ABCs of Real Estate

Absorption Rate — The pace at which available homes/units are leased or sold in a given market and period.

Abstract of Title — Summary of recorded documents affecting title (transfers, liens, encumbrances).

Access Easement — A recorded right to cross another parcel for access (ingress/egress).

Accessory Dwelling Unit (ADU) — A secondary, smaller dwelling on the same lot as a primary home (e.g., garage apartment, basement unit).

Active (Listing Status) — Property is on the market and available; no accepted contract.

Adjustable-Rate Mortgage (ARM) — Loan with an interest rate that can change after an initial fixed period per index and caps.

Adverse Possession — Gaining title by openly occupying land for a statutory period without permission (varies by state).

Affidavit of Title — Seller’s sworn statement confirming ownership and that no undisclosed liens/claims exist.

Affordable Housing — Housing priced so households at specified income levels (often % of AMI) spend no more than ~30% of income on housing.

Agency — The fiduciary relationship between a client and a real estate broker/agent.

ALTA/NSPS Survey — High-detail land survey meeting title insurance standards; shows boundaries, easements, encroachments, improvements.

Amenity Fee — Additional charge for access to features like pools, gyms, parking.

Amortization — Scheduled repayment of principal over time; often shown in an amortization schedule.

Annual Percentage Rate (APR) — Interest plus certain loan fees expressed as a yearly rate to compare costs.

Apartment — Individual rental housing unit within a multiunit building.

Appraisal — An independent, licensed estimate of a property’s market value.

Appraisal Contingency — Contract clause allowing a buyer to cancel/renegotiate if appraised value is below price.

Appreciation — Increase in a property’s value over time.

Arrears — Payments made after the period they cover (e.g., rent due at month-end in some leases).

“As-Is” — Sale where the property is offered without seller repairs; buyer accepts current condition.

As-Built (Plans/Survey) — Drawings or survey documenting how a building/site was actually constructed.

Assessed Value — Value set by a tax assessor for property tax purposes.

Assignment — Transfer of contractual rights to another party.

Assignment of Rents — Lender’s right (upon default) to collect rents directly from tenants.

Assumable Mortgage — Existing loan that a buyer can take over (subject to lender/loan rules).

Assumption (Loan) — Buyer takes over the seller’s existing mortgage (subject to lender approval/terms).

Attached (Dwelling) — A home sharing at least one common wall with another (e.g., townhome, duplex).

Attornment — Tenant’s agreement to recognize a new owner/landlord after a sale or foreclosure.

Back-End Ratio (DTI) — Debt-to-income ratio including housing plus other monthly debts.

Balloon Mortgage/Payment — Loan with small periodic payments and a large lump sum due at maturity.

Basis (Tax Basis) — Owner’s cost in a property for tax purposes (purchase price plus capital improvements, less depreciation).

Basis Point (bp) — One-hundredth of a percent (0.01%); used for rate/fee changes.

Baton (Right to Quiet Enjoyment) — Implied tenant right to use premises without interference (see “Quiet Enjoyment”).

Bilateral Contract — Agreement with mutual promises (most purchase agreements/leases).

Blanket Mortgage — Single loan secured by multiple properties or lots.

Boarding House — Property renting individual rooms (typically with shared kitchen/baths) for longer terms.

BOMA (Measurement Standards) — Methods for measuring commercial floor area (e.g., rentable vs. usable SF).

Bona Fide Buyer — Purchaser in good faith without notice of competing claims.

Bonus Room — Flexible, non-bedroom space (often no closet/window) used as office, playroom, etc.

BPO (Broker Price Opinion) — Broker’s value estimate, less formal than an appraisal.

Bridge Loan — Short-term financing to “bridge” until permanent financing or sale proceeds are available.

Brownfield — Property complicated by possible contamination; may qualify for remediation incentives.

Brownstone — Rowhouse/terraced home faced with brown sandstone, commonly in older urban areas.

BRRRR — Buy, Rehab, Rent, Refinance, Repeat investment strategy.

Build-to-Rent (BTR) — New single-family/townhome communities built to operate as rentals.

Building Code — Minimum standards for design, materials, life safety.

Building Envelope — Exterior shell (walls, roof, doors, windows) that separates interior from exterior.

Bungalow — Small, typically one-story home with a low-pitched roof and broad eaves.

Bungalow (Cottage) Court — Cluster of small cottages facing a shared courtyard on a single lot.

Buydown (Temporary 2-1/1-0) — Prepaid points creating lower teaser payments in early years.

