“Telecommuting is a work arrangement where employees perform job duties from a remote location, typically their home, using electronic communications to remain connected with their employer and co-workers. Telecommuting eliminates the need for a daily commute and can reduce overhead costs related to physical office space.”
Amortization refers to the process of paying off debt over a specific period of time through regular payments of principal and interest, ultimately resulting in the full repayment of the loan by the end of the term.
Financial transparency in real estate involves the full disclosure and public reporting of financial activities, allowing outsiders to accurately estimate risk and forecast income from investments.
Maquiladora, often referred to as twin plants, are manufacturing operations in Mexico, usually near the U.S.-Mexico border, where factories import material and equipment on a duty-free and tariff-free basis for assembly, processing, or manufacturing and then re-export the assembled product to the United States.
Table funding refers to the practice of originating mortgage loans using a lender's internal capital until these loans are packaged together and sold in the secondary market. This process enables the lender to recoup capital, allowing continued lending activities.
Tacking, in the context of real estate, refers to the process of adding successive periods of possession together to establish a continuous period required for a claim of adverse possession.
A tag sale, also known as a yard sale or garage sale, is a casual sale where individuals mark used household items with price tags. These sales are typically held on weekends at the vendor’s home, often featuring merchandise displayed in the front yard or driveway.
Takedown refers to the instance when a borrower actually accepts money from a lender under a line of credit or loan commitment, often structured in stages to align with project milestones.
Takeout financing is a type of long-term loan that replaces short-term interim financing, allowing project developers to refinance debt incurred during the construction phase. This helps bridge the gap between the completion of a project and its permanent financing, ensuring liquidity and financial stability.
Takeout financing refers to the commitment to provide permanent financing following the construction of a planned project. It typically requires specific conditions to be met, such as achieving a certain percentage of unit sales or leases. Most construction lenders mandate takeout financing to ensure the construction loan is 'taken out' by a permanent loan post-construction.
A takeout loan is a type of long-term financing that replaces short-term interim financing, such as a construction loan, to repay the short-term loan and provide capital for further development or investment.
In real estate, 'Taking' refers to the acquisition of a parcel of land through condemnation, or the application of restrictions that preclude any reasonable use of the land.
The TALF (Term Asset-Backed Securities Loan Facility) is a program created by the Federal Reserve that aims to support the issuance and accessibility of asset-backed securities (ABS) collateralized by underlying consumer and business credit. First introduced during the 2008 financial crisis, TALF seeks to encourage the flow of credit to households and small businesses.
Tangible personal property refers to assets that can be seen, touched, and moved without great difficulty. This category excludes real estate and intangible assets.
Tangible property refers to physical assets that can be seen and touched. This includes real estate, personal property, and other valuables.
A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures. Failure to pay, along with evasion of or resistance to taxation, is punishable by law.
Tax abatement is a financial incentive offered by a government to reduce or eliminate property taxes on a property for a certain period. This encourages development and investment in specific areas or projects.
A tax and insurance escrow account, often required by mortgage lenders, is used to fund annual property tax assessments and hazard insurance premiums for the mortgaged property. This account is funded through monthly contributions by the mortgagor.
A Tax Appeal or Tax Protest is an effort to reduce ad valorem property taxes, typically based on the argument that the assessed value is greater than the market value or that the assessment does not ensure equal and uniform taxation.
Tax assessment is the valuation of real estate property by a government entity to determine the property's tax liability. The assessed value is used to calculate the property taxes owed by the property owner.
A tax assessor is a local government official responsible for determining the value of properties within a jurisdiction for taxation purposes, playing a key role in how property taxes are assessed and collected.
The tax base refers to the collective value of property, income, or other taxable assets and activities that are subject to taxation. It is crucial in determining tax revenues as it forms the basis upon which tax rates are applied.
Tax Basis, also known as Basis (Tax), refers to the original value of a property or asset for tax purposes, with potential adjustments over time reflecting improvements, depreciation, or other factors.
A tax bracket refers to the range of income subject to a certain marginal tax rate. It defines the percentage of each additional dollar in income required to be paid as income taxes.
