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!
The Internal Revenue Service (IRS) is a federal agency that oversees the administration and collection of federal income taxes. Responsible for distributing tax forms, auditing tax returns, and enforcing federal tax laws, the IRS plays a crucial role in the financial ecosystem of the United States.
The Internal Revenue Service (IRS) is the U.S. federal agency responsible for tax collection and tax law enforcement, ensuring compliance with the nation’s tax laws and providing guidance and services to taxpayers.
International Architecture is an early-twentieth-century style characterized by simplicity, lack of ornamentation, and continuous window designs, giving a modern and minimalist appearance.
The International Association of Assessing Officers (IAAO) is a professional organization dedicated to promoting excellence in property appraisal, assessment administration, and property tax policy.
The International Code Council (ICC) is a nonprofit organization established in 1994, dedicated to developing a single set of comprehensive and coordinated national building codes. The ICC aims to ensure public safety and building performance through effective codes and standards.
The International Council of Shopping Centers (ICSC) is a prominent nonprofit association that supports the shopping center industry through a variety of resources, publications, and events focusing on financial, leasing, and legal matters.
The International Facility Management Association (IFMA) is a global organization focused on advancing the practice of facility management by integrating principles of business administration, architecture, and behavioral and engineering sciences. The organization promotes excellence through education, advocacy, and networking opportunities for its members.
A global organization dedicated to promoting private property rights and fostering international real estate investment and development.
The International Real Estate Society (IRES) is a federation of regional real estate societies that facilitates global cooperation among its members while allowing each society to maintain control over its activities.
The International Right of Way Association (IR/WA) provides education and professional development for individuals in the right-of-way industry, covering areas such as law, engineering, and appraisal. The association also offers the esteemed SR/WA designation.
Interpleader is a legal proceeding initiated by a neutral third party to resolve disputes between rival claimants over a particular property or transaction.
The Interstate Land Sales Full Disclosure Act (ILSA) protects consumers from fraud and abuse in the sale or lease of land across state lines by requiring developers to register subdivisions of 100 or more non-exempt lots with the Department of Housing and Urban Development (HUD) and provide prospective buyers with a property report.
An Interval Adjustment Cap refers to a limit on the amount a loan's interest rate can increase or decrease during each adjustment interval on an adjustable-rate mortgage (ARM). This cap helps borrowers predict and manage their mortgage payments by restricting rate fluctuation within set periods.
Interval ownership, also known as time-sharing, is a method of property ownership where multiple owners have exclusive rights to use a property for different intervals of time.
The term 'intestate' describes the condition of a person who dies without having made a valid will. In such scenarios, the deceased's estate is distributed according to state laws rather than the deceased's wishes.
Intrinsic Value refers to the inherent worth of a tangible property, distinguishing it from the perceived or market value. Assets like precious metals, art, and real estate are often evaluated for their intrinsic value due to their tangible desirability and utility.
Inventory in real estate refers to property held for sale or properties utilized in the development of goods destined for sale, which does not qualify for capital gains tax treatment.
Inverse condemnation is a legal procedure used to obtain compensation when a property interest has been taken or diminished in value by a government activity. It compels the government to pay the owner for such interference.
An investment involves the allocation of resources, usually money, into assets or ventures with the expectation of generating income or profit. It aims at wealth preservation and enhancement.
Investment analysis is the evaluation of the potential returns from real estate investments, helping assess the amount an investor should pay and the investment’s suitability. The analysis encompasses various methods to estimate returns based on multiple assumptions and investment horizons.
Investment bankers play a crucial role in helping organizations raise capital by bringing new securities such as stocks or bonds to the market, guiding clients through the complexities of financial regulation, pricing, and issuing.
The Investment Life Cycle refers to the entire process an investment goes through from its initial acquisition to its final disposal or sale. Understanding this cycle helps stakeholders make informed decisions regarding entry and exit points to maximize returns.
Investment properties are real estate assets purchased with the intention of earning a return on investment. This can be through rental income, the future resale of the property, or both.
An Investment Tax Credit (ITC) is a tax incentive that enables businesses to deduct a certain percentage of investment costs from their income tax liability.
