Real Estate Vocabulary Words Florida 2

Front 1

4 Components of Change

Back 1

Cycle of life: growth, equilibrium, decline, and revitalization.

Front 2

4 ECONOMIC CHARACTERISTICS OF REAL ESTATE

Back 2

1. Scarcity 2. Improvements 3. Permanence of investment 4. Location

Front 3

4 PHYSICAL CHARACTERISTICS OF REAL ESTATE

Back 3

1. Immobility 2. Indestructibilty 3. Uniqueness 4. Specific Performance

Front 4

Absorption Study

Back 4

An analysis of supply and demand concentrating on the aspects of changes in product inventory when properties are offered and sold. The focus is to identify the proper inventory which creates balance.

Front 5

Accession

Back 5

Additional property rights that an owner acquires when improvements (e.g. new carpet, paint, etc.) and/or additions are attached to the property by the tenant at the tenant's own cost. This legal right means that the owner will acquire any improvements to the property upon termination of the lease.

Front 6

Accretion

Back 6

Land located next to a body of water increasing due to water depositing additional soil (or waterborne solid material) gradually.

Front 7

Accrued Depreciation

Back 7

The total amount of depreciation attributable to the property.

Front 8

Acre

Back 8

An area consisting of 43,560 square feet.

Front 9

ADS

Back 9

See Annual Debt Service.

Front 10

AGRICULTURAL

Back 10

Farms, timberland, ranches, orchards, etc.

Front 11

Alluvion

Back 11

The washing against a shoreline; depositing sand or soil so as to gradually form firm ground.

Front 12

Amenities Benefit

Back 12

A gain resulting from a quality of life issue. Can be tangible, or intangible, on the property or off.

Front 13

Amortization

Back 13

The equal payment amount necessary to satisfy the interest and principal of a loan.

Front 14

Amortization of $1

Back 14

The period payment schedule necessary, including interest and principle, to reduce a $1 (or any amount) debt with equal payments. See "Mortgage Constant". One of the six functions of a dollar found on standard financial tables.

Front 15

ANNEXATION

Back 15

To change personal property into real property.

Front 16

Annual Debt Service (ADS)

Back 16

The annual payments of a loan. The annual debt service is figured by multiplying the mortgage payment by the number of payments in one year. Remember, annual debt service includes both the annual interest and principle payments.

Formula:

Monthly mortgage payments (with principle and interest) x 12 months.

Example:

For example if the mortgage payment is $5,000/mo. The Annual Debt Service = 5,000 x 12 mos. = $60,000.

Front 17

Anticipation

Back 17

A purchase/sale decision based on the perceived future value.

Front 18

Appraisal

Back 18

The act or process of developing an opinion of value, or an opinion of value based on generally accepted appraisal methods.

Front 19

APPRAISAL

Back 19

The process of estimating a property's market value

Front 20

Appraisal Methodology

Back 20

Generally accepted processes to identify value.

Front 21

Appraisal Process

Back 21

The principles and concepts used in estimating property value.

Front 22

Appraisal Standards Board (ASB)

Back 22

A committee under the Appraisal Foundation created to develop professional standards of practice for appraisals.

Front 23

Appraisal Subcommittee

Back 23

The government oversight entity charged with ensuring appraiser compliance with the federal laws. Their mandate includes, monitoring the FFIRA, states, and the Appraisal Foundation for compliance wit Title XI, and maintaining a registry of appraisers eligible to appraise FRT's.

Front 24

Appraiser

Back 24

One who performs professional appraisal services for client's, using generally accepted appraisal methods and adhering to all state and federal guidelines.

Front 25

Appraiser Qualifications Board (AQB)

Back 25

A committee under the Appraisal Foundation created to establish appraiser qualifications.

Front 26

APPURTENANCE

Back 26

A right or privilege associated with the property, although not necessarily a part of it.

Front 27

Arm's Length Transaction

Back 27

An agreement in which neither side has an unusual advantage, or overriding influence.

Front 28

Assessment

Back 28

A value amount placed on a property by the local community for taxation purposes.

Front 29

Attached Type

Back 29

More than one unit connected together, having at least one common wall.

Front 30

Avulsion

Back 30

To tear off. The sudden loss of land or soil due to a sudden natural act (e.g. earthquake, sudden change of river flow, etc.).

Front 31

Balance

Back 31

Occurs when supply and demand factors at the point of equilibrium.

Front 32

Band of Investment Method

Back 32

Is used to determine the overall rate of return on a property which is encumbered by a mortgage

Front 33

Bilateral Contract

Back 33

A contract where both parties have made promises in exchange to the other party, therefore a "meeting of the minds" has occurred and both parties are willing participants in the contract.