A tax consultant is a person or firm who, for a fee, assists individuals, businesses, and property owners in reducing their tax liabilities. They provide expert advice on tax legislation, planning strategies, and potential savings. Some states may require registration or licensing for tax consultants.
A tax credit is a direct reduction in the amount of tax that a taxpayer owes to the government. Unlike tax deductions, which reduce the amount of taxable income, tax credits reduce the actual tax due, providing dollar-for-dollar savings.
A tax-deductible expense is a type of expenditure that can be subtracted from taxable income, thus reducing the amount of income that is taxed. This helps in lowering the overall tax liability for individuals and businesses.
A tax deduction is an expense that can be subtracted from an individual or entity's gross income to reduce the amount subject to tax.
A tax deed is a legal document transferring ownership of a property to a purchaser following a public auction for unpaid property taxes.
Tax equalization ensures that taxpayers within the same jurisdiction pay similar amounts for equivalent properties, contributing to a fairer property tax system.
Tax Exemption is a full or partial retraction of property from the tax base, resulting in a lower AD VALOREM tax for the property owner.
Tax foreclosure is the process of enforcing a lien against property for nonpayment of delinquent property taxes. Taxing authorities hold a superior lien against all taxable property to enforce the payment of their taxes.
Tax Increment Financing (TIF) is a public financing method that municipalities use to subsidize redevelopment, infrastructure, and other community-improvement projects in distressed areas. The aim is to stimulate economic development and increased property tax revenues.
A tax liability refers to the amount of tax debt owed to the Internal Revenue Service (IRS) or a state's tax authority. These liabilities can result from income earned, properties owned, or other taxable activities.
A tax lien is a legal claim by a government entity against a property when the owner fails to pay taxes owed, effectively securing the amount of delinquent tax against the property.
A tax map is a detailed and comprehensive document that shows the location, boundaries, dimensions, and various relevant information about parcels of land subject to property taxes. These maps are typically bound into books and maintained as public records at local tax offices.
Taxes that apply to the sale of a home, governed primarily by Section 121 of the U.S. Internal Revenue Code, which provides an exclusion on capital gains for qualifying homeowners.
Tax preference items are specific types of income or deductions that are added to gross income to calculate the Alternative Minimum Tax (AMT). These items can include types of depreciation on real estate, among other things.
The tax rate is the ratio of a tax assessment to the amount being taxed and is a crucial factor in determining the tax liability of property owners. This rate can vary widely based on location and the type of tax being applied.
A tax representative or tax consultant is a professional who assists individuals and businesses in navigating tax-related matters. These professionals offer guidance on compliance, tax planning, and dispute resolution with tax authorities.
A tax roll is the comprehensive list of real estate properties within a specific jurisdiction that are subject to property taxes. It includes details about the properties' assessed values, which are used to determine the property tax liabilities.
A tax sale is the sale of property after a period of nonpayment of taxes, where the purchaser receives a tax deed. The defaulting owner typically has a redemption period to reclaim the property by paying owed amounts.
A tax shelter is an investment strategy that provides tax advantages by generating more after-tax income compared to before-tax income. These investments can produce before-tax cash flow while creating tax losses that can shield income from other sources from taxation.
A tax stop is a clause in a lease agreement that sets a limit on the amount of property taxes the lessor (landlord) is responsible for paying. Any property taxes exceeding this limit are paid by the lessee (tenant).
A Tax-Deferred Exchange, often referred to as a 1031 exchange, allows investors to defer paying capital gains taxes on real estate investments when one property is sold and a similar one is purchased within specified time frames.
Tax-exempt property, often pivotal in supporting non-profit organizations and government entities, refers to real estate that is not subject, in whole or in part, to ad valorem property taxes.
A Tax-Free Exchange, also known as a Tax-Deferred Exchange, is a real estate transaction that allows investors to defer capital gains taxes on the sale of an investment property by purchasing a similar property under IRS Section 1031.
Tax-sheltered income refers to income received, particularly from rental property, that is not subject to taxation, creating a tax benefit for the property owner. It typically occurs when depreciation expense claimed for income tax purposes exceeds mortgage principal payments.
