Terms Search - Rental Property in the Villages,
The following terms are not legal and complete definitions
and are meant to provide general guidelines only.
Real Estate Terms
Derived from Latin battere, "abatement"
a common legal term meaning "the beating down,
removal, or diminishment" of something. For example,
lead abatement refers to finding and removing lead
paint. Abatement usually refers to "Rent Abatement",
the incentive offered by a landlord, including free
rent, early occupancy, or reduction of fees.
The rate at which rentable space is filled, divided
into gross absorption and net absorption. Gross absorption
is a measure of the total square feet leased over
a specified period, with no consideration given to
space vacated in the same geographic area during the
same time period. Net absorption is equal to the amount
occupied at the end of a period, minus the amount
occupied at the beginning of a period. Net absorption
does take into consideration the space vacated during
Abstract of Title
Abstract of title is a historical summary of the recorded
instruments and proceedings on the title of a property.
Adjustable Rate Mortgage or ARM
An ARM is a loan that has a varying interest rate
and payment based on an adjustment period. The adjustment
is dependent on the variation in a benchmark index,
usually the LIBOR or prime rate. This loan is also
known as a variable rate mortgage.
Adjusted Sales Price
Adjusted sales price is the price on the contract
less all credit concessions by the seller.
Air rights are the legal ability to use or control
the space above a property. Air rights can be sold,
rented or leased to another party.
Amenities are the enhancements that buildings offer
its owners or tenants. These usually include a doorman,
health club, garage, children's playroom, common lounge,
Amortization is the periodic payment of principal
and interest on a liability (including a mortgage),
or the write-off of a non-depreciable asset over a
An amortization schedule is the designation of periodic
payments of principal and interest toward the principal
to eventually pay off a debt.
Annual Percentage Rate or APR
The APR is the actual effective rate of interest charged
on a loan expressed on a yearly basis and represents
the full cost of all elements associated with obtaining
a full mortgage into a single formula. The APR is
a useful device for making comparisons between mortgage
An appraisal is the evaluation of a property by a
licensed appraiser on its price based on previous
sales of similar properties. The appraised value is
used by a bank to determine the lending limit on a
given property. A seller may also have a property
appraised to determine the offering price during a
An assessment is a levy against property and can be
an extraordinary payment called for by the board of
directors of a cooperative or condominium for the
purpose of making a capital improvement or to provide
some other essential service for which funds in the
reserve account are inadequate.
An asset is something that is owned that has value.
Assignment is the process by which a right or contract
is transferred from one party to another. Examples
of typical assigned contracts are mortgages, leases
and deeds of trust.
An attorney-in-fact is a person appointed to perform
legal acts for another under a power-of-attorney.
A balloon mortgage is a short-term mortgage with fixed
installments of principal and interest that do not
fully amortize the loan. The balance of the mortgage
is due in a lump sum at the end of the term.
Board approval is a condition in the standard cooperative
sales contract requiring that the buyer obtain approval
from the board of directors of the cooperative corporation
as a prerequisite to completing the sale.
A bridge loan is a loan for a short duration of time
and can be used when one is purchasing one property
but is dependent on the equity from another property
that has not yet been sold. Once the property is sold
then the bridge loan is repaid.
Broker (See Real Estate Broker)
A brownstone is a townhouse that is usually a 3 to
5 story building, named for traditional "brown
stone" used in the facade. It may be a single
family building or have been converted into multiple
apartments. The original structure was built in the
19th or early 20th centuries.
Building restrictions are the requirements in building
codes that affect the size and appearance of the building.
Buy down is the voluntary paying of discount points
by a borrower to reduce mortgage interest rate at
the time the loan is made.
A buyer's broker is a broker who represents the buyer
in effectuating a purchase. Normally in residential
real estate transactions, the buyer's broker shares
the commission received by the listing broker, who
represents the seller.
By-laws are the rules by which the cooperative corporation
or condominium operates, including those regulating
elections, officers, and authorizations.
A capital expenditure is an improvement that will
have a life of one year or more and will increase
the value of the property.
Capital gain is the seller's gain on an asset used
in a trade or business or for investment, including
real estate. This gain is taxed at varying rates depending
on whether the asset was held for more or less than
Capital improvement is an item that adds value to
the property, adapts the property to new uses, or
prolongs the life of property. Maintenance is not
a capital improvement.
The percentage of the investment the investor will
receive back each year from the net income from the
Caps are percentage restrictions on an ARM which limit
the amount the interest rate may change per year and
over the life of the loan.
The carry-cost rule is used by banks to evaluate borrowers
for loans. It gives the maximum percentage of a borrower's
income that the bank will find acceptable to carry
the loan and related housing costs. This rule is used
in conjunction with the debt/equity ratio.
Cash flow is the income produced by an investment
property after deducting operating expenses and debt.
In a mortgage commitment, some lenders require that
the borrower have on deposit in their bank accounts
at the time of the closing an amount equal to a predetermined
number of months of the cost of principal, interest,
taxes, and insurance, which is referred to as a cash
Caveat is a warning or caution that may be an amendment
to a contract of sale.
Caveat emptor in Latin means "let the buyer beware",
which applies in most real estate transactions.
Certificate of Occupancy (C of O)
The Certificate of Occupancy is a certificate issued
by a local governmental entity responsible for the
use of land in the community where the property is
located stating that the structures on the property
or any improvements made to these structures comply
with the codes, ordinances and regulations of that
governmental entity and that they may be occupied.
Certificate of Title Opinion
Certificate of Title Opinion is a report based on
a title examination, which states the examiner's opinion
of the quality of a title to real property.
A cession deed is used to relinquish real property
to a municipality for a road or other public work
A chain in land measurement is a distance of 66 feet.
Chain of Title
Chain of Title is a successive conveyance of title
to a specific parcel of land.
Chattel is personal property.
Civil Rights Act of 1866
The Civil Rights Act of 1866 is a federal law that
prohibits all discrimination on the basis of race.
Civil Rights Act of 1964
The Civil Rights Act of 1964 is a federal law that
prohibits discrimination in many instances, but in
Title VI it prohibits discrimination on the ground
of race, color, or national origin under any program
or activity receiving federal financial assistance.
Civil Rights Act of 1968 (See Fair Housing Act of
The closing is when the transfer of ownership of a
property from the seller to the buyer occurs according
to the sales contract.
Closing costs are the expenses incurred in the purchase
and sale of real property paid at the time of settlement
or closing. Some examples of closing costs are title
insurance, attorney fees, appraisal fees, recording
fees and taxes.
A closing statement is an accounting of the funds
received and distributed in a real estate transaction.
Cluster zoning is a form of zoning that provides for
several different types of land use within a zoned
Coastal Zone Management Program
The Coastal Zone Management program is a program coordinated
by DOS to preserve and protect New York's coastline.
Co-broke is an arrangement between two brokerage firms
to share a commission. Normally used when one broker
is the seller's exclusive listing agent and the other
broker represents the buyer.
Code of Ethics
The Code of Ethics is a standard of conduct required
by license laws and by the National Association of
A codicil is a supplement or an appendix to a will
either adding or changing a bequest.
Collateral is the security put up in exchange for
a loan, which can be taken by the bank if the loan
goes unpaid. In the case of a mortgage loan, the collateral
is the property.
