Monthly or annual charges assessed in a condominium,
planned united development, or cooperative development
to cover operational costs.
Refers to the amount of personal or hired time, it takes
to run the investment.
A contract between the owner of income property and a
management firm or individual property manager that
outlines the scope of the manager's authority.
The financial and operational strategy for the ongoing
management of a property. It is based on market
analysis, a property analysis and the owner's goals.
(See market analysis, property analysis)
referred to as mobile homes or trailers, manufactured
homes are factory built on a
non-removable steel chassis and delivered to the site on
their own wheels. Manufactured homes conform to a HUD
code rather than local building codes and are not always
placed on a permanent foundation, making them more
difficult to finance. Manufacture homes are generally
less expensive than site built or modular homes.
Manufactured Housing Institute
In an adjustable-rate loan, the amount added to the
index rate that represents the lender's cost of doing
business (including costs, profits and risk of loss of
the loan). Generally the margin stays constant during
the life of the loan.
A place where goods can be bought and sold and a price
Factors affecting the sale and purchase of homes at a
particular point in time.
A regional and neighborhood study of economic,
demographic and other factors made to determine supply
and demand, market trends, and other factors important
to leasing and operating a specific property.
A method of pricing single-family rental homes and
condos using comparable market data. When pricing
multiple unit rental properties, the income approach is
Estimating a property's value based on a comparison of
the property with similar properties in the same locale
that have sold recently. Also known as the direct sales
Good or clear title, reasonably free from the risk of
litigation over possible defects.
The most probable price a property should bring in a
competitive and open market under all conditions
requisite to a fair sale. Such such conditions include
the assumption that the buyer and seller acted prudently
and knowledgeably and that the price is not affected by
The principal conveyance document used by the owners of
land on which condominiums are located.
A comprehensive plan to guide the long-term physical
development of a particular area.
Any fact that is relevant to a person making a decision.
Agents must also disclose to buyers material facts about
the condition of the property, such as known structural
defects, building code violations and hidden dangerous
conditions. Brokers are often placed in a no-win
situation of trying to evaluate whether a certain fact
is material enough that it needs to be disclosed to a
prospective buyer, such as the fact that a murder
occurred on the property 10 years ago or the fact that
the neighbors throw loud parties. It is sometimes
difficult to distinguish between "fact" and "opinion."
The statement "real property taxes are low" is different
from "real property taxes are $500 per year." Even
though brokers act in good faith, they may still be
liable for failure to exercise reasonable care or
competence in ascertaining and communicating pertinent
facts that the broker knew or "should have known." Many
state laws provide that the fact that an occupant of
property has AIDS is not deemed to be a material fact. A
broker who fails to disclose this fact is not liable for
concealment of a material fact.
The average of all items included within a group,
calculated by dividing the sum of the individual items,
or variates, by the number of variates.
A statutory lien in favor of a building contractor
(architects and designers in some states) to secure
payment for materials supplied and services rendered in
the improvement, repair or maintenance of real property.
The middle figure in a set of numbers.
A process where a neutral third party intervenes between
the disputing parties to reach a satisfactory solution.
One of a set of imaginary lines running north and south
used by surveyors for reference in locating and
describing land under the government survey method of
A legal description of a parcel of land that begins at a
well marked point and follows the boundaries, using
directions and distances around the tract, back to the
place of beginning.
One-tenth of one cent. Some states use a mill rate to
compute real estate taxes; for example, a rate of 52
mills would be $0.052 tax for each dollar of assessed
valuation of a property.
Someone who has not reached the age of majority and
therefore does not have legal capacity to transfer title
to real property.
Rights to subsurface land and profits. Normally, when
real property is conveyed, it includes everything above
and below the surface of the land, except where
specified by the grantor.
A false statement or concealment of a material fact made
with the intention of inducing some action by another
An error or misunderstanding. A contract is voidable if
there is a mistake that is mutual, material,
unintentional and free from negligence, such as both
parties honestly contracting for a different lot in a
subdivision (mistake of fact). Innocent mistakes seldom
serve to void a contract. A party cannot claim "mistake"
to get out of a contract on the basis that he or she did
not read the contract he or she signed and was therefore
mistaken as to its material terms; neither ignorance nor
poor judgment is a mistake of fact. Nor can a party
claim mistake in not knowing the legal consequences upon
signing the contract (mistake of law). When there is an
ambiguity known by one party who fails to explain the
mistake to the innocent party, the innocent party's
interpretation generally will prevail.
Measures taken to reduce adverse impacts on the
environment. To make less severe, as in the "mitigation"
of environmental hazards.
Prefabricated trailer-type housing units that are
semi-permanently attached to land, which is either the
owner's fee land or a leasehold, such as in a
mobile-home park. Mobile homes are usually affixed to a
concrete foundation and connected to utilities. Although
they may not be as mobile as the word implies, they may
be removed from such attachments and hauled to a new
location. In this respect mobile homes possess the
features of both real and personal property. They are
like real property when the units are attached to the
earth's surface, and like personal property when they
are detached and moved. The courts, however, generally
consider a mobile home as a fixture and thus treat it as
A mortgage loan on a large mobile-home, usually drawn
for a shorter term than conventional mortgages.