Buyer’s Agent — Agent representing the buyer’s interests in a transaction.

Buyer’s Market — Supply exceeds demand; buyers have leverage.

Bylaws (HOA/Condo) — Internal rules governing an association’s operations and member rights.

CAM (Common Area Maintenance) — Tenant’s share of property operating costs for common areas.

CapEx (Capital Expenditures) — Nonrecurring, value-adding improvements (roofs, HVAC replacements).

Capital Stack — Layers of financing (senior debt, mezzanine, preferred equity, common equity).

Capitalization Rate (Cap Rate) — NOI ÷ Price; a quick return metric for income property.

Carriage House — Small dwelling above/behind a garage (often ADU-style).

Carrying Costs — Ongoing expenses while holding property (taxes, insurance, interest, utilities).

Cash for Keys — Payment to occupant in exchange for voluntary move-out/lease termination.

Cash-on-Cash Return — Annual pretax cash flow ÷ total cash invested.

Caveat Emptor — “Buyer beware”; disclosure duties vary by state.

CC&Rs — Covenants, Conditions & Restrictions recorded on a property (common in HOAs/PUDs).

Certificate of Completion (COC) — Local confirmation that permitted work is finished per plans.

Certificate of Occupancy (CO) — Local approval that a building is safe/legal to occupy.

Certificate of Title — Statement from a title company/attorney on ownership status.

Chain of Title — Recorded ownership history of a property.

Change Order — Written change to construction scope, cost, or schedule.

Clear Title — Title free of disputed claims or undisclosed liens.

Closing — Final step transferring ownership; documents signed, funds disbursed, deed recorded.

Closing Costs — Fees paid at closing (lender, title, taxes, recording, etc.).

Closing Disclosure (CD) — Final loan/closing cost statement provided to borrowers (TRID).

Cloud on Title — Any claim/defect that may impair transfer (e.g., unresolved lien).

CMA (Comparative Market Analysis) — Agent’s valuation using recent comparable sales/listings.

Cold Call — Unsolicited outreach to prospective clients/leads.

Cold Sale (Colloquial) — An off-market or minimally marketed sale with limited preexisting relationship; not a formal legal term.

Community Land Trust (CLT) — Nonprofit holds land to keep housing permanently affordable via ground lease.

Concession — Incentive such as free rent or credits to close a deal/lease.

Condominium (Condo) — Ownership of an individual unit plus shared interest in common areas.

Conforming Loan — Meets GSE limits/standards (Fannie Mae/Freddie Mac).

Conservation Easement — Voluntary legal restriction protecting land in perpetuity (often with tax benefits).

Construction Draw — Periodic loan disbursement as work is completed/inspected.

Construction Loan — Short-term financing that funds building costs (interest-only with draws).

Contiguous Parcels — Parcels sharing a boundary.

Contingency — Contract condition that must be met (financing, inspection, appraisal).

Conventional Loan — Mortgage not backed by the government (FHA/VA/USDA).

Co-Tenancy Clause (Retail) — Allows rent reductions or lease remedies if key tenants/vacancy thresholds are not met.

Corner Lot — Lot with frontage on two intersecting streets.

Cost Approach — Appraisal method using cost to build new minus depreciation plus land value.

Cost Segregation Study — Engineering analysis to accelerate depreciation by reclassifying components.

Cottage — Small, cozy detached house; often older or in cottage-style developments.

Counteroffer — New offer responding to a prior offer with changed terms.

Covenant — Recorded promise restricting/obligating property use (runs with the land).

Craftsman Home — Early-20th-century style emphasizing handcrafted woodwork, low roofs, deep porches.

Credit Score — Numerical measure of creditworthiness used in lending.

Curb Appeal — How attractive a property looks from the street.

Days on Market (DOM) — Number of days a listing is active before going under contract.

Debt Service — Annual principal and interest payments on a loan.

Debt Service Coverage Ratio (DSCR) — NOI ÷ Annual Debt Service; lender risk metric.

Debt Yield — NOI ÷ Loan Amount; lender metric of return independent of interest rate.

Deed — Legal document transferring title from grantor to grantee.

Deed in Lieu — Owner deeds property to lender to avoid foreclosure.

Deed of Trust — Security instrument (in trust deed states) securing a loan with real property.

Deed Restriction — Recorded use limitation (e.g., no short-term rentals).

Defeasance — Loan payoff method substituting collateral (e.g., Treasuries) for prepayment-restricted loans.