Refers to when an owner combines two adjoining apartments
into one to enhance the value and the space.
Commercial zones allow usage for retail stores, restaurants,
hotels and service businesses.
Commingling is the mixing of money or property of
others with personal or business funds or other property.
The commission is the payment to the broker for his
or her efforts on marketing and selling the property,
and is usually a percentage of the total purchase
A commission split is the sharing of commissions between
the listing agent and the broker of the buyer.
The commitment fee is a fee paid to the lender for
processing, underwriting and originating the mortgage.
It is also known as an origination fee.
A letter issued by the lender to the applicant that
states funds will be provided subject to written terms
Common Area or Common Elements
The common area is the area in the property or in
the building that is available for use by all owners
The monthly charge levied by a condominium to cover
the cost of maintaining the common areas and services.
Common law is the law set by judicial precedent or
tradition as contrasted with a written statute.
Common Law Dedication
Common law dedication is an act by an owner allowing
the public use of a property.
Community planning is a master plan for the orderly
growth of a city or country to result in the greatest
social and economic benefits to the people.
Comparables (Comps) or Comparative Market Analysis
Comps are used in assessing or establishing the fair
market value of a property, a property which has been
sold recently that is similar in size, condition,
location and amenities.
Compensatory damage is the amount of money actually
lost, which will be awarded by a court in case of
a breached contract.
Competent parties are persons or organizations legally
qualified to manage their own affairs, including entering
Complete performance is the execution of a contract
by virtue of all parties having fully performed all
Condemnation is the exercise of the power of eminent
domain or taking private property for public use.
Condemnation Value is the market value of condemned
A condition in a contract is any fact or event which,
if it occurs or fails to occur, automatically creates
or extinguishes a legal obligation.
A condominium is a building in which ownership has
been partitioned into unit interests. Each apartment
owner receives a unit deed and owns an individual
unit, but common areas are shared with the other unit
owners of the building.
Condominium declaration is the document that, when
recorded, creates a condominium. It is also called
a master deed.
A conforming loan is a mortgage issued within the
framework of FNMA/FHLMC (Fannie Mae/Freddie Mac) guidelines
in terms and amount. In general, any loan which does
not meet these guidelines is a non-conforming loan.
A loan which does not meet guidelines specifically
because the loan amount exceeds the guideline limits
is known as a jumbo loan. The Office of Federal Housing
Enterprise Oversight (OFHEO) set the criteria on what
constitutes a conforming loan limit that Fannie Mae
and Freddie Mac can buy. Criteria include debt-to-income
ratio limits and documentation requirements. The maximum
loan amount is based on the October-to-October changes
in median home price, above which a mortgage is considered
a jumbo loan, and typically has higher rates associated
Conformity is the homogeneous uses of land within
a given area which results in maximizing land value.
A consent decree is a compromise in civil lawsuits
where the accused party agrees to stop the alleged
illegal activity without admitting guilt or wrongdoing.
Consideration is anything of value, as recognized
by law, offered as an inducement to contract.
Construction Loan or Mortgage
A construction loan is a short-term loan to obtain
funds to construct an improvement.
Constructive eviction results from some action or
inaction by the landlord that renders the premises
unsuitable for the use agreed to in a lease or other
Constructive notice occurs when one of any affected
parties are bound by the knowledge of a fact even
though they have not been officially notified of such
Consumer Price Index (CPI)
CPI is an index indicating the change in prices of
various commodities and services, providing a measure
of the rate of inflation.
Contingency is a condition in a contract relieving
a party of liability if a specified event occurs or
fails to occur.
A contract is a legally binding agreement between
two parties, and in order to have a valid Contract
of Sale in real estate there must be: an offer, an
acceptance, competent parties, consideration, legal
purpose, written documentation, description of the
property, and signatures of the principals.
Contract Buyer's Policy
Contract Buyer's Policy is title insurance that protects
the contract buyer against defects in contract seller's
Contract for Deed
Contract for deed is a contract of sale and a financing
instrument wherein the seller agrees to convey title
when the buyer completes the purchase price installment
payments. It is also called installment land contract
and installment plan.
Contract rent is the amount agreed to in a lease.
Contract Vendee Sale
A contract vendee sale is a transaction in which a
seller transfers beneficial rights, including the
right of possession and obligations of ownership,
to the purchaser and agrees to close at a future date
under definite terms. Ownership can be transferred
for tax purposes prior to the transfer of title.
Conventional Mortgage Loan
A conventional mortgage loan is a loan in which the
federal government does not insure or guarantee payment
to the lender, but is under the amount of a jumbo
A conversion is a change in ownership status. For
example, rental housing may be converted to cooperative
or condominium ownership. Such changes must conform
to guidelines determined by the laws of New York State.
A "convertible apartment" is a one or two
bedroom apartment that has space to make another bedroom.
The other bedroom can be made from the construction
of a wall; however the new bedroom must have a window
in order for it to be legally considered an additional
Conveyance is the transfer of title to real property.
A cooling-off period is a three-day right of rescission
for certain loan transactions.
A cooperative is a building owned by a corporation
in which each apartment is allocated shares of stock
as well as a proprietary lease. The amount of shares
owned is determined by the value and size of the apartment.
The cooperative building owns all of the units and
the purchaser is buying stock in the corporation or
Co-ownership occurs when title to real property is
held by two or more persons at the same time; also
called concurrent ownership
Corporation Franchise Tax
A corporation franchise tax is a tax calculated on
the net profit of the corporation.
Cost approach is an appraisal method for estimating
the value of properties that have few, if any, comparables
and are not income-producing.
A counter-offer is a new offer made by either the
buyer or seller when rejecting a previous offer.
A covenant is a promise made in writing.
Covenant Against Encumbrances
A covenant against encumbrances is a promise in a
deed that the title does not cause encumbrances except
those set forth in the deed.
Covenant for Further Assurances
Covenant for further assurances is a promise in a
deed that the grantor will execute further assurances
that may be reasonable or necessary to perfect the
title in the grantee.
Covenant of Quiet Enjoyment
A covenant of quiet enjoyment is a promise in a deed
or lease that the grantee or lessee will not be disturbed
in the use of the property because of a defect in
the grantor's or lessor's title or lease.
Covenant of Right to Convey
A covenant of right to convey is a promise in a deed
that the grantor has the legal capacity to convey
Covenant of Seisin
A covenant of seisin is a promise in a deed ensuring
the grantee that the grantor has the title being conveyed.
Covenant of Warranty
A covenant of warranty is a promise in a deed that
the grantor will defend the title against lawful claimants.
A credit score is a numerical rating provided on a
credit report that establishes creditworthiness based
upon a person's past credit/payment history and their
current credit standing.
The cubic-foot method is a means of estimating reproduction
or replacement cost, using the volume of the structure.
Cumulative-use zoning is a type of zoning permitting
a higher priority use even though it is different
from the type of use designated for the area.
Curtesy is a husband's interest upon the death of
his wife in the real property of an estate that she
either soley owned or inherited provided they bore
a child capable of inheriting the estate.
Damages is the amount of financial loss incurred as
a result of another's action.