An area zoned and set up to accommodate mobile homes by
providing water hookups and sewage disposal for each
home. The mobile-home park contains all utilities,
streets, parking and amenities. Mobile-home parks are
also called trailer parks.
The most frequently occurring variate.
Modular homes are built in sections at a factory,
transported to the building site on truck beds, then
joined together by local contractors. Modular homes are
built to conform to all state and local building codes
at their destinations. Local building inspectors check
to make sure a modular home's structure meets
requirements and that all finish work is done properly.
Modular homes are not necessarily less expensive than
than site built homes.
Molds are simple, microscopic organisms that are present
virtually everywhere both indoors and outdoors. Molds
are fungi and are needed to break down dead material and
recycle nutrients in the environment. For molds to grow
and reproduce they need only a food source such as
leaves, wood, paper, or dirt - and moisture.
A periodic tenancy under which the tenant rents for one
month at a time. In the absence of a rental agreement
(oral or written) a tenancy is generally considered to
be month to month.
A fixed natural or artificial object used to establish
real estate boundaries for a metes-and-bounds
1.A temporary suspension of payments due under a
financial obligation in order to help a distressed
borrower recover from financial difficulties and avoid
default and foreclosure. 2. A temporary suspension of
issuing building permits.
A legal document used to secure the performance of an
obligation. The term mortgage, which is derived from the
French words mort meaning "dead" and gage meaning
"pledge," is appropriate in that the pledge is
extinguished only after the debt is paid. In the usual
real estate transaction, the buyer seeks to borrow money
to pay the seller the difference between the down
payment and the purchase price. When the lender
(mortgagee) lends the money, the buyer/borrower
(mortgagor) is required to sign a promissory note for
the amount borrowed and to execute a mortgage to secure
the debt. The purpose of the mortgage note is to create
a personal liability for payment on the part of the
mortgagor; the purpose of the mortgage is to create a
lien on the mortgaged property as security for the debt.
A person, corporation or firm (not otherwise in banking
and finance) that normally provides its own funds for
mortgage financing as opposed to savings and loan
associations or commercial banks that use other people's
money - namely that of their depositors--to originate
mortgage loans. Although some mortgage bankers do supply
permanent long-term financing, the majority specialize
in supplying short-term and interim financing, either
through their own resources or by borrowing from
Mortgage Bankers Association of America
A person or firm that acts as an intermediary between
borrower and lender; one who, for compensation or gain,
negotiates, sells or arranges loans and sometimes
continues to service the loans; also called a loan
broker. Loans originated by the mortgage broker are
closed in the lender's name and are usually serviced by
the lender. This is in contrast to mortgage bankers, who
not only close loans in their own names but continue to
service them as well. Many mortgage brokers are also
licensed as real estate brokers and provide these
financing services as supplements to their realty
A kind of insurance policy that will pay off the
mortgage balance in the event of death, and in some
policies, disability. Premiums are paid with the regular
monthly mortgage payment.
mortgage insurance premiums (MIP)
Most FHA loans require the borrower to pay two mortgage
insurance premiums: one upfront paid at closing; the
second is an annual premium based on the loan balance
A lien or charge on the property of a mortgagor that
secures the underlying debt obligations.
The precise measurement of a piece of property,
including all improvements and easements. This survey
will show the placement of buildings, driveways,
walks and fences.
In a mortgage transaction, the party who receives and
holds a mortgage as security for a debt, the lender. A
lender or creditor who holds a mortgage as security for
payment of an obligation.
mortgagee's title insurance
An insurance policy protecting the lender for the amount
of the loan in the event of a future title dispute.
In a mortgage transaction, the buyer/borrower is the
mortgagor. The mortgagor is required to sign a
promissory note for the amount borrowed and to execute a
mortgage to secure the debt. The mortgage note creates a
personal liability for payment on the part of the
Any buyer with a strong incentive to make a purchase.
Any seller with a strong
incentive to make a deal.
A house that needs no repairs or updating and is ready
for trouble-free occupancy.
multiple-listing service (MLS)
A marketing organization composed of member brokers who
agree to share their listing agreements with one another
in the hope of procuring ready, willing and able buyers
for their properties more quickly than they could on
their own. Most multiple-listing services accept
exclusive-right-to-sell or exclusive agency listings
from their member brokers.
Bonds issued to finance public improvements such as
parks, schools and urban renewal projects.
Buyers looking for properties that meet specific needs.
A highly motivated or desperate seller.
A meeting of the minds; a mutual assent of the parties
to the formation of the contract.
mutual mortgage insurance
Insurance premiums and other specified FHA revenues are
paid into one of four FHA funds. Losses due to
foreclosure are met from these funds.