# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A Building Capitalization Rate (Cap Rate) is a metric used in real estate to convert an income stream from a property into a lump sum value. It is a crucial tool for appraisers and investors to estimate the value of a property.
Building codes are a set of regulations that govern the design, construction, and maintenance of buildings. These codes aim to ensure the safety, health, and general welfare of the building occupants and the public.
Building codes are regulations established by local governments that describe the minimum structural requirements for buildings, including foundation, roofing, plumbing, electrical, and other specifications intended to ensure safety and sanitation.
Building Efficiency Ratio signifies the proportion of a building's usable floor area as compared to its total area. It is a crucial metric used to determine the efficiency of a building’s design and its space utilization.
Building inspection is a crucial process involving a physical review of property as it proceeds under construction to ensure that each major component meets building codes. This includes inspection of foundations, plumbing, electrical wiring, roofing, and other materials. It also encompasses periodic inspection of existing public buildings for health and safety considerations.
A building line is a designated boundary at a specific distance from the lot's front and/or sides beyond which the construction of buildings is restricted. It ensures uniformity and compliance with zoning regulations.
A Building Loan Agreement, also known as a Construction Loan Agreement, is an agreement whereby a lender advances money to a property owner at specified stages of a building project, such as completion of the foundation, framing, and other significant milestones.
A building lot is a parcel of land designated for building purposes, typically within a defined community, subdivision, or urban development plan. These lots are often equipped with the necessary infrastructure and utilities such as water, electricity, and sewer systems.
The Building Owners and Managers Association (BOMA) is a professional association that provides support, education, and advocacy for practitioners who own and manage buildings, particularly office spaces.
A building permit is an official authorization granted by a local government entity that allows for the construction, expansion, modification, or renovation of a building or structure. This legal requirement ensures that construction complies with building codes, zoning laws, and safety standards.
The Building Residual Technique is an appraisal method where the income attributed to land is subtracted from the net operating income to determine the income generated by the building, which is then capitalized into the building's value.
Building restrictions are provisions in building codes that affect the orientation, size, and appearance of a building, implemented to ensure safety, aesthetics, and sometimes cultural coherence of structures within a particular area.
The building/land ratio is a real estate metric that compares the value of improvements (like buildings) on a piece of land to the value of the land itself. This ratio helps investors and appraisers assess the value and utility of a property.
The buildup rate is a method to develop a capitalization rate by adding the individual components contributing to the risk and return of an investment. It offers a systematic approach to evaluate the total return expected for real estate investments.
Built-ins refer to appliances, machinery, and other equipment that are constructed as part of a building rather than being freestanding and movable. These items are typically considered real property upon the sale of real estate.
A bulk sale involves the sale of multiple real estate assets together, often including a mix of high-performing and underperforming properties. This strategy can accelerate property disposal and manage complex portfolios effectively.
A bullet loan is a type of loan in which the whole principal amount is paid back at the end of the loan term rather than through periodic payments. These loans typically have a short to medium-term duration, usually between 5 to 10 years, and can pose significant risk if the borrower cannot refinance or repay the loan principal as per the agreement.
The Bundle of Rights Theory posits that property ownership entails a collection of distinct rights, including the rights of occupancy, use, and enjoyment, as well as the ability to sell, bequeath, give, or lease these rights.
A bungalow is an early-twentieth-century-style, one-story house that often features an open or enclosed front porch. It’s known for its simple, practical design, and is usually free-standing.
The Bureau of Land Management (BLM) is an agency within the U.S. Department of the Interior responsible for administering public lands, particularly national forests and other undeveloped lands. The BLM oversees various land management activities, including grazing, mining, and recreational use.
A Burned-Out Tax Shelter refers to a real estate investment that was once advantageous for providing large income tax deductions but has lost its tax-sheltering benefits over time due to the reduction and eventual nil in depreciation deductions and the decrease in interest deductions as mortgage payments increasingly cover the principal.
A business day is a standard day for conducting business and excludes weekends and public holidays. Business days are crucial for determining deadlines in contracts and other formal agreements.
The intangible value inherent in a business apart from its tangible assets, which encompass buildings, land, and fixtures, and also the overall value of a business in its entirety, consisting of all its parts, both tangible and intangible.
A Buy-Back Agreement is a contractual provision where the seller commits to repurchasing the property at a predetermined price upon the occurrence of a stipulated event within a specific timeframe.
A buy-sell agreement is a legally binding pact among partners or stockholders under which some agree to buy the interests of others upon a triggering event, such as death, disability, or retirement.