Depreciation (Tax) — Allocated deduction for wear/tear on investment property.

Detached (Dwelling) — A home with no shared walls (single-family house).

Developer Agreement — Contract with a municipality on infrastructure, timing, and obligations.

Disclosure — Required information provided to the other party (e.g., defects, agency).

Discount Points — Upfront fee to reduce loan interest rate; 1 point = 1% of loan.

Dormitory — Housing with shared bedrooms/baths for students or institutions.

Down Payment — Cash paid upfront toward purchase price.

Downzoning — Rezoning to lower intensity (e.g., from multifamily to single-family).

Due Diligence — Buyer’s investigation period for inspections, title, zoning, etc.

Due Diligence Period — Contract window to investigate and terminate or proceed.

Due on Sale Clause — Lender can demand payoff when property is transferred.

Duplex — Two dwelling units in one building (side-by-side or up/down).

Dumpsters/Enclosures (Site) — Waste handling area required by code/lease specs.

Dwelling — Any building or part thereof used for human habitation.

Earnest Money — Buyer deposit held in trust to show good faith; applied at closing.

Easement — Non-possessory right to use another’s land for a specific purpose (e.g., utilities).

Effective Date (Contract) — Date when last party signs/initials; starts contingency clocks.

Effective Gross Income (EGI) — GPR minus vacancy/credit loss plus other income.

Egress — A safe exit path from a building/bedroom required by code.

Eminent Domain — Government power to take private property for public use with just compensation.

EMD (Earnest Money Deposit) — Abbreviation for earnest money.

Encroachment — Physical intrusion over a property line (e.g., fence, building corner).

Encumbrance — Claim limiting title or use (liens, easements, restrictions).

Entitlements — Government approvals granting the right to develop as proposed (rezonings, variances, site plan).

Environmental Site Assessment (ESA) — Phase I/II studies assessing contamination risk.

Equity — Market value minus total debt/liens.

Escalation Clause — Offer provision that automatically raises price above competing bids up to a cap.

Escrow — Neutral third party holds funds/documents until conditions are met.

Escrow Account (Impounds) — Lender-held account for taxes/insurance paid with monthly mortgage.

Escrow Agent — Neutral third party holding funds/documents until conditions are met.

Escrow Holdback — Funds withheld at closing to ensure future repairs/completion.

Estate (Probate) — Decedent’s assets/liabilities subject to probate process.

Estoppel Certificate — Tenant statement confirming lease terms/status for buyers/lenders.

Eviction — Legal process to regain possession from a tenant.

Exclusive Agency — Listing allowing seller to avoid commission if they find buyer themselves.

Exclusive Right to Sell — Listing agreement granting broker exclusive right and commission.

Fair Housing Act (FHA Law) — Federal law prohibiting housing discrimination on protected classes.

Fair Market Rent (FMR) — HUD’s benchmark rents used in voucher programs.

Fannie Mae (FNMA) — Government-sponsored enterprise buying conforming loans.

Fee Simple — Highest form of private ownership with full bundle of rights, subject to laws/encumbrances.

FHA Loan — Government-insured mortgage with more flexible credit/down payment standards.

Fixture — Personal property that has become part of real property by attachment/intention.

Fixed-Rate Mortgage — Interest rate remains the same for the loan term.

Flipping — Buying, improving, and quickly reselling for profit.

Flood Insurance — Special policy covering flood damage (often required in certain zones).

Flood Zone — FEMA-mapped area with specific flood risk.

Floor-Area Ratio (FAR) — Total building floor area ÷ lot area (zoning metric).

Forbearance — Lender temporarily reduces/pauses payments.

Force Majeure — Clause excusing delays due to events beyond control (e.g., natural disasters).

Foreclosure — Legal process where lender takes property due to default.

Freddie Mac (FHLMC) — Government-sponsored enterprise buying conforming loans.

Free Rent (Abatement) — Period of rent forgiveness as a concession.

Front-End Ratio — Housing costs ÷ income (PITI-only DTI).

FSBO (For Sale By Owner) — Owner sells without listing agent.

Full-Service (Gross) Lease — Landlord pays most operating expenses; tenant pays one all-in rent.

Functional Obsolescence — Value loss due to design/utility issues (e.g., no closets).

Furniture, Fixtures & Equipment (FF&E) — Tangible items not permanently affixed (for furnished rentals).

Future Land Use Map (FLUM) — Planning map guiding future zoning decisions.

Garden-Style Apartment — Low-rise (1–3 stories) with surface parking and landscaped grounds.

