Abatement refers to a reduction in the amount, intensity, or duration of something. In the context of real estate, it typically applies to decreases in taxes, rents, or environmental harm.
An abnormal sale refers to a property transaction that does not represent typical market conditions and hence, does not reflect the property's market value.
An abode refers to the place where someone lives. It can range from a simple shack to an opulent mansion.
An absentee owner is a person or entity that owns a property but does not reside in or personally manage the property. They often delegate these tasks to property management companies or other individuals.
Absolute Title refers to a clear and unequivocal ownership of property, devoid of any liens, judgments, or other encumbrances. It confirms that the titleholder has indisputable legal right to transfer ownership or use the property as they see fit.
An 'Abstract of Title' is a comprehensive summary of all significant legal actions, including recorded instruments and court proceedings, that relate to a particular property's title. It serves as an essential document for title examination, providing potential buyers, investors, and lenders with a detailed history of property ownership and encumbrances.
A separate living unit within or adjacent to a single-family home, often referred to as a secondary suite, which can be used by family members or rented out to non-family tenants. Typically includes its own bedroom, small kitchen, and bathroom.
Accretion refers to the gradual increase of land by natural forces, often used in the context of real estate to describe the organic extension of a property boundary due to natural processes like sediment deposition from rivers or streams.
Accrued depreciation, also known as accumulated depreciation, refers to the total amount of depreciation expense that has been recorded against a company's assets up to a specified point in time.
Acknowledgment in real estate refers to a formal declaration made before an authorized official by the person who signed a document, stating that it is their voluntary act.
An acknowledgment is a formal declaration by the person who has signed a document, stating that the signature is their voluntary act made in the presence of an authorized official, typically a notary public.
Asbestos-Containing Material (ACM) refers to any material or product containing more than one percent asbestos. Asbestos, used for its strength and heat-resistant properties, is harmful when inhaled, leading to serious health problems such as lung cancer, asbestosis, and mesothelioma.
An acre is a standard unit of measurement used in the real estate and agriculture industries to denote a specific amount of land. It is used extensively in property transactions, valuations, and farming.
Acreage refers to the measurement of land specifically denoting parcels over one acre, commonly used in agricultural, rural, and development scenarios to define and quantify large plots of land.
The Accelerated Cost Recovery System (ACRS) was a method used to depreciate property for tax purposes at an accelerated rate. Introduced by the Economic Recovery Tax Act of 1981 (ERTA), it allowed for quicker cost recovery of investments in tangible property.
In real estate appraisal, 'Actual Age' refers to the chronological age of a property or improvement, as opposed to its Effective Age, which can be altered by maintenance, renovation, and use.
Actual possession refers to the physical control or occupancy of a property, distinct from legal ownership, where a person or entity exercises real custody or control over a property.
An ad valorem tax is a tax based on the assessed value of an item such as real estate or personal property. This term is commonly used in the contexts of property tax, real estate transactions, and import duties.
Adjusted Basis refers to the net cost of an asset after adjusting for various factors such as improvements, depreciation, and damage, and is primarily used for calculating capital gains or losses upon the sale of the asset.
An Administrator’s Deed is a legal document used to transfer property of an individual who died intestate, meaning without a will. The deed is executed by an estate administrator appointed by the court.
An affidavit is a written statement made under oath or affirmation before an authorized officer, often used to authenticate facts pertaining to a real estate transaction.
An affirmative easement is a legal right that allows someone to use another person's property for a specific, active purpose. This type of easement benefits the party receiving the easement by granting them the ability to utilize the land in a way that they would not be able to otherwise.
An after acquired clause is a provision in a mortgage loan that includes property subsequently purchased as security on the existing mortgage. This can complicate future financing and the restructuring of loans as additional acquired property becomes part of the original security.
An 'Agency Coupled with an Interest' type of relationship in which the agent possesses a beneficial interest in the subject property. This interest allows the agent to control the property and protect the agency relationship against outside interference, in addition to representing the interests of the principal.
The Agricultural Foreign Investment Disclosure Act (AFIDA) is a federal law requiring foreign individuals and entities to report their U.S. agricultural land holdings to the U.S. Department of Agriculture (USDA) to maintain transparency and monitor foreign investment in American farmland.
Air rights refer to the legal ability to use, control, or occupy the vertical space above a given piece of property. These rights can be leased, sold, or transferred to another party, often significantly impacting property development, urban planning, and real estate markets.
Air space refers to the portion of real estate located above ground level. Owners of property with vertical structures often have rights to the air space above their tangible property, up to a certain elevation regulated either by local laws or agreements.
Alluvium refers to soil or sediment that is deposited by the process of accretion, generally considered to belong to the owner of the land to which the material is added.
Alt-A Mortgages are residential property-backed loans which are given to borrowers who have credit scores better than subprime borrowers but provide less documentation than typically required for standard loan applications.
An amendment refers to a change, correction, or extension of an agreement that does not modify the basic thrust of the agreement.