The debt-to-equity ratio, also referred to as the
loan-to-value ratio, is a rule used by banks requiring
that a borrower invest a minimum amount of equity
cash (usually 10% to 25% of the purchase price) as
a condition to obtaining a mortgage. The rule is used
in conjunction with the carrying-cost rule to determine
how much money a bank will lend. A ratio of 1 means
100% leverage of a property, and higher than 1 means
Debt Service is the cost of carrying a loan, usually
through monthly payments, including the payment of
interest and principal.
Debt-to-Income Ratio or Debt-Service Ratio
The debt-to-income ratio is the relationship of a
borrower's monthly payment obligation on long-term
debts divided by gross monthly income, expressed as
a percentage. It is also known as bottom ratio.
Declaration is the master deed containing legal description
of the condominium facility, a plat of the property,
plans and specifications for the building and units,
a description of the common areas, and the degree
of ownership in the common areas available to each
Declaration of Restrictions
Declaration of restrictions is the instrument used
to record restrictive covenants on the public record.
Dedication is an appropriation of land or an easement
therein by the owner to the public.
Dedication by Deed
Dedication by deed is the deeding of a parcel of land
to a municipality.
Deductible expenses are the costs of operating property
held for use in business or as an investment. These
expenses are subtracted from gross income to arrive
at net income.
A deed is a written instrument transferring an interest
in real property when delivered to the grantee.
Deed in Lieu of Foreclosure
Deed in lieu of foreclosure is the conveyance of title
to the mortgagee by a mortgagor in default to avoid
a record of foreclosure.
A deed restriction is a limitation on land use appearing
in a deed.
An act performed by the buyer, seller, tenant or landlord
that breaches the contract of sale or lease and permits
a claim for damages.
A defeasance clause is a statement in a mortgage or
deed of trust giving the borrower the right to redeem
the title and have the mortgage lien released at any
time prior to defaulting by paying the debt in full.
A defeasible fee is a title subject to being revoked
if certain conditions occur.
Deficiency judgment is a court judgment obtained by
a mortgagee for the amount of money a foreclosure
sale proceed was deficient in fully satisfying the
Delivery and Acceptance
Delivery and acceptance occurs when the transfer of
a title by deed is given by the grantor to the grantee.
Demise is to convey an estate for years (leasing or
Department of Housing and Urban Development (HUD)
See U.S. Department of Housing and Urban Development.
Depreciation is the expensing of the original cost
of an asset, plus any qualified improvements, over
its scheduled life as defined by the IRS. Depreciation
deductions are permitted only for assets held by the
production of income or used in a trade or business.
The current term for depreciating residential real
estate is 27.5 years.
Descent is the distribution of property to qualified
heirs of one who has died intestate.
Description by Monument
Description by monument is a legal description of
multiple-acre tracts of land and may refer to permanent
objects such as a stone wall, large trees or boulders.
Description by Reference
Description by reference is a description on a deed
that refers to a plat of subdivision or other legal
Devise is a gift of real property by will.
Disclosure and Informed Consent
Disclosure and informed consent is a real estate agent
explaining his position in the agency relationship
and the verbal and written consent of the relationship
by the client.
The disclosure statement is an accounting of all financial
aspects of a mortgage loan required of lenders to
borrowers in residential mortgage loan as regulated
by the Federal Reserve Board.
Discount points are a one-time payment by the borrower
to the lender at closing to obtain a lower interest
rate on the mortgage loan. One point equals 1% of
the loan amount; therefore, two points on a $100,000
mortgage would cost $2,000. It is also referred to
A distribution box is part of a septic system that
distributes the flow from the septic tank evenly to
the absorption field or seepage pits.
Dominant tenement is land benefiting from an easement
A depreciation technique whereby the asset is divided
by its useful life and this sum is doubled. Thereafter,
in each succeeding year the accumulated depreciation
is deducted from the original asset value to recomputed
depreciation for the succeeding period. It is not
available for real estate, but it is permissible for
The down payment is the amount of money a buyer pays
upfront in order to purchase a property. It is usually
paid at the signing of the contract in the form of
a certified check. The amount is typically 10% of
the sales price.
Dower is the part of or interest in the real estate
of a deceased husband given by law to his widow during
A dual agent is a broker or salesperson who represents
both the buyer and seller in the same transaction.
Due diligence is the investigation and review of a
property to determine any legal liability.
A duplex apartment consists of two levels.
Earnest Money Deposit
Earnest money deposit is the deposit a buyer makes
at the time of submitting an offer to demonstrate
the true intent to purchase. It is also called a binder
or good faith deposit.
An easement is a non-possessory right of the use of
Easement appurtenant is a right of use in the adjoining
land of another that moves with the title to the property
benefiting from the easement.
Easement by Condemnation
Easement by condemnation is exercising the right of
Easement by Grant
Easement by grant is created by the express written
agreement of the landowners, usually in a deed.
Easement in Gross
Easement in gross is a right of use of the land of
another without the requirement that the holder of
the right own adjoining land.
The eave is the lowest part of the roof that projects
beyond the walls of the structure.
Economic depreciation is the physical deterioration
of property caused by normal use, damage caused by
natural or other hazards, and failure to adequately
The economic life is the period of time during which
property is financially beneficial to an owner.
Effective Interest Rate
Effective interest rate is the actual rate of interest
paid on a loan.
Egress is the exit from a building or parcel of land.
Enabling acts are laws passed by state legislatures
authorizing cities and counties to regulate land use
within their jurisdictions.
Encroachment is the trespassing on the land of another
by a structure or other object.
An encumbrance is a claim, lien, charge or liability
attached to and binding upon real property.
Environment Impact Statement (EIS)
The environment impact statement is a requirement
of the State Environmental Quality Review Act prior
to initiating or changing a land use that may have
an adverse effect on the environment.
Environmental Protection Agency (EPA)
The EPA is a federal agency that oversees land use.
Equal Credit Opportunity Act (ECOA)
ECOA is a federal law prohibiting discrimination in
Equitable title is an interest in real estate such
that a court will take notice and protect the owner's
Equity is the difference between what something is
worth and any loan secured by the asset (i.e. the
value of a property less the outstanding mortgage).
For example, if a home is worth $100,000 and the owner/borrower
owes $65,000 on the mortgage loan secured by the borrower's
home, then the borrower's equity is $35,000 or 35%
equity in the home.
Equity of Redemption
The equity of redemption is the borrower's right to
redeem the title pledged or conveyed in a mortgage
or deed of trust after default and prior to a foreclosure
sale by paying the debt in full, accrued interest
and the lender's costs.
Erosion is the wearing away of land by water, wind
or other processes of nature.
Escheat is the right of the government to take title
to property left by a person who dies without leaving
a valid will (intestate) or qualified heirs.
A state where consideration, benefits, legal rights,
document, or a sum of money is held by one person
in trust for another, for the purpose of assuring
performance under an agreement. Normally in a residential
real estate sale, the attorney for the seller is the
escrow agent for the deposit money securing the deal
until closing. The money is held in an escrow account.
Estate refers to the collection of all assets of a
deceased person. It is also the extent of interest
a person has in real property.
Estate at Sufferance
Estate at sufferance is the continuation to occupy
property after legal authorization has expired.
Estate at Will
Estate at will is a leasehold condition that may be
terminated at any point by either party.
Estate for Life
This is the interest of real property that ends with
the death of a person.
