Skip to content - Appraisal: An estimation of a property’s market value performed by a qualified appraiser based on comparable sales and other factors.
- Closing: The final step in the sale and purchase of a property where legal documents are signed, funds are exchanged, and ownership is transferred from the seller to the buyer.
- Deed: A legal document that conveys title to real property from the seller to the buyer.
- Easement: A right given to another party to use a specific part of the land for a particular purpose, such as utilities or access.
- Encumbrance: Any lien, easement, or restriction that may affect the value or use of the property.
- Escrow: A neutral third party holds onto funds and documents until all conditions of a land sale are met.
- Landlocked: Refers to a parcel of land that has no legal access to a public street, making it accessible only through other properties.
- Lot and Block: A system used to identify land parcels in subdivisions where a “lot” is a specific piece of land and a “block” is a group of lots.
- Plat: A map that shows how land is divided into lots with streets and alleys, often used in planning and development.
- Property Survey: A precise measurement of a property conducted by a licensed surveyor to determine its boundaries, easements, and other characteristics.
- Setback: A requirement in zoning laws that dictates the distance a structure must be from the property line, roadway, or other structures.
- Title: A legal document proving a person’s right to possess and use the property.
- Title Search: An examination of public records to confirm a property’s legal ownership and find any liens, encumbrances, or claims.
- Zoning: Regulations governing how land within certain areas can be used, such as residential, commercial, or industrial purposes.
- Due Diligence: The comprehensive process of evaluating a property before purchase, which includes reviewing title records, checking environmental conditions, and assessing zoning laws to ensure the property meets the buyer’s needs and compliance requirements.
- Land Use: Regulations and laws that govern how the land can be used, which may include limitations on building types, sizes, and purposes, often determined by the local government.
- Market Value: The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus.
- Option Agreement: An agreement where the seller gives a potential buyer the right to buy the property at a predetermined price within a specified time frame, often in exchange for a fee paid by the buyer.
- Parcel: A specific portion of land that is identified by its unique boundaries. It is often used in the legal description of real estate.
- Real Estate Agent: A licensed professional who represents buyers or sellers in real estate transactions in exchange for a commission.
- Restrictive Covenant: Conditions placed on a property by a developer or seller that restrict how the future owner can use the property. These are commonly found in planned communities.
- Right of First Refusal: A contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.
- Subdivision: The act of dividing a larger parcel of land into smaller lots for sale or development, which usually involves compliance with local planning and zoning regulations.
- Topography: The arrangement of the natural and artificial physical features of an area. This can include the contours of the land, elevation, and features such as rivers and hills, which are important for determining the suitability of land for certain types of development.
- Variance: A variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use the land in a manner that is typically not allowed by the zoning ordinance.
- Warranty Deed: A document that guarantees the seller holds clear title to a piece of real estate and has a right to sell it to the buyer.
- Assessment: The determination of the value of a property for the purpose of taxation. This may also involve evaluating the property’s condition and marketability.
- Buffer Zone: A parcel of land that is maintained in its natural state or landscaped to separate or screen different land uses within a community, such as between industrial and residential areas.
- Capital Gains Tax: A tax on the profit realized on the sale of a non-inventory asset that was purchased at a cost amount that was less than the amount realized on the sale. For real estate, this is the difference between the purchase price and the selling price, less any improvements.
- Conveyance: The act of transferring ownership of a property from one party to another. This is typically done by means of a legal document such as a deed.
- Deed Restriction: A limitation written into a deed that restricts the use of the real estate in some way. This is often used by sellers to control how the property is used in the future.
- Eminent Domain: The right of a government or its agent to expropriate private property for public use, with payment of compensation. This can affect property values and usability.
- Fixture: Personal property that becomes real property when attached in a permanent manner to real estate, such as a building or other structure.
- Floodplain: Areas mapped by national or local governments or agencies that are subject to periodic flooding. These areas may have building restrictions.
- Grandfather Clause: A provision in zoning laws that allows existing buildings and businesses to continue their current use, even if they do not comply with current zoning laws.
- Improvements: Additions or changes to land or buildings that affect the property’s value, which can include anything from landscaping to constructing buildings.
- Lien: A legal right or interest that a lender has in the property of another until a debt owed by that person is paid off.
- Nonconforming Use: An existing property use that doesn’t conform to current zoning laws but is legally allowed because it existed before the new zoning law was implemented.
- Quitclaim Deed: A legal instrument used to transfer interest in real property. The owner/grantor terminates (“quits”) any right and claim to the property, thereby allowing the right or claim to transfer to the recipient/grantee.
