RE Terminology Every Investor, Buyer, Seller, And Renter Should Know

When the time finally arrives and you are ready to sell, buy, or rent a home, it’s important to keep in mind a few key terminologies. Much like any industry, real estate agreements contain quite a bit of jargon that you simply just don’t hear on a daily basis.

Rest assured, this go-to Real Estate Glossary will be able to help you out in any real estate situation.

A

Absorption Rate: 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 the period

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: 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: Amenities are the enhancements that buildings offer its owners or tenants. These usually include a doorman, health club, garage, children's playroom, common lounge, etc.

Affidavit of title: A written statement that sellers make under oath certifying that they are in possession of the property, and that since the examination of the title on the date of the contracts no defects have occurred in the title. Marital status is also stated.

Agent: The licensed real estate salesperson or broker who represents buyers or sellers.

Appraisal: The estimated current market value of a property, as determined by a professional appraiser -- usually by comparing the property to recent sales of similar ones.

Assessed value: The value of real estate property as determined by an assessor, typically from the county.

"As-is": A contract or listing clause stating that the seller will not repair or correct any problems with the property.

B

Balloon Mortgage: 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: 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.

Bridge Loan: 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.

Back on market (BOM): When a property or listing is placed back on the market after being temporarily removed.

Back-up offer: When an offer is accepted contingent on the fall-through or voiding of an accepted first offer on a property.

Bidding war: When two or more buyers compete for a property by submitting higher offers than the first.

Brokerage: A firm engaged in buying and selling real estate for clients, using brokers and real estate agents to handle the deal.

Broker's tour: A set time and day when real estate sales agents come to view listings by multiple brokerages in the market.

Buyer's agent: The agent who shows the buyers the property and negotiates the contract for the buyer through closing.

Buyer's market: A market condition characterized by low prices and a supply of properties that exceed demand.

C

Capital Expenditure: 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: Profit earned from the sale which is above the original purchase price.

Capital Improvement: 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.
Capitalization Rate : The percentage of the investment the investor will receive back each year from the net income from the property.

Caps : 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.

Carry-Cost Rule: 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: Cash flow is the income produced by an investment property after deducting operating expenses and debt.

Caveat: Caveat is a warning or caution that may be an amendment to a contract of sale.

Chain of title: The document that shows the succession of conveyances, from some accepted starting point to the current holder of title.

Chattel: Chattel is personal property.

Closing: The end of the transaction process, in which the deed is delivered, documents are signed and funds are dispersed.

Closing costs: Expenses above and beyond the purchase price of a house and land (such as agent fees, taxes, etc.) that is paid by the buyer or seller at the completion of the sale.

Closing statement: A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made and all cash paid out in the transaction

Commission: The compensation paid to the listing brokerage by the seller for selling the property, a percentage of which is also paid to the buyer's agent (although in some cases a buyer may be required to pay his or her own share of the commission).

Commission split: The percentage of commission which is split between the real estate sales brokerage and the real estate sales agent or broker.

Comparable: A property used in an appraisal or comparative market analysis (CMA) report that is equivalent to the seller's property.

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.

Competitive Market Analysis (CMA): A comparison of the prices of recently sold or listed homes that are similar to a seller's property in terms of location, style and amenities. This is usually prepared by a listing agent for the property's seller.

Contingency: A provision in a contract that requires certain actions before the contract is binding or the transaction can be finalized or "closed."

Contract for deed: A sales contract in which the buyer takes possession of the property but the seller holds title until the loan is paid. Also known as an installment sale contract.

Cost approach: Determination of the estimated value of a property that comes from adding, to the estimated land value, the appraiser's estimate of the replacement cost of the building, less any depreciation.

Counteroffer: An offer made in response to an offer received from the buyer (which, in effect, rejects the buyer's offer).
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Curb appeal: The visual impact that a property projects from the view from the street.
D

Days on market: The number of days that a property has been for sale on the market.

Debt-to-Equity Ratio: 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 negative equity.

Debt Service: 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.

Deed 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.

Default: An act performed by the buyer, seller, tenant or landlord that breaches the contract of sale or lease and permits a claim for damages.

Depreciation: A loss of value in property due to physical or functional deterioration.

Defeasance Clause: 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.

Disclosures: Federal, state, county and local requirements of disclosure that the seller provides and the buyer acknowledges.

Down payment: The amount of cash put toward a purchase by the borrower.

DOM: Days on market -- the number of days that a property has been listed for sale.

Dual agent: A state-licensed individual who represents the seller and the buyer in a single transaction.
E

Earnest money: The money given as a good faith deposit to the seller at the time the offer is made. Once accepted by the seller, it is held in a trust account until closing.

Escrow account: The trust account established by a broker for the purpose of holding funds, such as the earnest money, on behalf of the seller or some other person until the closing.

Exclusive-right-to-sell listing: A listing contract whereby the owner appoints a real estate broker as his or her exclusive agent for a designated period of time, to sell the property on the owner's stated terms, and agrees to pay the broker a commission when the property is sold.

Expired listing: A property listing that has expired per the terms of the listing agreement.