Front 34

BROKERAGE

Back 34

The business of bringing people together in a real estate transaction

Front 35

Buffer Zone

Back 35

Space of land between 2 zoning districts

Front 36

Building Permit

Back 36

A document used to track compliance with codes

Front 37

Bundle of Rights

Back 37

The combined dominion over utilization of a property, including possession, control, enjoyment, and exclusion.
The bundle of rights are commonly known as these six rights.
1. The right to use and occupy the real property
2. The right to sell it in part or in whole.
3. The right to leave it to someone (will), give it away etc. (bequeath)
4. The right to rent/lease it.
5. The right to transfer the property by contract.
6. The right to do nothing at all the property.

Front 38

BUNDLE OF RIGHTS/STICKS

Back 38

Possession, control, enjoyment, exclusion, disposition.

Front 39

Bundle of Sticks

Back 39

Control, Possesion, Enjoy, Dispose

Front 40

Capital

Back 40

A sum of money available for investment

Front 41

Capital Gain

Back 41

A sum of money or profit made from a sale of an asset.

Front 42

Capital Improvements

Back 42

Renovations or modifications that change the characteristics of the property.

Front 43

Capitalization Rate "R"

Back 43

Income to value percentage used as an indicator of value. A Capitalization Rate is the rate your investment is paid back and is typically based on the Net Operating Income (NOI). See "IRV" also

Formula:

I/V = R
I/R = V
VxR = I

Example:

If you invest $1,000,000 on a property that has an NOI of $100,000, the Cap rate is 10%, meaning it will take 10 years to pay back the initial investment. This is the rate of return. If the NOI was $50,000, the Cap rate would be 5% and it would take 20 years to accumulate the original investment.

Front 44

Census

Back 44

A counting of the populous conducted by the federal government every 10 years, as prescribed in the U.S. Constitution.

Front 45

Chattel

Back 45

Another name for personal property

Front 46

CHATTEL

Back 46

Personal property

Front 47

Chattel Real

Back 47

A personal interest in real property (a lease)

Front 48

CHATTEL REAL

Back 48

A personal interest in real property.

Front 49

COMMERCIAL

Back 49

Business property, including office space, shopping centers, stores, theaters, hotels, and so on.

Front 50

Common Area Maintenance (CAM) fees

Back 50

The operational and maintenance costs of the common areas.

Front 51

Competitive Market Analysis (CMA)

Back 51

Looking at sold properties, and properties currently offered for sale, to develop a listing price for marketing purposes.

Front 52

Compounding

Back 52

The process of combining two or more things to form one new whole. In the financial context, this is the process by which income is earned on income that had previously been earned. Interest income is earned on an initial investment amount plus the interest the initial investment had earned previously.

The process of finding the future worth of a dollar using a specified rate and time period. The reverse of Discounting.

Also used to describe the frequency with which banks add interest onto principal. Typically banks compound Daily, Monthly, Quarterly or Annually.

Example:

If $100 is invested at a 5% interest rate (compounded annually), the investor will earned $5 in interest the first year and $5.25 the second year. The earnings of the second year are higher because the interest earned on the second year includes the initial investment amount, plus the interest earned the first year.

Front 53

Condemnation

Back 53

Taking private property through eminent domain.

Front 54

Conformity

Back 54

The proper melding of the uniqueness of the individual property with the character of the neighborhood and the desirability of the market.

Front 55

Contemporary

Back 55

House style with modern construction technology, energy efficiency, and environmental considerations.

Front 56

Contract Rent

Back 56

Amount due to the landlord (from the tenant), per lease agreement.

Front 57

Contributory Value

Back 57

The amount of value that a solitary item, or a combination of all the items located on the property, enhance the value of the property.

Front 58

COUNSELING

Back 58

Involves providing clients with competent advice based on sound professional judgement

Front 59

Credit Unions

Back 59

Established originally by large organizations, trades, and other large employment groups. Credit unions are banks that operate for the benefit of their "members", are not-for-profit corporations, and are licensed under the National Credit Union Administration.

Front 60

Date of Sale

Back 60

The date certain accepted as the actual time a transaction consummation occurred. Could be the purchase agreement date, the closing date, or the recording date depending on local custom.

Front 61

Date of Value

Back 61

The effective date of the appraisal.

Front 62

Debt Coverage Ratio

Back 62

The ratio of debt to Net Operating Income.

Formula:
NOI/ADS = DCR

net operating income divided by annual debit service equals debt coverage ratio

Front 63

Debt Service

Back 63

The amount of the annual loan payment.

Front 64

Debtor

Back 64

A person who owes another individual or company.

Example: Perfect Pools built a swimming pool for Paul. Paul never paid the contractor. Paul is the debtor.

Front 65

Decision-Making Process

Back 65

The conditions and considerations surrounding the conclusion to act upon a purchase and sale.

Front 66

Decline

Back 66

When an item (property) is becoming less desirable, and exhibits increasing market resistance.

Front 67

Deed

Back 67

A document that conveys the title

Front 68

Deed of Trust

Back 68

The agreement between borrower and lender. Ensures 3rd party (trustee) will hold title of borrower until debt is paid to lender. This document gives a lender the right to foreclose on the property if the borrower defaults on the loan.