Buy-Up refers to the payment of points, or a rebate, to the borrower for taking a loan with an above-market interest rate. Commonly referred to as 'negative points,' this payment helps offset fees and other settlement costs associated with the loan.
A Buyer's Agency Agreement is a contract that establishes the relationship between a potential buyer and a Buyer's Broker, where the broker represents the buyer's interests in real estate transactions.
A buyer's broker, also known as a buyer's agent, is a real estate professional hired by a prospective purchaser to locate an acceptable property for purchase and negotiate with the seller in the purchaser’s best interest.
A buyer's market is a real estate market condition characterized by a surplus of available properties leading to more power for buyers to negotiate lower prices. Often, it is the result of economic downturns, overbuilding, or local population decreases.
A buyout occurs when the owner of a new building acquires the remaining lease term of a tenant from a different building, thereby freeing the tenant from their old lease obligations and allowing them to negotiate a new lease.
Bylaws are a set of rules established by a condominium or homeowners' association to govern the management and affairs of the complex or neighborhood. These rules often define regulations concerning the usage of individual units, common areas, and the responsibilities of the homeowners and the association itself.
CAD is an acronym that can stand for 'Cash Available for Distribution,' 'Central Appraisal District,' or 'Computer-Aided Design,' all of which are pertinent in different realms of real estate and related industries.
A Cadastral Map is a legal map utilized for recording and determining the ownership of properties. It provides detailed information about the boundaries and ownership of each parcel of land.
The Community Associations Institute (CAI) is an international organization designed to provide education, resources, and advocacy for community association leaders, such as homeowners associations, condominium owners, and housing cooperatives.
A California bungalow is a single-story, compact house that became popular in the early twentieth century. Characterized by its low profile, simplicity, and affordability, it often includes a front porch, wide eaves, and built-in cabinetry.
The California Ranch, also known as the Ranch-style house, is a post–World War II–era architectural style that features a 1-story, ground-hugging design with a low, pitched roof. This distinctive style became popular in the post-war period for its simplicity, spaciousness, and informal living spaces.
A call option is a financial contract that gives the option buyer the right, but not the obligation, to purchase a specific quantity of an asset at a predetermined price within a specified time period.
Call provisions are clauses in a loan agreement that grant the lender the right to accelerate the debt and demand full repayment upon occurrence of a specific event or agreed-upon date.
Common Area Maintenance (CAM) charges are fees paid by tenants to cover the maintenance of common areas in a commercial property.
A Cancellation Clause is a provision within a contract that grants the right to terminate the agreed-upon obligations upon the occurrence of specified conditions or events.
CAP in adjustable rate mortgages (ARMs) refers to a limit placed on adjustments to protect the borrower from large increases in the interest rate or the payment level. There are different types of caps, including annual caps, lifetime caps (life-of-loan caps), and payment caps. This measure helps borrowers by providing predictability and stability in their mortgage payments.
Capacity of Parties refers to the legal competence of all parties involved in a contract to understand and engage in the agreement. Ensuring that all parties have the full legal capacity is crucial for the contract's enforceability.
Cape Cod Colonial is an early-American-style 1½-story compact house, often symmetrical with a central entrance and steep gable roof covered with shingles.
Capital Expenditure, commonly referred to as CAPEX, are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.
Capital refers to the financial assets or their financial value, as well as tangible factors of production used to create value. It is a significant part of the assets owned by an entity and is used to fund long-term operations and investments.
A capital asset as defined in Section 1221 of the Internal Revenue Code (IRC) that receives favorable tax treatment upon sale contains various exclusions such as inventory, property held for resale, property used in a trade or business, certain copyrights, and specific U.S. government obligations.
Capital calls are additional money requested from equity owners to bridge deficits in construction or operating costs. These calls often happen due to initial underfunding or unforeseen expenses.
Capital Expenditure (CapEx) refers to the funds used by an organization to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. These expenditures are critical for the long-term growth and operational efficiency of an organization and are generally depreciated over their useful life.
A capital gain is the profit that results from a sale of a capital asset, such as real estate, stocks, or bonds, where the sale price exceeds the purchase price.
Capital improvements, also referred to as capital expenditures, are significant upgrades, enhancements, or additions to an existing property that increase its overall value, extend its useful life, or adapt it to new uses.
A capital loss occurs when an investor sells a capital asset at a price lower than its purchase price. The capital loss is the difference between the selling price and the purchase price of the asset.