Estate for Years
Estate for years is a leasehold condition of definite
Estate from Year-to-Year
Estate from year-to-year is a leasehold state that
automatically renews itself for consecutive periods
until terminated by notice by either party; also called
estate from period-to-period or periodic tenancy.
Estate in Real Property
Estate in real property is an interest sufficient
to provide the right to use, possession, and control
of land. It also establishes the degree and duration
An estoppel certificate is a document executed by
a mortgagor or mortgagee setting forth the principal
amount. The executing parties are bound by the amount
An express agency is a relationship created by an
oral or written agreement between a principal and
An eviction is a landlord's action that interferes
with the tenant's use or possession of the property.
Eviction may be actual or constructive.
Exclusive Agency Agreement (Exclusive Listing)
An exclusive agency agreement is between a broker
and a seller designating the broker as the seller's
sole agent for the purpose of selling his or her property.
This agreement does not preclude the owner from effectuating
a sale on his own.
Exclusive Right To Sell Agreement
An exclusive right to sell agreement is between a
broker and a seller designating the broker as the
seller's sole representative for the purpose of selling
property. In contrast to an exclusive-agency agreement,
under an "exclusive-right-to-sell agreement",
a commission is due to the broker even if the apartment
is sold directly by the owner.
Exclusive Use Zoning
Exclusive use zoning is a type of zoning in which
only the specified use may be made of property within
the zoned district.
An executed contract is an agreement that has been
Fair Housing Act of 1968
The Fair Housing Act of 1968 is a federal act prohibiting
discrimination in the sale, rental or financing of
housing on the basis of race, color, religion, gender
or national origin.
Fair Housing Act of 1988
This federal act prohibits discrimination in the sale,
rental, financing, or appraisal of housing on the
basis of race, color, religion, gender, national origin,
handicap, or familial status.
Fair Housing Amendments Act of 1988
An amendment to the Fair Housing Act that prohibits
discrimination based on a mental or physical handicap,
or family status.
Fair Market Value
The fair market value is the price for a property
agreed upon between a buyer and seller in a competitive
Fannie Mae is the nickname for the Federal National
Mortgage Association (FNMA), a privately owned corporation
that purchase FHA, VA, and conventional mortgages.
The fascia is the area facing the outside of a soffit
in house construction.
Federal Housing Administration (FHA)
The Federal Housing Administration is a federal agency
that is part of the Department of Housing and Urban
Development (HUD) that sets policy for mortgage underwriting
and provides insurance for residential mortgages.
Fee Simple Absolute
Fee simple absolute is the inheritable estate in land
providing the greatest interest of any form of title.
FHA Insured Loan
An FHA insured loan is a mortgage insured by the Federal
The finance charge is the amount imposed on the borrower
in a mortgage loan, consisting of origination fee,
service charges, discount points, interest, credit
report fees, and finders' fees.
A loan secured by personal property, such as real
estate property. The stock and lease of a cooperative
corporation also constitute such personal property,
and a loan secured by these instruments is referred
to as a financing loan. Generally, real estate brokers
refer to these financing loans as mortgages because
they operate in the same manner, even though technically
they are not.
A first mortgage is a mortgage whose lien is superior
to the lien of any other mortgage on the same property.
This lien is superior either because it was recorded
prior to all other mortgages or because the mortgagee
of another mortgage which had been recorded ahead
of this mortgage has agreed to have a lien subordinated
to the lien of this mortgage.
A fixed lease is when the rental amount remains the
same for the entire lease term; also called flat,
straight or gross lease.
A loan secured by real estate that has a fixed interest
rate and payment amount for the term of the loan (normally
15 or 30 years).
A fixture is an item (appliance, light fixture, etc.)
that is permanently attached to a property.
Flashing is a metal material used in parts of the
roof or walls to prevent water from penetrating the
A levy issued on the transfer of ownership by a cooperative
corporation or condominium association against the
seller, typically, though it may be against the buyer..
The flip tax is usually a percentage of the purchase
A type of loan where the interest rate is not fixed
over the term but is allowed to vary according to
the change in a specified index, and is also referred
to as an ARM (Adjustable Rate Mortgage).
A floating slab is a type of foundation constructed
by pouring the footing first and then pouring the
slab after the footing has set.
The footing is the concrete base below the frost line
that supports the foundation of the structure.
Foreclosure is an enforcement process in which the
lender under a defaulted mortgage takes title to the
property for the purposes of selling it to recoup
moneys owed under the mortgage.
The 421-a tax incentive program was created in 1971
to encourage housing development. Under the program,
developers of apartment buildings on vacant or underutilized
lots throughout the five boroughs receive a temporary
exemption from property tax on the value added to
the site by new construction. Condominiums can be
sold at any price and the tax savings are passed on
to the individual owner.
Freddie Mac is the nickname for Federal Home Loan
Mortgage Corporation (FHLMC), a corporation wholly
owned by the Federal Home Loan Bank System that purchases
FHA, VA, and conventional mortgages.
Frieze board is the wooden member fastened under the
soffit against a wall.
A front foot is a linear foot of property frontage
on a street or highway.
A full bath is a bathroom that consists of a sink,
toilet, and a bathtub or shower.
Fully Amortizing Mortgage
A fully amortizing mortgage is a mortgage with scheduled
uniform payments that will fully pay-off the loan
over the term of the mortgage.
Functional obsolescence is a flawed or faulty property
that is rendered inferior because of advances or changes.
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Real Estate Terms (G-L)
A general agent refers to the entity that has full
authority over a property of the principal, such as
a property manager.
A general lien is a lien that attaches to all of
the property of a person within the court's jurisdiction.
General Warranty Deed
A general warranty deed is a deed denoting an unlimited
guarantee of title.
Ginnie Mae is the nickname for Government National
Mortgage Association (GNMA), a U.S. government agency
that purchases FHA and VA mortgages.
A girder is the main beam in a structure that spans
the distance from one side of the foundation to the
Good Faith Estimate
A Good Faith Estimate is an estimate of the fees
a mortgage borrower will be required to pay at closing.
It is required by Federal law that the lender provides
the Good Faith Estimate within three business days
of the initial loan application.
In a mortgage, the grace period refers to a specified
time frame in which payment may be made without the
borrower being in default.
A graduated lease is a lease in which the rent changes
from period to period over the lease term. This type
of lease is usually used by a new business tenant
whose income will increase over time.
Graduated Payment Mortgage (GPM)
A graduated payment mortgage has payments that are
lower in the early years but increase on a scheduled
basis until they reach a level of amortization.
A "grandfather clause" allows an activity
to continue that was once considered acceptable or
legal, but has since had the rules or laws changed.
An example of this is when a building once allowed
pets, but subsequently changed the House Rules to
not allow pets. The existing tenants or owners are
allowed to keep their pets, but new occupants to the
building are not allowed to bring them in. The existing
pets and owners are "grandfathered".
A grant is a transfer of title to real property by
A gross lease is a lease in which the lessor pays
all costs of operating and maintaining property, including
the property taxes.
A ground lease is a long-term lease of unimproved
land and is usually for construction purposes.
The habendum clause is the statement in a deed that
begins with the words "to have and to hold"
and describes the estate granted.
A half bath, or powder room, has a sink and toilet,
but does not have a bathtub or shower.
Headers are wooden reinforcements for the placement
of doors and windows.