Front 69

Deed Restriction:

Back 69

A clause in a deed which limits the use of the property.

Front 70

Defeasible Fee

Back 70

A conditional interest in the land

Front 71

Delineation

Back 71

To describe something in words or sketch.

Front 72

Demographics

Back 72

Data related to trends, habits, or concentration of people.

Front 73

Detached Type

Back 73

A stand alone building.

Front 74

DEVELOPMENT

Back 74

Involves the construction of improvements on the land.

Front 75

Direct Capitalization

Back 75

Converting one year's income into a value estimate.

Front 76

Direct Market Extraction

Back 76

Isolation from a group of similar properties in the market for comparing to a target item or property.

Example:
Appraiser gets selling prices and net operating incomes of competing similar properties that recently sold (direct market extraction method).

Front 77

Discounting

Back 77

Calculating present worth of a future amount of money. Assumes future payments worth less based on lost opportunity to invest those funds for immediate profit. Reverse of compounding.

Explanation:
A dollar spent in 5 years is worth less than a dollar spent today. Using a 6% discount rate, a dollar payable in 5 years is worth about 75 cents today.

Front 78

Dividend

Back 78

Income from an equity investment.

Front 79

Dominant Estate

Back 79

Property that benefits from the easement, (one granted right of way and use of the servient property).

Front 80

Dower

Back 80

A marital interest in property

Front 81

Duplex

Back 81

Multiple housing units connected by at least one common wall.

Front 82

Duress

Back 82

Excessive pressure on individual to create a desired result.

Front 83

Easement

Back 83

Right to use or enter another person's land for a specific purpose.

Front 84

Easement

Back 84

The right to use the land of another

Front 85

Easement Appurtenant

Back 85

An easement that belongs to and therefore goes with the land regardless of future owners.

Front 86

Economic Age-Life Method

Back 86

Determine depreciation of improvements using a systematic annual rate from new condition to zero usefulness.

Front 87

ECONOMIC FACTORS FOR A PROPERTY TO HAVE VALUE
D.U.S.T.

Back 87

Demand- must be coupled with purchasing power.

Utility- the ability of the land to satisfy a want.

Scarcity- must be a demand for land.

Transfer-ability-land that cannot be transferred.

Front 88

Economic Life

Back 88

Period that improvement is expected to return a value to its user, based on its intended use.

Front 89

Economic Rent

Back 89

Rent a property on open market could get if vacant and available. Aka market rent.

Front 90

Effective Age

Back 90

Age improvements appear based on chronological age, condition, and modernization.

Front 91

Effective Gross Income (EGI)

Back 91

The reasonable amount of gross income a property should produce after allowing for market vacancy.

Front 92

Effective Gross Income Multiplier (EGIM)

Back 92

Derived from the market and applied to the subject property's effective gross income (EGI) to estimate value.

Formula:
sales price/EGI = EGIM

Front 93

Eminent Domain

Back 93

Goverments right to take property

Front 94

Eminent Domain

Back 94

Right of government to take private property for a public purpose after justly compensating the property owner.

Front 95

Encroachment

Back 95

Extension of an improvement across a boundary

Front 96

Encroachment

Back 96

Permanent object from one property extends over onto another property illegally.

Front 97

Encumbrance

Back 97

Anything that affects the title of a property or limits its use, such as mortgages, judgments, leases, easements, liens, or restrictions.

Front 98

ENFORCEMENT OF PRIVATE RESTICTIONS

Back 98

Anyone who may be affected by the violation of a private restriction.

Front 99

Equilibrium

Back 99

Point in time when an improvement or a location is at its peak of desirability, and supply and demand are in balance.

Front 100

Equity Capitalization Rate (Re)

Back 100

Annualized rate of/on return that equity investors receive. Typically calculated on the property's pre-tax income of the first year. Aka equity dividend rate.

Formula:
pretax cash flow/capital investment = Re

Front 101

Escalation Clause

Back 101

An agreement to adjust prices/rent based on certain events or indices.

Front 102

Escheat

Back 102

Reversion of property to the state

Front 103

Escheat

Back 103

Transfer of property ownership to the state after the owner dies without a will and without living heirs.

Front 104

Escrow Agent:

Back 104

Independent entity who holds promised funds until agreed conditions have been met or a certain event has taken place.

Front 105

Excess Land (Surplus Land)

Back 105

The excess land of a property not needed to support the site's highest and best use.

Front 106

Excess Rent

Back 106

Amount by which contract rent exceeds market rent.

Front 107

Exculpatory Clause

Back 107

In a lease, this clause relieves the owner/landlord of liability for the tenant's property or personal injury. Also in a contract, this clause relieves one party to the agreement of liability as a result of actions or lack of actions performed in the course of executing the terms of the contract.

Front 108

Executed Contract

Back 108

A contract where all obligations have been fulfilled by all parties.

Front 109

Executory Contract

Back 109

Promises made in the contract in the process of being fulfilled. Promises yet to be completely fulfilled from involved parties.

