A log cabin is an early-American-style house constructed from unfinished logs. It leverages the simple yet sturdy nature of timber to provide shelter and is often associated with rustic settings.
A lot is an individual parcel of land within a subdivision's plat. This land unit must have the appropriate zoning designation to be considered buildable and suitable for construction.
An MAI Appraisal is an appraisal conducted by an individual holding the MAI designation from the Appraisal Institute, indicating that the appraiser has met rigorous education, experience, and ethical standards.
A maintenance fee is an assessment by a Homeowners' Association (HOA) or a Condominium Owners' Association (COA) to cover the costs associated with maintaining and operating common elements and areas.
The management fee is the cost charged by a professional property management company for overseeing and managing rental properties. It is typically a fixed percentage of the total rental income generated by the managed property.
A type of prefabricated housing that is largely assembled in factories and then transported to sites of use. Manufactured homes are built to the standards of the HUD-code.
Market analysis involves studying supply and demand conditions in a specific area for a specific type of property or service. It aids developers in deciding project types and securing financing for proposed developments.
Market Delineation is the process of defining the geographic extent of the demand for a specific property, which helps in understanding where potential customers come from and how far they are willing to travel.
Market indicators are statistical data points that reflect patterns in construction, sales, and leasing activities within the real estate market. These indicators are closely monitored for insights into economic trends and performance.
Market segmentation is the process of defining the socioeconomic characteristics of the demand for a specific property or properties. It helps in identifying and targeting the right audience for real estate projects and listings.
A marketing plan is a formal strategy used to sell a property, which includes an advertising strategy, identification of a target market, and a pricing scheme.
A Master Deed, used by condominium developers or converters, is a legal document that records the division of a property into individually owned units, includes restrictions on their use, and outlines ownership of common areas.
Material participation is a tax term referring to the substantial, continuous, and regular involvement in business operations necessary to qualify for certain tax deductions related to real estate losses.
A Materialman is an individual or business entity that supplies materials utilized in the construction or repair of buildings and other types of property.
A megalopolis is a large, sprawling urban area that consists of several metropolitan regions merging into an unbroken stretch of urban development.
Metes and bounds is a legal method used to describe the boundaries of a piece of land using physical features, directions, and distances. It is often employed before land has been subdivided or platted.
A Metropolitan Division is a county or group of counties within a large Metropolitan Statistical Area (MSA) that functions as a distinct economic area. These divisions are essential in understanding the economic dynamics within larger urbanized regions.
MGIC is a provider of private mortgage insurance in the United States. Private mortgage insurance (PMI) protects lenders by covering mortgage payments in the event the borrower defaults, particularly when the borrower puts down less than 20% as a down payment.
In real estate, a mill represents one-tenth of a cent. It is often used to express tax rates on a per-dollar basis of assessed valuation.
The millage rate is a tax rate applied to property, where each mill represents $1 of tax assessment per $1,000 of assessed property value.
A Mineral Lease is an agreement that grants the lessee the right to excavate and sell minerals or remove and sell petroleum and natural gas from the lessor's property in return for royalty payments.
Mineral rights are the privileges granted to individuals or entities regarding the extraction and sale of minerals found on or beneath a piece of land. These rights are separate from surface and air rights.
Mini-warehouses consist of small lockable individual units, often with garage-door-style openings, providing short-term storage solutions for personal or business use.
Minimum lot size or minimum lot area refers to the smallest parcel of land allowed for development as per zoning regulations. This concept ensures proper land use and community planning.
A Mobile Home Park is a subdivision of plots designed for the siting of mobile homes. Plots are typically leased to mobile home owners and include utilities, parking space, and access to utility roads. Many parks also offer amenities such as swimming pools and clubhouses.
The Modified Accelerated Cost Recovery System (MACRS) is a method of depreciation used for income tax purposes in the United States. It allows for the accelerated depreciation of property over specified recovery periods.
Mold is a type of fungi that thrives in moist environments and can pose significant health risks if not properly managed. Specific varieties, such as Stachybotrys chartarum, can lead to severe health problems, especially in individuals with existing respiratory conditions.