General Contractor (GC) — Prime builder responsible for construction and subcontractors.

General Warranty Deed — Deed warranting clear title against all claims, past and present.

Gentrification — Neighborhood change involving rising values and displacement concerns.

Geotechnical Report — Soil/groundwater analysis informing foundations, pavements, and stormwater.

Good Faith Money — Informal term for earnest money deposit.

Grant Deed — Deed guaranteeing title not previously conveyed by grantor and free of undisclosed encumbrances.

Green Building — Construction emphasizing energy efficiency and sustainability.

Gross Leasable Area (GLA) — Area available to be leased to tenants.

Gross Living Area (GLA – Residential) — Above-grade finished, heated living space per appraisal standards.

Gross Potential Rent (GPR) — Total rent at full occupancy before losses.

Gross Rent Multiplier (GRM) — Price ÷ Gross Annual Rent; quick valuation shortcut.

Gross Up (Operating Expenses) — Adjusting variable expenses to a specified occupancy level for comparisons.

Ground Lease — Tenant leases land and builds/operates improvements during term.

Group Home — Licensed residence providing support/supervision for specific populations.

Guarantor — Person/entity promising to repay if borrower/tenant defaults.

Guardian Ad Litem (Housing Court) — Court-appointed protector for minors/wards in housing cases.

Guide Meridians/Lot & Block — Survey systems for legal land descriptions.

Gutter/Fascia (Maintenance) — Exterior drainage components affecting property condition.

Gym (Amenity) — Fitness room; in leases, defined hours/rules may apply.

Habitable (Warranty of Habitability) — Minimum standards for safe, livable housing.

Hard Costs — Direct construction costs for labor/materials.

Hard Money Loan — Asset-based, short-term loan with higher rates/fees.

HBP (Homebuyer Program) — Local downpayment/closing cost assistance program.

HELOC — Home Equity Line of Credit secured by a primary residence.

Highest & Best Use — Most legally permissible, physically possible, financially feasible use.

HOA (Homeowners Association) — Organization managing common areas/rules in planned communities.

Hold Harmless (Indemnity) — Agreement to protect another party from certain claims/losses.

Holdover Tenant — Tenant remaining after lease ends without landlord consent.

Home Inspection — Professional evaluation of a property’s condition.

Home Warranty — Service contract for covered systems/appliances breakdowns.

Homestead Exemption — Property tax benefit for primary residences (varies by state).

HOI (Homeowners Insurance) — Property insurance covering hazards, liability, and more.

Hotel/Transient Use — Lodging for short stays; may be restricted by zoning/HOA.

House Hacking — Owner occupies one unit/room and rents others to offset housing costs.

Housing Choice Voucher (Section 8) — Tenant-based rent assistance program administered by PHAs.

Housing Cost Burden — Paying >30% of gross income on housing; >50% is severe burden.

HPR (Horizontal Property Regime) — Legal framework similar to condos in some states.

HUD — U.S. Department of Housing and Urban Development.

HUD-1 — Older settlement statement, largely replaced by the Closing Disclosure (CD) for most loans.

Hurricane Clips/Straps — Structural connectors improving wind resistance (inspection item).

HVAC — Heating, Ventilation, and Air Conditioning systems.

iBuyer — Company that makes quick, data-driven cash offers to purchase homes.

Impact Fee — One-time fee to fund public infrastructure needed by new development.

Improvement District (PID/BID/SAD) — Special district levying assessments to fund local improvements/services.

Improvements — Buildings or fixtures added to land that increase value.

Inclusionary Zoning (IZ) — Requires or incentivizes including affordable units in new projects.

Income-Restricted Housing — Units limited to households under specified AMI thresholds.

Ingress — Legal right or path to enter a property.

Inspection Contingency — Contract right to inspect and renegotiate/cancel based on findings.

Insurance Binder — Temporary proof of insurance coverage.

Interest Rate Cap — Limit on how much an ARM rate can change per period/life.

Interest Reserve — Budgeted loan funds to pay interest during construction/lease-up.

Interest-Only Loan — Payments cover interest only for a period; principal later.

Internal Rate of Return (IRR) — Discount rate making NPV of all cash flows equal zero.

Intended Use (Appraisal) — Stated purpose for which an appraisal is prepared.

Inventory Home — New construction home built speculatively and ready/near-ready to close.

Inverse Condemnation — Government action effectively “takes” property value without formal eminent domain.

Investment Property — Real estate purchased to produce income or appreciate.