Front 110

Expense Stop

Back 110

Maximum landlord/owner will spend in operating a property; when exceeded, tenant will pay the rest.

Front 111

Expenses (E)

Back 111

The costs associated with the operation of an income producing property. In formulas, shown as "E."

Front 112

Exposure Period

Back 112

Time a property has been available for sale and properly marketed.

Front 113

Express Contract

Back 113

Involved parties specifically agree on terms and state intentions in writing or orally.

Front 114

External Obsolescence

Back 114

Issue outside property lines that has a negative effect on the property's value.

Front 115

Externalities

Back 115

Influences outside the property lines that effect property's value either positively or negatively.

Front 116

FACTORS AFFECTING DEMAND

Back 116

Population, demographics, employment and wage levels

Front 117

FACTORS AFFECTING SUPPLY

Back 117

Labor force and construction and material cost, goverment controls and goverment financial policies.

Front 118

Federal Deposit Insurance Corporation (FDIC)

Back 118

Insures deposits in regulated financial institutions. Quasi-government entity.

Front 119

Federal Financial Institutions Examination Council (FFIEC)

Back 119

Organization founded in 1978 to train bank examiners and to develop flood or federal disaster relief rules and procedures.

Front 120

Federal Home Loan Mortgage Corporation

Back 120

A government sponsored enterprise (GSE), created to act as a clearinghouse for mortgages.

Front 121

Federal National Mortgage Association (FNMA)

Back 121

AKA Fannie Mae. Private investor group that purchases home mortgages. Founded in 30s as a public clearinghouse for mortgages as part of the New Deal.

Front 122

Federal Reserve Board (FRB)

Back 122

A private, quasi-government entity that oversees the operation of the Federal Reserve System.

Front 123

Federal Reserve System

Back 123

Private group of original monetary centers that control flow of currency (federal reserve notes). Founded 1913.

Front 124

Fee Simple

Back 124

Fullest form of freehold property ownership, affected only by the four great forces that influence value. Complete ownership with the right to occupy a property and sell it to a buyer at any time. Still under any limitations from the 4 government powers: taxation, escheat, eminent domain, and police power.

Front 125

Fee Simple Absolute

Back 125

An estate without conditions

Front 126

FEE SIMPLE ABSOLUTE
INDEFEASIBLE FEE

Back 126

Ownership without conditions

Front 127

Fiduciary

Back 127

Relationship between two parties; one has the responsibility to act for the benefit of the other.

Front 128

Financial Benefit

Back 128

Monetary gain from ownership.

Front 129

FINANCING

Back 129

Business of providing the funds that make real estate transactions possible.

Front 130

Fixed Expense or Fixed Cost

Back 130

Constant expenses that do not fluctuate with occupancy.

Front 131

Fixture

Back 131

Personal property that becomes real property when permanently attached to real estate.

Front 132

Fixture

Back 132

Personal property that is attached to real estate

Front 133

FIXTURES

Back 133

Personal property that has been afixed to real property.

Front 134

Four Great Forces that influence property value

Back 134

Social, economic, governmental, and environmental.

Front 135

Freehold

Back 135

An interest in land that has no time limit

Front 136

Freehold Estate

Back 136

To possess property in full, complete ownership for an indeterminable length of time.

Front 137

FRUCTUS NATURALES

Back 137

Trees, shrubbery, fruits of nature.

Front 138

FRUTUCS INDUSTRIALES

Back 138

Crops (Personal Property) Emblements.

Front 139

Functional Obsolescence

Back 139

Item in the improvement no longer desired by the market based on the item's utility.

Front 140

Future Value of $1

Back 140

Amount to which $1 will grow in a specified time period. One of six functions of a dollar on standard financial tables.

Front 141

Future Value of $1 Per Period

Back 141

Amount to which a series of $1 payments will grow in a specified time period. One of six functions of a dollar on standard financial tables.

Front 142

Gentrification

Back 142

Rehabilitation of deteriorated neighborhood, often done by remodeling or tearing down structures in order to rebuild the area.

Front 143

Going-Concern Value

Back 143

Value created by a business operation as opposed to the value of its assets.

Front 144

Government Survey Method

Back 144

AKA Rectangular Survey Method. A form of legal description. Uses townships of 36 sq miles in 1 mile sections. 1 mile = 640 acres. 1 acre=43,560 ft. Two sets of lines: east-west Base Lines; north-south Principal Meridians. Every 6 miles are more east-west lines called township lines and north-south lines called range lines.

Front 145

Graduated Rent Lease

Back 145

Lease with periods of rent adjustments.

Front 146

Gross Income Multipliers

Back 146

Used to depict a property's ranking among comparable properties or to determine value.
Derived from analysis of sale price and gross rent or income.

Front 147

Gross Lease

Back 147

Lease where costs associated with the tenant's occupancy are borne by the owner.

Front 148

Gross Rent Multiplier (GRM)

Back 148

Used to determine a property's ranking among similar properties. Divide the sale price of a property by its monthly or annual gross rent.