Molding refers to ornamental strips of material, such as wood, used to cover joints between walls and ceilings, and to trim door and window frames. It adds a decorative touch to interiors and can significantly enhance the aesthetic appeal of a space.
A Month-to-Month Tenancy Lease is a rental agreement that can be extended or terminated each month by either party, providing flexibility for both landlords and tenants.
A fixed object and point established by surveyors to determine land locations and boundaries. Monuments serve as crucial reference points in the legal description of a property.
A mortgage is a legal agreement in which a lender provides a borrower with funds to purchase real estate. The property serves as collateral for the loan.
Mortgage assumption is the process by which a homebuyer takes over the seller's existing mortgage, continuing to make payments under the original terms. This can potentially offer favorable interest rates and terms compared to current market rates.
Mortgage fraud occurs when a potential borrower or a financial institution makes false representations that distort true financial outcomes, often leading to fraudulent gains or losses.
Mortgage Guaranty Insurance Corporation (MGIC) is a company that provides mortgage insurance, which protects lenders from losses when a borrower defaults on a mortgage loan. MGIC ensures that lenders can recover the money if a borrower does not fulfill their loan obligation.
The Mortgage Interest Deduction is a tax incentive for homeowners which allows them to deduct interest paid on a mortgage of their primary residence or secondary residence from their taxable income.
A collection of similar loans that are sold as a unit in the secondary market or used to back a security, ultimately sold in the capital markets.
Mortgaged Property refers to real or personal property that has been pledged as security for the repayment of a loan. This secured asset is usually real estate property, where the borrower retains ownership while the lender holds a legal claim until the debt is repaid in full.
A mortgagee is an entity or individual who lends money to a borrower to purchase real estate and holds a lien on the property or title as security for the debt.
A 'Mortgagee in Possession' situation arises when a lender takes possession and control of a mortgaged property following the foreclosure of a loan secured by the mortgage. The lender holds the property, collecting any income produced, until it is sold at the foreclosure sale.
A move-up home refers to a property that is larger, more expensive, or better equipped than a starter home, often acquired by individuals or families who have increasing financial stability and changing needs.
In multifamily residential properties, a 'unit' refers to a self-contained suite of rooms designed to be occupied by one tenant or family. Each unit typically features a private entrance and may be personalized to maintain a level of individuality separate from other units in the same building or complex.
A multiple exchange is a tax-free exchange in which more than one property or more than two parties are involved. This type of exchange allows for a series of transactions that enable parties to swap properties or interests to achieve their desired outcomes without generating a taxable event.
Muniments of Title are documents that serve as evidence of ownership, facilitating the transfer of property rights by clearly demonstrating the chain of ownership.
NAREIM is an organization of professional real estate investment managers dedicated to advancing the values and practices of the real estate investment management industry.
The National Association of REALTORS® (NAR) is a professional association dedicated to promoting professionalism, ethics, and standards in real estate activities. With over 1.3 million members, the NAR is a prominent organization within the real estate industry.
The National Flood Insurance Program (NFIP) is a program created by the U.S. Congress in 1968 through the National Flood Insurance Act of 1968. The NFIP's aims are to reduce the impact of flooding on private and public structures by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations.
An organization that provides leadership for the apartment industry on legislative and regulatory matters, advances research and the exchange of strategic business information, and promotes the desirability of apartment living.
The National Council of Real Estate Investment Fiduciaries (NCREIF) is an association that provides performance and analytics information for real estate investment markets, aiming to enhance fiduciary standards in real estate investments.
Negotiation in real estate refers to the process of bargaining between two or more parties, typically a buyer and seller, aiming to reach a mutually agreeable contract. The successful negotiation results in the formation of a legally binding contract detailing the terms and conditions under which the sale or purchase will proceed.
A neighborhood is a district or locality characterized by similar or compatible land uses. They often have identifiable place names and boundaries composed of major streets, barriers, or abrupt changes in land use.
The neighborhood life cycle represents the generalized pattern of physical and social changes that residential areas undergo over time. This cycle can be influenced by various factors including economic conditions, demographic shifts, and policy interventions.
