Terms Beginning With - M
Property Development & Investment Glossary, Terms & Definitions
Macroeconomic risk factors
Risk factors or variables that have the ability to alter the prices and returns on all properties in all markets.
The trademark of the mortgage insurance company MGIC Mortgage Marketing Corporation for the first non-federal secondary market for conventional mortgages.
The angle between magnetic north and true north, measured in degrees east or west.
Member of Appraisal Institute.
A railroad line's main or through track, on which traffic moves through yards or between stations. The main line follows a timetable or train order and is controlled by block signal indication.
The expense incurred in order to keep a property in good working order.
Activities necessary to restore a property's normal wear and tear.
The care and work put into a building to keep it operational and productive; general building repair and upkeep. Deferred maintenance contributes to a building's value loss.
A charge or lien imposed on property owners to keep their real estate in operation and productive use, particularly in condominiums. The amount of the maintenance fee in a condominium is usually determined by the board of directors after a review of the budgets. Typically, there are two budgets. The first is intended to anticipate monthly needs with totals by category for the entire year. Monthly financial statements compare actual receipts and disbursements to operating budget figures, providing a clear financial picture upon which management decisions can be made.
A five-year capital budget, prepared or updated on a yearly basis, is intended to anticipate major expenditures such as painting the building, purchasing association insurance for the common areas, re-carpeting corridors, and replacing any large-ticket items. To cover these costs, a reserve fund is established. This reserve fund money is kept in regular savings accounts or higher yield time certificate deposits and is withdrawn as needed for disbursements.
An owner's association charges a fee to cover the costs of running the property.
The age at which a person is no longer considered a minor and can enter into contracts without parental consent. The majority of states set the legal drinking age at eighteen years old.
The individual (borrower) who signs a promissory note and thus becomes primarily liable for payment to the payee (lender). The drawer is the person who creates a check.
The commission of a clearly unlawful act, especially when committed by a public official.
A landscaped public space designated for pedestrians. Malls are common components of large retail shopping centers. They are being built in established downtown retail areas to revitalize existing businesses, as well as in suburban areas to generate new business.
A shopping center's covered public space that connects individual retail establishments.
The agreement that serves as the foundation for the property owner's relationship with the property management agency.
A contract between the owner of a property that makes money and the person or company in charge of managing that property. The management agreement spells out how much power the agent has, as well as their duties, pay, how to fire them, how to pay for expenses, and other things. A written management agreement should include, at a minimum, the legal description of the property to be managed, hold-harmless clauses, the scope of services, the rate and schedule of compensation, requirements for accounting and reports, the start date, the end date, and any options for renewal.
The agreement between a property owner and a management business that specifies the management company's responsibilities, duration, and fees.
Risk that a property may not be managed successfully, resulting in a decrease in net cash flows and returns.
A detailed examination of a property's economic, physical, and operational aspects, with recommendations for changes and improvements that could increase the property's profitability.
You have authorized a real estate agent to manage your property.
The partner who makes the decisions and carries the majority of the risk in a limited partnership.
A court-issued emergency writ directing a public official to perform a specific action. A court, for example, might order a reluctant public official to issue a real estate license if the complainant is qualified, or it might order a governmental agency to issue a building permit if the complainant is qualified.
A style of architecture where the top floor or floors of a building are made to look like the roof. A roof like this has two slopes on each of the building's four sides, with the upper slope being less steep.
The decorative piece that goes around the edge of a fireplace. Most mantels are made of pretty wood and have a shelf on top.
A type of housing unit that is built in a factory according to the Federal Manufactured Home Construction and Safety Standards (HUD, Title 6), has at least 320 square feet, and is built on a permanent chassis. Not more than 5 percent are moved more than once.
Even though many communities have zoning laws that limit factory-built housing, manufactured housing is a cost-effective way to deal with rising housing costs in many parts of the country. But both Fannie Mae and Freddie Mac will buy mortgage loans backed by a manufactured home on the secondary market if certain conditions are met. At the very least, the home must be a single-family dwelling that is considered real property in that community, and it must be permanently attached to the foundation according to the manufacturer's requirements for anchoring, support, stability, and maintenance.
A graphical depiction of a part of the earth's surface rendered to scale and on a precise projection, displaying both natural and man-made elements.
An ordered system of lines on a plane - that represents an imagined system of lines on a datum surface.
Maps and plats
Land surveys are made by registered surveyors or civil engineers and show landmarks, boundaries, area, ownership, and other things about a piece of land. Most of the time, sub-dividers must send maps and plats of proposed subdivisions along with their applications to record and register the subdivisions (if the Torrens system is used). After that, when lots in a subdivision are sold, the legal description only needs to say the subdivision, lot, and block number, which can be found on the map that was recorded.
On adjustable rate mortgages, the "markup" is often two to three percentage points over the index rate.
In an adjustable-rate loan, the amount added to the index rate represents the lender's cost of doing business (costs, profits, and loan risk). In most cases, the margin remains constant throughout the life of the loan.
The gains obtained from an additional unit of output are described as an economic term. It might be used to express the financial benefits of extra investment in a financial context.
The cost of producing each extra unit of an item or service in terms of economic terms.
Marginal cost of capital
The cost of one more dollar in new capital funds.
Marginal cost of production
The expense of increasing one's production rate by one unit every period.
Land that isn't worth much because it's hard to get to, doesn't get enough rain, or has steep terrain. Modern techniques for reclaiming and developing land have made it possible to turn some unusable land into attractive and useful developments. Former desert land, for example, has been turned into nice subdivisions.
Property that is just marginally profitable to operate.
A county recorder's notation of a satisfaction or release of mortgage, as evidenced by a note of its liber (book) and page number on the margin of the recorded mortgage.
An economic phrase used to indicate money generated by the sale of an extra unit of an item or service.
Marginal tax rate
The rate of income tax that is charged on the last dollar of income. This number is often used when figuring out how to invest money.
The tax rate that is applied to the last dollar of income.
Satisfaction resulting from the purchase of an additional unit of an economic item or service.
A place for boats to dock and stay that usually has places to fix them, gas, supplies, and other amenities. Also called a boat basin.
The federal estate tax deduction equal to 100 percent of the assets passing to the surviving spouse.
A type of signature symbol.
Mark To Market
To recalculate an asset's worth depending on its current market price.
An institution that enables the exchange of goods and/or services.
A collection of properties that are each competitive to a specific type of buyer.
The integration of supply and demand analyses in a certain market.
Supply and demand economic dynamics and their effects on real estate profits, risks, and valuations are studied.
An assessment approach that determines the worth of a property by comparing it to the market value of similar structures sold recently in a comparable market location.
The geographical region containing the majority of demand and the majority of competitors.
At a given period in time, the connection between supply and demand for a certain type of real estate in a local market.
Interest rates, demographics, employment levels, vacancy rates, and absorption levels are just a few examples of market characteristics to consider.
Market data approach
One of the three conventional assessment methods. The examination of previous sales of similar properties gives an indicator of value.
Market demand curve
The amount of an economic commodity or service that will be desired at various price levels is represented by a curve. Demand curves are usually downward sloping, showing that as prices rise, so does demand.
A subset within a market segment that can be distinguished from the remainder of the segment by particular features.
Critical summary characteristics of a real estate market, such as occupancy rates, rental rate increases, or sales rates.
The proportion of overall demand captured by a project in a market area.
A property's actual purchase price; 'market value' is simply an estimate.
The rent that a property would fetch on the open market if it were unoccupied and available right now.
