Real estate glossary
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ABS: A type of black plastic pipe commonly used for waste water lines.
Aggregate: Crushed rock or stones, often used in making aggregate patios.
Air Chamber: A vertical air filled pipe that prevents "air hammer" by absorbing pressure
when water is shut off at a valve.
Alligatoring: A coarse checked pattern on the surface of a material. This is often
caused by exposure to the sun and/or aging.
Ampacity: How much current a wire can safely carry.
APR: An abbreviation for the annual percentage rate, or the cost of credit
on an annual basis. It is expressed as a percentage.
Appraisal: An estimate of a property's current market value, as prepared by
an appraiser.
Asphalt: A bituminous material that is used in paving and roofing, because of it's
waterproofing ability.
Assessment: The placing of a value on a property for the purpose of taxation.
Back-End Ratio: A ratio that indicates what portion of a person's monthly
payment goes towards paying debts.
Backfill: The replacement of excavated earth into a trench or pit.
Backflow: The reverse flow of water or other liquids into a pipe.
Ballast: A transformer that increases voltage in a fluorescent lamp.
Balloon Payment: The final lump sum payment that is due at the termination of
a balloon mortgage.
Base Sheet: The bottom layer of built-up roofing.
Bay Window: Any window space projecting outward from a window, either
square or polygonal in shape.
Bearing Wall: A wall that supports a vertical load in addition to it's own weight.
Bill of Sale: A written document that transfers title to personal property.
Brick Tie: Metal strips or wires that are inserted into the mortar joints of brick
veneer.
Cantilever: Any part of a structure that extends beyond it's main support and
is balanced on it.
Casement Window: A window with hinges on one of it's vertical sides. This
type of window swings open like a door.
Chain of Title: An analysis of the transfer of a property's title over a period
of years.
Clear Title: A title that is free of liens or legal questions as to the ownership of
a piece of property.
Closing Costs: Any fees that are paid by a buyer or a seller during the closing of
a mortgage loan.
Conduit (electrical): A pipe, usually metal, in which electrical wire passes through.
Construction Loan: A short term loan for financing construction costs.
Convertible ARM: An adjustable rate mortgage that allows the borrower to
convert the mortgage to a fixed rate loan within a specified period of time.
Crawlspace: A shallow space below a building, which is normally enclosed
by foundation walls.
Damper: A metal door, usually placed within ductwork, that controls air flow.
Dedicated Circuit: An electrical circuit that serves only one appliances or
a specified "system", such as a series of smoke detectors.
Deed: The legal document which conveys title to a property.
Depreciation: The decline in the value of a property.
Disconnect: A large electrical on-off switch.
Discount Points: An amount paid to either maintain or reduce the interest rate
on a loan.
Diverter Valve: A device that changes the direction of water flow from one
faucet to another.
Dormer: A box-like projection from the sloping plane of a roof that frames
a window.
Double Hung Window: A window with two vertically sliding sashes, both of
which can move up or down.
Downspout: A pipe that extends from a gutter and serves to drain away water.
Easement: A right of way giving someone (other than the owner) access to or
over a piece of property.
Eaves Protection: An additional layer of roofing material which is applied at the
eaves to protect against damage from water backup.
Elbow: A plumbing or electrical fitting that lets you change direction in pipe or
conduit.
Equity: A person's financial interest in a property.
Evaporator Coil: The part of a cooling system that absorbs heat as air passes
through it.
Expansion Joint: A joint that allows for building material expansion and
contraction due to temperature fluctuations.
Exposure: The portion of roof or wall cladding material that is exposed to the
weather after installation.
Fair Market Value: The highest price that a ready, willing and able buyer would
pay, and the lowest price a ready, willing and able seller would accept for an
item of value.
Fannie Mae (FNMA): The Federal National Mortgage Association. This
congressionally chartered company is the nation's largest supplier of
home mortgage funds.
Fascia: A vertical member which is attached to a roof structure and often to
the backing of a gutter.
FHA Mortgage: A mortgage that is insured by the Federal Housing Administration.
This is often referred to as a government loan.
Fixed Rate Mortgage: A mortgage where the interest rate does not
fluctuate over the life of the loan.
Flatwork: Another word for concrete driveways, patios, sidewalks and floors.
