A devisee is an individual or entity designated in a will to receive real estate property from the estate of a deceased person. They inherit the property as specified by the terms outlined in the will.
Direct capitalization is a valuation method used in real estate to estimate the value of an income-producing property by dividing the net operating income (NOI) by the capitalization rate (cap rate).
Direct costs are expenses that are readily identifiable in the construction of real estate, including labor, materials, and contractor’s overhead and profit. These are contrasted with indirect costs, which include expenses like architect’s fees and interest during construction.
Direct damages refer to the compensation paid by a government entity for the value of land and improvements taken through eminent domain proceedings. It contrasts with indirect damages and severance damages.
A Direct Reduction Mortgage is a type of fixed-rate mortgage where both interest and principal are repaid with each payment, ensuring that the loan is fully amortized over its term.
The Direct Sales Comparison Approach, also known as the Sales Comparison Approach, is a real estate appraisal method used to estimate the value of a property by comparing it to recently sold properties with similar characteristics within the same market area.
Directional growth refers to the location or direction toward which a city or urban area is expanding. Understanding directional growth is crucial for real estate investors, developers, city planners, and policymakers to make informed decisions about property investments, infrastructure development, and urban planning.
A disbursement refers to the act of paying out money, often seen in contexts like loan origination or the dissolution of investment ventures.
Discharge in Bankruptcy refers to the release of a bankrupt party from the obligation to repay debts that were, or might have been, proved in a bankruptcy proceeding.
Procedures resulting from the state Real Estate Commission's investigation of complaints against licensees, potentially leading to revocation or suspension of licenses and other penalties.
A disclaimer is a statement that rejects responsibility or renunciation of ownership concerning a specific matter. In real estate, disclaimers are commonly used in financial documents and ownership claims.
A Disclosure Statement is a legally required document in real estate transactions that compels sellers to reveal specific information about the property's condition and any material facts relevant to the transaction.
A discount in the context of real estate represents the difference between the face amount of an obligation and the amount advanced or received for the loan. It often indicates the sale of a loan or mortgage at less than its face value.
A licensed broker who provides brokerage services for a lower commission than that typically charged in the market, often offering less extensive services or unbundled service options.
Discount points are fees paid directly to the lender at the time of the loan origination to reduce the interest rate and lower monthly mortgage payments. Frequently used in conventional, FHA, and VA loans, they offer borrowers flexibility in managing loan costs.
The discount rate serves as a critical financial mechanism for converting future income streams into present-day values, ensuring the appropriate valuation and feasibility of real estate investments.
Discounted Cash Flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. This technique incorporates the time value of money by discounting the future cash flows to present value.
Discounted Cash Flow (DCF) is a financial valuation method used to determine the value of an investment based on its expected future cash flows, which are discounted to reflect their present value. This technique takes into account the time value of money.
A discounted loan is a loan that is sold or traded for less than its face value due to market interest rate differences or inherent risk characteristics.
Discounted Present Value (DPV) is the present value of expected future cash flows, discounted at a specific rate to account for the time value of money. It's often used to evaluate the attractiveness of an investment.
Discounting is the process of estimating the present value of an income stream by reducing expected cash flow to reflect the time value of money. It is the opposite of compounding, and mathematically, they are reciprocals.
Discrimination in real estate refers to applying special treatment, often unfavorable, to individuals based on race, religion, sex, color, national origin, handicap, or familial status. It is a serious issue as real estate transactions should be conducted fairly and equitably.
Disintermediation refers to the process where financial intermediaries, such as banks or savings and loan associations, are bypassed, and funds are directly invested into other assets to seek higher yields.
Displacement in real estate refers to the involuntary movement of population due to the conversion of their homes to other uses. This can occur due to various factors, including legal actions like condemnation, urban renewal projects, redevelopment initiatives, and natural disasters.
Disposition costs refer to the various expenses incurred by a seller in the process of selling a property. These can include real estate agent commissions, legal fees, closing costs, and transfer taxes.