The rent that might be earned if a property was rented on the open market.
Tries to ascertain consumer sentiments; attempts to ascertain what customers want, where they want it, and how much they are ready to pay for it.
A study of customer demands used to create a product that is appropriate for a specific market segment.
The investigation of market circumstances in a certain location.
Because of changes in the marketplace's economic conditions, there's a chance that net operating income will fall short of forecasts.
Market risk factors
Risk factors or circumstances that cannot be mitigated. Also known as systemic risk factors.
A wide picture of a region's economics and demography.
Submarket identification and demarcation
An effort to mimic the activities of buyers and sellers in the market. In real estate, it would be an effort to predict the result of a real estate transaction by modeling the activities of "most likely" buyers and sellers.
The price at which a property may be purchased on the open market in an arm's-length transaction under all of the circumstances necessary for a fair sale. The commonly recognized definition assumes that both the buyer and the seller behave responsibly and with knowledge, and that the price is not altered by undue stimulation received by any side.
The price a property should sell for in a competitive market with a regular offering period, no coercion, arm's-length negotiation, standard financing, and well-informed buyers and sellers.
The greatest price at which a property is expected to sell, usually agreed upon by the vendor and the listing agency.
A qualified buyer's pricing range for a property.
The most likely price a property should fetch in a competitive and open market under all conditions necessary for a fair sale as defined by federal lending institutions (Fannie Mae, Freddie Mac). Such conditions include the assumption that both the buyer and seller acted prudently and with knowledge, and that the price was not influenced by undue stimulus. The consummation of a sale as of a specified date and the passing of title from seller to buyer are implied in this definition if the following conditions are met:
- Both the buyer and the seller are usually motivated.
- Both parties are well-informed or well-advised, and they are acting in their best interests.
- A reasonable amount of time is allowed for open market exposure.
- Payment is made in cash in US dollars or via comparable financial arrangements.
- The price represents the normal consideration for the property sold, unaffected by any special or creative financing or sales concessions granted by anyone involved in the transaction.
Market-adjusted normal sale price
Normal selling price adjusted for changes in market circumstances between the date of sale and the date of the subject property's appraisal.
An examination of how to bring a product or service to market. It evaluates the product's or service's features in connection to the demands of potential customers, as well as which marketing channels are most likely to generate the intended outcomes.
Real estate title that is devoid of reasonable questions.
The term "merchantable title" refers to a title that is free of defects that could lead to a lawsuit. A marketable title is one that: 1) doesn't have any hidden encumbrances; 2) doesn't have any serious flaws and doesn't rely on doubtful questions of law or fact to prove its validity; 3) doesn't put a buyer at risk of lawsuits or embarrassment while enjoying the property; and 4) would be accepted by reasonably well-informed and prudent people acting on business principles and knowing the facts and their legal significance.
A marketable title doesn't have to be perfect; it just has to be free of reasonable or plausible arguments against it. If asked to order specific performance of the sales contract, a court would tell the buyer to take it.
If there was a big chance of a lawsuit, the title wouldn't be marketable, and the buyer couldn't be forced to buy the lawsuit along with the property. An unmarketable title doesn't mean that the property can't be transferred, but it does mean that certain flaws in the title may limit or restrict its ownership, and the buyer can't be forced to accept a transfer that is significantly different from what was agreed upon or "marketed" in the contract of sale.
If the buyer writes into the contract that the seller must deliver the title "free from all defects or encumbrances," the seller should know that the buyer could probably reject the title even if there was a small or insignificant defect or encumbrance. If the contract doesn't say otherwise (in a "subject to" clause), any of the following could make the title unmarketable: easements, restrictions, violations of restrictions, zoning ordinance violations, existing leases, encroachments (except for small ones), and outstanding mineral and oil rights.
A burdensome zoning ordinance does not generally render title unmarketable. But if a seller lies and says that a zoning ordinance won't stop a buyer from using the property the way they want to, when in fact it will, the zoning ordinance may be the same as a lien or encumbrance. Also, if the seller doesn't tell the buyer about a zoning ordinance violation, it could be considered fraud or give the buyer the right to get out of the contract.
The buyer must ask about the title's ability to be sold before accepting the deed. Once the buyer has signed the deed, the only thing he or she can do is sue based on any warranties that are written into the deed.
A title that is devoid of flaws.
Marketable title laws
State regulations aimed at limiting the number of years a title search must "reach back" through the title "chain."
The time between the beginning of marketing and the final closing. The popularity of the sale is proportional to the length of the marketing period.
People who work in an office building.
The primary conveyance document used by owners of land on which condominiums are built. According to state law, the master deed, along with a declaration, must be submitted when recording or registering the condominium.
Master form instrument
A master form instrument is a document that is filed with the county registrar and has several forms, such as covenants and other clauses in a mortgage or deed of trust. Such a thing doesn't have to be recognized (notarized and witnessed). It is organized by the name of the person who wrote it down. After that, any part of a master form instrument can be included in a mortgage or deed of trust by referring to it, as long as the reference says that the master is recorded in the county and gives the date, file number, volume, and page. A reference like this should also say that the person who signed the mortgage or deed of trust was given a copy of the master.
A building's or development's dominant lease. A developer, for example, might lease land from a fee owner, build a building or condominium, and then sublease space to others. Because the sublease is subject to the terms of the master lease, the provisions in the sublease generally conform to the terms of the master lease.
A lease with a lot of power.
Master limited partnership (MLP)
A limited partnership formed under state partnership law in which the limited partnership's interests are registered to be publicly traded; also known as a publicly traded limited partnership. The partnership interests are distributed to a "master" limited partner, who then arranges for the public sale of the units.
A long-term plan for how the land in a certain area will change over time.
The person or company in charge of servicing mortgage loans.
A wall switch that can be used to control more than one light or outlet in a room.
Any information that can help someone make a decision. Real estate licensees must tell their clients all important facts, especially about the property's condition, such as known structural flaws, violations of building codes, and hidden dangers. Using seller disclosure statements, which are now required in a number of states, moves a lot of the burden of disclosure from the real estate licensee to the seller.
Brokers are often in a no-win situation when they have to decide if a certain fact is important enough that it needs to be told to a potential buyer. For example, if a murder happened on the property ten years ago or if the neighbors throw loud parties, these are facts that need to be told. It can be hard to tell the difference between "factual" and "personal" "Real estate taxes are low" is not the same as "real estate taxes are $500 per year." Even if brokers are acting in good faith, they could still be held responsible if they did not use reasonable care or competence to find and share important facts that the broker knew or should have known "ought to have known."
Under the rules of fair housing law, the fact that a person living in a home has AIDS is not considered to be a material fact. If a broker doesn't tell the client about this fact, they are not guilty of hiding a material fact.
The person who made the materials used to build an improvement. If the owner or the main contractor owes the material man money that hasn't been paid, the material man can put a lien on the property. The material man has until the deadline set by state law to file a lien. Usually, the date of completion is used to figure this out.
Suppliers of materials used in the building or upgrading of real estate.
Claim based on the supply of materials in connection with the construction or improvement of real property.
The deadline for repaying a debt.
When a debt, such as a mortgage note, becomes due and is extinguished if paid in accordance with the agreed-upon payment schedule.
Maturity imbalance problem
Banks, thrifts, and other financial organizations face a situation in which long-term assets are supported by short-term liabilities.
The arithmetic average is used in statistics.
The mean, also known as the average, is the value that falls in the middle of a group of values.
The middle number of a group of numbers. 5 is the average of 1, 3, 7, and 9.