A hectare is the metric system equivalent to 2.47
Holding period refers to the length of time a property
A holdover tenant is a tenant that remains in possession
of a property after a lease terminates.
Home Equity Loan
A home equity loan is a loan made against the equity
in a home.
House rules are building rules regulating the conduct
and responsibilities of homeowners as they affect
the building's common areas and services.
Housing Expense Ratio
The housing expense ratio is the relationship of
a borrower's monthly payment obligation on housing
(principal, interest, taxes, insurances and other
applicable housing expenses) divided by gross monthly
income, expressed as a percentage. It is also referred
to as top ratio.
HVAC is an acronym that stands for heating, ventilation
and air conditioning.
A hydronic system is a process in an HVAC system
where liquids are heated or cooled.
Hypothecate is to pledge property as security for
the payment of a debt without giving up possession.
Improvements are changes or additions made to a property.
These typically increase the value of the property.
Indemnification is the reimbursement or compensation
paid to someone for a loss already suffered.
Index is a benchmark, usually a published interest
rate, such as a one-year London Interbank Offered
Rate (LIBOR) security yields, used to calculate the
interest rate of an adjustable rate mortgage when
rate is scheduled to change. Generally, a margin stated
in loan documents is added to the index to determine
the new interest rate.
An index lease is a lease with a method of determining
rent by an index, such as the LIBOR index.
An ingress is the right to enter a parcel of land,
usually used as "ingress and egress", or
both entering and leaving.
An injunction is a court instruction to discontinue
a specified activity.
Special rights offered to tenants occupying apartments
in a building in the process of converting to a co-op
or condo, giving them the exclusive right to buy their
apartments for a limited period of time and normally
at a discounted price.
Installment Land Contract
See Contract For Deed.
An installment sale is a property sale in which the
purchaser pays the purchase price over a period of
years. The seller recognizes gain for tax purposes
by the proportion of the profit (determined by the
profit divided by the nest sales price of the asset)
received on each payment as it is received.
Insurable interest is the amount of property qualifying
The insured value is the amount that a structure
is insured and should include the cost of replacing
the structure if completely destroyed.
The interest-rate spread is the differential between
the retail interest rate charged to a borrower and
the wholesale rate accepted by the financial industry
when acquiring home mortgage loans. The spread is
the profit to the bank.
The interest rate is the cost of borrowing money
from a lender. Rates will vary and will change over
Interim financing is a short-term or temporary loan
such as a construction or bridge loan.
Interim interest is interest owed by the borrower
to the lender on the mortgage loan from the day of
the closing top the date covered by the first payment.
Intestate is the condition that occurs when someone
dies without a valid will.
Involuntary alienation is the transfer of title to
real property as a result of a lien foreclosure sale,
adverse possession, filing a petition in bankruptcy,
condemnation under power of eminent domain, or, upon
the death of the titleholder, to the state if there
aren't any heirs.
A New York City program giving tax breaks for the
substantial rehabilitation of an existing property.
The program provides for an abatement of tax on a
formula based on the level of improvement and an exclusion
from additional tax due to the change in use of the
Joint tenancy is a form of co-ownership that includes
the right of survivorship.
A joist is a wooden framing member used in the construction
of floors and ceilings.
A judgment lien is a general lien resulting from
a court decree.
A mortgage issued in an amount exceeding the threshold
stipulated under Fannie Mae (FNMA) regulations for
a conforming loan.
A land lease is a situation in which a building and
other land improvement are rented for a term of years.
At the end of the lease term, the right of possession
is extinguished and reverts back to the landowner.
At the time, the tenant loses any remaining equity
interest in the property.
Landmark status is the designation given to a building
or neighborhood that is under government protection
for purposes of preservation.
The Landmarks Commission is a city governmental agency
assigned responsibility for recommending properties
and neighborhoods to be landmarked and ensuring that
landmarks are properly preserved.
A lease is a written agreement to rent a property
or part of a property from an owner.
Letter of Adequacy
A letter (usually issued by a managing agent) found
in the offering plan of a building converting to cooperative
or condominium ownership affirming that the income
and expenses, as expressed in the proposed budget,
are adequate to cover the costs of running the building.
This expert evaluation is required by the New York
State Martin Act.
A liability is a debt or claim that is owed.
Stands for "London Interbank Offered Rate",
and is the average yield of interbank offered rates
for one-year U.S. dollar-denominated deposits in the
London market. LIBOR is a common index used as a benchmark
for adjusting mortgage interest rates in adjustable-rate
A lien is an encumbrance on property which acts as
security for the payment of a debt or the performance
of an obligation. A mortgage is a lien. A lender will
want most, if not all, liens on a property removed
before making a mortgage loan.
Lien Foreclosure Sale
A lien foreclosure sale is the sale of property without
consent of the owner, as ordered by a court or authorized
by state law due to a debt resulting in a lien.
Life estate is a freehold estate created for the
duration of the life or lives of certain named persons.
It is a non-inheritable estate.
Life Estate in Remainder
A life estate in remainder is a form of life estate
in which certain persons are designated to receive
the title upon termination of the life tenancy.
The like-kind exchange is an exchange of similar
property, as defined in the Internal Revenue Code
that can be performed without recognition of taxable
gain at the time of transfer.
Limited Liability Company
A form of organization that is similar to a partnership,
in that recognition of income and expenses flow directly
through to the owners for tax purposes (without a
corporate tax), but that still permits insulation
from liability similar to that of a corporation.
Liquidated damages are the agreed amount to be paid
as compensation for a breach of contract.
Liquidity refers to the ability of assets that are
readily convertible to cash.
Lis pendens means a "lawsuit pending".
See Notice of Lis Pendens.
The term used by brokers to market an apartment for
sale or rent.
The listing broker represents the interests of the
seller or landlord in the sale or rental of his or
The loan commitment is the written obligation from
a lending institution to provide a mortgage to a borrower.
Loan Origination Fee
The loan origination fee is the financing charge
required by a lender.
Loan-to-Value Ratio (LTV)
The loan-to-value ratio is the mortgage amount divided
by the lower of the purchase price or the appraised
value of the property. This ratio is expressed as
a percentage. A lender will use this ratio in determining
the maximum mortgage loan that it will make on the
Lock-In / Rate Lock Agreement
A lock-in is an agreement by the lender guaranteeing
the applicant a specified interest rate on the mortgage
loan provided the loan closes within a set period
A loft refers to an open living space that was converted
from commercial space to residential space. Lofts
contain very high ceilings, large windows and open
space. In New York City, most lofts and converted
commercial space are located in downtown Manhattan.
A lot is a measured section of land.
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Real Estate Terms (M-R)
The monthly charge levied on owners by a cooperative
corporation to cover the building's operating costs,
real estate taxes, and the debt service on the building's
In New York City, most of the cooperative and condominium
buildings are managed by an outside company, or managing
agent, which is responsible for the building operations.
A mansion tax is a New York State tax of 1% of the
selling price levied on the buyer of any residence
costing in excess of $1,000,000.
The market value of a property is an estimation of
the price for a property in relation to the current
real estate market.
Martin Act is the New York State law regulating the
conversion of properties to cooperative or condominium
ownership, and is also referred to as Section 352eee
and 352eeee of New York State's General Business Law.