- Real Estate Broker: A step up from a real estate agent, a broker has more training and can work independently or have other agents work for them.
- Site Plan: A detailed architectural plan that outlines the layout of improvements to be made to a parcel of land, including building footprints, access roads, parking, landscaping, and utilities.
- Land Lease: An agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements revert back to the property owner.
- Market Analysis: An examination of the current trends in a real estate market, which helps determine the best price and strategy for selling a property. This can include analyzing comparable sales, local market trends, and economic conditions.
- Mortgage: A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.
- Offer to Purchase: A formal proposal by a potential buyer to buy a property at a specified price under certain conditions. This can be binding or non-binding depending on the terms.
- Right-of-Way: The legal right, established by usage or grant, to pass along a specific route through grounds or property belonging to another.
- Severance: The act of separating a piece of land from a larger parcel, or separating a building from the land, which can affect the property’s value and how it can be used.
- Special Assessment: A charge that local governments may impose on property owners to pay for local improvements such as streets, sidewalks, and sewers.
- Tax Lien: A lien imposed by law upon a property to secure the payment of taxes. A tax lien may be imposed for delinquent taxes owed on real property or personal property.
- Underwriting: The process by which a lender determines if a buyer’s loan application is an acceptable risk. Underwriters assess the creditworthiness of the potential borrower and the value of the property being purchased.
- Vacant Land: Land that has no buildings or structures on it at all. Zoning and planning regulations may have specific requirements for developing vacant land.
- Zoning Ordinance: A law that defines how property in specific geographic zones can be used. Zoning ordinances regulate building size, location, and the use of buildings.
- Zoning Variance: Permission granted by a local government or agency that allows for a specific deviation from the zoning ordinance. This is typically granted when the variance will not negatively impact the community.
- 1031 Exchange: A swap of one investment property for another that allows capital gains taxes to be deferred. The properties involved in the exchange must be of like kind and meet specific criteria under IRS rules.
- Abstract of Title: A historical summary of the recorded instruments and proceedings that affect the title of a property. This includes deeds, mortgages, wills, probate records, court litigations, and tax sales.
- Boundary Survey: A process to determine the physical property lines of a parcel of land based on its legal description. This survey is often required during the sales process to ensure accurate boundaries and avoid disputes.
- Chain of Title: The chronological sequence of conveyance documents that trace the ownership of a property from the original owner to the present day.
- Developer: An individual or company that builds new structures or renovates existing ones on land to increase its value and prepare it for sale or lease.
- Environmental Impact Assessment (EIA): An evaluation required to understand the effects of new developments on the environment. This assessment can influence zoning, land use, and the feasibility of a project.
- Feasibility Study: An analysis that assesses the practicality and potential success of a proposed real estate development, considering factors such as economic, technological, legal, and scheduling considerations.
- Grantee: The party in a deed who is buying or receiving title to a property.
- Grantor: The party in a deed who is selling or conveying the title to a property.
- Land Development: The process of making improvements on a land parcel to increase its value. This could include clearing, excavating, building infrastructure like roads, utilities, or erecting buildings.
- Land Use Planning: The process by which a municipality or other governmental unit regulates land use in a way that promotes more desirable social and environmental outcomes as well as efficient use of resources.
- Leasehold Estate: An interest in real property that gives a tenant the right to use and occupy rental property for a stated term under a lease.
- Legal Description: A formal description of a piece of real property, including boundaries and references to geographical features, which accurately describes the property and will hold up in court.
- Lis Pendens: A notice filed in the public record of a pending lawsuit involving the ownership or rights to a property, which warns all potential buyers that the property’s title is in question.
- Market Price: The actual selling price of a property or the price that a buyer is willing to pay.
- Master Plan: A comprehensive long-term plan intended to guide growth and development of a community or region. It includes analysis, recommendations, and proposals for a community’s population, economy, housing, transportation, community facilities, and land use.
- Negative Amortization: A situation in which the principal balance of a loan increases because the mortgage payments do not cover the interest due. This can occur with adjustable-rate mortgages.
- Recording: The act of entering documents regarding title to a property into public records. Recording deeds, mortgages, and other legal instruments helps to establish a person’s rights against subsequent purchasers.
- Redevelopment: The process of improving cleared or undeveloped land by constructing new buildings or making improvements to existing buildings on the property.
- Sub-agent: An agent who cooperates with another agent to assist in selling property on behalf of the owner, but who is not directly contracted by the owner.
- Transfer Tax: A tax imposed by a state, county, or municipality on the passing of title to property from one person or entity to another.