Investment value refers to the estimated value of a real estate investment to a specific investor, which can vary from the property's market value based on the investor's unique situation and objectives.
Investment-grade property refers to real estate of such quality and size that it’s eligible for inclusion in high-quality institutional portfolios, typically owned by large investors like insurance companies, pension funds, and real estate investment trusts (REITs).
Involuntary alienation refers to the loss of property ownership against the owner's will, often caused by nonpayment of debts such as taxes or mortgage foreclosures.
Involuntary Conversion Condemnation occurs when private property is taken for public use without the owner's consent, often through eminent domain or sudden destruction by nature. This process leads to the conversion of private property into a public asset or adaptation.
An involuntary lien is a legal claim against property imposed without the owner's consent, often due to unpaid obligations like taxes or special assessments.
The Inwood Annuity Factor is a number used to determine the present value of a series of equal periodic payments from a level payment income stream, considering a specific interest rate.
Inwood Tables provide a set of annuity factors used for calculating the present value of an annuity based on various interest rates and maturity periods. These tables are instrumental in real estate and financial analysis.
An interest-only loan is a type of mortgage where the borrower is obligated to pay only the interest on the principal balance for a set period, usually between 5 to 10 years.
The International Right of Way Association (IR/WA) is a professional member organization compromised of global infrastructure real estate practitioners. IR/WA provides education, best practices, and forums for discussion to facilitate real estate and infrastructure professionals in acquiring land rights.
In the realm of real estate, 'irrevocable' refers to a commitment or agreement that cannot be changed, withdrawn, or undone once it is established. This term is commonly used in the context of legal and financial documents where permanence is crucial.
An irrigation district is a special-purpose, quasi-governmental entity designed to provide water and other utilities to rural areas, primarily for agricultural use.
An Italian Villa is a Latin-style, substantial 2- or 3-story house often constructed from masonry with prominent overhanging eaves.
Itemized deductions are specific expenses that can be deducted from taxable income to reduce the amount of federal income tax owed. They include costs such as mortgage interest, property taxes, and certain types of losses.
Jeopardy in real estate refers to the risk or danger of losing a property, typically due to default on a loan or failing to meet certain contractual obligations, leading to potential foreclosure or other legal actions.
Joint and several liability is an obligation that allows a creditor to demand full repayment from any or all of those who have borrowed. Each borrower is liable for the entire debt, not just a prorated share.
Joint ownership refers to a property ownership structure where two or more individuals hold title to a property collectively. This structure can have various legal implications, depending on how the ownership is defined and agreed upon among the parties.
Joint Tenancy refers to the ownership of property by two or more individuals who collectively hold an undivided interest in the real estate, alongside the right of survivorship. This arrangement ensures that when one joint tenant passes away, their interest in the property automatically transfers to the surviving joint tenant(s).
A Joint Venture (JV) is an agreement between two or more parties to pool their resources for the purpose of accomplishing a specific task. This task can be a business activity or a property investment. Each party in the joint venture retains their individual profits, losses, and assets, while jointly sharing control over the project.
Joists are essential structural elements in building construction, providing support for floors, ceilings, or other horizontal platforms. They are typically made from wood, steel, or engineered materials and are spaced at regular intervals to distribute weight efficiently.
A decree issued by a court determining that one individual is indebted to another and specifying the amount owed.
A judgment creditor is an entity that has received a court decree or judgment entitling them to collect a debt owed by the judgment debtor.
A judgment debtor is an individual or entity who has been ordered by a court to pay a sum of money but has not yet satisfied this obligation. This term is often used in legal and real estate contexts where defaulting on financial responsibilities can lead to court judgments.
A judgment lien is a court-ordered claim upon a debtor's property, established to satisfy a debt ruled upon in a court of law. This lien ensures the creditor's right to a debtor's asset in case of non-payment.
Judicial foreclosure is a legal process in which a defaulted debtor’s property is sold under the supervision and ratification of a court, often resulting in a deficiency judgment against the debtor if the sale price does not cover the owed amount.
A Jumbo Mortgage is a type of home loan that exceeds the conforming loan limit set by governmental bodies like Freddie Mac and Fannie Mae. These loans are often used for purchasing luxury homes or properties in highly competitive markets.