Joint Tenancy — Co-ownership with right of survivorship.

Jumbo Loan — Mortgage exceeding conforming loan limits.

Junior Lien — Lien with lower priority than others (e.g., second mortgage).

Jurisdiction — The governmental area whose laws apply to the property.

Just Compensation — Payment owed to an owner in eminent domain cases.

Judicial Foreclosure — Court-supervised foreclosure process (required in some states).

Key Money — Upfront fee sometimes charged for desirable leases (more common in commercial/NYC).

Kick-Out Clause — Seller can accept a better offer if first buyer can’t remove contingencies by a deadline.

Kitchen Triangle — Layout concept for sink, stove, refrigerator efficiency (design term).

Knob-and-Tube — Older wiring type; may impact insurance/inspection.

Knock-Down Rebuild — Demolish existing home to build new on same lot.

Koi Pond (Feature) — Water feature; can impact maintenance/insurance considerations.

Land Bank — Public/quasi-public entity that acquires and repositions problem properties.

Land Contract — Seller financing where buyer pays over time; deed transfers after payoff.

Land Lease (Ground Lease) — See Ground Lease; tenant rents land only.

Land Trust (Title Holding) — Arrangement where a trustee holds title for privacy/estate planning.

Land Use Plan — Long-range policy map guiding future zoning decisions.

Landlord — Property owner who leases to a tenant.

Lease — Contract granting possession/use for rent over a term.

Lease Assignment — Tenant transfers remaining lease to a new tenant with consent.

Leaseback (Sale-Leaseback) — Owner sells property and leases it back from buyer.

Leasehold Estate — Tenant’s legal interest during the lease term.

Lease-Option — Lease granting tenant the option to buy at set terms.

Lender’s Policy (Title Insurance) — Protects the lender’s security interest; required for most loans.

Lessee/Lessor — Tenant/Landlord.

Letter of Credit (LOC) — Bank instrument guaranteeing payment/performance (e.g., for improvements).

Letter of Intent (LOI) — Nonbinding outline of deal terms before a full contract.

Lien — Legal claim against property as security for a debt.

Lien Theory vs. Title Theory — Whether mortgage is a lien (borrower holds title) or title passes to lender/trustee (e.g., GA security deed).

Lien Waiver — Statement waiving rights to file a lien (often from contractors).

Lis Pendens — Recorded notice of pending litigation affecting title.

Listing Agreement — Contract between seller and listing broker.

Listing Agent — Broker representing the seller.

Load Factor (Core Factor) — Ratio used to convert usable SF to rentable SF in commercial buildings.

Loan Estimate (LE) — Early disclosure of loan terms, fees, and APR (TRID).

Loan-to-Value (LTV) — Loan amount ÷ property value or price (whichever is lower).

Lock-In (Rate Lock) — Lender commitment to a specific interest rate for a set period.

Loft — Large, open living space, often in converted industrial buildings.

LOMA/LOMR — FEMA letters revising flood hazard status or maps.

Loss Assessment (HOA Insurance) — Owner’s share of an HOA’s insurance shortfall assessed to members.

Lot Coverage — Portion of lot area covered by buildings.

Lot Line — The legal boundary of a parcel of land.

Low-Rise/Mid-Rise/High-Rise — Building height categories (approx. 1–3 / 4–7 / 8+ stories).

Maintenance Reserve — Funds set aside for repairs/replacements (CapEx).

Manufactured Home — Factory-built home on a permanent chassis; HUD-code, transportable.

Market Comparable (Comp) — Recently sold/leased similar property used for valuation.

Market Rent — Rent a unit could command in the current open market.

Market Value — Most probable sale price under typical conditions.

Master Association — Umbrella HOA for multiple sub-associations/uses in a larger development.

Master Insurance Policy — HOA/condo policy covering common elements/structures.

Mechanic’s Lien — Contractor/supplier lien for unpaid labor/materials.

Metes and Bounds — Land description using distances and bearings from known points.

Mezzanine Loan — Subordinate financing secured by equity interests vs. property.

Millage Rate — Property tax rate per $1,000 of assessed value.

Missing Middle Housing — Duplexes, triplexes, fourplexes, cottage courts, etc., between SF homes and large apartments.

Mixed-Income Housing — Development mixing market-rate and income-restricted units.

Mixed-Use — Property combining residential with retail/office, etc.

Modular Home — Factory-built in sections; assembled on permanent foundation; built to local code.

Momentum (Absorption) — Informal term referencing leasing velocity; see Absorption Rate.

