Welcome to the Lexicon of Real Estate Terms
Navigating the world of real estate can be daunting, especially with the myriad of terminology that pervades the industry. Our Lexicon of Real Estate Terms is here to simplify your experience, providing you with more than 3,300 terms and definitions and 33,000 Quizes to help you feel comfortable using modern real estate language.
This comprehensive guide serves as a quick reference for various audiences, whether you are a home buyer or seller, a real estate professional, a business student, an investor, or an attorney. We understand that mastery of the language is crucial in making informed decisions in the real estate market, and our lexicon is designed to empower you.
What You’ll Find in Our Lexicon:
Our lexicon includes detailed definitions for real estate topics from A to Z. Whether you’re looking to understand key concepts for personal knowledge or to enhance your professional repertoire, you’ll find terms related to:
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Appraisal: Learn about the process of determining a property’s market value.
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Architecture: Explore different styles and terminologies that define building design.
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Brokerage: Understand the role of real estate brokers and the services they provide.
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Construction: Familiarize yourself with the terms used in the building process.
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Debenture: Discover financial instruments that could impact real estate investments.
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Flood Plain: Understand the risks and regulations associated with properties in flood-prone areas.
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Negative Amortization: Get insights into loan types that increase in balance over time.
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Security Instrument: Learn about the agreements that secure a loan against a property.
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Subprime Loan: Understand the implications of loans given to borrowers with poor credit.
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Underlying Mortgage: Familiarize yourself with the financial obligations tied to a property.
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Zoning: Get to grips with laws that define how land can be used.
In addition to these definitions, our lexicon provides a wealth of resources, including:
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Common abbreviations used in real estate communications.
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Mathematical formulas essential for calculating mortgage payments, investment returns, and more.
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Charts and diagrams to visually represent complex concepts and processes.
Why Use Our Lexicon?
By utilizing this resource, you’ll gain confidence in your understanding of real estate terminology. Whether you’re conducting research, preparing for a transaction, or simply looking to expand your knowledge base, our lexicon ensures you have access to the information you need at your fingertips.
Join us in diving into the intricate world of real estate language, and empower yourself with the terminology that shapes the industry. Feel free to explore and reference frequently; your journey into mastering real estate has just begun!
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.
Earnest money is a deposit made by a purchaser of real estate to evidence good faith.
An Earnest Money Contract is a crucial document in the real estate acquisition process, outlining the intention of a buyer to purchase a property and of a seller to sell it. It typically includes details about the amount of earnest money paid, the conditions under which the money will be applied or forfeited, and other terms of the sale.
EBITDA is a measure of a company's overall financial performance and is used as an alternative to earnings or net income in some circumstances. It strips out potentially non-operating and non-cash factors like interest, taxes, depreciation, and amortization.
An easement is a legal right allowing one party to use another property owner's land for a specific purpose. It manifests through agreements that outline the extent and conditions of use.
An easement by necessity is a type of easement that allows the owner of a landlocked property to access a public road or other essential resources through a neighbor's land.
An easement by prescription is a type of easement that is acquired through continuous and open use of another's property for a specific duration, as defined by state law, without the property owner's permission.
An easement in gross is a type of easement that grants an individual or entity the right to use another person's land for a specific, limited purpose. This right is not tied to owning any parcel of property and usually terminates upon the grantee's death.
A negative easement is the right to prevent the owner of a property from using it for specific purposes. This is in contrast to an affirmative easement, which allows the holder to make use of the property for a specified purpose.
An Eastlake House is a nineteenth-century-style home characterized by its ornate three-dimensional ornamentation created with chisels, gouges, and lathes, rather than scroll saws. Its unique styling predominantly features details that resemble furniture legs and knobs, distinguishing it from other Victorian architectural styles such as Queen Anne and Carpenter Gothic.
Eaves are the parts of a roof that extend beyond the exterior walls of a house. They are crucial for directing rainwater away from a house's walls and foundation, preserving structural integrity and aesthetic appeal.
The EB5 VISA program provides a pathway to U.S. permanent residency for foreign investors who make substantial monetary investments in U.S. businesses, particularly in real estate projects that create jobs.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a common measure used to evaluate a company's operating performance by focusing on the earnings generated from its core business operations.
Easements, Covenants, Conditions, and Restrictions (ECCR) refer to the limitations and obligations placed on property usage and design, which are often enforceable by homeowner associations or property developers.
Echo Boomers represent the children of Baby Boomers, born from the mid-1970s to the late 1980s. Also known as Generation Y or Millennials, this group formed a significant demographic and influenced housing demand, especially between 1995 and 2006.
Ecology is the scientific study of interactions among organisms and their environments, focusing on processes such as energy flow, nutrient cycling, population dynamics, and ecosystem development. It aims to understand how natural processes and human activities affect ecosystems and seeks ways to maintain or restore the systemic natural balance.
An economic base refers to industries within a geographic market area that provide essential employment opportunities crucial for supporting the community. The concept helps determine the core industries that drive local economic growth.
Economic Development encompasses actions and initiatives taken by municipalities or communities to improve their economic health or the standard of living of residents.
Economic feasibility is a crucial component of a Feasibility Study that evaluates whether a proposed project or investment is financially viable and worth pursuing.
Economic life refers to the remaining period for which real estate improvements are expected to generate more rental income than their operating expenses.
Economic obsolescence refers to the decrease in property value caused by external factors, such as environmental changes or new developments. It is also known as external obsolescence or environmental obsolescence.
Economic Occupancy refers to the effective occupancy rate of property units based on units rented for money, rather than the physical occupancy, which simply counts the number of occupied units regardless of whether rent is being paid.
