected future net cash flows.
Price
The dollar amount paid to the previous owner by the new owner for the acquisition of title.
Primary Lessee
The party who leased from the owner of the property. This tenant may further lease the space to a sublessee.
Prime Lessee
The party to the lessee with the landowner. This party leases to a sublessee.
Probability
The likelihood of occurrence of a stated event when a number between zero and one represents the chance or estimated likelihood that the event will occur.
Profession
A line of work for which the participants have a formal program of education and training which extends of a long period of time. The work contributes to the public interest; there is a fiduciary, private relationship between the worker and the client and the members of the profession regulate themselves to a large degree.
Profit
Taxable income of new profit.
Property Insurance Coverage
The financial protection given the insured property against property loss from, for example, theft, vandalism, tornados, hurricanes, floods, and fires.
Property Management
The operation of a property entailing advertising, merchandising the pace, drawing up appropriate leases, collection of rents, repair and maintenance, and profit and tax accounting. These property services may be performed by the owner, an acquaintance, or a professional real estate firm with this business specialty.
Property Tax
A tax levy places on the value of personal and real property. The state government usually permits the local government to levy and collect property taxes.
Property Tax Appraisal
The estimation of property value for property taxation purposes.
Property Tax System
The system of property appraisal, assessment, tax calculation, and tax collection usually devised by the state and local governments.
Quantitative Analysis
Analysis in numerical form. Significant factors are represented by appropriate numbers, and numerical procedures are used to analyze the collection of data in numerical form.
Quarter Section
(1) One fourth of a section; (2) a tract of land that is one fourth of a mile square.
Quit Claim Deed
A type of deed that contains no warranties of title. Whatever property rights the grantor has at the time of title transfer are conveyed to the grantee.
Rate
A portion of 100 percent, for example, a 10 percent rate of interest and a 5 percent increase in population.
Rate of Inflation
The rate of increase in the money supply over the increase in productivity. This is a rate at which the United States dollar declines in value in a period of inflation.
Ratio
The relationship between two numerical factors whose result is usually shown as a percentage or a decimal fraction. The radio is indicated when one number is divided by another number.
Ratio Analysis
The analysis of financial data that utilizes relationships between any two financial factors. A ratio shows the proportionate relationship of one factor to another.
Raw Land
Land that is unimproved with landscaping, utility lines, and streets.
Real Estate
The land and everything attached to the land and everything under and over the earth’s surface; the physical aspects of the earth’s surface, site improvements such as utility lines and landscaping, and buildings resting on the earth’s surface.
Real Estate Appraisal
The report of estimated value for a real property as of a given date.
Real Estate Cycle
The fluctuating pattern of the overall real estate business resulting from periodic increases and decreases in the total value of real estate transactions. Four stages in the real estate cycle are expansion, peak of prosperity, recession or contraction, and depression. If only three stages are defined, the real estate cycle consists of growth, equilibrium, and decline.
Real Estate Investment
The purchase of real property with the intent to receive a return or yield from the investment, as well as the return of the purchase price.
Real Estate Markets
The numerous market segments each of which describes the demand components for specific types of real properties. For example, the real estate market for a single family one-story house tends to be somewhat different from the market for a single-family two-story or split-level house. The market for residential space is significantly different from the market for office building space.
Real Property
(1) The interests, benefits, and rights inherently in the ownership of real estate; (2) the bundle of rights with which the ownership of real estate is endowed.
Recession
A significant decline in the level of industrial production, reflected in a decrease in economic activity. A recession is a mild buy significant decline in general economic activity, whereas a depression is a major decline in industrial production and economic activity.
Reconciliation
The study of three possible values derived from the three approaches to the appraisal estimation for the subject property so that a valid estimate of value may be reached. The estimate of value, then, may take the form of a single value or a range of values.
Recorded Plat
The plat map, recorded in the court house, town hall, or parish hall, showing lot and other land ownership boundaries as well as easements and development restrictions.
Regional Shopping Center
The shopping center located in a suburban area of a major metropolitan area that offers a variety of specialty and shopping goods and services, plus a variety of convenience goods and service, to a trading radius of 20 to 30 minutes’ driving time. They key tenants are primarily high-credit-rated chain stores, including one of two major department stores.
Replacement Cost
The cost of replacing the functional utility of an existing house in today’s market.