Mortgage — Loan secured by real property.

Mortgage Broker — Intermediary who shop loans with multiple lenders.

Mortgage Insurance (PMI/MIP) — Insurance protecting lender when LTV is high.

Mortgage Note (Promissory Note) — Borrower’s promise to repay per stated terms.

Mortgage Servicer — Company that collects payments, manages escrow, handles delinquency.

Motivated Seller — Seller eager to sell quickly, often more flexible on terms.

MLS (Multiple Listing Service) — Broker database for sharing listings/compensation.

Multi-Family — Property with 2+ residential units (duplex, triplex, etc.).

Municipal Code — Local ordinances/codes governing building and use.

Mutual Release — Agreement by all parties to cancel a contract and release claims.

Natural Hazard Disclosure — Statement of risks (flood, fire, seismic) where required.

Negative Amortization — Payment less than interest due, increasing principal balance.

Neighborhood Association — Informal group (not an HOA) advocating for area issues.

Neighborhood Stabilization — Programs/investments aimed at reducing blight/vacancy.

Net Effective Rent — Average monthly rent after amortizing concessions.

Net Lease (NN/NNN) — Tenant pays base rent plus some/all expenses (taxes, insurance, CAM).

Net Operating Income (NOI) — Effective gross income minus operating expenses (before debt service/CapEx).

Net Present Value (NPV) — Present value of all cash inflows/outflows using a discount rate.

Net Worth (Underwriting) — Borrower’s assets minus liabilities.

Neutral Density (Zoning Context) — Planning concept balancing capacity w/ impacts.

Non-Conforming Use — Previously legal use no longer allowed under current zoning but grandfathered.

Non-Disclosure Agreement (NDA) — Contract limiting sharing of confidential information.

Non-Owner Occupied — Investment or second-home occupancy type for lending/insurance.

Non-Recourse Loan — Lender’s remedy limited to collateral, subject to carveouts.

Non-Refundable Fee — Fee that is not returned (e.g., application/pet admin fees).

Notary — Official witnessing signatures and verifying identity on documents.

Notice of Default (NOD) — Lender notice that borrower is in default.

Notice to Cure or Quit — Landlord notice requiring correction of a violation or surrender of possession.

Notice to Vacate — Written notice to terminate tenancy or demand possession.

Novation — Substituting a new party/contract with consent of all parties.

Nuisance — Use that unreasonably interferes with others’ enjoyment of property.

Occupancy Permit — See Certificate of Occupancy.

Occupancy Standard — Reasonable person-per-bedroom guidance used by housing providers.

Offer — Proposal to purchase or lease with stated terms.

Off-Market — Property not publicly advertised on the MLS.

Open House — Public showing during a scheduled window.

Open Listing — Nonexclusive listing; commission only if that broker brings the buyer.

Operating Agreement — LLC governance document covering capital, management, and distributions.

Operating Expenses (OPEX) — Costs to run a property (taxes, insurance, maintenance, management).

Operating Statement — Summary of a property’s income and expenses.

Opportunity Zone (OZ) — Designated census tracts offering capital gains tax incentives via Qualified Opportunity Funds.

Option Consideration — Nonrefundable fee paid for an option right (e.g., lease-option).

Option Period — Time during which buyer can cancel for a fee (state-specific).

Option to Purchase — Contract right to buy at agreed terms/price within a timeframe.

Origination Fee — Lender fee for processing a loan.

Overage (Retail Percentage Rent) — Additional rent based on sales above a breakpoint.

Overlay District — Zoning layer adding rules on top of base zoning (e.g., historic, flood).

Overimprovement — Spending beyond what the market supports for the location.

Owner Financing (Seller Financing) — Seller carries a note instead of buyer using a third-party lender.

Owner’s Policy (Title Insurance) — Title policy protecting the owner’s interest.

Owner-Occupied — Property used as the owner’s primary residence.

Pad Site — Standalone site (often in a retail center) for a single user like a bank or restaurant.

Parcel Number (APN/Parcel ID) — Assessor’s identification number for a property.

Partial Release (Deed/Loan) — Lender releases a portion of collateral from a blanket lien.

Party Wall — Wall shared by two adjoining properties with defined rights/maintenance.

Patio Home — Small lot, low-maintenance detached or attached home with private patio/courtyard.

Payment in Arrears — See Arrears; common for CAM reconciliations and some rents.

Percolation (Perc) Test — Soil test determining suitability for septic systems.

