Real Estate Glossary

We have to communicate with many people everyday to perform many important tasks such as buying, selling, consulting, and more. It is easy to get overwhelmed by the extensive lexicon of real estate terms and verbiage so this guide was created to assist you. We want to help you here providing easy-to-digest definition of some commonly used terms. 

 

A

 

Administrator 
A person who is granted authority and appointed by a probate court to settle the affairs of an individual dying without a Will. Administratrix refers to a woman administrator.  

Advertising
Promotional announcement of purchased space in newspaper, magazine or other medium used to inform the public to attract public commodity in the process of sales property aid. 

Agency Fee
A fee that is charged by Estate Agent to represent client to landlord or vendor upon closing of transactions of Sale and Purchase Agreement/ Tenant Agreement.

 

Anchor Tenant
A major department in a commercial development store in a shopping center whose quality is determined by the size of a secured loan. It is also known as key tenant.

 

Appraisal Estimate and Opinion of Value
A conclusion resulting from analysis of facts by a qualified appraiser or valuer to assist buyer or seller in making decision regarding price listing of real estate or purchase bidding. 

Appraised Value
The estimated assessed value of real property in the opinion of a licensed certified appraiser who qualify in conjunction with appraisal principals.

Appreciation
Increase value of an asset and property over the period life-time between original value of an asset with the new value of the property.

 

Assessment

 

The official valuation and monthly fee paid on a property for public improvements and to cover maintenance costs for a property.

Auction
A sale of property by a competitive bid. The successful highest bidder will get the property they bid for.

 

B

 

Bulk Purchasing
Also known as volume buying. It is a method of buying product in large quantities at a lower price compared by unit property to cut down operation costs.

 

Buyer Price Opinion (BPO)
 In the period before foreclosure, the lender will pay a real estate broker to complete a BPO on the property. is a tool used by lenders and mortgage companies to value properties in situations where they believe the expense and delay of an appraisal is not necessary.

 

By-Laws
Self-imposed rules for operating internal affairs under a corporation or organization to regular daily operations and are usually recorded, commonly added at a general meeting of a management corporation.

 

C

Caveat

A common law concept of entry made on the register document of title which gives notice of the caveator's claim to title or an interest therein. It is a latin term of “let the buyer beware”.

Competitive Market Analysis
Competitive Market Analysis also known as Comparative Market Analysis CMA, a study of comparison of displayed property that has been recently sold, properties for sale and expired or failed properties in terms of selling price location style and amenities. 

 

Commercial Property
Commercial Property is different types of property including office buildings, factories, and shop-lots improvements with the capability of generating profit in a business area.

 

Confidentiality
The fiduciary duty that requires the agent to keep secret any information that his or her principal consider to be private due to loyalty obedience of clients’ material facts.

Conveyance
A document which transfers the ownership of a property from a person to another e.g: from buyer to seller with an unregistered title as a trust deed.

 

D

 

Developer
Any person or body of persons  who develops any land for the purpose of accommodation including accommodation for commercial and industrial use and includes the executors, administrators and successors in title or permitted assigns.  

Draft Contract 
The wording suggested as an early idea or early prototype for the contract that can be amended several times before the final wording is agreed and accepted.

 

E

Encumbrance 
A legal claim upon real property that affects or limits a title of the property value such as mortgages, leases or restrictions.  

Escrow 
A legal arrangement for deposit in which an asset is delivered to a neutral third party to be held in trust pending a contingency with specified agreement.

 

Ethics 
A code of professional standards, containing aspects of fairness and duty, concerned with standards of right and wrong behavior to the general public by real estate professionals.

 

F

 

Foreclosure 
The legal process in where a lender  or bank or other secured creditor sells or repossesses a parcel of real property (immovable property)  terminate the deal after the owner has failed to comply with an agreement between the lender and borrower. Foreclosure also known as “Auction”.

 

Freehold 
This is the legal term for the way that an owner holds the property subject to any mortgages, charges, easements, covenants to name a few, shown by the deeds.

 

I

 

Interest Rate 
The sum of money charged by a lender to a borrower for a loan presented as a percentage annually, monthly or daily. 

 

L

 

Land Bank
A place that act as supplier for a specific usage.