Taxable income or loss is the amount of income or loss a taxpayer reports on their tax return from various sources, including rental real estate. It involves subtracting various allowable deductions from gross income to determine the net amount subject to taxation.
Taxable Value, also referred to as Assessed Value, is the dollar amount assigned to a property for the purposes of calculating property taxes. It's an estimation of a property's market value determined by the local tax assessor.
A teaser rate is an initial lower interest rate offered on an adjustable-rate mortgage to entice borrowers, which eventually adjusts to the fully indexed rate.
Tenancy refers to the right of possession of real property, which can relate to both ownership and occupancy. It includes various forms such as tenancy in common and joint tenancy.
Tenancy at sufferance occurs when a tenant who legally occupied a property remains in possession after the lease has expired, without the landlord's consent.
Tenancy at will is an arrangement where a tenant occupies a property with the specific permission of the landlord but without a lease, lasting as long as both parties agree.
Tenancy by the Entirety is a form of joint property ownership reserved strictly for married couples, ensuring equal possession and incorporating the right of survivorship. Upon the death of one spouse, full ownership seamlessly transfers to the surviving spouse, offering protection from individual creditors.
Tenancy for life, often referred to as a life estate, is a form of property ownership where one person (the life tenant) has the right to use and benefit from a property for the duration of their lifetime. Upon the death of the life tenant, the property passes to another party known as the remainderman or reversionary interest holder.
A tenancy for years is defined by a lease agreement for a specified period, such as months or years, typically fixed from the outset.
A tenancy from year to year, also known as a periodic tenancy, is a rental arrangement that continues for an indefinite duration, typically requiring a notice period for termination. This type of tenancy renews automatically at the end of each period (generally a year), unless either the landlord or tenant gives proper notice to terminate the lease agreement.
Tenancy in Common (TIC) represents a form of ownership in real estate where two or more individuals hold an undivided interest in the entire property, without Right of Survivorship, enabling them to independently convey their respective shares.
Tenancy In Common (TIC) is a form of real estate ownership by two or more parties, where each holds an undivided interest in the property without rights of survivorship.
Tenancy in Severalty refers to the ownership of property by a single individual or legal entity. This format of ownership allows the owner full control without the need to collaborate with co-owners or partners.
A tenant is an individual or organization that holds the right to use and occupy real estate property owned by another entity, typically under a lease agreement for a fixed or indefinite period.
Tenant fixtures are installations or improvements made by a lessee that can be removed upon the expiration of the lease.
Tenant Improvements (TIs), also known as leasehold improvements or build-outs, refer to changes made to the interior of a rented commercial property to customize it for the specific needs of the tenant.
Tenant Improvements, often abbreviated as TIs, refer to the customized alterations a building owner makes to rental space as part of a lease agreement to configure the space for the tenant's specific needs.
Amounts paid by a tenant to a landlord for the tenant’s share of expenses, typically encountered in net leases and leases with stop clauses. These payments help cover specific property-related costs such as common area maintenance, property taxes, and utility expenses.
A Tenant Representative Broker represents tenants in seeking the best property to lease, negotiating favorable transaction terms, and assisting with related leasing processes.
In real estate, a tender is an offer to perform an obligation, including delivery or actual performance, under a contract. A tender can involve payments, delivering deeds, or offering services as required by contractual terms.
Tenements refer to certain types of property, particularly older apartment units, and generally describe structures that are permanent and attached to land. They form part of the broader category of real property.
Tenure refers to the nature of an occupant's ownership rights and indicates whether one is an owner or a tenant. It is a critical factor in real estate, providing insights into housing markets and property management.
Tenure in land refers to the mode in which a person holds an estate in lands. This includes various forms such as fee simple ownership and leasehold estates.
In real estate, the term can refer to the duration during which a lease is effective or the maturity period of a loan such as a mortgage. Understanding the implications of the term is crucial for both lessees and borrowers.
A Federal Reserve funding facility established to lend up to $200 billion on a nonrecourse basis to holders of certain AAA-rated asset-backed securities, designed to promote the flow of credit to consumers and businesses.
A term loan is a loan with a set maturity date, typically borrowed with little to no amortization of the principal balance, requiring a significant payment at the end of the term.