Percentage Rent — Retail lease rent based on a share of tenant sales above a breakpoint.

Permit — Official authorization to build/alter/occupy per code.

Phase I ESA — Initial environmental due-diligence report reviewing historical uses/risks.

Phase II ESA — Sampling/testing investigation following a Phase I red flag.

PITI — Principal, Interest, Taxes, and Insurance; components of a mortgage payment.

Pipeline (Leasing/Sales) — Prospective deals/tenants in progress.

Planned Unit Development (PUD) — Master-planned community with common areas and private covenants.

Plat — Recorded map showing lot boundaries, easements, and rights-of-way.

Plottage (Assemblage Value) — Increased value by combining parcels under one ownership.

Pocket Listing — Property marketed privately by a broker without full MLS exposure.

Points — See Discount Points.

Power of Attorney (POA) — Legal authority granted to act on someone’s behalf.

Pre-Approval — Lender credit/income review supporting a conditional approval amount.

Pre-Qualification — Preliminary, informal assessment of borrowing ability.

Prepayment Penalty — Fee charged for paying off a loan early (where allowed).

Price per Square Foot (PPSF) — Price metric used for comparison/valuation.

Principal (Loan) — Outstanding amount owed on a mortgage.

Private Mortgage Insurance (PMI) — Insurance required when down payment is below a threshold on conventional loans.

Probate Sale — Sale of property from an estate, often court-supervised.

Pro Forma — Projected income/expenses used for underwriting an investment.

Pro Rata Share — Tenant’s allocated share of expenses based on leased area.

Property Condition Assessment (PCA) — Engineering review of building systems and capital needs.

Property Management — Operating and maintaining rental property for owners.

Property Tax — Ad valorem tax based on assessed value.

Protected Class — Groups shielded by fair-housing laws (e.g., race, color, religion, sex, disability, familial status, national origin; others vary by state/locality).

Proration — Dividing taxes/rents/HOA dues between parties based on closing date.

Public Housing Authority (PHA) — Local agency administering vouchers/public housing.

Public Improvement/Special Assessment District — Area levying assessments to fund infrastructure/services.

Punch List — Final list of items to correct before completion/turnover.

Purchase & Sale Agreement (PSA) — Binding contract to buy/sell real property.

Purchase-Money Mortgage — Seller-provided financing used to acquire the property.

Quadplex (Fourplex) — Building containing four separate dwelling units.

Qualified Intermediary (QI) — Neutral party facilitating a 1031 exchange.

Qualified Mortgage (QM) — Loan meeting federal ability-to-repay rules.

Qualified Opportunity Fund (QOF) — Investment vehicle for Opportunity Zone tax benefits.

Quantity Survey (Cost Approach) — Detailed construction cost estimation method for appraisals.

Quiet Enjoyment (Covenant of) — Tenant’s right to use premises without disturbance from the landlord or others with superior title.

Quiet Title Action — Lawsuit to resolve adverse claims and clear title.

Quitclaim Deed — Deed transferring any interest the grantor has without warranties.

Radon — Naturally occurring gas that can accumulate indoors; health disclosure/testing item.

Rate Buydown — Seller or borrower pays points to temporarily or permanently lower rate.

Rate Cap — Upper limit on ARM interest rate changes.

REALTOR® — Member of the National Association of REALTORS® bound by its Code of Ethics.

Real Estate Broker — Licensed professional supervising agents and brokerage activities.

Real Estate Investment Trust (REIT) — Company owning/operating income-producing real estate with special tax treatment.

Real Estate Owned (REO) — Property owned by a lender after foreclosure.

Real Property — Land and permanently attached improvements.

Recapture (Depreciation) — Tax on prior depreciation taken when property is sold at a gain.

Receivership — Court-appointed manager operates property during disputes/defaults.

Recording — Entering documents into public records to give notice.

Redemption Period — Time after foreclosure/tax sale when owner may reclaim property (varies by state).

Redlining — Illegal practice of denying services based on neighborhood demographics.

Refinance — Replace an existing loan with a new one, typically for better terms.

Rehab — Renovation to improve condition/value.

Release of Lien — Document removing a lien from record after payoff.

Rent Abatement — Temporary reduction/suspension of rent (often for repairs/conditions).

Rent Escalation (Bumps) — Scheduled increases in rent during the term.

Rent Roll — List of units, tenants, and current rents.

Rent Stabilization/Control — Local laws limiting rent increases (jurisdiction-specific).

Rent-Ready — Condition suitable for immediate occupancy by a new tenant.