The capital market is a venue where various long-term securities such as equities, mortgages, and bonds are traded. It contrasts with the money market, which deals with short-term securities.
Capital Recapture is the return of an investor's original investment in a property or business, often through income generated by that asset. It's also known as Capital Recovery.
Capital Recovery refers to the process by which an investor recoups the initial investment in a real estate or business venture. This is typically achieved through revenue generation, cash flows, or sale of the asset. Understanding capital recovery is crucial for assessing the viability and profitability of investments.
A capital reserve is a fund created to finance major, long-term investments, property or infrastructure enhancements within a real estate property. These are set aside from profits and retained earnings specifically for future large scale repairs, renovations, or unexpected large expenses.
Capital structure refers to the composition of capital invested in a property, reflecting the interests of those who contributed both debt and equity capital.
In finance and real estate, capitalization is the process of deriving a present value for future income through a capitalization rate. In accounting, it involves setting up an asset on financial records to be depreciated over its useful life rather than expensed immediately.
Capitalization rate, commonly referred to as Cap Rate, is a real estate valuation measure used to compare different real estate investments. It is calculated by dividing the net operating income (NOI) by the current market value of the property.
A capitalization rate (Cap Rate) represents the rate of return expected to be generated on a real estate investment property. It helps in deriving the property's current market value or the potential return on investment.
Capitalizing in real estate is the process of estimating the present value of an income stream, setting up the cost of an asset on financial records, or supplying a business with capital.
Capitalized value refers to the present value of a future income stream, discounted at a specific rate called the capitalization rate. It is a crucial concept in real estate valuation for properties producing regular income.
A Captive Real Estate Investment Trust (Captive REIT) is a business and tax strategy employed by large retailers and banks with substantial real estate holdings or property loans. The REIT is sold by the company to investors to hold the real estate assets that were previously on the company's books. The company then pays rent to the REIT, which it deducts as a business expense.
Capture rate is a key metric in real estate that measures the sales or leasing rate of a particular development compared to all developments in the market area. This rate helps developers and investors gauge the market performance of a specific project within a competitive landscape.
A carriage house is a secondary structure used primarily for parking vehicles or providing additional living space, often located on the same property as a principal residence. Originally designed to house horse-drawn carriages and the carriage driver, it now serves versatile roles in modern real estate.
Carry-back financing, also known as seller financing, occurs when the seller of a property provides a loan to the buyer to complete the property purchase. This arrangement can be beneficial in situations where traditional mortgage financing is difficult to secure.
Carrying charges refer to the ongoing expenses necessary for holding a property, such as taxes, interest on loans, insurance, and maintenance costs. These charges are pertinent to both idle properties and properties under construction.
Carryover basis is the tax terminology used in tax-deferred exchanges to describe the transfer of the adjusted tax basis from a relinquished property to the newly acquired property. This concept is significant in deferring capital gains tax until the final sale of the property.
A provision in an agreement that removes or excludes a particular portion of the property or obligations. Carve-outs can pertain to items in sales agreements, mortgages, or leases, potentially subjecting them to new terms or entirely exempting them from certain existing terms.
The Case-Shiller/S&P Home Price Index is a measure developed by economists Carl Case and Robert Shiller for Standard & Poor's Corporation. It tracks the price changes of single-family homes in the U.S. by analyzing repeat sales of properties across various metropolitan areas.
Cash Available for Distribution (CAD) is a key metric for assessing the financial performance of Real Estate Investment Trusts (REITs). It is derived from Funds From Operations (FFO), after deducting costs of recurring capital expenditures.
Cash equivalent in real estate refers to converting the price of a property sold with either favorable or unfavorable financing into the price the property would have sold for if the seller had accepted all cash in the transaction.
Cash flow refers to the periodic amounts available to an equity investor after deducting all periodic cash payments from rental income, providing insight into the liquidity and operational viability of a real estate investment.
Cash Flow Analysis assesses the inflows and outflows of cash in a business or investment over a specific period, aiding in financial strategy and decision-making.
A Cash Flow Mortgage is a unique debt instrument where almost all income from property rental is used to pay the lender, typically with no interest rate specified.
The Cash Method is a straightforward accounting technique in which revenue and expenses are recorded when they are actually received or disbursed. It is most commonly used by small businesses and individual taxpayers for its simplicity and ease of use.
The term 'Cash Out' refers to the process of completely liquidating an asset, enabling the owner to receive its total monetary value in cash.