Replacement Reserves
The accounting reserves set aside for the periodic, needed replacement of short-lived equipment, furnishings, and construction components of an income property. The replacement reserves cover replacement of the roof, the carpeting, the kitchen appliances, the draperies, and other such short-lived assets.
Reproduction Cost
The cost on constructing a physical structure like the subject property at the present time.
Residential Market
The demand and supply conditions related to living space as opposed to working or recreational space.
Residual Value
The value of an asset at the end of the investment holding period. The residual value of real property is the surplus of the sale price of the property over the payment of the mortgage balance and required income taxes.
Return on Equity
The profit or cash flow to which the equity investors are entitled. If the profit or cash flow to equity is divided by the equity contributed, the ratio, return on equity, results.
Reversion
The value of the owner’s real property at the end of the investment holding period.
Reversion Value
The value of the owner’s real property at the end of the investment holding period.
Sales Contract
An offer made by a prospective buyer through a real estate broker to a prospective seller that may be accepted if the seller signs the contract. When the seller accepts the offer, the real estate broker is usually entitled to a commission for the selling property.
Savings Deposit
A deposit that earns interest at a private financial institution.
Section of Land
A one-mile square tract of land that is a portion of a township, six-miles square. A section may be divided into quarter sections.
Security Agreement
A financial agreement that represents the equity or debt of an operating concern. The investor in the security agreement—the stockholder of bondholder—has the financial indebtedness of the firm secured by its assets that are not offset by its liabilities.
Sell-Out Period
The period of time within which the assets available for sale are completely sold.
Sensitivity Analysis
The analysis of end results by changing one variable or expense-revenue account balance at a time.
Septic Field System
The ground-filtration system, made up of several field lines through many square yards of the earth’s surface, that facilitates waste-water purification. The waste water has already been treated in an underground septic tank.
Septic Tank
An underground tank used to process waste water from the occupied building which the septic tank system serves. The waste water is reprocessed through a septic tank and field-line system.
Shareholder
The investor in the stock or equity share of a corporation or trust. Shareholder is synonymous with stockholder or holder of beneficial interests.
Shopping Center, Planned
A unified, fully preplanned shopping area under the development design of a single real estate developer who builds a single retail complex on a large tract of land where parking and loading-dock facilities are integral with the retaining space.
Site
Land improved for the construction of improvements such as buildings.
Site
Land improved for the construction of improvements such as buildings.
Site Improvements
The improvements made to the prepared site other than permanent structural improvements. Site improvements often consist of shrub and tree landscaping, fences, light poles, sidewalks, and driveways.
Skilled Labor
Persons who have attained skills associated with business and industry and developed through formal education, apprenticeships, and years of experience on the job using acquired skills. Wages tend to be higher for laborers with skills desired by business and industry.
Socioeconomic Groups
Groups classified by general social and economic characteristics.
Solar Heating System
The heating system operating partially or wholly on energy sources. Special solar heating panels and heat pumps are usually required as part of the installation of this type of heating system.
Solar Panel
A panel to catch the rays of the run for a solar energy system for a residential, commercial, industrial, or institutional building. Quite often today, solar panels are installed on a roof to catch the sun rays from the south.
Special Assessments
The expenses for municipal improvements charges to the property owners whose property values benefit from the municipal improvements.
Special Purpose Property
(1) The property designed and built for a special use; (2) single purpose property.
Specialty Shopping Centers
Merchants of specialty retain goods and services located in a shopping center that attracts customers from a 30- to 40- minute driving radius of the center. Not key chain tenant may be located in the center. Small specialty chains and independent stores are represented by small boutiques, specialty food stores, and specialty restaurants.
Specialty Warranty Deed
A contract transferring title to real property from the special agent of the owner to the grantee. The special agent with fiduciary responsibility is often the estate administrator, or the executor, or the guardian.
Specific Urban Centers
(1) Towns, villages, cities, standard metropolitan areas, or other such urban areas that are incorporated or unincorporated but bear a specific name; (2) Groups of residents in communities or neighborhoods that house businesses and community facilities.
Spouse
A marriage partner. The term spouse may either apply to a husband or wife. The legal term has no sex connotation.
Stabilized Annual Income
A representative income of the recent fluctuating annual incomes from an investment. The stabilized annual income may be an average of the recently generated annual incomes.