A neighborhood shopping center is a type of retail property designed to provide convenience shopping for the day-to-day needs of consumers in the neighborhood. It typically offers a mix of convenience-oriented stores and services.
A net listing is a type of real estate agreement where the broker's commission is the surplus amount over an agreed-upon net price to the seller. This arrangement is illegal in some states due to potential conflicts of interest.
Net proceeds from resale refer to the amount a seller receives from the sale of a property after all costs and expenses associated with the sale have been deducted. It is important to calculate these net proceeds as they determine the actual financial benefit the seller gains from the property sale.
Net Realizable Value (NRV) is the estimated selling price of a property in the ordinary course of business, less reasonably predictable costs of completion and selling expenses. It is a crucial concept particularly in inventory and financial accounting, where it's used to ensure assets are not overstated in financial statements.
An early-American-style house that is simple and box-shaped. The traditional material for the exterior siding is white clapboard. A steep pitched roof is used to shed heavy snow.
A decision by the Department of Veterans Affairs (VA) to pay the guaranteed amount to the lender rather than acquiring the property in foreclosure when a guaranteed loan goes into default. This typically occurs when the property's value has declined significantly.
A nominee is an individual or entity acting on behalf of another person for specific purposes, generally to hold property rights temporarily.
Nonconforming land use refers to a property use that does not comply with current zoning laws but is allowed to continue because its use began before the zoning restrictions were enacted or changed.
A nonexclusive listing allows multiple real estate agents to market a property simultaneously. This gives the property owner the flexibility to sell through any agent and pays commission only to the agent who successfully sells the property.
In the context of real estate and building materials, nonfriable typically refers to materials, specifically asbestos-containing materials (ACMs), that are in good condition and do not easily crumble to release fibers when handled.
Nonjudicial foreclosure is a process used in certain states that allows lenders to sell a property directly without court involvement. This method is typically faster and less expensive.
Normal wear and tear physical depreciation refers to the gradual loss of a property's value due to usage and aging, which includes minor damages, material degradation, and obsolescence occurring under normal usage conditions.
Notice in real estate refers to the official communication of a legal action or one’s intent to take an action. It serves to inform individuals or parties of important legal actions or changes regarding property and tenancy.
A legal notice filed after the completion of construction that signals the time frame during which an unpaid contractor can legally file a mechanic’s lien.
A Notice of Default is a formal notification sent to a borrower or a tenant indicating that they have failed to make the required payments or comply with the terms of a loan or lease agreement. It often includes details on the grace period provided to cure the default and the penalties that will be applied if the default is not resolved.
Obsolescence in real estate refers to a loss in property value due to reduced desirability and usefulness of a structure because its design and construction are outdated. This can result from various factors such as changes in design preferences, technological advancements, or geographic shifts.
An Occupancy Certificate (OC) is an essential document that certifies that a building is suitable for occupancy and has been constructed according to approved plans and specifications, complying with relevant regulations and safety standards.
An occupancy permit, also known as a certificate of occupancy, is an essential document that certifies a building's compliance with local building codes and laws, permitting its use for commercial or residential purposes.
The 'Offering Price' refers to the amount a prospective buyer offers for a property on the market. This crucial figure determines the start of a negotiation process and can heavily influence the final transaction.
An offeror is an individual or entity that presents or extends an offer to another party in a real estate transaction. This term is crucial in contract law as it denotes the party who initiates the contractual agreement.
On-site refers to operations or services performed directly at the location, often related to property management, development, or various other activities.
An OPCO/PROPCO Deal is a financial arrangement where a parent company creates a subsidiary property company to manage real estate assets. This deal structure allows the operating company to reduce debt exposure, improve credit ratings, and potentially avoid double taxation when the property company is set up as a REIT.
Operating Capital refers to the funds required to finance the day-to-day activities of a business. It is otherwise known as working capital and is essential for maintaining the operational liquidity necessary for running regular business operations.
An Opinion of Title is a certificate, often provided by an attorney, that attests to the validity of the title to a property being sold. This document plays a crucial role in real estate transactions.