Junior anchors are stores in a community or regional shopping center that are smaller than the anchor tenant, yet larger than the inline stores. They typically range from 15,000 to 40,000 square feet.
A junior lien, also known as a junior mortgage, is a type of lien or security interest that is registered on a property after a primary, or senior, lien. These liens are subordinate to the senior lien in terms of priority and repayment during foreclosure.
A junior lien, also known as a subordinate lien, refers to any lien that will be paid after earlier liens have been paid. It denotes the secondary position of the lien in order of payment priorities.
A junior mortgage is a type of mortgage that rises behind a prior mortgage in lien priority, which means in case of default, the primary mortgage get paid first before the junior mortgage is addressed.
Junk fees are charges levied by a lender at closing in the hope that the borrower will neither question them nor abort the transaction. These fees often are of a questionable nature but are relatively small compared to other legitimate closing costs.
Jurisdiction refers to the geographic or topical area of authority granted to a specific government entity. This concept is crucial in determining which legal entity has the right to preside over a particular matter or region.
Just Compensation refers to the amount of money paid to a property owner when their property is legally taken by the government under the power of eminent domain. The payment is intended to be equivalent to the Fair Market Value of the property taken.
A landmark U.S. Supreme Court case that defined the parameters for the government's use of eminent domain to transfer land from one private owner to another for economic development.
Key money refers to amounts paid at the outset to lease a property, especially in regions where desired property types are scarce.
A Key Tenant, also frequently referred to as an Anchor Tenant, is a major retailer or other business that is considered to be significantly beneficial to a commercial property. They draw considerable foot traffic, consequently supporting smaller businesses in the same complex.
A kick-out clause is a provision in a real estate sales contract that enables the seller to void the agreement if a superior offer is received before the sale closes.
Kickbacks are fees or rebates paid to an agent or other participant in a transaction as an incentive to refer customers to a particular vendor, without any actual service provided to the customer besides the referral. These practices are often illegal and can jeopardize the integrity of the real estate transaction.
A kicker is a payment required by a mortgage, in addition to normal principal and interest, often linked to a borrower’s financial performance metrics such as gross sales or profits.
A kiosk is an independent stand that is used for selling merchandise. It is often located in the common areas of large shopping centers and malls, catering to consumer convenience and typically offering products ranging from food to small novelty items.
Laches is a legal doctrine used to bar claims in which plaintiffs have unreasonably delayed in asserting their rights, causing detriment to the defendant.
An organization devoted to the exchange of information and ideas pertaining to land economics, fostering a network of professionals engaged in various aspects of land use, development, and conservation.
Land encompasses any part of the Earth's surface that is not covered by water. It is a fundamental real estate term that includes the ground itself, soil, and any other sub-surface materials.
Land banking refers to the practice of acquiring parcels of land with the intention of holding onto them until they become more valuable or are ready to be developed.
A Land Contract is a real estate installment sale arrangement whereby the buyer can use, occupy, and enjoy the land, but the seller retains the deed and title until all or a specified part of the purchase price has been paid.
Land economics is a branch of economics that studies the allocation, use, and value of land. This field aims to understand how land resources are utilized, valued, and managed, with a special focus on agriculture and urban development. It integrates knowledge from geography, environmental studies, and economic theory to analyze land-related issues.
A land lease, also known as a ground lease, is a contractual agreement where the tenant leases the land on which they intend to construct a building or other improvements, while the land itself remains the property of the landlord.
A land lease community is a type of housing development where homeowners lease the land under their homes from a landowner who often provides community infrastructure and amenities. These communities are commonly associated with manufactured or mobile homes.
Land reclamation is the process of creating new land from oceans, seas, riverbeds, or lake beds. This process is used for various purposes including agricultural, industrial, residential, and infrastructural development.
The Land Residual Technique is a method used in real estate appraisal to estimate the value of land by using the net operating income (NOI) and the value and return of improvements on the property. It is especially useful for feasibility analysis and determining the highest and best use of a property.
A land sale-leaseback is a financial transaction where the owner of a piece of land sells it to an investor and simultaneously enters into a lease agreement to continue using the land for a specified period.
Land use controls or regulations refer to government ordinances, codes, and permit requirements designed to ensure that private use of land and natural resources aligns with established policy standards.