Forced Air Heating: A common type of heating system where air is heated
through a heat exchanger and circulated through a system of ducts and vents.
Form: A temporary structure that is intended to contain concrete as it is placed
and begins to harden.
Freddie Mac: One of the two federal agencies that purchase home loans
from lenders (the other agency is Fannie Mae).
Frost Line: The depth of frost penetration in soil and/or the depth at which the
earth will freeze and swell.
Gable: A sidewall, typically triangular, which is formed by two sloping roof planes.
Gasket: A device that serves to seal joints against leaking.
Gazump: Raising the price on real estate after a deal has already been reached.
Gazunder: When a buyer reduces his or her bid on a property after the deal has
been made but before the papers have been signed.
Graduated Lease: A lease that is periodically adjusted, with the adjustments
based on changes in the appraised value of the property being leased.
Grantee: The person to whom the interest in real property is conveyed.
Grantor: The person who is conveying and interest in real property.
Grout: Mortar which is made of just the right consistency to flow into joints and
cavities of masonry work, fill the voids, and harden.
Gutter: A trough that channels water from the eaves to the downspouts.
Hearth: The inner or outer area of a fireplace, usually made of stone, tile or brick.
Hose Bib: An exterior water faucet.
Heat Pump: A device that uses compression and/or decompression of gas
to heat or cool a building.
House Poor: A person who directs an unusually large portion of his or her monthly
income towards house payments (and can't afford much else).
Housing Bonds: Bonds that are secured by mortgage re-payments on homes or
rental properties.
Housing Market Index: An index of over 300 builders, which shows the demand
for new homes. The index runs from 0 - 100, so a rating of 50 is average.
Housing Starts: The number of new residential housing projects that have
been initiated during any given month.
HVAC: An abbreviation for heat, ventilation and air conditioning.
I-Beam: A steel beam with a cross section resembling the letter I.
Ice Damming: The build-up of ice and water at the eaves of a sloped roof.
Income Trust: An investment trust that holds assets that are income producing.
Real estate investment trusts are one of the more popular investment trusts.
Interest Rate Ceiling: The highest interest rate that can be charged on an adjustable
rate mortgage or loan.
Jack Post: A metal structural support which can be raised or lowered. It is usually
used to replace an old supporting post in a building.
Joint Tenancy: A form of ownership were each party owns the entire property. In
other words, ownership is not separate, and a survivor owns the entire
property.
Joist: One of a series of parallel beams, usually two inches in thickness, that are
used to support floor and ceiling loads. Joists are supported by larger beams,
girders or load bearing walls.
Jumbo Loan: A loan that exceeds Fannie Mae's and Freddie Mac's loan limits.
This is also called a non-conforming loan.
Knob and Tube Wiring: A common form of electrical wiring used before the Second
World War.
Land Value: The total value of a piece of land, including any upgrades or improvements.
Leader: Another word for a downspout.
Leasehold Estate: A way of holding title to a property where the mortgagor does not
actually hold title to a given property. Instead, he or she holds a long-term lease
on that property.
Leasehold Improvement: Improvements on a leased asset that increase the value of
the asset.
Lease Option: A type of financing option where a person(s) leases a property with
an option to buy it.
Lessee: The person (or entity) that rents land or property from a lessor.
Lessor: The person (or entity) that rents land or property to a lessee.
Liabilities: A person's financial obligations.
Lien: The right to take and hold or sell the property of a debtor as security or payment
for a debt.
Life Cap: For an adjustable rate mortgage, a limit on the amount the interest rate charged
can change over the life of the loan.
Lintel: A horizontal element that supports the load over an opening, such as a
door or window.
Liquid Asset(s): Assets in the form of cash or some other asset that can be quickly
converted to cash.
Load Bearing Wall: A wall supporting it's own weight and some other structural
elements of a building, such as a roof, floor structure, etc.
Loan Origination: How a lender refers to the process of obtaining new loans.
Loan to Value (LTV): The percentage relationship between the amount of the loan
and the appraised value or sales price of a property.
Lock-In: An agreement between a lender and a borrower, where the lender guarantees
a specific interest rate, for a specific amount of time, for a specific amount of money.
Lock-In Period: The amount of time that the lender has guaranteed the rate for (commonly
for 60 days or more).