Formula:
Sales price/gross monthly rent = GRM

Front 149

Gross Rental Income

Back 149

Income of a property derived solely from rental sources.

Front 150

Growth

Back 150

Period in which a property or area exhibits strong desirability and maintains expansion.

Front 151

HETEROGENEITY OR NONHOMOGENITY

Back 151

Uniqueness of the land

Front 152

Heterogeneous

Back 152

Properties or characteristics that are not alike. Appraisal term meaning dissimilar.

Front 153

Heterogenity

Back 153

Uniqueness of land

Front 154

Highest & Best Use

Back 154

Most profitable, legally permitted, economically feasible, and physically possible use of the property.

Front 155

HIGHEST AND BEST USE OF LAND

Back 155

The use of land that will earn for the owner maximum value-not by zoning.

Front 156

Home Inspector

Back 156

Professional who analyzes the structural and non-structural components of a house to determine quality and condition.

Front 157

Implied Contract

Back 157

An agreement between parties demonstrated by acts and conduct, rather than exchanged promises.

Front 158

Improvement

Back 158

Items attached to the land such that if removed could change the value of the property.

Front 159

IMPROVEMENTS

Back 159

To improve the value of a property.

Front 160

Income Approach

Back 160

Using the relationship of income produced by the property and the property's value.

Front 161

Income, Rate, and Value (IRV)

Back 161

Formula used to estimate value using a property's net operating income.

I/V = R
I/R = V
V x R = I

Front 162

Index Lease

Back 162

Lease that requires rent adjustments based on a specific economic data statistic.

Front 163

INDUSTRIAL

Back 163

Warehouses, factories, power plants, and so on.

Front 164

Injunction

Back 164

Court order to stop or perform a certain action.

Front 165

Intended Use

Back 165

Use of the conclusions of the appraisal report.

Front 166

Interpolation

Back 166

Determination of a number that falls between an established set of numbers on a chart.

Front 167

Investment

Back 167

A monetary or sweat equity participation in a commercial venture with the expectations of receiving a profit during a holding period or at the time of disposition.

Front 168

Investment Value

Back 168

An investment value is the value of an income property to a particular investor, based on that investor's particular requirements and situation.

Front 169

Investor

Back 169

An individual or group engaged in lending or participating in commercial ventures.

Front 170

LAND

Back 170

Earth's surface extending downward to the center and upward to infinity, including permanate natural structures. Trees & water.

Front 171

Land

Back 171

The surface and subsurface of the Earth

Front 172

Law of Decreasing Returns

Back 172

Cost of item is greater than expected value. Item is economically impractical.

Front 173

Law of Increasing Returns

Back 173

Item value equal to or greater than its cost.

Front 174

LAWS AFFECTING REAL ESTATE

Back 174

contract law, general property law, agency law, real estate license law, federal, federal, state & local tax, zoning & land use.

Front 175

Leased Fee Estate

Back 175

Owner or landlord gives right to use and occupy a property to a tenant via a lease.

Front 176

Leasehold Estate

Back 176

To have some or all property rights for a specific length of time, but not actual ownership.

Front 177

Legal Description

Back 177

Statement of size, dimensions, and location of a property.

Front 178

Lessee

Back 178

Person leasing property (one paying rent to landlord).

Front 179

Lessor

Back 179

Legal owner of a property who leases to a tenant.

Front 180

Leverage

Back 180

The use of borrowed funds

Front 181

License

Back 181

Permission

Front 182

Lien

Back 182

A claim against a property

Front 183

Lien

Back 183

Claim on a property (personal or real) to secure a debt.

Front 184

Life Cycle of Real Estate/Neighborhood

Back 184

Growth, equilibrium, decline, and revitalization.

Front 185

Life Estate

Back 185

A form of ownership that ends when the owner dies. Person called life tenant. Property can not be left to an heir. Life estate names future owner (remainderman) upon death of the life tenant.

Front 186

LINKAGE

Back 186

Supporting land

Front 187

Linkage

Back 187

The time and distance from one place to another (e.g., from home to grocery store).

Front 188

Liquidation Value

Back 188

Value sought during a forced sale like foreclosure.

Front 189

Lis Pendens

Back 189

Notice that a legal suit has been filed against specific lands; may affect title to the land.

Front 190

Littoral Rights

Back 190

Rights of owners of land next to lakes, seas, and oceans. Landowners with littoral rights have unrestricted access to the waters but own the land only to the median high-water mark.

Front 191

Loan Officer

Back 191

Agent for lender who help borrowers get a loan.

Front 192

Loan Processor

Back 192

Lender's agent who processes loan documents, and often controls the completion of the transaction.

Front 193

Loan Underwriter

Back 193

Lender's agent who makes sure loan documents and appraisal meet all lender requirements.

Front 194

Loan-to-Value Ratio (LTV)

Back 194

Amount of loan on a property in relation to property's value.