A surveyor's use of an artificial line to measure the natural, uneven, winding property line formed by rivers, streams, and other watercourses bordering a property. The meander line is used to measure area rather than to delimit title or determine a boundary line. Surveyors will sometimes use straight lines to approximate the natural line on courses. The true boundary of land described as being bounded by a meander line is the stream or waters. imply high water See also high water mark.
Measure of damages
The rule of law established by statute or case law regarding the amount of damages a plaintiff can recover from a defendant for breach of contract or other civil wrong.
Real estate professionals can do their jobs better if they know the metric equivalents of U.S. measurements. The Metric Conversion Act of 1975 says how the U.S. system can be changed to the International Metric System.
A lien that secures a claim arising from the provision of services in conjunction with the building or improvement of a property.
For nonpayment of a labor or material debt, a lien is issued.
Material men and mechanics (and architects and designers in some states) are entitled to a statutory lien to secure payment for materials supplied and services rendered during the improvement, repair, or maintenance of real property. Common law didn't recognize this right. Mechanics are workers, whereas material men are providers.
The mechanic's lien gives security to individuals who provide labor or furnish supplies in the improvement of the real property (but usually not public property) based on the "enhancement of value" theory. The parties who conducted the work or supplied the supplies should be granted a lien on the property because the value of the property has been increased as a result of their efforts. Subcontractors, materialmen, and laborers are entitled to a lien, but it is not a subrogation of the rights of the original contractor. As a result, anyone who provides labor or materials for the improvement of real estate can claim a mechanic's lien if the contract is genuine.. No charges for tools or office overhead like telephone, stationery, or other comparable expenses are covered by the lien because it only applies to work and materials that are permanently integrated into the structure.
An equitable interest in the property acquired through a contract for deed, as well as an ownership interest in the improvement itself, are all covered by a mechanic's lien. Although only the lessee contracts for the construction of the building, the lessor is also included in the definition of a "owner" for the purposes of the lease.
When the owner has not paid for the work, or when a general contractor has been paid but hasn't paid the subcontractors or suppliers, a lien can be used to secure payment. An agreement (express or implicit) with the owner or the owner's authorized representative is required for the work to have been completed.
Mechanics' liens are governed by the laws of the state where the property is located. It is possible in some states to give priority to mechanics' liens, rather than previously recorded liens, such mortgages. Unless a claimant takes action to enforce a lien within a set period of time, usually one or two years, the lien will expire. A court action is typically required to foreclose the lien and generate funds to satisfy the lien through the sale of real estate.
If enough work has been done to give notice that the property is being improved or is going to be improved, the lien becomes effective at that point in time. If the property is transferred after the lien is effective, but before the filing of the notice of lien, the mechanic's lien takes priority. Thus, a good-faith purchaser for value who is without notice of the evident commencement of activities accepts title subject to the potential of a subsequent notice of lien. A savvy purchaser should obtain sufficient title insurance (an extended coverage policy) as protection against this type of danger.
In many states, mechanics' and material men's liens have precedence over all other liens of any kind, except (1) liens in favor of any branch of the government; (2) mortgages, liens, or judgments recorded or filed before visible beginning of operations; and (3) mortgages recorded before the date of completion, under which all or a portion of the monies advanced and secured up to that point have been used to pay for the improvement. Such a statement must be included in the mortgage.
Once a mechanic's lien has been paid off, a formal notice (usually termed a satisfaction of lien) shall be filed in the right court at the expense of the lienee (owner) (owner). The satisfaction of lien must be submitted with the registrar of titles if the liened property is registered under the Torrens system.
In most cases, a "notice of nonresponsibility" posted or recorded by the property owner protects the owner from mechanics' liens for work allowed by a lessee or vendee (under contract for deed). For the contractor, the notice said that he would be responsible for payment only to the person who had authorized the job.
Construction and other renovations to real estate might result in liens.
An engineer who specializes in the design and construction of heating, ventilation, and air-conditioning systems, as well as other mechanical systems.
the number in the midst of a group of numbers
The figure in the middle of a set of numbers. The median would be $90,000 if the sales prices were $70,000, $90,000, and $180,000, respectively. Some lenders consider eligible income to be 80% or less of the area median income.
An alternative dispute resolution process in which an impartial third party assists two disputing parties in resolving their differences. If the mediation is successful, it should be reduced to a legally binding written agreement. If mediation fails, the next step is usually binding arbitration.
Meeting of the minds
Consensus or agreement between the parties to a contract about what the contract is about. If both parties say and do things that show they want to be bound by a contract, they can be held responsible. So, even if the parties don't mean to be legally bound by a contract, they may be seen as being so by the law because of how they act. There can't be a contract unless both parties agree on the terms. This means that there has to be a good offer that is properly accepted.
An agreement reached by all contracting parties.
Interest rates, demographics, employment levels, vacancy rates, and absorption levels are just a few examples of market characteristics to consider.
The use of violence to obtain a contract. Threatening a contract, like duress and undue influence, is grounds for contract voidance.
A group of merchants at a shopping mall formed to promote the tenants' companies.
A group formed by shopping center tenants to facilitate joint advertising, promotion, and other activities that benefit the entire center.
The merging of two or more interests or estates into one. When a servient and a dominant estate merge, an easement may be extinguished. Example: Samir, the owner of servient estate lot 1, grants Sonja, the owner of dominant estate lot 2, an easement to cross over lot 1. Sonja thus obtains ownership of 1. If Sonja later sells 2 to Milan, the easement is no longer valid; it has been merged into l and must be recreated.
When a greater and a lesser estate become vested in the same person, the lesser estate generally merges into the greater estate. When a landlord sells property to a tenant, the leasehold estate merges with the original freehold estate. Obviously, the lease has been terminated, and the tenant is no longer required to pay rent. This is also true when the leased fee is inherited by the tenant.
Unless otherwise provided in the contract or the deed, when a deed is delivered pursuant to a contract for deed, all terms of the contract for deed are merged into and superseded by the deed. As a result, if a vendor wants representations, warranties, or restrictions in the contract for deed to continue and survive the deed, he or she must include them in the deed or specify which covenants and conditions in the contract are to survive delivery of the deed or assignment of the lease. In essence, the contract merges with the deed and disappears. Also, if a sales contract requires something to be done after the closing and delivery of the deed, such as the installation of a sewer system, this requirement will usually survive and be enforceable; that is, matters collateral to the conveyance are not merged.
A contract's merger clause states that this writing constitutes the entire agreement between the parties; all prior negotiations and representations are not included in the contract.
Land surveyors employ a set of imaginary lines that run north and south as a reference in the government survey method of property description.
An intermediate or middle conveyance is any conveyance that occurs between the first and most recent conveyances in the chain of title.
Land that was wrongfully taken over and used to make money. Usually, the legal owner can get back mesne profits.
A house and the surrounding buildings and land that are used by the household.
Data about data describes the data's substance, quality, condition, and other attributes.
Metes and bounds
A way of defining real property borders by references to long-lasting landmarks.
A mete is a unit of measurement (foot, mile) and a bound is a boundary marker in a method of representing real estate. A sequence of directed distances that define the property's limits.
The boundary lines of a parcel of land, as well as their terminal points and angles, are described in a land description.