Stabilized Net Operating Income
(1) An amount that represents fluctuating estimates of future expected net operating income over a number of periods; (2) a representative amount for a typical period.
Standard of Living
The level of social and economic existence of households and individuals that is characterized by various investments in personal equipment and property, club and professional memberships, schooling, recreational pursuits, reading habits, and social and economic goals. It is often said that the standard of living of American citizens has steadily increased over time.
Statistics
(1) Characteristics of sample data from a population from which the population characteristics may be estimated; (2) measures of central tendency dispersion, and association from which a phenomenon may be described.
Stock
The evidence of ownership of a corporation. One share of stock represents a portion of the ownership of the corporation.
Subcontractor
One who contracts with the general contractor to perform part of the work of the owner-developer that has been contracted to be done by the general contractor.
Subdivision
The development of an area with streets and public utility lines where the land has been divided into building lots, for example, residential subdivision.
Subdivision Developer
The person who subdivides raw land and improves it for residential construction. This person may also construct houses on a speculative basis on the improved, subdivided land.
Subjective Value
Estimates of value that are colored by personal preferences and qualitative judgment.
Sublessee
The contracting tenant who leases from the primary lessee. The primary lessee has contracted for the use of the space with the lessor, the owner.
Subletting
The renting of leased space by the lessee, who rented the space from the lessor, the building owner or landowner.
Survivorship Right
The right of an investment partner to inherit automatically property rights from a deceased partner. The rights of heirs and acquaintances through the terms of a will do not take precedence over the survivorship rights of a joint partnership agreement. For example, the partners to a joint tenancy have survivorship rights. At the demise of a joint tenant, the remaining joint tenants acquire undivided interests in a larger portion of the overall estate.
Tax Abatement
(1) The arbitrary establishment by local taxing authorities of required tax payment at the level prior to the recent development or planned development of the site. (2) The taxation of developed property at a level less than the typical taxation of that type of property in the area in order to encourage financially real estate development. Often property tax abatement for new or expanding industry results in higher sales and income tax receipts for the local government.
Taxable Income
Income subject to a type of taxation. Quite often we refer to taxable income as the income subject to federal and state income taxes.
Taxable Real Property
Real Property that is not tax-exempt. This property is subject to property taxation.
Tax Assessment
The value for property tax purpose which placed on a property to which the tax rate. The tax assessment may or may not be the fair market value of the property subject to property taxes. The assessed value may represent only a portion of the fair market value, according to local tax laws.
Tax Assessment Value
The market value or a percentage of market value of the land and improvements that is subject to ad valorem taxes levied by one or more political subdivisions and the state.
Tax Assessor
The local government official charged with the responsibility of placing a value for property tax purposes on every parcel of land and every building which is subject to property taxation.
Tax-exemption
Excluded from federal income taxation. For example, the interest on a tax-exempt municipal bond is not subject to federal income taxation.
Tax-exempt Municipal Bond Financing
Financing by means of municipal bonds whose interest is not considered income for federal income tax purposes. The bond interest received by the investor is exempt from federal income taxation.
Tax-exempt Revenue Bond
A bond whose interest is exempt from the investor’s federal income taxation and whose repayment of interest come from the revenue generated by the financed facility, such as toll roads or industrial plants.
Tax Map
A map showing the tax burden or the ownership associated with each parcel of land.
Tax Revenue
The government’s revenue from taxes.
Tax Shelter
A financial technique of charging noncash expenses against otherwise taxable income so that federal income taxes are reduced and overall cash flow is increased.
Tenancy in Common
The joint ownership form that permits ownership of an undivided interest in the asset, unequal contributions to the partnership ventures, and the fight of inheritance of the heirs and friends of the individual partners in the event of death. Survivorship rights between the partners are not permitted.
Tenants’ Association
An organization of the tenants of a building or a complex that hopes to benefit from joint undertakings and association. It may seek better building conditions, lower rents, or better living environments.
Tenant’s Responsibilities and Obligations
The tenant’s responsibilities and obligations under the landlord-tenant laws. Remedy may be sought by the landlord if these responsibilities and obligations are not met.
Title Insurance
Insurance written by a title insurance underwriter on the ownership of the land and its improvements. As the title insurance is being written, the insurance company indicates to the insured that beyond the shadow of a doubt, the current recorded owner of the property is the true owner of the property. There is little likelihood that a claimant with superior property rights will claim the property in opposition to the interests of the currently recorded owner.