Formula:
Loan amount/property value = LTV

Front 195

Long-Term Lease

Back 195

A lease of ten years or more.

Front 196

Lot and Block

Back 196

A form of legal description used in subdivisions (subdivided plat). Using a description of a subdivision and a reference to the lot number and block number.

Front 197

Market

Back 197

A set of arrangements that brings parties together

Front 198

MARKET

Back 198

Aplace where things can be bought or sold.

Front 199

Market Area

Back 199

Area in which other similar properties compete with the subject property in the minds of potential purchasers and users.

Front 200

Market Price

Back 200

Price actually paid by a buyer of an income producing property.

Front 201

Market Rent

Back 201

Rent a property could get in open market if vacant and available for rent. AKA economic rent.

Front 202

Market Time

Back 202

Time it will take for a specific property to sell at a specific price.

Front 203

Market Value

Back 203

Most probable price a property will bring (informed parties, fair sale).

Front 204

Masonry

Back 204

Concrete, stone, or brick construction materials.

Front 205

Mass Appraisal

Back 205

Appraisal of a group of properties or an area for the purpose of assessment and taxation.

Front 206

Matched Pair Analysis

Back 206

Comparison of two properties to determine how much one variable is contributing to the value.

Front 207

Mean

Back 207

Average value of a set of numbers.

Front 208

Median

Back 208

Middle value or midpoint in a series of numbers.

Front 209

Meeting of the Minds

Back 209

Agreement between parties on price and conditions of a contract.

Front 210

Metes and Bounds

Back 210

Metes = distance. Bounds = direction. Line extends in a certain direction from point of origin (metes). Points when the direction changes are called bounds. Continues until the line ends back up at the point of origin.

Front 211

Mill

Back 211

Mil = 1/1000 of a dollar. Tax rate in mils $1 for every $1,000 of assessed value.

If the tax rate is 10 mills, then you are charged $10 for every $1,000 in assessed value. If assessed value is $50,000, then taxes will be $500. 50,000/1000 = 50.
50 x 10 = $500.

Front 212

Mineral Rights

Back 212

The right to remove minerals from the ground

Front 213

Mode

Back 213

Most frequently occurring number in a list of numbers.

Front 214

Mortgage

Back 214

Document pledging a real estate asset as collateral for a real estate loan.

Front 215

Mortgage Constant (Rm)

Back 215

Factor or multiplier used for amount to pay interest and principle over a specific period of time, with equal payments. AKA loan constant or mortgage loan constant.
Formula:
Debt service/mortgage principal = Rm

Front 216

Mortgage Constant Ratio

Back 216

The continuous factor necessary to pay the contract interest and reduce principle at regular intervals.
Formula:
Yearly mortage amount (ADS)/loan amount = MCR

Front 217

Mortgagee

Back 217

Recipient of the document pledging the real estate asset (lender).

Front 218

Mortgagor

Back 218

The person pledging the real estate asset (borrower).

Front 219

National Credit Union Administration (NCUA)

Back 219

Oversees the operation of the not-for-profit credit unions nationwide.

Front 220

National Mortgage Market

Back 220

Government and private groups of investors who buy mortgages from primary lenders. AKA secondary mortgage market.

Front 221

Net

Back 221

Profit after all deductions.

Front 222

Net Operating Income (NOI)

Back 222

Property's available income after deducting for operating expenses.
Formula:
Gross rental income + other income - vacancy = effective gross income

Effective gross income - expenses = NOI

Front 223

Non-Conforming

Back 223

A land use that is differant from present-zoned land

Front 224

Observed Condition Method

Back 224

Judgment of appraiser in analyzing present condition of improvements compared to condition when new.

Front 225

Office of the Comptroller of the Currency (OCC)

Back 225

Oversees activities involving currency; operates under Treasury department; est 1863.

Front 226

Office of Thrift Supervision (OTS)

Back 226

Oversees control of Savings & Loan Association activity.

Front 227

Operating Expense Ratio

Back 227

Ratio of expenses to effective gross income.
Formula:
total expenses/effective gross income = OER

Front 228

Option Contract

Back 228

Gives buyer of contract right (but not obligation) to buy a property at a set price within a certain time frame. Holder of this contractual right usually pays a fee for this right.

Front 229

Other Income (OI)

Back 229

Income from sources other than rent: laundry facilities, vending, parking fees.

Front 230

Overage Rent

Back 230

Rent paid by a retail tenant based on a percentage of gross sales in excess of a specified dollar amount (breakpoint).

Front 231

Overall Capitalization Rate (Ro)

Back 231

Income rate used to identify relationship between property's total price or value and the single year's net operating income.
Formula:
NOI/total biz value = Ro

Front 232

Percentage Lease

Back 232

Tenant agrees to pay a specific base amount of rent every month, plus a percentage of any gross sales above a certain amount. Common in commercial properties.

Front 233

PERMANENCE OF INVESTMENTS

Back 233

The capital & labor used to build an improvement.