A common way to describe a piece of land that uses terminal points and angles to describe the shape and size of the parcel's boundaries. A metes-and-bounds description starts at a well-marked starting point and follows the boundaries of the land by courses and metes (measures, distances, compass direction) and bounds (landmarks, monuments) and then goes back to the starting point. Most of the time, though, monuments are more important than courses and distances when checking such a description. A description is wrong if it doesn't close off an area by going back to where it began. If there is a difference between the distance between two monuments and a straight line measurement, the distance between the two monuments is what counts. This is an example of a "metes and bounds" description:
The following is a description of a piece of land in Red Skull, Virginia: Starting at the point where the east line of Jones Road meets the south line of Skull Drive; going east along the south line of Skull Drive for 200 feet; going south 15° east for about 216.5 feet to the centre of Red Skull Creek; going northwest along the centre line of Red Skull Creek until it meets the east line of Jones Road; going north about 105 feet along the east line of Jones Road to the point where it all started.
When describing a piece of property in a town or city, a metes-and-bounds description can start with:
Starting at a point on the south side of Kent Street, I walked 100 feet east from the corner where the southside of Kent Street meets the east side of Broadway. From that point, I drew a line to...
A metes-and-bounds description can start with:
That part of lots 7, 8, and 9 in Block R of Lightwater's Subdivision in the NW1/4 of the SE1/4 of Section 16, Township 39 north, Range 12 east of the 5th principal meridian.
The locations where illegal methamphetamines are manufactured, which can include a wide range of structures and enclosures, from RVs to motels, apartments, and upscale residential houses. The chemicals used to manufacture methamphetamines, as well as the byproducts of the process, are highly toxic, contaminating the buildings and the grounds surrounding them more than many federally designated toxic waste sites. One pound of methamphetamine production can generate five to seven pounds of toxic waste while emitting poisonous gases into the atmosphere.
Metropolitan statistical area (MSA)
An MSA is made up of one or more urban counties that form a single labor market region centered on a metropolis with a population of at least 50,000 people.
The area surrounding a major city. The Chicago metropolitan area, for example, is frequently interpreted to include certain areas in western Indiana as well as the surrounding suburbs in Illinois.
A floor that sits between the ground and first floors.
A floor that connects two main stories of a building or the floor and ceiling of a one-story structure. A mezzanine typically occupies a small portion of the total floor space.
After a first mortgage, debt that is paid off.
A high-yielding investment in real estate development that bridges the gap between bank loans and the developer's own equity, sometimes with a second mortgage on the property
A means of getting additional leverage in addition to a conventional first mortgage. This loan is frequently secured by the pledge of an equity stake in the borrower's partnership or firm, rather than a lien on the property.
A tiny space's climate, such as an inner city, a residential sector, or a mountain valley.
Microeconomic risk factors
Risk that is related to a certain property or local market and that the owner/investor can control. This risk can be mitigated by diversifying one's holdings.
Small economic unit theory. Known colloquially as the firm's theory.
A person who brings together two or more parties but doesn't do the negotiating for them. The so-called middleman exception is an exception to the rule that a real estate broker can't get a fee from both parties without their permission first. The middleman exception doesn't apply if the broker has any power or discretion to negotiate on behalf of the principal. In this case, the broker just brings the parties together so they can negotiate their own contract. In real life, though, true middleman status doesn't happen very often.
The acquisition of an income-producing property is assumed to occur on the 1st of the month, regardless of the actual transaction date, according to a tax law.
A structure of four to fifteen stories.
A building with four to seven stories.
Midrise apartment buildings
Apartment buildings of four to nine floors in height.
A unit of linear distance that is equal to 1,760 yards, 5,280 feet, or 1.609 kilometres.
A key event or point in time in the project that represents the start and/or completion of a major deliverable.
A clause in some residential leases that allows a military tenant to terminate the lease in the event of transfer, discharge, or other appropriate circumstances. Following is some sample language.
It is expressly agreed that if the lessee herein receives official orders releasing him or her from duty at Fort Shafter or from active duty in the army, or ordering him or her to live in service quarters, he or she may terminate this lease by providing written notice of intent to do so. Such termination will take effect 30 days after the notice is served on the lessor. If the date of such termination falls between the days on which rent becomes due, a proportionate part of the rent due but for such termination shall accrue on the first day of the rental period in which termination takes effect.
A tenth of a dollar. Some states use a mill rate to figure out how much sales tax and property tax to charge. For example, if the mill rate is 52 and the property is worth $40,000, the tax would be 0.052 times $40,000, or $2,080. You can also say or figure out that this tax is $52 per $1,000.
Units of measurement used to express the amount of a property tax assessment; the number of dollars per $1,000,000. Twenty mills equals $20 for every $1,000,000.
One-tenth of a penny is a rate used by municipal taxing bodies.
The amount of tax levied per $1,000 of property value. A millage rate of 20 indicates that a person who owns a property with an assessed value of $100,000 would pay 20 X 100,000 = $2,000 in tax.
Subsurface rights, including rights to oil, gas, coal, and other mined commodities, can be separated from land ownership.
Profits and rights to subsurface land. Unless the grantor agrees otherwise, the grantee of real estate usually receives all of the land's rights and titles, including its surface and subsurface features.
A building that houses self-storage units. A mini warehouse is typically found in an industrial park and is designed to provide individuals and small businesses with small, secure storage (10 to 200 square feet). Operators must follow legal procedures when disposing of goods that appear to have been abandoned by the renter. A mini storage facility is another name for it.
A warehouse that provides business and domestic users with tiny storage facilities.
Minimum lot area
A rule in a zoning ordinance that sets a minimum size for a lot on which a building can be built.
Minimum property requirements
Before the FHA will back a residential mortgage loan, the property must meet certain minimum standards. It must be habitable, well-built, and in a good area. To meet these requirements, a broker should take repair costs into account when figuring out the seller's closing costs. Parties to an FHA loan can't get out of having to meet FHA requirements by using a "as is" clause.
Base rent is the smallest amount of rent due from a tenant under a lease with a varying rent schedule.
Mini Perm loan
An intermediate lender loan that provides funding during the construction phase, the lease-up period, and for several years after the lease-up stage.
Acts that can be done without forming an agency relationship, but may still need a real estate license. They are simple tasks that are done for customers on a regular basis and don't require judgment, discretion, or advice. For example, a licensee who works for a seller might show the property to the buyer, help the buyer find a lender, and do the paperwork needed for closing. In most states, you need a real estate license to do these things, even though they don't involve clients.
Someone who has not reached the age of majority; a person who is still considered a minor in the eyes of the law. State laws set the legal age of majority, which can be different depending on the law's purpose, such as the legal age to drive, drink, or sign contracts. Most contracts that a minor signs, with the exception of those for things like food and clothes, can be broken by the minor. But if the minor doesn't back out of the contract within a reasonable amount of time after becoming an adult, the contract is fully binding on him or her. For example, if a minor lists a property with a broker, the broker could not get a commission if the minor decides to back out of the listing contract when the broker finds a buyer who is ready, willing, and able to buy. In any case, a minor couldn't sell the property without the court's permission, because they don't have the legal ability to transfer ownership of property or make a valid will.
Even if the minor lies about his or her age, the minor can still back out of the contract, but the lie could lead to a claim for fraud damages.
A deed signed by a minor can be revoked, but a minor can be a grantee and can get property as a gift or inheritance. Most people think that a minor can't give someone else the power to sell his or her property, so any power of attorney signed by the minor is invalid.
If a minor's land needs to be sold to pay for the minor's care or to make an investment, the court must be asked to appoint a guardian. The minor then becomes a ward of the court. If the guardian posts a bond, the court can give the guardian a special license to sell the property (the guardian does not need a real estate license).