Rent-to-Own (Lease-Option) — Tenant pays option consideration and can buy later per agreed terms.

Rentable vs. Usable SF (RSF/USF) — RSF includes a share of common areas; USF is within premises.

Replacement Cost — Cost to replace improvements with similar materials/quality.

Reserves (Operating/Replacement) — Funds set aside for expenses and capital items.

Reserve Study — Long-term plan for major repairs/replacements and required funding (common in HOAs/condos).

Residual Land Value — Land value derived by subtracting development costs and profit from finished project value.

Restrictive Covenant — Recorded limitation on use or development.

Reverse Mortgage (HECM) — Loan allowing seniors to access home equity; repaid when sold/moved/estate.

Right of First Refusal (ROFR) — Right to match another party’s offer and purchase/lease first.

Right of Way — Legal right for passage over property (often for roads/utility).

Right-of-Entry — Permission to enter property for specific purposes.

Riparian Rights — Rights of landowners on flowing watercourses.

Rooming House — Property renting individual rooms (often shorter term than boarding house; definitions overlap by locality).

ROW House (Rowhome) — Attached homes in a continuous row sharing side walls.

Sale-Leaseback — Owner sells property and simultaneously leases it back from the buyer.

Sales Comparison Approach — Appraisal method comparing recent, similar sales.

Second Mortgage — Junior lien recorded behind a first mortgage.

Security Deposit — Tenant funds held to cover damages/obligations beyond normal wear.

Seller’s Market — Demand exceeds supply; prices rise, days on market drop.

Setback — Required distance between structures and property lines.

Short Sale — Lender-approved sale below the loan balance.

Short-Term Rental (STR) — Lodging rented typically <30 days; locally regulated.

Specific Performance — Court order requiring a party to perform contract obligations.

Square Footage (SF) — Area measurement; standards vary (ANSI/BOMA).

Tenant Improvement (TI) — Interior build-out customized for a tenant.

Term Sheet — Non-binding summary of proposed loan or investment terms.

Tiny Home — Small dwelling (often <400 sq ft); subject to local code/parking rules.

Title — Evidence of ownership and the bundle of rights.

Title Insurance — Policy protecting against covered title defects/claims.

Townhome (Townhouse) — Multi-story attached dwelling with its own entrance.

Transfer Tax — Tax imposed by a jurisdiction upon title transfer.

Triplex — Building containing three dwelling units.

Turnkey — Move-in ready; minimal work required.

Under Contract — Property has an accepted offer; contingencies may remain.

Underwriting — Lender’s analysis of borrower, property, and risk.

Uniform Residential Loan Application (URLA) — Standard consumer mortgage application.

Unpermitted Space — Improvements built without required permits/inspections.

USDA Loan — Government-backed mortgage for eligible rural areas/borrowers.

Usable Square Feet (USF) — Interior area exclusive to a tenant; excludes common areas.

Utility Allowance — Estimated tenant utility costs used in affordable housing/voucher calculations.

VA Loan — Mortgage benefit program for eligible veterans/servicemembers.

Value-Add — Strategy to increase income/value via renovations/operations.

Variance (Zoning) — Permission to deviate from strict zoning rules based on hardship.

Vendor’s Lien — Seller’s lien securing unpaid purchase price in some jurisdictions.

VRBO — Short-term/vacation rental platform.

Voucher (HCV) — Housing Choice Voucher subsidy paid to landlords by PHAs.

Walkability — Ease of meeting daily needs on foot; sometimes scored by third-party indexes.

Walk-Through — Final inspection before closing/possession to confirm condition.

Warranty Deed — Deed with the strongest title warranties from seller to buyer.

Wholesaling — Contracting to buy a property and assigning the contract for a fee.

Workforce Housing — Moderately priced housing serving essential workers above typical affordable thresholds.

Wraparound Mortgage — New loan that “wraps” an existing loan; buyer pays seller, seller pays original lender.

Xeriscaping — Drought-tolerant landscaping that reduces irrigation needs.

Yard Setback — Required open space around structures by zoning (front/side/rear yards).

Yield Maintenance — Prepayment premium designed to keep lender’s yield whole.

Zestimate® — Zillow’s automated valuation model; an estimate, not an appraisal.

Zero Lot Line — Building placed directly on or very near one lot boundary.

Zoning — Local regulations dividing land into districts with permitted uses/densities.

Zoning Map — Official map showing zoning districts and overlays.

Zoning Variance — Relief from specific zoning standards.