I’m back with the second part of the beginners’ dictionary into real estate investments. The previous material revealed some of the most useful and interesting estate nouns and today’s sequel will do the same. As always, I’m Ofir Eyal Bar, willing to share some of the insightful knowledge I’ve acquired throughout my career in real estate.
Market value — the price of a property agreed by both buyers and sellers, given full information, and with no constraint to act. It is also commonly referred to as fair market value.
Mediation — a dispute resolution helping warring parties solve their problem without having to go to court. A neutral third party (a.k.a. the mediator) meets with both sides to find a common ground and a mutually-beneficial solution.
Multiple listing service — a service designed for real estate firms to share information about homes that are up for sale. The membership provides a monthly book or PC service for realtors with detailed listings.
Negative amortization — an amortization in which the payment made is insufficient to fund the complete repayment of the loan until its termination.
Non-escrowing loan — a loan in which mortgage lenders don’t require escrow accounts for property taxes, hazard insurance, or homeowner’s association duties.
Obsolescence — a value loss for a real estate property generated by internal or external changes.
Ordinance — law adopted by a town or city council to establish parking rules, noise regulation, garbage removal, part operations, and other similar activities.
Panic peddling — an illegal practice that involves inducing panic selling in a neighborhood by making representations of the entry of members of a minority group (also known as blockbusting).
Private mortgage insurance –default insurance for conventional loans, that normally insure the top 20–25% of the loan.
Qualifying ratios — the comparisons between a borrower’s debts and the gross monthly income.
Quiet enjoyment — the right of a property owner or tenant to benefit from his property without outside interference. Disruptions of quiet enjoyment can constitute a nuisance., which is why most leases and rental agreements contain a covenant of quiet enjoyment.
Realtor — real estate broker or an associate holding active membership in a local real estate board that is affiliated with the National Association of Realtors.
Redlining — an illegal practice of refusing to originate mortgage loans, or limit their number, in certain areas, based on racial or ethnic factors.
Secondary mortgage market — a market where buying and selling or existing loans, to provide additional liquidity for lenders, is possible. This comes in contrast with the primary mortgage market.
Servient tenement — a property that will be subject to usage by another for a specific purpose. For instance, when a beachfront house has a public walkway to the beach on its premises is a servient tenement.
Tenancy by the entirety — special property ownership designed for married couples only. Both spouses benefit from the right to enjoy the entire property. In case one spouse dies, the surviving one gets title to the property.
Torrens system — a system of land registration used in some states where the clear title is set with a government authority, which is responsible for issuing title certificates to owners.
Underwriting — a process that involves verifying data and then approving a loan.
Usufruct — the right to use a property or the income generated by a property that is owned by another person or entity.
View ordinance — law adopted by cities with desirable vistas (in the mountains or overlooking the ocean) to protect a property owner from having his view obstructed by growing trees. It does not cover buildings or other structures that may block the view.
Voidable — a contract that appears valid and enforceable at first glance, but could be declared invalid by either of the parties involved, for several reasons (like a contract entered into by a minor).
Warranty deed — a specific type of deed containing express assurances on the matter of legal validity of the title being transferred. We could have general or special warranty deeds.
Writ of execution — court order that authorizes and directs the property offices of the court (usually it’s a sheriff) to carry into effect the judgment or decree of the court.
Zero lot line — term used to describe the positioning of a structure on a lot so one side rests exactly on the lot’s boundary line.
Zoning — exercising the police power of the city to regulate and control the character or use of a property. Using zoning laws, cities can be divided into different areas according to their use, like industrial zone, single-family residence, etc.
This was the second part of the beginners’ real estate dictionary. I’m Ofir Bar and hopefully, all the terms described had managed to provide more insights into the real estate world. As you can see, there are a lot of terms you need to know to manage properties efficiently, but you can learn everything with ease.