Most of the time, a minor can't get title by adverse possession unless the adverse possession continues for the prescription period after the minor turns 18.
A subgroup that seems to be outnumbered by other groups. Often used to group people of a different language, sex, colour, nationality, religion, culture, ethnicity, or way of life. In the context of fair housing laws, "minority" meant people who had been treated unfairly in the past and for whom it is now illegal to do so. The word "minority" isn't always accurate, because a small group of people can sometimes become the largest group. Today, the preferred term is "protected classes," which means any group designated by HUD as a protected class against which real estate licensees or sellers cannot discriminate. Federal fair housing laws make it illegal to treat people differently because of their race, colour, religion, national origin, sex, family situation, or disability (handicap). For example, white males are clearly in the minority (in terms of numbers), but they have not been named a protected class.
A crime that isn't as bad as a felony and is usually punishable by a fine or a year or less in jail.
A mistake in a name. To fix a mistake in a deed, you should make and record a correction of the deed so that there are no title disputes in the future. A mistake in the name of a corporation in a deed is not a big deal if the corporation can still be found, like when the deed says "Abby, Ltd." when the real name is "Abby, Limited." If the seller's deed to the grantee has a covenant of further assurance, the seller can be forced to sign a correction of deed.
An improvement that is not in the best place or that was not planned well enough so that it is too expensive or doesn't make the best use of the site. One example is a modern house built next to a group of Victorian mansions.
A lie or a deliberate attempt to hide a fact that is important in order to get someone else to do something. If the misrepresented fact is material to the transaction, a court will grant relief in the form of damages or rescission. A positive statement, such as "This house does not have termites," can be misrepresented. It can also refer to the concealment of a material fact known to one party who is aware that the fact is not reasonably ascertainable by the other party. As an example, consider a seller who is aware of a serious defect in the support beams but fails to disclose this information to the buyer. This failure to disclose is referred to as "negative fraud" at times. However, if the buyer clearly does not believe or rely on the misrepresentations, or conducts his or her own investigation and relies solely on this investigation, the contract cannot be canceled on the grounds of misrepresentation.
Opinion statements are not normally material facts. "This house is a great buy at $50,000 because it is worth much more than that," for example, is an opinion statement, also known as "puffing." Take note of the distinction between the statements "Taxes are low" and "Taxes are $500," where actual taxes are $1,000. It would be no defense to a broker if the seller told him the taxes were $500--information the broker should confirm. However, if the person making the representation has superior knowledge, the representation is treated as fact, even if it is an opinion. If a builder says, "The foundation appears to be properly laid," he or she may be held liable if it is not.
Courts have ruled that a broker who represents that he or she does not believe the property is on filled land may be held liable if the land is filled and the buyer suffers damages as a result. Although misrepresentations are typically oral or written statements, they can also be as simple as a nod of the head, pointing out false boundaries, or displaying a forged map - in other words, any action that may convey a false message. Statements about easements, sewer connections, high water, proposed special assessments, number of legal units, and roof condition are common subjects for misrepresentation lawsuits.
A person does not have to intentionally misrepresent a fact. A broker or salesperson is liable if he or she is aware of, or should have been aware of, the falsity of a statement. Thus, if a broker negligently misrepresents a material fact in order to induce a buyer to buy, and the buyer relies on that fact to the buyer's detriment, the broker is liable. The seller is also liable because the statement was made within the scope of the agency's authority by the seller's agent. When a broker fails to disclose a material fact, a dissatisfied buyer usually has a successful case against the broker if:
- The broker is aware of facts unknown to or beyond the buyer's reach that have a material impact on the property's value or desirability, and the broker fails to disclose these facts.
- Through such nondisclosure, the broker intends to defraud the buyer.
- As a result of the misrepresentation, the buyer suffers actual damages.
The following are some of the consequences of misrepresentation:
- The real estate licensee's license may be suspended or revoked.
- The defrauded party may seek restitution or have the contract terminated.
- The seller may not have to pay a commission to a broker who misrepresented the transaction.
- A misrepresenting broker may be jointly and severally liable to the purchaser under the federal Interstate Land Sales Act.
- As a result, buyers may be able to keep their properties and sue sellers for any difference in value.
- The buyer may be able to recover damages for expenses incurred as a result of the misrepresentation.
An error or misunderstanding. A contract can be broken if both parties make a mistake that is material, unintentional, and not caused by negligence. For example, if both parties honestly agree to buy a different lot in a subdivision, the contract can be broken (mistake of fact). Most of the time, innocent mistakes don't break a contract. A party can't use the word "mistake" to get out of a contract by saying that they didn't read the contract they signed and were therefore wrong about its important terms. Ignorance or bad judgment are not mistakes of fact. Also, a party can't say they made a mistake because they didn't know the legal consequences of signing the contract (mistake of law).
When there is a misunderstanding and one person knows about it but doesn't tell the other person, the other person's interpretation usually wins.
Ends of two boards of the same form that are cut at an angle and fitted together to make an angular shape in carpentry.
A method of reducing the influence of a certain action on the natural or human environment.
Reducing the causes of environmental risks and limiting their influence on the environment and on human life. For example, radon mitigation involves installing a system of pipes and fans in the right way to lower the amount of radon.
The process of constructing excess acreage of compensation credits through wetland replacement, augmentation, restoration, and/or preservation in wetland mitigation design.
Mitigation of damages
A contract law principle that says a party who has been hurt has to take reasonable steps to reduce or get rid of the amount of damages that party is owed. For example, a landlord may have to try to find a new tenant for a space that was left empty or left by a tenant who broke the lease.
A portfolio that includes a range of assets, such as stocks, bonds, and real estate.
A condominium building with both residential and commercial units. It could include retail, office, and residential space, as well as industrial, office, and residential space.
A development that incorporates at least three substantial revenue-producing uses that are physically and functionally integrated and constructed in accordance with a cohesive plan, whether in one building or numerous structures.
At least two distinct types of real estate developments are engaged in this proposed development.
MLS (multiple listing service)
A computerized database shared by real estate agents that displays houses and condominiums that are now for sale or have just sold.
Before June 15, 1976, prefabricated trailer-type housing units were commonly applied to manufactured housing, but this is no longer the case.
Supply and demand economic dynamics and their effects on real estate profits, risks, and valuations are studied.
Mobile home park
A zoned area designed to accommodate mobile or manufactured homes, with water hookups and sewage disposal for each home. All utilities, streets, parking, and amenities are included in the mobile home park. Mobile home parks are parks and communities that were built before 1980.
A factory-built home on a permanent foundation that is linked to local utilities and is situated on a set lot.
A house built as part of a land development programme to show the style, construction, and possible furnishings of similar houses that will be built and sold. A model home, also called a demonstration home or spec home, is a great way to sell a house if it is done right. After it has served its purpose, it is often sold with some of the furniture. The first house built in a new neighborhood may be used as a model, and it's usually the last one to sell.
A piece of land used to build mobile homes.
1. The effect that improvements made to nearby parcels have on how the land is used and how much it is worth.
2. Changes made to a contract. Any time, as long as both parties agree, a contract can be changed.
3. A change to the design of a building that is required by law. For example, the Americans with Disabilities Act says that public buildings need to be more accessible to people with disabilities.
Modification and assumption agreement
When the due-on-sale condition of the mortgage is enforced owing to a change in ownership, a written agreement to adjust the interest rate is required. There is also no longer any personal accountability for the prior mortgagor in terms of the mortgage.