A master deed is the instrument that legally establishes
a condominium. It is also referred to as a condominium
A mechanic's lien is a statutory lien available to
anyone supplying labor or material to the construction
of an improvement of land that ahs not been properly
Metes and Bounds
Metes and bounds is a system of land description
with distances and directions.
A monolithic slab is a type of foundation in which
the footing and slab are poured at the same time.
A mortgage is a pledge of real estate collateral
to secure a debt. Also, it is a legal document describing
and defining the pledge. The mortgage may also include
the terms of repayment of the debt. It is also referred
to as a deed of trust.
A mortgage banker is an institution that performs
services similar to those of a mortgage broker. However,
a mortgage banker is also legally permitted to lend
its own funds.
A real estate professional who represents an array
of banks seeking to issue mortgages. The mortgage
broker meets with a customer, assists with the application,
and facilitates the mortgage process on behalf of
the borrower and the bank. Generally, in the case
of residential mortgages, the mortgage broker is paid
a fee by the bank for this service.
Mortgage Insurance (or Private Mortgage Insurance
Mortgage insurance is insurance that protects the
lender in case the home buyer does not make their
mortgage payments. Typically, a borrower would be
required to pay a fee for mortgage insurance if their
down payment is less than 20%.
A mortgage note is a document signed at closing which
states the borrower's promise to re-pay a sum of money.
The note states an interest rate and a fixed period
of time (term) for repayment.
Mortgage satisfaction refers to the full payment
of a mortgage loan.
The mortgagee is the lender in a mortgage transaction.
The mortgagor is the borrower in a mortgage transaction.
A multiple dwelling is a structure with two or more
Multiple Listing Service (MLS)
A MLS is a central service for real estate listings
available to member brokers.
National Association of Realtors (NAR)
The NAR is the largest and most prominent trade organization
for real estate brokers and agents.
This occurs when a loan permits the borrower to make
a payment that is less than the full amount required
to cover the interest charge on the open balance and
the shortfall is added to the mortgage principal.
A negative pledge is when the condominium places
restrictions on the unit deed and trust agreement
restricting the right of an owner to finance a condominium
unit for more than a specified amount.
A net lease refers to a type of lease in which the
tenant pays a fixed rent plus the operational costs
of the property.
A net listing is a method of establishing the listing
broker's commission as the entire amount above specified
new amount to the seller. This method of establishing
a broker's commission is illegal in New York State.
Net worth is your assets less your liabilities.
A nonconforming use refers to the utilization of
land that does not conform to the zoning ordinance
for the area.
A nonrecourse note is a type of note in which the
borrower has no personal liability for payment.
Some legal documents, including certain leases and
contracts of sale, are notarized by a certified Notary
Public to verify the authenticity of a signature.
Notice of Lis Pendens
Notice of lis pendens is a public record warning
all concerned parties that title to a property is
the subject of a lawsuit and any lien resulting from
the suit will attache to the title.
An offer is made to purchase a property at a specific
price. Once an offer is accepted, then a contract
of sale is issued by the seller's attorney.
Open-ended Listing Contract
An open-ended listing contract is a contract between
a seller and a real estate broker that does not have
a termination date.
An open-end mortgage is a mortgage that may be refinanced
without rewriting the mortgage contract.
Origination is the first step in the mortgage loan
process consisting of the completion of the application.
An ordinance is a law enacted by the local government.
An open listing is an apartment for sale for which
the owner has not signed an exclusive agreement with
a real estate broker. Many brokers may represent the
seller, or the seller can promote the property independently.
Option to Renew
An option to renew is a provision in a lease that
states the method and terms of a lease renewal.
The origination fee is a service charge by a lending
institution for a mortgage.
Ownership in Severalty
Ownership in severalty is title to real property
held in the name of one person only.
A parcel is a specific portion of land such as a
Partition refers to the legal proceeding that divides
property of co-owners so each will hold title in severalty.
Party wall refers to the wall in common between two
adjoining structures, such as in townhouses and brownstones.
A passive loss is a loss generated by investment
real estate when real estate is not the taxpayer's
primary business. Loss in excess of income may not
be fully recognized for tax purposes in the year it
A penthouse apartment refers to the apartment on
the highest floor in a luxury, high-rise building.
A percentage lease refers to a lease that has a rental
amount that is a combination of a fixed amount plus
a percentage of the lessee's gross sales.
Percolation is the movement of water through soil.
Percolation (Perc) Test
A perc test determines if the soil is sufficiently
porous for the installation of a septic tank.
Perfecting a Loan
When a loan is issued against a personal property,
it is recorded in the county clerk's office against
the name of the borrower. The recording process perfects
a security position against the collateral.
A periodic tenancy lease automatically renews for
successive periods unless terminated by either party.
It is also called an estate from year to year.
A sale of real estate in which income is recognized
for tax purposes but no money has been received correlating
to the gain amount. This can occur when the property's
basis has been depreciated below the property's mortgage
Pied-a-terre is a term that refers to an apartment
that is not the primary residence of the owner. The
term refers to an apartment that is used only sporadically
throughout the year.
PITI is an acronym for a mortgage payment that includes
principal, interest, taxes and insurance.
A plat is a property map that is part of the public
Platform framing is the most common type of framing
in residential construction in which the framing of
the structure rests on a subfloor platform.
Points refer to the payment made to a lender as consideration
for issuing a mortgage, usually based on a percentage
of the loan amount. Each point is equal to 1% of the
principal of the mortgage.
A post-war building is one that was built after World
War II, typically between the 1950s and 1970s. They
vary in size, but are usually taller than pre-war
buildings, are often constructed of white, red or
brown brick and have few architectural details. The
rents are usually lower than in pre-war or newer buildings.
A powder room is also referred to as a half-bath,
and only has a toilet and sink.
A pre-approval is a process in which a conditional
commitment is issued after a loan profile is underwritten
with all standard documentation except a property
appraisal and a title search.
A pre-qualification is a process in which a loan
officer calculates the housing-to-income ratio and
the total debt-to-income ratio to determine an approximate
maximum mortgage loan amount.
A pre-war building is one that was built before World
War II, and mainly prior to 1929, since there were
few residential buildings built during the 1930s.
Buildings are less than 20 stories and usually have
large rooms, mouldings, hardwood floors and high ceilings.
Price-to-Earnings Ratio (P/E Ratio)
The price-to-earnings ratio is the common metric
used to assess the relative valuation of equities.
To compute the P/E ratio in the case of a rented house,
divide the price of the house by its potential earnings
or net income, which is the market rent of the house
minus expenses, which include maintenance and property
taxes. This formula is:
House P/E Ratio = House Price / Rent-Expenses
Compare this ratio to the simpler but less accurate
It is the basic affordability measure for housing
in a given area. It is generally the ratio of median
house prices to median familial disposable incomes,
expressed as a percentage or as years of income. This
ratio, applied to individuals, and also referred to
as "attainability", is a basic component
of mortgage lending decisions.
The price-rent ratio is the average cost of ownership
divided by the received rent income (if buying to
let) or the estimated rent that would be paid if renting
(if buying to reside). This formula is:
House Price-Rent ratio = House Price / Monthly Rent
Generally, a primary residence of an owner or renter
is one that they occupy the majority of time, usually
considered to be 6 months and 1 day out of every year.