Mansard Roof: A roof with two sloping planes of different pitch on each of it's
four sides.
Manufactured Home: A home that is built in a factory and later shipped to, and built on,
another location.
Marginal Land: Property which is barely profitable to use.
Market Value: The price that a willing and able buyer and seller would agree upon.
Masonry: Stone, brick, hollow-tile, concrete block or other similar building materials.
Maturity: The date at which a financial obligation must be repaid.
Mello-Roos: A form of financing that is available to U.S. cities, counties and special
districts to finance major improvements and services within a particular district.
Mid-Rise: A four to eight story building that contains residential apartment or
condominium units.
Mill Rate: The amount of tax paid per dollar of the accessed property value.
Mortgage: A legal document that pledges a property to a lender as security for a debt.
Mortgage Banker: A company, individual or institution that sells, originates and
services mortgage loans.
Mortgagee: The lender in a mortgage situation.
Multi-Dwelling Unit: Properties that provide separate housing units for more than one
family.
Negative Amortization: The increase in the balance of a loan due to interest payments
being higher than the re-payments made on a loan.
Negative Equity: When the value of an asset falls below the amount due on the loan
that was used to purchase that asset. As an example, if you owe $200,000 on a
home and the home is only worth $170,000, you have negative equity.
Net Lease: A commercial real estate lease in which the tenant pays not only for
space, but also a portion of the landlord's operating expenses.
New Home Sales: An economic indicator that measures sales of newly
built homes.
Non-Amortizing Loan: A type of loan where payments are not made on the principal.
Instead, payments go towards paying interest charges or some other
minimum fee.
Non-Financial Asset: An asset with a physical value, such as land or a
physical object.
Note: A written instrument of credit attesting to a debt and a promise to pay
off that debt.
Nuisance: Something that interferes with the use of a property, by being annoying,
dangerous, offensive, etc.
Offer: A proposal to enter into an agreement with another person.
Open Listing: A listing under which the owner reserves the right to list his or
her home with someone else.
Option: The right to purchase property within a definite time at a definite price.
There is no obligation on the part of the buyer to buy the property. The seller,
however, is obligated to sell if the buyer decides to buy during that time.
Origination Fee: A fee charged by lenders, in addition to interest, for services
in connection with the granting of a loan.
Panic Peddling: The illegal practice of inducing people to sell their home by making
indications that a minority group is moving into the neighborhood.
Parapet: The portion of an exterior wall that extends above the edge of a roof.
Partial Release: A mortgage provision that says that some pledged collateral can
be released from the mortgage contract if certain provisions are met.
Party Wall: A wall erected on a line between adjoining properties for the use
of both properties.
Percentage Lease: A lease in which all or part of rental is a specified percentage of
gross income from total sales made upon the premises.
Personal Property: Property which is tangible, movable, and not fixed to the land. Also called
chattel or personalty.
Personal Deterioration: The loss of value to real property from all causes due to the action of
the elements or old age.
PITI: Principal, interest, taxes and insurance.
Plat Book: A record of recorded subdivisions of land.
Points: Fees paid to induce lenders to make mortgage loans at a particular interest rate.
Each point is equal to 1% of the loan amount.
Police Power: The authority of a government to adopt and enforce law governing the
use of real estate based on the need to promote public safety, health, and general welfare.
Power of Attorney: A written authorization by a person to another person to act for him on
his behalf.
Prepayment: Paying off all or part of the mortgage before the scheduled date.
Prepayment Penalty: A fee paid to the lending institution for paying a loan prior to the
scheduled maturity date.
Prime Rate: The interest, or discount rate charged by a commercial bank to its largest
and strongest customers.
Principal: The amount of money owed to a lender not including interest.
Purchase Offer: A Document that lists the price, terms and conditions under which a buyer
is willing to purchase a property.
Qualify: To meet a mortgage lender's approval requirements.
Qualifying Ratios: Comparisons of a borrower's debts and gross monthly income.
Quarry Tile: A man made or machine made clay tile used to finish a floor
or wall.
Quiet Enjoyment: The right of a property owner or tenant to enjoy his or her property
without interference.
Quitclaim Deed: A deed that transfers whatever ownership interest the transferor has
n a particular property.
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