Topography
The varying curvature of the surface of the land. For example, the building site may be rolling and covered with trees and shrubs, or the building site may be flat, flood-prone, and bare of shrubbery and trees.
Townhouse
A two-story apartment, rented or owned, in which the living room, dining room, kitchen, and half-bath are usually downstairs and the bedrooms and other bathrooms are upstairs.
Township
A six-mile square tract of land located in terms of nearby baselines and meridians. Each township has 36 sections, each one mile square. Townships are a part of the governmental or rectangular survey system of land description.
Trading Area
The primary secondary, of tertiary areas of potential business for commercial enterprise. The residents and business occupants of these defined areas will probably patronize the subject establishment over a year’s time.
Treasury Bill
A short-term discount rate note usually no more than 270 days in length that is sold by the Federal Reserve for government financing purposes or monetary control.
Treasury Bond
U.S. Treasury obligation whose original term to maturity exceeds five years.
Treasury Note
An obligation of the U.S. Treasury that usually matures beyond 180 days in the future but within five years. It is an intermediate-term U.S. Treasury obligation. Usually shorter-term Treasury obligations are called “bills” and longer-term obligations are called “bonds.”
Treasury Securities
The short- and long-term debt obligations issued by the U.S. Treasury to cover the costs of running the United States government.
Trustee of the Deed of Trust
The fiduciary agent who holds the title to the financed property while the trustor makes the required payments and the beneficiary notes the progress of the repayment of the loaned monies. Upon default on the financing terms, the trustee, after default is legally proven, conveys the title to the beneficiary who may request the sale of the property for the recapture of the unpaid amount.
Typical Investor
The investor who best characterizes the usual investor for an asset. For example, the typical investor in a three-bedroom house has been a married couple with two dependants.
Underemployed Rate Trends
The increasing or decreasing pattern of unemployment rates over time for an area.
Urban Development
The improvement of land and the construction of buildings in a new urban area.
Urban Redevelopment
The rebuilding of an urban area. New land uses are substituted for the original land uses.
U.S. Supreme Court
(1) The highest court of appeals in the Unites States; (2) a federal court whose Supreme Court justices sit on the bench in the Supreme Court chambers in Washington, D.C.
Vacancy Rate
The portion of the rentable or salable units that was not rented or sold over the year’s time.
Valuation Process
The scientific method of analysis leading the appraiser to the estimated value of a real property.
Value
The price determined by demand any supply conditions.
Value in Use
The subjective value placed on an asset from the owner’s use of and familiarity with the asset. For example, a long-term owner of a single-family dwelling may attach more value to the family homestead, because of the long-term use of and familiarity with the house, than a stranger would.
Variable Rate Mortgage
The mortgage whose interest rate changes, usually every six months, based on the movement up or down of a money and capital market index or the movement up and down of the New York bank commercial paper rate or bank prime rate. Notice is given mortgagor by the mortgage lender sufficiently in advance of the periodic mortgage payment.
Variable Rate of Interest
A rate of interest that changes with an index or a base rate, such as the New York bank commercial paper rate or prime rate.
Vendor
The seller of an asset. The vendor may be a seller of a real property on the basis of a vendor’s lien. A vendor’s lien provides for the financing of the prospective purchaser—the vendee—by the seller—the vendor.
Veterans Administration
The federal government agency assigned the governmental responsibility for veterans affairs. Loan guarantees are forthcoming for mortgage loans for veterans with appropriate military entitlement. Also, loans and loan guarantees for small business enterprises are available from the VA and its affiliate organizations.
Witness, Expert
The person who responds to courtroom questioning because that person is considered an authority on the given subject.
Yield, Overall
The yield from all possible sources over the entire term of the investment. Overall yield on real estate investments may come from periodic cash flow, cash reversion proceeds, refinancing proceeds, equity buildup, and tax savings.
Zoning Change
A change from the original zoning classification to a new zoning classification or a change from the original zoning specifications to the new zoning specifications.
Zoning District
An area designated for one or more related land uses and perpetuated through the zoning ordinance established for the area.
Zoning Ordinances
Land use regulations passed by local government officials, which designate the areas for residential, commercial, industrial, and institutional improvements. Zoning ordinances usually promote the community adherence to the adopted master plan for the community.