Modified accelerated cost recovery system (MACRS)
A depreciation method that lets assets lose value over a longer period of time than the accelerated cost recovery method (ACR). The Tax Reform Act of 1986 (TRA '86) got rid of ACR and replaced it with MACRS. MACRS keeps the ACR structure but makes it take longer for most depreciable assets to get their money back. For residential rental property put into use after December 31, 1986, the recovery period is 27.5 years, and for nonresidential real property, it is 39 years. In real estate, the accelerated method is no longer an option. The only method that can be used is the straight-line method.
The current rules for depreciation don't make a difference between new and used property, nor do they take any salvage value into account. Depreciation of parts is not allowed unless new parts are added after the initial purchase. The way that improvements or additions are depreciated is the same as how the property itself is depreciated. A mid month rule now applies to both residential rental property and other types of real property. That is, the property is considered to have been put into use at the middle of the month, no matter when it is put into use.
TRA '86 also made an alternative depreciation system (ADS), which must be used for property that is mostly used outside the United States, for property that is leased to a tax-exempt entity or paid for with tax-exempt bonds, and to figure out the amount of depreciation that is treated as a tax preference for the purposes of the corporate and alternative minimum taxes. ADS real estate is written down over a period of 40 years. Even if a taxpayer doesn't fit into any of the above groups, they can still choose to use ADS.
Modified internal rate of return (MIRR)
A version of the internal rate of return intended to address the many root problems by discounting all negative cash flows back to the time an investment commitment must be made and compounding all positive cash flows ahead to the end of the last year of the investment holding term. The modified internal rate of return is the discount rate that matches the present value of all negative cash flows with the future value of all positive cash flows.
A Ginnie Mae security backed by a pool of guaranteed mortgage loans. Holders of pass-through securities receive a pro-rata part of the repayment of interest and principal.
Modified uniform limited partnership act
A modified version of the Uniform Limited Partnership Act that precisely defines the acts that restricted partners can perform without jeopardizing their limited liability.
Construction of six-sided houses (four walls plus ceiling and floor) or building components in a controlled manufacturing environment using highly sophisticated methods; prefabricated home is another name for this type of construction. Because the home can be constructed in the factory while the construction site is being prepped, modular solutions can reduce construction time and hence save money.
Modular buildings does not have any federal codes of standards. There are several uses for modulars outside of residential construction: office buildings, hotels, strip malls, schools and factories, and storage. Unattached modular homes are sold as personal property, and hence no written listing or real estate license is required for a commission to be earned by a real estate agent selling one.
A common measurement that affects where window mullions, ceiling tiles, light fixtures, columns, electrical distribution systems, walls, and other things are placed. The chosen module could make office design a lot more flexible.
1. The cornice is a wood molding that goes over the place where the roof boards meet the outside wall. The picture mold is put on the inside where a wall meets the ceiling.
2. A simple life form that can't make its own food through photosynthesis and doesn't need sunlight to grow. It gives off spores and alcohols, ketones, and hydrocarbons, which can cause allergies, breathing problems, and sinus problems in some people. Most molds grow well when the humidity is above 55%, and they can spread quickly in homes with little air flow. Mold is just one of the many environmental problems that often affect real estate deals. There are no federal rules about telling people about mold problems, and only a few states have similar rules. Buyers should be reminded that they not only have the right to find out, but also the responsibility to find out.
Controlling the money supply in order to boost or stifle economic growth.
Money market fund
Mutual funds that invest primarily in short-term debt instruments, such as CDs, commercial paper, Treasury bills and other U.S. government securities, are known as short-term debt mutual funds.
Capturing, analyzing, and reporting on project performance, often in comparison to plan.
A single wavelength or, most typically, a small range of wavelengths
A market arrangement in which any number of rivals supply sufficiently distinct goods or services that purchasers are not wholly indifferent among them, such that selection is influenced by factors other than price alone.
A feature of an item or service that distinguishes it from other goods or services, making the others less attractive as alternatives.
A type of rental agreement in which the tenant pays rent for a set amount of time at a time. If there isn't a written or verbal rental agreement, a tenancy is usually month-to-month or, if there are boarders, week-to-week. Under this type of tenancy, the estate keeps renewing indefinitely until either the lessor or the lessee gives the statutory notice that the tenancy is over. According to the laws of most states, this notice must be given at least one rental period before the end of the lease. In other words, if the rent is due every month, you must give one month's notice; if it's due every week, you must give one week's notice; and so on. In some states, you can give the required notice at any time of the month.
When a tenant stays after the lease term is over, this can lead to a month-to-month tenancy. When there isn't a new lease agreement, the landlord can either kick out the tenant or let them stay. Most of the time, a landlord's agreement is clear when they accept rent. Courts usually decide that tenants who want to stay will be able to do so for the same amount of time as the original lease, as long as that time is one year or less. Some courts have said that a holdover tenancy can only last for one year. So, if the original lease was for six months and the tenancy is extended, courts usually think that the extension is also for six months. If the original lease was for five years, however, the holdover tenancy could not be longer than one year (the statute of frauds period). Some written leases say that a tenant who stays past the end of the lease is a month-to-month tenant if there is no renewal agreement. Most of the time, this is a good deal.
A representative unit in a building that is meant to show how the area will look in the future.
In statistics, the arithmetic mean.
Monthly loan constant
A loan payment factor that is used to calculate payments on a fixed-rate, level-payment loan.
A natural or man-made object that can be seen and is used by the government or surveyors to mark the lines and boundaries of a survey. Some monuments are made by people, like stakes, iron pins, or posts. Others are made by nature, like trees, streams, and rivers that have been marked. One problem with natural monuments could be that they move from where they were first built. A comer in a government survey system would be an example of an intangible monument. Even though it can't be seen, it can still be found with accuracy by survey.
For a metes-and-bounds description to be correct, it must start at a monument, which is called the "point of beginning" (such as an iron pin or the intersection of two streets). When there is a disagreement about who owns a piece of land, the monuments win, even if the courses or distances in a metes-and-bounds description in a deed or other legal document say otherwise.
The material physically deposited by a glacier; also, the material (load) transported in or on a glacier; moraines, as landforms, often have hilly or rolling terrain.
The ability of the licensed person to serve the general public in a fair and honest manner.
Conduct that goes against the acknowledged customary rule of right and duty amongst people; conduct that goes against justice, honesty and modesty; or conduct that goes against morality and decency in the private social sphere. Examples include embezzlement, perjury, robbery, and theft; on the other hand, failing to pay income tax, speeding or possessing minor amounts of marijuana may not be considered morally turpitude. As a result, felonies are deeds that are depraved in character.
If a person has been convicted of a crime involving moral turpitude, state licensing authorities may refuse to give a license unless that person has received a full and free pardon or has provided adequate proof of living an upright and moral life for a defined length of time.
1. To avoid a default and foreclosure, the lender suspends the monthly payment due under the terms of the financing agreement for the duration of the borrower's recovery period.
2. A temporary halt in the issuance of building permits while the government investigates more stringent zoning controls, as with condominium conversions. This is sometimes referred to as a zoning freeze and occurs most often in relation to shoreline development and no-growth policies.
More or less
When describing real estate, this phrase means that the size or dimension given is about right. A small difference from the real size doesn't affect the validity of the contract, but a big difference could be a reason to get out of the deal. For their own safety, buyers should hire a surveyor to find out where the exact boundaries are. Some courts have said that the phrase "more or less" means that the property is being sold in its entirety, not by the acre.
A security interest in real estate that is used to guarantee the repayment of a loan.
A document in which real estate is pledged as collateral for a loan.