Front 234

Personal Property

Back 234

Items on the property there at the discretion of the owner (movable items like washing machine, television).

Front 235

Physical Deterioration

Back 235

Wasting away of an asset due to actions of the environment surrounding the improvement.

Front 236

Police Power

Back 236

Health, Safety, Welfare Regulation

Front 237

Potential Gross Income (PGI)

Back 237

Expected total annual income of property at full occupancy at market rent.

Front 238

Present Value of $1

Back 238

Value today of a future payment, considering compound interest.

Front 239

Present Value of $1 Per Period

Back 239

Present value of a series of payments due in the future with interest.

Front 240

Primary Lending Mortgage Market

Back 240

Local banks, credit unions, and savings & loan associations who lend money to individuals, secured by real estate.

Front 241

PRIORITY

Back 241

Where a property is regulated by zoning & private restrictions; which ever is more restrictive takes precedent.

Front 242

Progression

Back 242

When a property's value is enhanced by its association with superior properties.

Front 243

PROPERTY MANAGMENT

Back 243

A person or company hired to maintain and manage property on behalf of it's owner

Front 244

Property Operating Income Statement

Back 244

Financial statement created to illustrate a property's income and expenses.

Front 245

Proximate

Back 245

Distance between two or more items.

Front 246

Public Domain

Back 246

Information freely available for public consumption (e.g. public records).

Front 247

Public Law 101-73

Back 247

Federal law created to change the operations of the financial institutions and create appraiser laws.

Front 248

Public Perception

Back 248

Actions of market concerning value.

Front 249

Purchaser Base

Back 249

Availability of buyers in the market.

Front 250

Purpose

Back 250

Defining something in appraisal process, such as a value.

Front 251

Quality of Life

Back 251

Issues related to emotional well-being of a person.

Front 252

Quit Claim Deed

Back 252

Grantor transfers all his/her interests to someone else. A legal document by which a person "quits" any claim to property.

Front 253

Radon

Back 253

A natural gas

Front 254

Real Estate

Back 254

Land and all it's improvements

Front 255

REAL ESTATE

Back 255

Land at, above,& below earth's surface, plus all things permately attached to it.

Front 256

REAL ESTATE LICENSE LAWS

Back 256

To protect the public from fraud, dishonesty, and incompetence in transactions.

Front 257

Real Property

Back 257

Includes land and real estate plus a legal bundle of rights (or Sticks)

Front 258

Real Property

Back 258

Rights associated with property ownership.

Front 259

REAL PROPERTY

Back 259

The interest,benifits,and rights that are automatically included in ownership of the land and real estate.Legal bundle of rights.

Front 260

Realtor

Back 260

A member of the National Association of Realtors.

Front 261

Reconciliation

Back 261

The analysis of the combined data collected, appraisal methods performed, and the professional judgment of the appraiser, culminating in a final decision.

Front 262

Regression

Back 262

When a property's value is diminished by its association with inferior or dissimilar properties.

Front 263

Reliction

Back 263

Water line recedes and leaves the exposed land permanently dry. Also known as dereliction.

Front 264

Remainderman

Back 264

Person entitled to a future interest of a property upon the death of the former owner.

Front 265

Remaining Economic Life

Back 265

Period in which a property will return a value to its user.

Front 266

Renewal Option

Back 266

Provision in lease that gives the right (not obligation) to the tenant to extend the lease for a given amount of time, at a specified rent amount stated in the option.

Front 267

Replacement Cost

Back 267

Cost of rebuilding of an improvement or structure with an item of same utility.

Front 268

Reproduction Cost

Back 268

Cost of rebuilding of an improvement or structure with an exact replica.

Front 269

Reserve for Replacements

Back 269

Monies set aside for the repair or replacement of short-lived items.

Front 270

RESIDENTIAL

Back 270

All property used for single family or muti family housing whether in urban, suburban or rural areas.

Front 271

RESTICTIVE COVENANTS

Back 271

Land use that may be controlled privately through deed restrictions by developer or land owner.

Front 272

Restrictive Covenants

Back 272

Use restrictions placed on a property by a private entity (previous owner or a homeowner's association).

Front 273

Reversion

Back 273

Return of rights of use and possession to the lessor at the expiration of a lease.

Front 274

Reversionary Interest

Back 274

Remnant of an estate that grantor holds after granting a life estate to another person.

Front 275

Reversionary Right

Back 275

Return of rights of use and possession to the lessor at the expiration of a lease.

Front 276

Revitalization

Back 276

Natural or government enhanced renewal of an area.

Front 277

Ridge Board

Back 277

A horizontal board that serves as the highest point of the roof structure.

Front 278

Right of First Refusal

Back 278

Arrangement that grants a particular potential buyer the first right to purchase a property, given certain agreed-upon conditions, if the owner decides to sell.

Front 279

Riparian

Back 279

Land next to streams or rivers. Owners have rights of use and ownership to the average high water mark.

Front 280

Runs with the land

Back 280

Legal restriction to the land in a deed binding for current and future owners.