The American Land Title Association (ALTA) is a national trade association representing the interests of the land title industry, which includes title insurance agents, title insurance companies, abstracters, and real estate attorneys. ALTA provides support, education, and advocacy to its members, aiming to protect property owners by securing their property rights through industry standards and practices.
The American Land Title Association (ALTA) is a national trade association representing the title insurance industry, including title agents, abstractors, and real estate attorneys. Established to promote uniformity and high standards in title insurance policies and practices, ALTA creates best practices, advocates for public policy positions, and provides educational resources.
The American Society of Farm Managers and Rural Appraisers (ASFMRA) is a professional association whose members are experts in the appraisal or management of farms and rural properties. The organization focuses on the professional development of members through education, advocacy, and ethical standards.
An AML Adjustable Mortgage Loan is a type of mortgage that allows the interest rate to adjust periodically based on changes in a corresponding financial index that's associated with the loan. This type of mortgage is often chosen for its initial lower interest rates.
An anchor pad refers to the land underneath the building of an anchor store in a shopping center. This land may be owned by the retail store or controlled through a ground lease.
An anchor parcel refers to the land under and around an anchor tenant in a shopping center that includes the tenant’s building, parking, and landscaping. This property may be owned by the anchor tenant or controlled through a ground lease.
Annexation is the process by which an incorporated city extends its boundary to include additional territory, often requiring legal procedures and public votes. In real estate context, it also refers to the permanent attachment of personal property to a property.
A fundamental real estate concept that asserts the value of a property today is the present value of the sum of anticipated future benefits.
Federal and state regulations aimed at maintaining fair competition by preventing monopolies, anti-competitive practices, and unreasonable restraints on commerce.
An apartment (building) is a residential structure containing multiple dwelling units, generally intended as rental housing, featuring common entrances and hallways.
Apportion refers to the allocation of property taxes paid by a company, such as a utility or railroad, within a state based on various factors like the value and location of the property.
An appraisal is a professional opinion or estimate of the value of a property, which is conducted by a trained and certified appraiser.
Appraisal Approach refers to one of the three primary methods used to estimate the value of a property. The three key appraisal methods include the Cost Approach, Income Approach, and Sales Comparison Approach. Each methodology evaluates different aspects of the property to determine its fair market value.
The Appraisal Foundation is an organization formed to establish uniform requirements for appraiser qualifications and reporting standards. It is governed by a Board of Trustees and includes three independent boards.
An appraised value is an estimate of a property's worth, calculated by a licensed appraiser during the home-buying process.
An appraiser provides a professional opinion on the value of a property. Certification for real estate appraisers in the United States includes CERTIFIED GENERAL APPRAISER and CERTIFIED RESIDENTIAL APPRAISER, among others. Appraisers must fulfill educational, experiential, and examination requirements.
In real estate, the term 'Approach' often refers to the different methods or strategies used in appraising property value. Each approach considers various factors impacting the valuation of real estate.
An appurtenance refers to anything adjacent or pertinent to a piece of property, enhancing its use and contributing to its greater enjoyment, such as easements, rights-of-way, or parking spaces.
Arable land refers to land that is suitable for cultivation and farming. This land typically has rich soil and an appropriate climate for growing crops.
Arbitrage in real estate involves buying and selling properties, or financial instruments linked to real estate, in different markets to profit from price differences. This strategy can also include leveraging financial instruments like REITs or mortgage-backed securities to exploit discrepancies in pricing.
The manner in which a building is constructed, including the layout, floor plan, style and appearance, materials used, and the building technology employed.
In real estate, 'area' refers to a two-dimensional space defined by boundaries, such as floor area, the area of a lot, and market area. The concept of area is crucial in various real estate applications including property assessment, planning, and development.
AREUEA, the American Real Estate and Urban Economics Association, facilitates the exchange of ideas and research among academics and professionals in real estate and urban economics. Established in 1964, AREUEA supports academic research and policy analysis to advance the understanding of urban development and real estate market functioning.
Asbestos is a mineral fiber that was once commonly used in a variety of building construction materials for insulation and as a fire-retardant. While its use has declined since the late 20th century due to health concerns, the presence of asbestos in older buildings remains a significant issue due to its potential health risks.
Asbestos-Containing Material (ACM) refers to products that include asbestos, a mineral fiber that has been widely used in building materials due to its durability and resistance to heat. However, the use of asbestos has generally been prohibited since the early 1980s due to health risks.
The asking price is the price a property seller lists when trying to attract potential buyers. It is the starting point for negotiations and is typically determined based on market conditions, property value, and other factors.
Assessed value or valuation is the value against which a property tax is imposed. The assessed value is often lower than the market value because of state law, conservative tax district appraisals, and infrequent reassessment.
The assessment base, also known as the tax base when applied to property taxes, is the total value of the property within a jurisdiction that is subject to taxation. This term is crucial in understanding how municipalities calculate property taxes and fund essential services.