A lien on real estate used to secure a debt. A specific contract in which the borrower transfers a security interest in the mortgaged property to the lender.
A debtor's transfer of ownership to a creditor in exchange for security on a debt that continues while the obligation is unpaid.
A contract that pledges a property as security for the repayment of a loan on the property
In some places, a deed of trust is used instead of a deed of trust to make real estate the security for a loan. A mortgage is a two-party contract between a mortgagor (a borrower) and a mortgagee (a lender).
A month-to-month leasing arrangement that can be terminated at any time.
A legal document that guarantees the fulfillment of an obligation. The word "mortgage" comes from the French words mort, which means "dead," and gauge, which means "pledge." This is a good name for the loan because the pledge isn't removed until the debt is paid off. In a typical real estate deal, the buyer borrows money to pay the seller the difference between the down payment and the purchase price. When the lender (mortgagee) gives the money, the buyer/borrower (mortgagor) must sign a promissory note for the amount borrowed and a mortgage to secure the debt.
For a mortgage to be valid, there must be both a debt and a pledge. The mortgage note makes the mortgagor personally responsible for making payments, and the mortgage puts a lien on the property as security for the debt. Even though the note and the mortgage can be on the same paper, they are usually on separate ones. The mortgage is no longer a good form of security once the debt is paid off or becomes unenforceable, like when the statute of limitations runs out. The mortgage document is long and has many clauses, such as provisions for acceleration, subordination, release schedule, defeasance, and waivers. There are also promises to pay taxes, keep the property in good shape, and keep enough insurance. If the mortgagor doesn't pay taxes or insurance premiums, the mortgagee can pay them and add the amount to the mortgage debt.
Most mortgages have a clause called "assignment of rents." This lets the lender collect rents if the borrower doesn't pay on the note but keeps getting rental income from the property.
In practice, the mortgage says that if the borrower doesn't pay the note, the lender can take possession of the property. Even though this isn't always the case, the property that is mortgaged is usually the property that the borrower buys with the money from the loan. So, if the borrower (mortgagor) doesn't pay back the loan, the lender (mortgagee) can start foreclosure proceedings to sell the property and keep the money that's still owed on the note. If the money from the sale is less than what is owed, the mortgagee can get a deficiency judgment against the person who owes the money.
Contract law applies to mortgages: the mortgage must be in writing, name the parties (who must be able to legally sign a contract), include a legal description of the property being mortgaged, state a consideration, include a mortgage clause, state the debt, and be signed by the borrower (mortgagor). Also, borrowers should say if they are married or not. Spouses should always sign because they have homestead rights to the property, no matter what their gender is. The mortgage is usually acknowledged and then recorded. The date of recording is used to figure out the order of priority of the lien. The mortgage is written down because it gives the borrower rights and interests in the real estate. The mortgage note, on the other hand, doesn't need to be written down because it's only a personal obligation. There is no rule that says the number of signatures on the note has to match the number of signatures on the mortgage.
Some states see the mortgagee as the owner of the property that was put up as collateral, but this can be changed if the debt is paid off or the obligation is met. These states are called "title theory states" because they see the mortgage document as a transfer of property. Lien theory states are the ones that see a mortgage as nothing more than a claim on real property.
Under the lien theory, if the borrower doesn't pay, the mortgagee must foreclose, put the property up for sale, and use the money from the sale to pay down the debt. As a way to protect the mortgagor, some state laws give the mortgagor a set amount of time after the foreclosure sale to redeem the property. Whether a state uses the title theory or the lien theory of mortgages, the mortgagee's security interest in the land is considered personal property and can only be transferred when the debt that the mortgage secures is also transferred.
When a property is sold, the mortgages on it can be taken over, made subject to (unless a due-on-sale clause says otherwise), or paid off. When the mortgage is paid off in full, the owner of the property should make sure that the note is returned and "canceled," and that a "satisfaction of mortgage" or "release of mortgage" is recorded to show that the mortgage is no longer a lien on the property.
There are many different kinds of mortgages. Some of these are the adjustable-rate mortgage loan, the graduated-payment mortgage, the wraparound mortgage, the shared appreciation mortgage, the flexible loan insurance payment, and the buy-down mortgage. Under their own headings, we talk about these and other types of mortgages, such as blanket mortgages, budget mortgages, open-end mortgages, package mortgages, participation mortgages, and purchase-money mortgages.
When purchasers assume the payments on the sellers' mortgages and become personally accountable by issuing a note in their name.
A person, corporation, or firm that isn't in banking or finance and usually uses its own money to finance mortgages, unlike savings and loan associations or commercial banks, which use the money of their depositors to start mortgage loans. Some mortgage bankers do offer permanent long-term loans, but most of them focus on short-term and interim loans, which they get from their own money or from commercial sources. People say that everything a mortgage banker lends must be sold.
Because of the mortgage correspondent system, mortgage bankers can do a lot more now than they could before. Under this system, a mortgage banker or mortgage banking company tries to make a lot of loans and then sells them at a discount to big investors like insurance companies, commercial banks, and retirement and pension funds. Mortgage bankers are a major source of construction loans and are very active in lending money on commercial real estate like shopping centres and office buildings.
The secondary mortgage market is where most of the money for mortgage banking comes from. If the secondary market wasn't involved, this is how a typical mortgage banking deal would look:
1. A local mortgage banker makes a deal with a savings and loan association (like one in New York) to sell $5 million worth of loans within a certain amount of time.
2. Loans are made to individuals.
3. The loans are taken care of for the association by a local mortgage banker.
4. The loans are sold to the New York investor based on the agreement that was made before.
Also, these loan administrators are experts at getting FHA and VA loans started in areas where mortgage money is hard to come by. Most of the time, they sell these mortgages to banks in other parts of the country where money isn't as tight for an origination fee. So, most of the time, they are not the final lenders in mortgage deals. The goal of the mortgage banker is to sell the loan on the secondary mortgage market for a profit while taking on the risk themselves. The mortgage broker, on the other hand, does not do anything without the principal's permission. The mortgage banker usually stays in the picture and takes care of the mortgage for clients who are big investors. These services include collecting monthly payments, distributing the money to pay taxes and property insurance, keeping an eye on the loan, preventing late payments, and taking the right steps to fix things if a payment is late.
A legal document used to ensure that a debt or obligation is paid.
Individuals or businesses who originate real estate loans can keep such loans in their own portfolios or sell them on the secondary market.
Full-service mortgage firms that originate, process, close, fund, and sell loans in the secondary mortgage market, as well as service loans for loan investors.
Person or company that works as a middleman between the borrower and lender; one who, for fee or advantage; negotiates, sells or arranges loans; also known as a loan broker; When a mortgage broker originates a loan, the loan is typically closed and serviced by the lender. Mortgage bankers, on the other hand, not only close loans in their own names, but also maintain a relationship with them after they are closed. In order to prevent any potential conflicts of interest, many mortgage brokers are also registered as real estate brokers and offer these financial services in addition to their real estate ones.
A mortgage lender who originates, sells, and services loans.
A middleman between individuals who need mortgage money and those who offer them. Brokers charge a fee to arrange mortgage loans, but they do not originate or service the loans.
A lender's obligation to provide cash at some point in the future. Loan terms might be set or those in effect at the time the funds are to be advanced.
A person who specializes in putting together a borrower and a lender for a fee.
A person who will charge a fee to originate and service a loan.
Individual mortgage bankers or brokers working on behalf of an institutional lender in a specific geographic area.
A mortgage-investing mutual fund that is professionally managed.