Front 281

Sandwich Lease

Back 281

Sublease. The person subleasing the property to another is the sandwich party because he is between the owner and tenant.

Front 282

Savings & Loan Associations

Back 282

Investment group based lenders and financial services institutions.

Front 283

Scarcity

Back 283

The usable supply of land in an area

Front 284

SCARCITY

Back 284

The useable supply of land in an area.

Front 285

Secondary Mortgage Market

Back 285

Groups that purchase home loan mortgages from the Primary Lending Market.

Front 286

Servient Estate

Back 286

The property giving rights to another property (right of way, easement).

Front 287

Set Back

Back 287

Space between a property and a building line

Front 288

SEVERANCE

Back 288

An item of real property can become personal property. EX: a tree is real property til the owner cuts it down.

Front 289

Site

Back 289

Land improved with utilities and so on in anticipation of development.

Front 290

Situs

Back 290

Aspect of location that contributes to the market value of a real property. Where the property is located for legal purposes.

Front 291

SITUS

Back 291

Location. Area preference.

Front 292

SPECIAL PURPOSE

Back 292

Churches, schools, cemeteries, and government-help lands.

Front 293

Specific Performance

Back 293

A law suit to force completion of a contract

Front 294

Specific Performance

Back 294

Court order requiring a party to fulfill the contractual agreements or face possible imprisonment. Possible when monetary damages would not suffice and an adequate alternative remedy is not available.

Front 295

Square Foot Method

Back 295

Technique to measure the size of a structure based on exterior measurements.

Front 296

Statute of Frauds

Back 296

Real estate contracts must be in writing in order to be enforceable.

Front 297

SUBDIVISION

Back 297

Splitting of a single property into smaller parcels.

Front 298

Sublease

Back 298

Person leasing a property leases it to a third party for payment of rent for period no longer than original lease.

Front 299

Subordination Clause

Back 299

Mortgage clause that allows subsequent mortgages on the same property to have higher claim or right than the current mortgage. Makes other debts or rights secondary to the claims of another party.

Front 300

Substitution

Back 300

A knowledgeable buyer will pay no more for one item than for a comparatively equivalent substitute.

Front 301

Supply and Demand

Back 301

Relationship between availability and desirability.

Front 302

SUPPLY AND DEMAND

Back 302

When supplies increase and demand remains stable, prices go down. Or Vice Versa.

Front 303

Surplus Land

Back 303

Excess land of a property not needed to support the site's highest and best use.

Front 304

Surplus Productivity

Back 304

Net real property income after all the costs of labor, capital, and management have been paid.

Front 305

TEST FOR FIXTURES

Back 305

1. Intent of the annexor 2. Method of annexation 3. Adaption to the real estate 4. Agreement

Front 306

Time Value of Money

Back 306

Analysis of the worth today of payments to be received in the future.

Front 307

TITLE

Back 307

Ownership of real property, not a printed document.

Front 308

Title

Back 308

The legally recognized interest someone has in land.
Evidence of ownership.

Front 309

Title XI

Back 309

Regulations governing the appraisal profession.

Front 310

Townhouse

Back 310

Multiple housing units connected by at least one common wall.

Front 311

TRADE FIXTURES

Back 311

Fixtures used in the course of business. Something owned by the tenant & attached to a rented space.

Front 312

Trade Fixtures

Back 312

Items owned by and attached to leased property, by a tenant who is conducting a business.

Front 313

Traditional

Back 313

Most common style of residential construction.

Front 314

Trust Deed

Back 314

Agreement between borrower and lender. Trustee holds title of borrower until debt is paid to lender. Gives a lender right to foreclose if borrower defaults.

Front 315

Undivided Interest

Back 315

Apportioned ownership that happens when two or more parties have interest in the same property. May be equal or unequal.

Front 316

Uniform Standards of Professional Appraisal Practice (USPAP)

Back 316

Minimum standards and guidelines for appraisals.

Front 317

UNIQUENESS AND IMMOBILITY

Back 317

The 2 characteristics of land that have the most impact on the market.

Front 318

Unities

Back 318

Time, Title, Interest, Possesion.
(PETE)

Front 319

Utility Easement

Back 319

Right to use or enter another person's land for utility lines.

Front 320

Vacancy (V)

Back 320

Potential occupancy vs non-occupied units.

Symbol is "V" in formulas.

Front 321

Variable Expense

Back 321

Expenses affected by the property's occupancy such as painting and management fees.

Front 322

Variance

Back 322

Relief from the harshness of zoning

Front 323

Waste

Back 323

Destruction of property

Front 324

WATER RIGHTS

Back 324

Special common-law rights held by owners of land adjacent to rivers, lakes, or oceans.

Front 325

Weep Hole

Back 325

An opening that allows for drainage of water

Front 326

Yield Rate

Back 326

Percentage result of annual cash income to the investment cost.

Front 327

Zoning

Back 327

Government's right to control use of property.