An Assessor Parcel Number (APN) is a unique identifier assigned to tracts of land and properties by a tax assessor, which is pivotal for property record-keeping and taxation purposes. It enables quick access to detailed information about the property.
An Assessor's Parcel Number (APN) is a unique numerical identifier assigned to each piece of real estate by a tax assessor for purposes of identification and record-keeping.
Understanding what constitutes an asset is crucial for evaluating one's financial health. Assets are things of value owned by an individual or organization that can provide future economic benefits.
The term 'assign' in real estate refers to the transfer of one's property rights or contract rights to another party. This can apply to leases, mortgages, deeds of trust, and other contractual agreements. It's important to note that assigning a contract does not typically relieve the initial party of their contractual obligations unless a novation, or the substitution of one party for another with the consent of all parties involved, occurs.
An atrium is a large open space located within a building, often featuring a glass roof or large windows to allow natural light to enter. It can serve as a central gathering space and often includes greenery or other aesthetic elements.
An Attorney's Opinion of Title is a legal document in which an attorney provides their judgment regarding the validity and marketability of a property title after conducting a thorough examination of public records and property title abstracts.
An auction is a method of selling property to the highest bidder. This process is utilized for a variety of real estate transactions and can involve different bidding procedures. The property is ultimately sold to the highest bidder.
An auctioneer is a professional who conducts auctions, manages bidding processes, and finalizes sales or transfers of property through public competition.
An avigation easement is a property right granted typically near an airport, allowing for overflight and related ancillary activities such as the emission of noise and dust, the restriction or prohibition of certain activities, and the guarantee of unobstructed airspace.
A Backup Contract is a pre-arranged agreement to purchase real estate that takes effect if a primary contract is not completed, providing a secondary buyer an opportunity under predefined conditions.
The remaining amount after subtracting relevant values, such as the outstanding principal on a loan or the remaining funds in an account.
The base year in real estate is a starting point used to compare financial data, often related to property taxes or operating expenses, to calculate escalations or adjustments in subsequent years.
A basis point (bps) represents one hundredth of one percent or 0.01%, and it is commonly used in the financial and real estate sectors to denote changes in interest rates and other percentages.
A bedroom community, also known as a commuter town or suburb, is primarily residential in nature, located close to a city or employment center. These communities typically lack substantial employment opportunities themselves and are inhabited largely by workers who commute to urban areas for work.
In real estate and other facets of financial planning, a 'Beneficiary' is a person or entity designated to receive benefits or assets, such as proceeds from a life insurance policy, trusts, or estates.
Biannual refers to events or actions that occur twice within a single year, similar to the term 'semiannual.' It is important not to confuse it with biennial, which means occurring every two years.
Biennial refers to events or processes that occur every two years. In real estate, this can relate to property assessments, contract renewals, or other cyclical activities.
A 'Block' in real estate is typically defined as an area of land enclosed by streets or delineated by street intersections. Blocks form the basic units of city layouts and are crucial in urban planning and design.
The Board of Equalization (BOE) is a government entity responsible for ensuring uniform property tax assessments within its jurisdiction. This entity operates at both local and state levels to maintain equity and fairness in property taxation.
A board of equalization is a governmental body tasked with ensuring property assessments for tax purposes are fair and equitable. These boards are pivotal in balancing the property tax system to avoid over- or under-taxation.
BOMA Measurements refer to the standards offered by the Building Owners and Managers Association for accurately measuring the leasable square footage of commercial buildings.
A bond-type lease is a type of net lease requiring the tenant to pay rent for the entire lease term, providing a near-guaranteed income stream to the landlord and often resulting in favorable rental rates for the tenant. This lease arrangement continues regardless of any damage to the leased property.
A boundary, often referred to as a property line, defines the physical extent of a parcel of land, delineating ownership and legal rights. They are crucial for determining land use, development, and resolving disputes.
A term used to describe the physical property and infrastructure of a business or organization, as opposed to its intangible assets or online presence.
A bridge loan is a short-term financing solution used to bridge the gap between the termination of one loan and the commencement of another loan. Typically employed in real estate, bridge loans allow borrowers to meet liquidity requirements while awaiting long-term financing.
A British Thermal Unit (BTU) is a unit of heat energy, defined as the quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.
A British Thermal Unit (BTU) measures the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit. It is a fundamental unit of measurement in heating and cooling systems and energy production.
Brownstone refers to a nineteenth-century style house typically characterized by its distinctive brownstone facade, 4 or 5 stories, and a stoop that leads up to the first floor. These houses commonly share side walls with adjacent houses, creating a row of similar structures often found in urban settings.
A buffer zone is a designated area used as a transitional space between two distinct land uses. This zone helps reduce the potential conflicts and impacts between differing land uses by providing a physical and sometimes functional separation.
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.
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 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.
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.
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.
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.
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.
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.
The term 'Cash Out' refers to the process of completely liquidating an asset, enabling the owner to receive its total monetary value in cash.