Land Use Intensity (LUI) refers to the extent to which a land parcel is developed, considering the conformity with zoning ordinances and regulations.
Land Use Planning is an activity, generally conducted by a local government, aimed at guiding public and private land use decisions to ensure they are consistent with community policies. It is primarily used to inform Zoning decisions.
Land Use Succession refers to the change in the predominant use of a neighborhood or area over time, often driven by social, economic, and environmental factors. This process can significantly alter the character and demographic makeup of a region.
In early English law, the phrase 'land, tenements, and hereditaments' was used to encompass all sorts of real property, including the rights and interests inherent in real estate ownership.
The land/building ratio is a comparative value of land relative to the improvements, commonly used in the assessment of property worth in real estate to understand property valuation dynamics.
Landlocked refers to a condition where a property has no direct access to a public road, requiring access through an adjacent property.
A landlord is a property owner who rents out their property to a tenant in exchange for rent. They have the right to lease property for a specific time period while earning rental income.
A landmark can serve as a boundary marker for land, or it could be a historically significant or well-known structure that attracts attention and tourist interest.
A Landscape Architect is a professional who designs building sites, subdivisions, and other projects requiring expertise in areas like drainage, grading, vegetation, installation of utilities, and site improvements.
In condemnation proceedings, the larger parcel refers to the overall property from which the condemned property is taken. It includes properties that are affected, although not actually taken, to determine severance damages.
A late charge or late fee is a penalty that businesses or lenders impose on customers who fail to make a payment by the specified due date, including any applicable grace period. These fees can be quite substantial, sometimes up to 5% of the regular payment amount, and are meant to incentivize timely payments.
Latent defects are hidden flaws in a property that are not apparent at the time of purchase or during an initial inspection but may reveal themselves later, often causing significant issues.
Lead is a toxic metal once commonly used in construction materials such as plumbing pipes and paint, but now it is identified as a hazardous substance. Its presence in property necessitates special disclosures during transactions.
Lead-based paint is considered a hazardous material and capable of causing poisoning. Disclosure of its existence in a property is mandatory when selling or leasing, as dictated by federal laws such as the Residential Lead-Based Paint Hazard Reduction Act of 1992.
LUST refers to leaking underground storage tanks, a critical environmental issue requiring prompt attention and remediation. These tanks often contain hazardous substances that can contaminate soil and groundwater.
Leaking Underground Storage Tanks (LUSTs) are a major environmental concern, as they can release hazardous substances into the ground, posing risks to both the environment and human health.
A lease is a legal contract in which the entity entitled to the possession of real property (lessor) transfers those rights to another entity (lessee) for a specified period in exchange for payment called rent.
A Lease Abstract encapsulates the major highlights and key provisions of a lease agreement, offering a quick reference for property managers, landlords, and tenants while ensuring essential information is easily accessible.
A Lease Proposal is an offering made to a prospective tenant that outlines the key terms and conditions of a potential lease agreement, facilitating the leasing process.
A lease purchase agreement, also known as a lease with option to purchase, is a contractual arrangement that combines elements of a traditional rental lease with an option to buy the property within a specified timeframe. It can provide benefits for both buyers and sellers.
A Lease with Option to Purchase is a leasing arrangement where the lessee (tenant) has the right to purchase the leased property at a predetermined price within a specified timeframe, subject to certain conditions.
A lease-own hybrid model is a commercial real estate lease arrangement in which a tenant leases space in a property and simultaneously gains an ownership stake in the entity owning the property. This model allows tenants to participate in annual profits and appreciate in the property’s value while committing to long-term, above-market rent payments.
A Leaseback, often referred to as a Sale-Leaseback, is a financial transaction in which a property owner sells their asset and leases it back from the buyer. This allows the original owner to continue using the property while freeing up liquid capital.
Leased Fee refers to the landlord's ownership interest in a property that is under lease. It's the structure for defining income from rental property, emphasizing the importance of anticipated rental income for assessing value.
Leased Fee Adjustment in real estate appraisal is the reduction in market value of a leased fee estate caused by current leases at below-market rent, resulting in a positive value for the leasehold estate held by the lessee enjoying the rent savings.