The principal in the mortgage is the amount that
is borrowed and on which interest is paid or received.
Private Mortgage Insurance (PMI)
See Mortgage Insurance.
Processing is the second step in the mortgage application
process which involves the verification of information
stated on the application. Credit reports and the
appraisal are also ordered at this time.
Current tax rules permit the profit on the sale of
a primary residence to be tax exempt for up to $250,000
for an individual, or $500,000 for a married couple.
Property Condition Disclosure Form
This form is a comprehensive checklist pertaining
to the condition of the property including its structure
and any environmental issues in and around the property.
The property description is an accurate, legal description
of the land.
The tax issued by a municipality on the ownership
of a property.
The lease issued by a cooperative corporation to
each tenant-shareholder prescribing his or her right
to occupy a specific apartment and his or her general
obligations as an owner and tenant.
In relation to a co-op, the pro-rata share is your
apartment's share of the building's underlying mortgage.
The share is determined by dividing the amount of
the underlying mortgage by the number of shares in
the building then multiplying the per-share amount
by the number of shares for your apartment. The lower
of either the appraised value or purchase price then
divides that number.
A document issued by a sponsor in the process of
converting a building to a cooperative or condominium
ownership. It is intended to provide "full disclosure"
of all relevant facts associated with evaluating an
investment in the property, and is also referred to
as the offering plan or black book.
A quadruplex is an apartment with four levels.
Radon is a colorless, odorless gas present in soil
that enters a home through small spaces and openings.
A rate cap is the limit on interest rates during
the term of an adjustable rate mortgage.
Ratios are guidelines applied by the lender during
underwriting a mortgage loan application to determine
how large a loan to grant an applicant. The ratios
the lenders use are generally the Loan-to-Value Ratio,
Housing-to-Income Ratio, and Debt-to-Income ratio.
Real Estate Broker
A real estate broker is an individual employed on
a fee or commission basis as an agent to bring buyers
and sellers together and assist in negotiating real
estate contracts between them.
Real Estate Investment Trust (REIT)
An REIT is a trust owned by shareholders that buys
and initiates mortgage loans.
Real Estate Salesperson
A real estate salesperson performs any of the acts
of a real estate broker but while associated with
and supervised by a broker.
Real Estate Settlement Procedures Act (RESPA)
RESPA is a federal law that regulates the activities
of lending institutions in making mortgage loans.
Real Property Tax Lien
This lien is a tax levied against real property by
the local government and has priority over all other
When investment real estate has been depreciated
for tax purposes, the gain on the sale includes a
"recapture" of the previously written-off
depreciation as gain. In certain cases, this can result
in a tax liability that exceeds the cash received.
See "Phantom Gain".
A recognition letter is a letter from the cooperative
corporation's board of directors recognizing the secured
rights of a lender to the shares of stock and the
proprietary lease on a specific apartment.
Recording is registering the ownership, lien, or
claim of a party to a specific parcel of real estate
with the local county.
Recording fees are the fees charged by the recorder's
office to record a document such as a mortgage, deed
of trust, deed and UCC Financing Statement.
Redlining is the resistance of lending institutions
to make loans for the purchase, construction, or repair
of a dwelling due to the socio-economic conditions
of the property's location.
A referral fee is a percentage of a broker's commission
paid to another broker for the referral of a buyer
Refinancing are the proceeds of a new loan used to
pay off an existing mortgage on the same property.
A rental is the possession, but not ownership, of
a property for a limited duration of time under defined
terms and conditions.
A rental building only has apartments for rent and
not for purchase.
A form of rent regulation, rent control occurs when
an apartment has tenants that have been in continual
residence since July 1, 1971, or other qualified occupants
that have been in residence with the original tenant
continuously for either two years (immediate relative)
or five years (non-relative). Rent control limits
the amount of rent landlords can charge for apartments
and restricts their ability to evict.
Another form of rent regulation, rent stabilization
usually applies to buildings built before 1974 and
apartments removed from rent control. After the rent
has legally been raised to over $2,500 per month,
or the household income of the tenants is over $200,000
per year, rent stabilization is no longer in effect.
The amount that landlords are legally allowed to increase
the rent every year is regulated by the NYC Rent Guidelines
Board. It also covers buildings that receive J-51
and 421-A tax benefits, so there are newer buildings
with apartments that have higher rent that also are
regulated by rent stabilization.
A reserve fund is the amount reserved to provide
funds for future expenses in order to maintain a cooperative
or condominium building and is managed by the building's
Residential Lead-based Paint Hazard Reduction Act
This act stipulates procedures to be followed in
disclosing the presence of lead-based paint in the
sale or rental of properties built prior to 1978.
Reverse Annuity Mortgage
A reverse annuity mortgage is a type of mortgage
that retirees on fixed incomes can use to generate
income out of the equity in their homes while they
continue to live in the home.
R-Factor or R-Value
The R-Factor is a rating that measures the degree
of resistance to heat transfer.
A rider is an addendum to a document that covers
A ridge beam is the highest part of framing in a
structure and forms the apex of the roof.
Right of Assignment
The right of assignment allows the lender to sell
a mortgage at any time and obtain money invested rather
than wait for the completion of the loan term.
Right of First Refusal
A condition contained in many condominium master
deeds that permits the board to review any party seeking
to purchase or rent an apartment and to refuse the
applicant if it so desires. If the board refuses the
applicant, it must thereafter purchase or rent the
apartment under the same terms and conditions stipulated
in the contract.
Right of Survivorship
The right of survivorship is the right of an owner
to receive the title to a co-owner's share upon death
of the co-owner, as in the case of joint tenancy and
tenancy by the entirety.
Right-of-way is an easement allowing someone to use
the land of another for a specific purpose.
Riparian rights are the rights of an owner of property
adjoining a watercourse such as a river, including
access to and use of the water.
Apartment size may be described by number of rooms.
A room in NYC must be at least 100 sq. ft. and have
a window, except in the case of a kitchen. Most kitchens
are counted as rooms, unless they are Pullman types,
which are part of the living room. Baths are not counted
as rooms. A three room apartment consists of a living
room, bedroom and kitchen. A four room apartment could
have two bedrooms, or a bedroom and dining room, a
living room and kitchen.
Running with the Land
Running with the land refers to rights that are passed
with the title of property from the grantor to the
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Real Estate Terms (S-Z)
The sale price, also referred to as the purchase
price, refers to the amount of money paid by the purchaser
to the seller.
Sales Comparison Approach
The sales comparison approach is an appraisal tool
for estimating the value of a property with other
similar properties that have sold recently.
Satisfaction of Mortgage
The satisfaction of mortgage indicates that a mortgage
has been paid in full.
A list in the offering plan of all the apartments
being sold in a newly-constructed building or one
that is undergoing conversion. It presents allocated
shares or unit-percentage interest, room count, and
other material cost elements, including the projected
maintenance charge and the tax-deductible portion
of the maintenance.
The projected cost of operating a cooperative or
condominium during its first year of operation and
is part of the offering plan.
Section 421 A
A New York City tax program intended to stimulate
new construction by permitting a phase-in of the real
estate tax over a period of ten years.
The security deposit is the payment required by the
landlord that guarantees that the tenant will meet
their financial obligations under the terms of the
lease. Besides guarding against any unpaid rent, it
also guards against any potential damage that may
be incurred by the tenant.