Dispossess proceedings refer to the legal process initiated by a landlord to remove a tenant from a rental property and regain possession, typically due to non-payment of rent or violation of lease terms.
The termination of an agreement or contract, regardless of the initiating circumstances, is known as dissolution. This could occur due to various reasons such as the completion of contract terms (performance), a court order, or mutual agreement among the parties involved.
The Distinguished Real Estate Instructor (DREI) designation is awarded to exceptional real estate educators who exhibit profound expertise, mastery in teaching techniques, and a dedication to lifelong learning in the real estate industry.
Distraint is the legal right of a landlord to seize a tenant’s personal property to satisfy the payment of back rent.
A distress sale involves selling assets, typically real estate, at a significantly reduced price to generate quick cash due to financial exigencies or other compelling circumstances.
Real estate that is under foreclosure or impending foreclosure due to insufficient income production, leading to negative cash flow or default on mortgage payments.
A Distribution Center is a specialized warehouse facility focusing on the receipt, temporary storage, and redistribution of products to various retail locations or customers. Often, these centers are integral to supply chain and logistics strategies.
Divided interest refers to partial ownership interest in a property, where rights or interests are split among different parties.
Document recording is a crucial process in real estate transactions that involves filing documents, such as deeds or mortgages, with a recorder of deeds or an appropriate government office to create a public record of property ownership and interests.
Documentary evidence refers to evidence in the form of written or printed papers used in legal and real estate proceedings to support facts and claims.
DocuSign is a computer software that allows proposed contracts to be emailed to principals for electronic signature and/or initials. It streamlines the process by indicating where to sign, initial, and date the document.
The Dodd-Frank Wall Street Reform and Consumer Protection Act is a sweeping legislative overhaul signed into law in 2010 to address the financial crisis of 2007-2010. It aims to improve financial stability and protect consumers by regulating financial institutions more rigorously.
Dodge Data & Analytics provides critical data and insights on construction projects, cost estimates, and trends, serving builders, insurers, and appraisers.
In real estate slang, 'DOG' refers to an unwanted property that is typically hard to sell due to various issues such as poor appearance, poor construction, lack of market demand, or negative environmental conditions.
Domicile refers to the place which an individual treats as their permanent home, or lives in and has a substantial connection with. It determines various legal aspects such as taxation, voting rights, and application of local laws.
A dominant tenement refers to a parcel of land that benefits from an easement on an adjacent or nearby property, known as the servient tenement, allowing specific uses such as access or utilities.
In real estate, a donee is the recipient of a gift. This term is commonly used to describe someone who receives property or other assets without providing any compensation in return.
In real estate, a donor is an individual or entity that gives real property or assets without receiving equal value in return. This term often refers to gifts or philanthropic contributions where the donor voluntarily transfers ownership to another party, such as a charity or a public institution.
A dormer is an architectural structure that protrudes from a sloping roof surface, commonly housing a vertical window and providing additional space, light, and ventilation to the upper areas of a building.
Double Declining Balance (DDB) is an accelerated method of depreciation used for tax purposes, applying twice the straight-line depreciation rate to the remaining book value of an asset.
Double taxation refers to the taxation of the same income at two different levels, typically at the corporate and individual levels. This often occurs when income is taxed once at the corporate level and again at the shareholder level when dividends are distributed.
A manufactured home consisting of two single units joined together at the home site. The finished home is at least 20 feet wide.
Dower under common law refers to the legal right of a wife or child to part of a deceased husband's or father's property. This right ensures that the surviving spouse or child can claim a portion of the deceased individual's estate, regardless of the arrangements in the will.
A down payment is the initial upfront portion of the total amount due on a property purchase. It is typically paid in cash, representing a percentage of the property's value.
A DOWNREIT is an arrangement between the owner of real property and a Real Estate Investment Trust (REIT) aimed at providing tax advantages to the property owner. The result is effectively a partnership with ownership units held by those who contribute properties to the venture. The DOWNREIT owns real estate either outright or as part of a limited partnership.