A term mortgage is a type of mortgage that matures, or comes due, after the lapse of a pre-agreed-upon period of years, typically ranging from one to ten years.
The forecast ratio of the next year's operating income to the sale price at the time the property is expected to be resold. Contrast to Going-In Cap Rate.
Terminal value represents the remaining value or expected remaining value of a property at the end of a certain period, such as an income projection period. It is an essential component in financial modeling and valuation, like Discounted Cash Flow (DCF) analysis, to determine the future worth of an asset.
Termination in real estate entails the conclusion of contractual obligations such as leases, loans, or options either by performance or by breach.
The scheduled end date of a lease, mortgage, or option, indicating the conclusion of the agreed terms and obligations.
A clause in a real estate sales contract that allows the buyer to have the property inspected for termite infestation, often requiring the seller to treat the property or providing the buyer with the option to cancel the contract.
A termite inspection is an examination of a structure by qualified personnel to determine the presence of termite infestation. This is often a requirement stipulated in a real estate sales contract to protect the buyer from purchasing a property with termite-related damages.
Termites are insects that bore into wood and destroy it, often leading to significant structural damage in properties.
Conditions and arrangements specified in a contract, determining the obligations, rights, and conditions particular to an agreement between parties involved in a real estate transaction.
A testament is a legal document that articulates an individual’s wishes about how their personal property should be distributed after their death. The terms 'will,' 'testament,' and 'last will and testament' are often used interchangeably.
A testamentary trust is a trust established in accordance with the instructions left in a person's will and becomes active only after the death of the testator.
Testate refers to having made a valid will before death. It contrasts with intestate, where there is no will, and the estate administration follows statutory default rules.
A testator is a person who has made a will or given a legacy. In general law, a testator is the individual who explicitly provides their desires regarding the distribution of their estate upon their death through the legal document known as a will.
A testatrix is a woman who has made a legal will to manage the distribution of her property upon death. The term comes from the Latin word 'testātrīx,' the feminine form of 'testātor,' and is specifically used to indicate that the individual is female.
A clause in a deed or other conveyance that cites the act and date, ensuring that all details such as names and legal descriptions are correct before signing.
A third party is an individual or entity that is not directly involved in a transaction or contract but may still be involved or affected by it. Third parties serve different roles in real estate transactions, such as tenants, escrow agents, or other relevant stakeholders.
Third-Party Mortgage Origination involves the process of using an intermediary, generally a mortgage broker, between the borrower and the lending institution. The intermediary performs all tasks and duties required to originate the loan according to the requirements of the lending institution.
Tight money is a condition of the credit markets characterized by high interest rates, rigid underwriting standards, and scarcity of high loan-to-value loans. In such environments, it becomes more difficult for individuals and businesses to obtain financing.
TILA-RESPA Integrated Disclosures (TRID), established in 2015 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, streamlined and simplified existing mortgage disclosure forms. By integrating the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA), TRID aimed to ensure borrowers receive clearer, more concise information about their mortgage details and associated costs.
Tilt-Up Wall Construction is a popular construction technique used primarily for industrial and retail properties. Concrete walls and columns are prepared on the ground in a horizontal form. These slabs are then tilted up to a vertical position to form walls.
The phrase 'Time Is of the Essence' in a contract requires that all time-related provisions must be strictly adhered to, emphasizing that any delays could be a breach of contract.
The Time Value of Money (TVM) is a financial concept that asserts money available at the present time is worth more than the same amount in the future due to its earning potential.
A form of property ownership under which a property is held by a number of people, each with the right of possession for a specified time interval. Time-sharing is most commonly applied to resort and vacation properties.
Timeshares allow multiple parties to own a share of a property, granting them the right to use it during specific time periods each year. This form of property ownership is often utilized for vacation destinations and resort properties.
Title in real estate is a legal document or designation that denotes ownership and interest in a property. It is evidence that the owner of land is in lawful possession thereof. Title differs from the right to possession alone, as it signifies both the right to possess and evidence of ownership.
Title 1 Loans are FHA-insured loans that allow borrowers to make nonluxury improvements (such as renovations or repairs) to their homes. Loans less than $7,500 do not require a property lien.