The seller contribution is a payment by the seller
of a property of some, or all, of the buyer's closing
A seller's agent is the listing agent that works
in the best interests of the seller.
A service drop is the above-ground electrical cables
that come from the nearest electrical pole connecting
the electrical service of the house.
Service lateral are the underground electrical wiring
connecting the electrical service of the house.
Servicing are activities the lender performs such
as collecting the payments and/or paying taxes and
insurance from an escrow account.
Servient tenement refers to land encumbered by an
The setback is the distance from the front or interior
property line to the point where the structure is
Severalty refers to ownership by only one person.
When purchasing in a cooperative building, the apartment
is not actually purchased directly as real estate
but rather shares in the cooperative corporation are
purchased. The amount of shares represent the portion
of the building owned based on the size and location
of the unit in the apartment. A proprietary lease
is then issued by the corporation for a specific unit
to the purchaser.
A soffit is the area under the roof extension of
a structure that can be made of wood, vinyl or aluminum.
SONYMA (Sonny Mae)
SONYMA or State of New York Mortgage Agency raises
money from the sale of New York tax-free bonds and
uses these funds for mortgage loans.
The sponsor is the developer or owner of the property
that initiates the conversion of a property from single
ownership to cooperative or condominium ownership.
The area measured in square feet of a certain property.
Square footage can be measured in different ways and
is usually considered approximate. Condominium apartments
have specific laws that determine the way in which
the apartment is measured and usually more accurately
reflect the actual square footage within a property.
A standing mortgage is an interest-only mortgage
with no principal reduction over time. See "Balloon
Subject to Financing
A clause in the contract of sale for a cooperative
apartment stipulating that the agreement is conditioned
upon the buyer's obtaining financing from a financial
institution in an agreed-upon amount.
A sublet is when the owner of an apartment or the
main lease holder decides to rent the apartment to
Super Jumbo Loan
This is a loan that exceeds $1,000,000.
A survey is a document indicating measurements, boundaries
and the area of a property.
A tax abatement is a financial incentive offered
by a local or municipal government to stimulate development
in a particular area. The owner of the property and/or
the developer has reduced taxes for a specific period
of time, typically 10-15 years. The taxes are raised
incrementally to the full tax burden over the period
of a few years.
A tax deductible expense helps to reduce taxable
income. The tax deductible expenses related to real
estate are interest payments on mortgages and real
Tenancy by the Entirety
Tenancy by the entirety refers to co-ownership limited
to husband and wife, with the right to survivorship.
Tenancy in Common
Tenancy in common is co-ownership that does not include
the right of survivorship.
The amortization term is the period of time in which
the interest and principal payments of a loan must
A term mortgage is a mortgage with interest payments
only during the mortgage term, with the principal
due at the end of the term.
The title of a property is the evidence or documentation
that an owner is in lawful possession of the property,
such as a property deed.
Title insurance is an insurance policy protecting
the insured from financial loss caused by a defect
or question about the title to real property.
Title search is a process that examines local public
records, laws and related court decisions to determine
if any other parties have valid claims against the
subject property (such as past due taxes, judgments
or mechanics' liens). It also discloses past and current
facts about the subject property's ownership.
Title Transfer Tax
Title transfer tax is a tax imposed on the conveyance
of title to real property by deed.
A townhouse is a private residence where at least
one wall is shared with another residence.
The Treasury Index is the weekly average yield on
US Treasury securities adjusted to a constant maturity
of one, three or five years, as made available by
the Federal Reserve Board.
Triple mint condition refers to a residence that
is in immaculate condition.
Triple Net Lease
Triple net lease refers to a condition when the lessee
pays all the expenses associated with the property
in addition to the rent.
A triplex is an apartment that has three levels.
Federal law requires that the lender must give this
document to the home buyer within three business days
after the loan application. This disclosure gives
details of the mortgage payments along with the corresponding
APR and finance charges.
12 MAT Index
Stands for "12-month average Treasury index"
and is a 12-month average of the one-year U.S. Treasury
rates used for one form of a monthly adjustable mortgage.
Since it is based on historical experience, this index
lags current interest rates.
In mortgage lending, underwriting is the decision-making
process used to determine whether the loan risk is
acceptable to the lender. Underwriting involves the
satisfactory review of the property appraisal and
examination of the borrower's ability and willingness
to repay the debt and sufficiency of collateral value
of the property.
Unencumbered property is property that is free of
Unity of Interest
Unity of interest occurs when co-owners all have
the same percentage of ownership in a property.
Unity of Possession
Unity of possession occurs when all co-owners have
the right to possess any and all portions of the property
owned, without physical division.
Unity of Time
Unity of time occurs when co-owners receive title
at the same time in same conveyance.
Unity of Title
Unity of title occurs when co-owners have the same
type of ownership in a property.
Unrelated Business Taxable Income (UBTI)
A special federal tax levied on investment income
generated from property held in a pension plan in
which there is a mortgage. The property ownership
is allocated between the cash investment and the mortgage,
and all gain allocable to the mortgage portion is
subject to UBTI tax.
Shares of stock in a cooperative corporation transferred
to the sponsor at the completion of the conversion
process. The sponsor normally gets special rights
to rent and/or sell these shares (representing special
apartments) without board approval.
U.S. Department of Housing and Urban Development
A federal agency that administers funding for projects
related to housing.
Useful life is the period of time that a property
is expected to be economically useful.
Use variance is the permission to use the land for
a purpose which, under the current zoning restrictions,
Usury is charging a rate of interest higher than
the rate allowed by law.
The vacancy rate is the projected rate of the percentage
of rental units that will be vacant in a given year.
VA Guaranteed Loan
A VA guaranteed loan is a mortgage loan in which
the loan payment is guaranteed to the lender by the
Department of Veteran Affairs.
Valuation establishes an opinion of value utilizing
an objective approach based on facts related to the
property, such as age, square footage, location, cost
to replace, etc.
Value in Use
Value in use is the present worth of the future benefits
A variance is a deviation from specific requirements
of a zoning ordinance due to special conditions of
A vendor's affidavit is a document signed under oath
by the seller stating that the seller has not encumbered
title to real estate without full disclosure to the
Vesting options are choices buyers have in how to
Vicarious liability is one person being responsible
for the actions of another.
A walk-up building is a building that does not have
an elevator and are usually four or five stories.
The walk-through inspection of a property occurs
right before a closing to ensure that the property
is being delivered as stipulated in the contract of
Wetlands are federal and state protected transition
areas between uplands and aquatic habitats that provide
flood and storm water control, surface and groundwater
protection, erosion control, and pollution treatment.
Words of Conveyance
Words of conveyance is a stipulation in a deed demonstrating
the definite intent to convey a specific title to
real property to a named grantee.
A wraparound mortgage is a junior mortgage in an
amount exceeding a first mortgage against the property.
Writ of Attachment
A writ of attachment is a court order preventing
any transfer of attached property during litigation.
The yield refers to the return on an investment.
An area of a municipality or specific building that
is zoned for a specific use, such as residential,
Zoning are the laws regulating land use.
Zoning ordinance is a statement settling forth the
type of use permitted under each zoning classification
and specific requirements for compliance.