Lease 
A contract granting between owner and tenant setting used of property during a specified time for a specified payment 

 

Leasehold 
An estate or interest in the land for a specific period and usually for the payment of rent to the lessee who is often subject to covenants. Also known as “Leasehold Estate”.

Letter of Offer and Acceptance (LOA)
Contract to purchase from a buyer to a seller in property business. 

Liens 
A special encumbrance’s form of security interest for the payment of a debt or obligation.

 

Listing Contract 
Agreement contract between an owner and a licensed real estate broker whereby an owner engages a real estate company for a specified period to sell property, for which upon sale the agent receives a commission under terms specified or agreed.

 

M

Mortgage 
Also known as “liens against property” or “claims on property” where a debt of instrument for lending money on real estate is secured by specific real estate property. The property is pledged as security for the loan and large purchased without paying the entire value of up front payment.  

 

Mortgage Banker 
A person who works for the bank which specialized lending institution that lends money solely with respect to real estate and paid a commission on small percentage of the loan.

 

O                            

 

Open Listing 
A type of listing agreement in which more than one real estate agent may be employed to sell the property where the owner pays a commission only to the agent  who finds the buyer for property business process.

 

P

 

Periodic Tenancy 
Also known as “Estate from Period to Period”. Rent is set at certain amount of period where tenancy that is not bound to a lease with a fixed period, could be a week, a month or even a year.

 

Power of Attorney 
A written instrument where person act as the agent of the person granting it, to perform specified as agreed on his or her behalf.

 

R

 

Redemption 
Paying off a loan of a real property after a judicial foreclosure sale.

 

Real Estate Agency 
A real estate body or company in where the principal engages a real estate negotiator in the sale or rent of real estate property 

Real Estate Agents 
A qualified person licensed to negotiate and transact the sale of real estate on behalf of the property owner. 

Real Estate Investment Trust (REIT) 
REIT is a publicly traded trust similar to associations that pool investors' capital to invest in a variety of real estate ventures, such as apartment and office buildings, shopping centers, medical facilities, industrial buildings, and hotels to allow investors to channel their funds into real estate investment market. 

Real Estate Negotiators 
A qualified person licensed to represent the real estate company and deal with negotiating and transacting sales of real estate on behalf of the property owner.

Real Estate Owned (REO)
Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction.

Refinance
Refinance is also known as “New Loans” is the transaction process of obtaining a new loan to replace an existing loan or lease balance to the purpose of refinance the property or to secure financing. 

 

S

 

Sale and Leaseback 
A financial arrangement whereby an investor purchases real estate owned and used by a business and then leases it back to that business where in such cases the buyer gets a return in terms of monetary form on his or her investment.  

Sale and Purchase Agreement (SPA)
A legal contract signed by the vendor and purchaser which stated all the terms and conditions of purchasing a property includes the process of buying and selling a product or services.

 

Share Units Entitlement
Each parcel is given a "share units entitlement" and this is shown on the strata plan depending on a number of factors, size of the parcel, the location of the parcel, the selling price of the parcel and the market value of the parcel calculated on the basis of share unit entitlements. The larger your share unit, more levies you need to pay.  

Short Sale
Sale of property in which the proceeds from the sale will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens' full amounts. The lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. 

 

Sinking Fund
A fund that comes from a property income along with interest where levies paid into this account to cover periodic expenditures such as renewal and replacement of fixtures and fittings to replace components of an improvement.

 

Squatter 
A person who without permission and any legal claim who occupies the property of another and claims title to it.

 

Subletting 
Also known as “Agreement”. Partial transfer or leasing of a tenant's right in a rental property to a third party of some remaining term.

 

T

 

Tenant 
A person who holds, possesses leases or rents a premises from a landlord by any kind of title.

 

Tenancy Agreement 
A periodic tenancy created by the legal agreement of binding document containing details about the rental terms. Also known as a “Rental Agreement”.

Trustee 
A third party or person (or institution) to which legal title for a beneficiary to secure the performance that entrusts to use for another's benefit of a property.

 

V

 

Valuer 

 

A professional who has assesses and is trained to determine the value of fixed property, implementing feasibility studies and provide expert advice on property related matters. Also known as “Appraiser”.