A cash purchase in real estate refers to acquiring property without the use of financing or loans, where the buyer pays the full purchase price in cash.
Cash throw-off, often referred to as cash flow, is a crucial metric in real estate investment that indicates the amount of cash generated by a property after all operating expenses and debt service have been paid. It is a measure of the income-producing ability of a property.
Cash-on-cash return (CoC return) is a rate of return commonly used in real estate transactions that calculates the cash income earned on the cash invested in a property.
A measure of annual cash return on the amount of cash invested in a property, often used to evaluate the performance of income-generating real estate.
A Cash-Out Refinance allows homeowners to replace their existing mortgage with a new, larger loan, providing them with the difference in cash.
Casualty insurance provides protection against the financial impacts arising from accidents, injuries, and legal liabilities, safeguarding both personal and business interests from unexpected losses.
'Caveat Emptor,' a Latin phrase meaning 'let the buyer beware,' is a fundamental principle in real estate transactions. It emphasizes the responsibility of buyers to thoroughly inspect and review the property themselves, utilizing due diligence, except for latent defects, which are hidden or concealed defects not immediately detectable during an inspection.
Caveat Subscriptor is a legal doctrine stating 'let the seller beware,' which holds sellers liable for goods found to be defective post-sale unless sold 'as is.'
Caveats are warnings, often written to a potential buyer, to exercise caution and due diligence; usually offered as a means for the seller or broker to minimize liability for potential deceptive trade practices.
The CCIM (Certified Commercial Investment Member) designation is a prestigious credential awarded by the CCIM Institute, a recognized affiliate of the National Association of REALTORS®. This certification highlights a member's expertise in commercial and investment real estate, setting a high professional standard in the industry.
The CCIM Institute is a leading global provider of education and certification for commercial real estate professionals, affiliated with the National Association of REALTORS®. It offers rigorous training leading to the Certified Commercial Investment Member (CCIM) designation and disseminates industry knowledge through the Commercial Investment Real Estate magazine.
A 'Cease and Desist' order is a legal mandate issued by a court or administrative agency to stop an individual or business from continuing an identified illegal activity. Within real estate, these orders are crucial for preventing antitrust violations and illegal discriminatory practices.
A census tract is a geographic region defined for the purpose of taking a census, which is typically delineated by the U.S. Census Bureau to capture detailed demographic data about residential areas.
The Central Appraisal District (CAD) is a government organization responsible for appraising the value of properties within its jurisdiction for tax assessment purposes. By providing a consistent valuation process, it avoids duplication and inconsistencies among various taxing entities.
A Central Business District (CBD) is the commercial and business center of a city, often characterized by a high concentration of office buildings, retail stores, and cultural institutions.
The Central Business District (CBD) is typically the commercial and business center of a city, characterized by high concentrations of office buildings, retail stores, hotels, entertainment venues, and governmental buildings. This area serves as the focal point for business and commerce, attracting significant daytime population.
Central Trade & Transfer (CTT) is an exchange platform where illiquid real estate investments can be sold, including both auctions and off-auctions activities.
CERCLA, also known as Superfund, is a United States federal law designed to clean up sites contaminated with hazardous substances and pollutants. This act provides a federal 'Superfund' to clean up uncontrolled or abandoned hazardous-waste sites and accidents, spills, and other emergency releases of pollutants and contaminants into the environment.
A Certificate of Deposit (CD) is a financial product commonly offered by banks and credit unions that provides an interest rate premium in exchange for the customer's commitment to leave a lump-sum deposit untouched for a predetermined period.
A Certificate of Deposit (CD) is a type of savings account that carries a specified minimum deposit and term, typically offering a higher yield compared to regular savings accounts.
A Certificate of Eligibility (COE) is issued by the Department of Veterans Affairs (VA) to indicate that the recipient is eligible for a home loan guaranteed by the agency.
A Certificate of Insurance (COI) is a document that verifies the existence of insurance coverage, including details about the type and extent of coverage provided. It serves as proof of insurance for the insured party, typically issued by the insurance company or broker.
A Certificate of No Defense, also known as an Estoppel Certificate, is a legal document used in real estate transactions to certify that the represented facts are accurate and there are no existing claims or disputes. This document plays a crucial role in ensuring transparent and risk-free real estate deals by confirming the status and obligations attached to a property.
A Certificate of Occupancy (C/O) is a legal document issued by a local government agency or building department certifying that a building complies with applicable building codes and is safe for occupancy.