F

Fiduciary relationship: A relationship of trust and confidence between the real estate agent and client, as under the terms of a listing contract or buyer agency agreement.

Flat fee: A predetermined amount of compensation received or paid for a specific service in a real estate transaction.

For sale by owner (FSBO): A property that is for sale by the property owner and not represented by a real estate agent.
G

General Agent: A general agent refers to the entity that has full authority over a property of the principal, such as a property manager.

General Lien: 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: Ginnie Mae is the nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.

Girder: A girder is the main beam in a structure that spans the distance from one side of the foundation to the other.

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.

Grace Period: In a mortgage, the grace period refers to a specified time frame in which payment may be made without the borrower being in default.

Graduated Lease: 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.

Grandfather Clause: 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".

Grant: A grant is a transfer of title to real property by deed.

Gross Lease: A gross lease is a lease in which the lessor pays all costs of operating and maintaining property, including the property taxes.

Ground Lease: A ground lease is a long-term lease of unimproved land and is usually for construction purposes.

H

Habendum Clause: The habendum clause is the statement in a deed that begins with the words "to have and to hold" and describes the estate granted.

Half Bath: A half bath, or powder room, has a sink and toilet, but does not have a bathtub or shower.

Headers: Headers are wooden reinforcements for the placement of doors and windows.

Hectare: A hectare is the metric system equivalent to 2.47 acres.

Holding Period: Holding period refers to the length of time a property is owned.

Holdover Tenant: 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: 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: HVAC is an acronym that stands for heating, ventilation and air conditioning.

Hydronic System: A hydronic system is a process in an HVAC system where liquids are heated or cooled.

Hypothecate: Hypothecate is to pledge property as security for the payment of a debt without giving up possession.

I

Improvements: Improvements are changes or additions made to a property. These typically increase the value of the property.

Inclusions: Fixtures or personal property included in a contract or offer to purchase.

Indemnification: Indemnification is the reimbursement or compensation paid to someone for a loss already suffered.

Index: 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.

Index Lease: An index lease is a lease with a method of determining rent by an index, such as the LIBOR index.

Ingress: An ingress is the right to enter a parcel of land, usually used as "ingress and egress", or both entering and leaving.

Installment Sale: 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.

Installment sales contract: A sales contract in which the buyer takes possession of the property and pays the purchase price in periodic installments, even though the title is retained by the seller until the loan is paid off. The same as: contract for deed.

Interest Rates: The interest rate is the cost of borrowing money from a lender. Rates will vary and will change over time.

Intestate

Intestate is the condition that occurs when someone dies without a valid will.
J

Joint Tenancy: Joint tenancy is a form of co-ownership that includes the right of survivorship.

Joist: A joist is a wooden framing member used in the construction of floors and ceilings.

Judgment Lien: A judgment lien is a general lien resulting from a court decree.

Jumbo Loan: A mortgage issued in an amount exceeding the threshold stipulated under Fannie Mae (FNMA) regulations for a conforming loan.\

L

Land Lease: 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.

Lease option: When a lease gives the tenant the right to purchase the property during the lease term.

List date: Actual date the property was listed with the current broker.

List price: The price of a property through a listing agreement.

Listing agreement: A contract between an owner-seller and a real estate broker to have the broker find a buyer for the owner's real estate in exchange for the owner paying a commission.

Listing appointment: The time when a real estate sales agent meets with potential clients (who are selling a property) to secure a listing agreement.

Lockbox: A device with a combination or keypad that hangs from the doorknob and stores the keys to the property for sale, so that agents can gain access for showings.
M

Market value: The estimated price that a property is likely to sell for under normal conditions on the open market.

Multiple-listing service (MLS): A group of member brokers who agree to share their listing information with one another in the hopes of procuring buyers for their properties more quickly than they could on their own.

National Association of REALTORS® (NAR): A national association of real estate sales agents.

N

National Association of Realtors (NAR): The NAR is the largest and most prominent trade organization for real estate brokers and agents.

Negative Amortization: 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.

Negative Pledge: 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.

Net Lease: A net lease refers to a type of lease in which the tenant pays a fixed rent plus the operational costs of the property.

Net listing: A listing contract between the seller and the seller's broker which sets a baseline price for a property; the broker nets any funds above that price when it sells. This type of listing is illegal in some states.

Nonconforming Use: A nonconforming use refers to the utilization of land that does not conform to the zoning ordinance for the area.

Nonrecourse Note: A nonrecourse note is a type of note in which the borrower has no personal liability for payment.

Notarize: 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 attaché to the title.

O

Open listing: A listing contract under which the broker's commission is contingent upon the broker bringing in a buyer before the property is sold by the seller or another broker.

Offer

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.

Offering Plan

See "Prospectus".

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.

Open-end Mortgage: An open-end mortgage is a mortgage that may be refinanced without rewriting the mortgage contract.

Origination: Origination is the first step in the mortgage loan process consisting of the completion of the application.

Ordinance: An ordinance is a law enacted by the local government.

Open Listing: 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.

Origination Fee: 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.

P

Parcel: A parcel is a specific portion of land such as a lot.