In real estate, downtime refers to the period during which rentable space remains vacant between tenants, posing a financial challenge for property owners and managers aiming for continuous revenue from their assets.
Downzoning involves changing the zoning classification of a tract of land to a less intensive use than currently permitted. It can affect the owner's investment-backed expectations and may raise compensation issues.
A provision in a mortgage that pledges multiple properties as collateral, potentially including newly acquired properties owned by the borrower. A default on one mortgage constitutes a default on the one with the dragnet.
A draw refers to the periodic advancement of funds from a construction lender to a developer according to a pre-arranged schedule, either at regular intervals during construction or after the completion of specific segments of the project.
The DREI (Distinguished Real Estate Instructor) designation is a prestigious title awarded to educators in the real estate field who demonstrate exceptional teaching abilities, comprehensive industry knowledge, and a commitment to furthering real estate education.
A drive-by appraisal, also known as an exterior-only appraisal, is a valuation of a property's market value based primarily on an external inspection from the street or perimeter without conducting an interior evaluation of the property.
DRY CLOSING refers to a real estate closing without the actual immediate exchange of property and funds, where parties meet and provide assurances that the transaction will occur according to the previously negotiated sales contract.
A Dry Mortgage, also known as a Nonrecourse Mortgage, is a type of financing where the borrower is not personally liable beyond the collateral securing the loan. In these agreements, the lender can seize the property used as collateral to satisfy the loan, but cannot pursue the borrower for any remaining balance if the collateral does not cover the full liability.
Drywall, also known as gypsum board, is a widely used building material for interior walls and ceilings. Its convenience and ease of installation have made it the preferred choice for modern construction over the traditional lath and plaster method.
Dual agency occurs when a real estate agent represents both the buyer and seller in the same real estate transaction. This arrangement is subject to strict regulatory controls to manage potential conflicts of interest.
Dual Contract refers to the illegal or unethical practice of providing two different contracts for the same real estate transaction. This is often done to deceive lenders or other stakeholders.
Ducts or ductwork are metal tubes or conduits used to distribute heated, cooled, or ventilated air from a central HVAC system throughout a house or building. These ducts can either be cylindrical or have a rectangular cross-section.
Due Care refers to the standard of conduct that is expected from a reasonable and prudent person in a given situation. It imposes a duty to act as a reasonably careful person would under similar circumstances.
Due diligence is the process by which an individual or organization makes a reasonable effort to gather and provide accurate, complete information before executing a financial transaction or agreement. It often precedes the purchase of property and includes a careful examination of physical, financial, legal, and environmental characteristics.
Due Process refers to the legal necessity for following established procedures when the government intends to limit or seize an individual’s property rights. This ensures fair treatment by providing appropriate notifications and opportunities for affected parties to present their viewpoints.
A due-on-sale clause is a provision in a mortgage agreement that requires the full repayment of the loan when the property is sold.
A dummy corporation is an entity established to facilitate business transactions on behalf of a principal by superficially holding certain assets or liabilities.
A duplex is a type of multi-family home that features two distinct living units within one building and a single structure.
Duress in real estate refers to a situation where an individual is compelled to enter into a contract or agreement due to a threat or coercion, making the contract voidable.
A Dutch auction is a bidding process in which the auctioneer starts with a high asking price which is gradually lowered until a bidder accepts the current price.
Dutch Colonial homes are a distinctive style characterized by their gambrel roofs, flared eaves, and an overall early-American aesthetic. Typically moderate in size, they are built over 2 to 2½ stories.
Duty to disclose refers to the legal obligation of a seller, broker, or agent to inform a prospective buyer or interested party about any negative condition or material fact that could influence the property's value or a buyer's decision.
A dwelling is any structure or place where people reside, such as apartments, hotels, mobile homes, nursing homes, and single-family houses.