The principle that transactions must have a genuine financial or economic effect and not be solely orchestrated to evade taxes. This concept is crucial for determining the legitimacy and validity of financial actions, especially in tax law.
Economic rent refers to the excess payment made to a factor of production over and above the amount needed to bring that factor into production. This term is often used in economics and appraisal contexts.
In real estate condemnation, an economic unit refers to whether some or all of the property taken has a different highest and best use than the larger parcel.
Effective age refers to the age of a property based on the wear and tear it has sustained, as opposed to its actual chronological age.
The Effective Date of the Appraisal, often referred to as the Appraisal Date, is the specific point in time at which the value of the property is assessed. This date is crucial for reflecting the property's market conditions and physical state at that particular time.
Effective demand refers to the actual demand for a product or service that is backed by the ability and intention of consumers to pay for it at the prevailing price.
Effective Gross Income (EGI) for income-producing property is the potential gross income minus a vacancy and collection allowance, plus miscellaneous income.
The Effective Interest Rate (EIR) represents the true rate of return on a loan or investment, factoring in all associated financing expenses beyond the nominal interest rate.
The effective rental rate calculates the true cost of renting a property by taking into account rental concessions over the lease's duration. This provides a more accurate measure for both tenants and landlords compared to the asking rent.
The effective tax rate is a measure used to compare the tax payments with the market value of the property or annual income, facilitating comparisons across different jurisdictions with varying assessment ratios.
The efficiency ratio in real estate is the proportion of a building's area that is leasable space, reflecting how efficiently space within the building is utilized for leasing purposes.
An efficiency unit or apartment is a small dwelling unit, often consisting of a single room, within a multifamily structure. In most cases, kitchen and bath facilities are not complete.
Egress refers to the right or means of a property owner to exit their land parcel and access a public road or other routes of escape. This is a critical aspect of property rights and accessibility.
EIFS (Exterior Insulating and Finish Systems) is a synthetic exterior cladding system used as an alternative to traditional stucco. It provides insulation and a finished surface in a single integrated layer, enhancing the energy efficiency and aesthetic of buildings.
An ejectment action is a legal process utilized to regain possession of real property from someone who is unlawfully occupying it, particularly when there is no lease agreement in place.
Ekistics is the scientific study of human settlements, including city growth, planning, and design. It involves analyzing how people utilize and organize spaces in urban and rural environments.
An Electronic Signature (e-signature) is a digital method for identity verification through the Internet, usually used in connection with contracts and other types of agreements. This method often involves security measures such as a Personal Identification Number (PIN) to indicate the approval of the individual agreeing to the transaction.
Elements of comparison are critical attributes or variables used in real estate to evaluate and contrast different properties during an appraisal or analysis process.
An elevation drawing is an orthographic (nonperspective) representation of a property from different views such as the front, rear, or side. This type of drawing helps illustrate how a planned or existing structure is situated in its topographical context.
The Elizabethan or Half Timber Style is an architectural design characterized by a 2- or 2½-story structure with part of the second story overhanging the first, incorporating stone and stucco walls with visible wooden beams.
A technique used in the appraisal of mortgaged income property to estimate its present value by discounting the future annual cash flow and expected resale proceeds.
Emblements refer to growing crops which are considered to be personal property. This concept primarily applies to tenant farming wherein a tenant has the right to harvest crops even after the lease on the land has expired.
Eminent domain is the power of the government or its delegate to take private property for public use, with the requirement that the owner is fairly compensated. This legal principle ensures that essential public projects can proceed while protecting the property rights of individuals.
An employee is an individual who works for an employer who dictates not only what tasks the individual performs but also how those tasks are accomplished. Employers are usually responsible for paying Social Security taxes, withholding income taxes, and providing any obligatory employee benefits.
The Employee Relocation Council, now known as Worldwide ERC, is a nonprofit professional membership organization focused on the effective relocation of employees globally. It provides insight into costs, services, and best practices for transferring employees.
Empty nesters are a significant segment of the housing market, typically comprising couples whose children have moved out to establish their own households. This often leads to a demand for smaller and more manageable housing units.
Encapsulation in real estate refers to the process of covering or enclosing hazardous materials to prevent the release of dangerous substances into the environment or to minimize exposure hazards. It is commonly used for materials like asbestos and lead paint in older buildings, offering a safer and often more cost-effective alternative to removal.
Encroachment in real estate refers to any intrusion or overlap, such as a building or structure, onto another person's property. This can lead to disputes between property owners and may require legal intervention to resolve.
In real estate, 'encumber' refers to the act of burdening a property with a liability, debt, or legal claim, which can limit the owner's ability to transfer title or decrease the property's market value.
An encumbrance is a claim, lien, charge, or liability attached to and binding real property, which may affect its transferability or decrease its value.
End Loan, often referred to as a Permanent Mortgage, is a financing process that replaces a construction loan or interim loan when a property is completed. This loan facilitates long-term financing once the project transitions from the construction phase.
The term End of Year (EOY) refers to the time typically at the end of the fiscal or calendar year, important for financial reporting, tax preparation, and business analysis.
An end user in real estate refers to the individual or entity that ultimately uses or occupies a property, though they may not necessarily be the one who purchases, produces, or pays for it.
In real estate, endorsement refers to the act of signing one's name to authorize a check, note, or other financial document, as well as offering support or credibility to a statement.
Energy efficiency in real estate refers to buildings designed and constructed to minimize energy use for heating, cooling, and other utilities. This is typically achieved through additional insulation, weatherproofing, and the use of advanced equipment that reduces energy consumption.