Partition: Partition refers to the legal proceeding that divides property of co-owners so each will hold title in severalty.

Party Wall: Party wall refers to the wall in common between two adjoining structures, such as in townhouses and brownstones.

Passive Loss: 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 was incurred.

Parcel identification number (PIN): A county or city tracking number for a property.

Pending: The status of real estate under an accepted contract that has not yet closed its transaction.

Preview appointment: When a buyer's agent views a property alone to see if it meets his or her buyer's needs.

Principal: 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: 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.

Profit Exemption: 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.

Q

Quadruplex: A quadruplex is an apartment with four levels.

Quit-claim deed: A document that releases the grantor/seller from whatever interest he or she has in the real estate.
R

Radon: Radon is a colorless, odorless gas present in soil that enters a home through small spaces and openings.

Rate Cap: A rate cap is the limit on interest rates during the term of an adjustable rate mortgage.

Ratios

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 agent: An individual who is licensed by the state and who acts on behalf of his or her client, the buyer or seller.

REALTOR®: A registered trademark of the National Association of REALTORS® that can be used only to refer to its members.

Re-list: Property listed by a broker that formerly was listed with another broker.

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 liens.

Recapture: 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".

Recognition Letter: 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: Recording is registering the ownership, lien, or claim of a party to a specific parcel of real estate with the local county.

Recording Fees: 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: 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.

Referral Fee: A referral fee is a percentage of a broker's commission paid to another broker for the referral of a buyer or seller.

Refinancing: Refinancing are the proceeds of a new loan used to pay off an existing mortgage on the same property.

Rental: A rental is the possession, but not ownership, of a property for a limited duration of time under defined terms and conditions.

Rental Building: A rental building only has apartments for rent and not for purchase.

Rent Control: 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.

S

Sale Price: 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.

Schedule A: 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.

Schedule B: 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.

Security Deposit: 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.

Severalty: Ownership of real property by one person only; also called sole ownership.

Seller Contribution: The seller contribution is a payment by the seller of a property of some, or all, of the buyer's closing costs.

Seller's Agent: A seller's agent is the listing agent that works in the best interests of the seller.

Service Drop: 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: Service lateral are the underground electrical wiring connecting the electrical service of the house.

Servicing: Servicing are activities the lender performs such as collecting the payments and/or paying taxes and insurance from an escrow account.

Servient Tenement: Servient tenement refers to land encumbered by an easement.

Setback: The setback is the distance from the front or interior property line to the point where the structure is located.

Severalty: Severalty refers to ownership by only one person.

Shares: 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.

Soffit: 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.

Sponsor: 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.

Staging: Preparing a home for sale through the neutral but appealing placement of furniture and accessories.

Survey: The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions and position of a house on a lot, including the determination of any existing encroachments or easements.
T

Tax Abatement

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.

Tax Deductible: A tax deductible expense helps to reduce taxable income. The tax deductible expenses related to real estate are interest payments on mortgages and real estate taxes.

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.

Term, Amortization: The amortization term is the period of time in which the interest and principal payments of a loan must be made.

Term Mortgage: A term mortgage is a mortgage with interest payments only during the mortgage term, with the principal due at the end of the term.

Title: 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: Title insurance is an insurance policy protecting the insured from financial loss caused by a defect or question about the title to real property.

Temporarily off market (TOM): A listed property that is taken off the market for a short time.

Title search: The examination of public records relating to a real estate parcel which determines the current state of its ownership.

Transaction: The purchase process from offer to closing or escrow.
U

Underwriting: 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.

Under contract: A property that has an accepted real estate contract between a seller and a buyer.

Unencumbered Property: Unencumbered property is property that is free of any lien.

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.

Unsold Shares: 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 (HUD): A federal agency that administers funding for projects related to housing.

Useful Life: Useful life is the period of time that a property is expected to be economically useful.

Use Variance: Use variance is the permission to use the land for a purpose which, under the current zoning restrictions, is prohibited.

Usury: Usury is charging a rate of interest higher than the rate allowed by law.

V

Vacancy Rate: 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: 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 of ownership.

Variance: A variance is a deviation from specific requirements of a zoning ordinance due to special conditions of the property.

Vendor's Affidavit: 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 purchaser.

Vesting Options: Vesting options are choices buyers have in how to acquire property.

W

Walk-up Building: A walk-up building is a building that does not have an elevator and are usually four or five stories.

Walk-through: A showing before closing that permits the buyers one final tour of the property that they are purchasing, typically so that they can check for any changes or defects.

Walk-Through Inspection: 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 sale.

Wetlands: 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.

Wraparound Mortgage: 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.

Y

Yield

The yield refers to the return on an investment.

Z

Zone: An area of a municipality or specific building that is zoned for a specific use, such as residential, commercial, etc.

Zoning: Zoning are the laws regulating land use.

Zoning Ordinance: Zoning ordinance is a statement settling forth the type of use permitted under each zoning classification and specific requirements for compliance.

Websites Referenced: 

http://worklife.columbia.edu/real-estate-terminolo...

http://realestate.aol.com/blog/2010/09/14/terms-every-seller-should-know/