An option in real estate refers to the right to purchase or lease a property upon specified terms within a specified period.
An optionor is the party that grants or sells an option contract, giving the buyer the right, but not the obligation, to purchase or sell an asset at a specified price within a set period.
Orientation refers to the positioning of a structure within a site concerning sunlight angles and prevailing winds, which influences energy efficiency, lighting, heating, cooling, and overall comfort.
The original cost represents the total purchase price initially incurred for acquiring an asset, including any associated acquisition expenses. This figure is essential for various financial calculations and reporting, forming the baseline for depreciation, amortization, or gain and loss assessments.
Override refers to a fee paid to someone higher in the organization, or a percentage paid from earnings for additional expertise or management oversight.
An owner occupant is a resident of a property who also owns the property. This term differentiates from absentee owners and rental tenants and has significant implications for real estate, including financing and tax benefits.
An Owner's Title Policy, also known as Mortgagor's Title Insurance, provides protection to property owners against potential losses due to title defects, liens, or other legal encumbrances on the property that may arise after purchase.
A pad site is an individual freestanding retail space that typically encompasses ¾ to 1½ acres, often located near larger shopping centers or commercial developments.
A parcel is a defined piece of property under one ownership. It can be a standalone lot or part of a larger subdivision.
A Parcel Identification Number (PIN), also known as an Assessor Parcel Number (APN), is a unique numerical identifier assigned by local tax assessors to uniquely identify a parcel of real estate.
Partial Interest refers to the ownership of a part of the ownership rights in a parcel of real estate, which can include rights like mineral rights or easements. It can also describe an undivided interest in a property shared with several other owners.
A Party Wall is a wall built along the line separating two properties, partly on each parcel. Either owner has the right to use the wall and has an easement over that part of the adjoining owner’s land covered by the wall.
Passive activity income refers to profits derived from business activities in which the taxpayer does not materially participate or rental activities, which are typically deemed passive regardless of material participation.
Patent conveyance is the act of transferring a title to government land, often granted by the federal government to individuals or companies through an official document known as a patent.
The payoff amount represents the total remaining balance on a loan, inclusive of any prepayment penalties, that must be paid upon settlement to release a lien and transfer the title of the property.
"Perfecting title" refers to the legal process of removing any "clouds" or claims against a real estate title, ensuring that the property has a clear and legally sound ownership status. This often involves actions such as paying off liens, resolving disputes, obtaining quitclaim deeds, and addressing other title defects. The goal is to ensure that the title is marketable and can be transferred without any legal challenges to the ownership rights.
Perils in the context of real estate refer to various risks that can cause damage to a property, which are often covered under homeowner's insurance policies.
A Periodic Estate, also known as periodic tenancy, is a type of lease agreement that automatically renews at the end of each lease period unless either party provides notice of intention to terminate the agreement.
Permeability refers to the ability of soil or other substrates to allow liquids and gases to pass through them. It's a key factor in determining soil's capacity to support different types of land uses, particularly in terms of drainage and agriculture.
A permit is a vital document issued by a government regulatory authority that grants the bearer the right to perform specific activities such as constructing, modifying, or occupying a building.
Personal liability refers to an individual’s legal responsibility for a debt. In most mortgage loans on real estate, personal liability means that the borrower is accountable not only for the property but also for the repayment of the debt itself. Distinguishing it from nonrecourse loans and enhanced by additional clauses like the exculpatory clause, this concept is critical in financial and real estate transactions.
Personal property, also referred to as personalty, is any asset other than real estate. It includes items that are movable and not affixed to or associated with the land.
A personal residence is a dwelling unit that one claims as their primary home. This dwelling establishes one’s legal residence for voting, tax, and legal purposes.
Personalty refers to all property that is movable and not fixed to land. It is distinct from realty, which pertains to real estate and immovable property.
In real estate, pitch primarily refers to the slope or angle of a roof, which can greatly influence the property's design, function, and appeal. 'Pitch' can also denote a thick black substance used in construction and maintenance, such as driveway pavement or roof patching.