A type of insurance that protects a lender from any financial loss caused by a mortgagor failing on a loan.
Insurance that pays the mortgage if the insured mortgagor dies or is otherwise unable to perform his or her duties. In essence, mortgage insurance is a type of life insurance with a decreasing term. The premiums are paid along with the mortgage payment each month.
Mortgage insurance premium (MIP)
FHA-insured loans demand an upfront insurance fee.
Mortgage joint venture
A collaboration between developers and others who provide all or most of the capital in the form of loans to create properties that will be utilized in their businesses or added to their portfolios.
Mortgagee's equity in their home is pledged as collateral for the debt they owe the lender. In contrast to a tax lien, which is enforced by law, a mortgage lien is one that the property owner voluntarily places on their home. The priority of a mortgage lien is established through the recording of the lien, as is the case with other liens on real property. There is no legal obligation to record a mortgage or lease until it has been signed by all parties involved. Unless it is subordinated to later liens, a recorded mortgage, regardless of its title, has priority over any other mortgages or liens that are subsequently recorded. With all liens, the mortgage lien is subordinate to any liens for special assessments or state real estate taxes. It is not until the mortgage lien is recorded with the registrar of titles and reflected on an owner's certificate of title that a Torrens lien can be applied to the property.
To protect future advances, such as in the case of a construction loan, the mortgagee (the lender) may take out an obligation to make mandatory payments to the mortgagor (the borrower). It is only when the mortgage clearly refers to this particular advance as being secured by a previously recorded lien that such future advances take precedence over other liens that have taken effect since the mortgage was recorded that such future advances take precedence over other liens.
A mortgage encumbrance is a lien on a property that is used to finance a loan.
The many sorts of residential loans made available to residential borrowers by originating lenders. The cost of the different mortgage elements, such as the contract interest rate and the amount of upfront discount points and origination costs, is listed on the menu.
The debt is described, as well as the mortgagor's vow to pay it back.
Offset accounts can help you save money on taxes by putting taxable income from deposit accounts against the interest you pay on your mortgage in after-tax money. It's also not true that all offset accounts pay the same interest rate as your mortgage. Many don't pay the same rate of interest as your mortgage.
Mortgage participation certificates
Under the conditions of a mortgage, the party to whom real estate is committed. In most cases, the lender in a real estate transaction.
Loan commitments authorized but unmet by an originating lender, as well as loans funded but unsold.
A pool of mortgage loans where people can put their money.
Mortgage protection insurance
Borrowers get insurance to cover their loan payments if they can't make them because of things like serious sickness and job loss. This kind is called "loan insurance."
A real estate investment trust that predominantly invests in first mortgage-secured real estate loans.
A real estate investment trust (REIT) is a company that invests in real estate and loans money on it.
Real estate investment trusts that buy mortgage liabilities and, in effect, become lenders.
On the mortgage note issued by the mortgagee, there is a disclaimer of any further obligation.
Mortgage spreading agreement
A contract that lets a mortgage lien on a property cover other properties that it didn't cover before. This gives the lender more security and is often used when the person who took out the mortgage wants to get more money.
A type of financing in which a homebuilder allows a buyer of a new home to occupy the home for a set period of time (e.g., six months) without making monthly payments. The money saved is put toward a down payment, a savings account to serve as a reserve to help make monthly payments after permanent financing is in place, or into a fund to reduce the interest rate on permanent financing. For a limited time, a builder may offer a reduced monthly payment, or subsidy.
The procedure of inventorying real estate loans. Mortgage bankers or brokers may inventory loans while creating pools of loans for later transfer to bigger institutional real estate lenders.
Mortgage-Backed Securities (MBS)
Securities that are collateralized by mortgages on real estate.
It refers to all securities whose repayment security is a mortgage loan (or a group of mortgage loans) backed by real estate. Interest and principal payments to investors come from payments made on the underlying mortgage loans.
Pools of mortgages are utilized to guarantee the security, which is used to direct funds from the securities market into the housing market. Popular MBS programme run by Ginnie Mae known for minimal risk and big return. As a bond, the Ginnie Mae MBS security consists of a pool of VA and FHA loans. MBS programmes are also offered by Freddie Mac and Fannie Mae.
Mortgage-equity rate analysis
Estimation of an overall capitalization rate by taking a weighted average of the capitalization rates for debt (mortgage constant) and equity (equity dividend rate). The weight is defined by the percentage of the total investment that each component (debt and equity) represents.
In the case of a mortgage loan, the lender.
Under the conditions of a mortgage, the party to whom real estate is committed. In most cases, the lender in a real estate transaction.
The lender is the person who gets the mortgage claim.
A person or entity who has a mortgage on a property.
On the mortgage, the lender is referred to as
The company that lends the money.
A person who has a lien on a property as collateral for a loan.
The mortgage holder is the individual involved in a mortgage transaction who receives and holds a mortgage as security for a debt. A mortgage holder might be a lender or creditor who holds a mortgage as security for payment of an obligation.
Mortgagee In Possession
When a mortgagee has executed their mortgage rights and taken possession of the property from the mortgagor. In the United States, this is referred to as foreclosure.
After a mortgagor defaults, the mortgagee obtains a court order to seize control of the property.
Acquiring or developing a project to the farthest extent possible.
In the case of a mortgage loan, the borrower.
Under the conditions of a mortgage, a party pledges real estate. Borrower who promises property as collateral for a loan.
The mortgage claim's borrower or grantor.
A person who lends money to buy a house with a mortgage.
The person who gets the money from a lender.
A person who promises property as collateral for a loan.
The person who gives a mortgage as security for a debt; the borrower; usually the landowner, but it could also be the owner of a leasehold estate; the borrower or debtor who hypothecates or puts up property as security for an obligation.
Real estate that is given to a church, school, or charity so that they can own it forever. There are laws about how much of a person's estate can be left to such institutions.
A phrase used in landscape ecology to indicate the patchy quality of habitat as a result of land use fragmentation; an assemblage of overlapping aerial or space shots or images whose edges have been matched to make a continuous graphical depiction of a piece of the earth's surface.
Most favored tenant clause
A clause in a lease that guarantees a tenant that any negotiating concessions given to other tenants will also be given to this tenant. When renting a building for the first time, this kind of clause is especially helpful because it lets the renter know that later renters won't get better deals.
Most fitting use
Real estate utilization that best balances the public and private interests.
Most probable selling price
A probabilistic estimate of the price at which a future property transaction will take place; a prediction of the transaction price that will emerge if a property is offered for sale under current market conditions for a reasonable period of time at the terms of sale that are currently prevalent for such properties.
Most probable use
The most likely application for a property. Recognizes that usage is not guaranteed. The most likely usage is the one with the highest likelihood of occurrence. Recognizes the possibility of other uses while assigning them a lower probability.
Accommodations for transients that have on-site or near-on-site parking for guests. Facilities including dining rooms, meeting rooms and swimming pools are typical in some motels.
People usually buy bigger and more expensive homes as their incomes go up. When someone moves into their first home, or "starter home," it's likely to be smaller and less expensive than their other homes.
MSA ( metropolitan statistical area)
Master Senior Appraiser.
A metropolitan area comprising various political jurisdictions joined together for the purpose of tabulating statistics by the United States Census Bureau.
Underground termites need ways to get in and out.
Small chamber or vestibule for entering from a play area or alley. Washing and drying machines are common in the mudroom.
The component of a structure that is on its ground or foundation and is the lowest horizontal member of the structure. An example of this would be foundation timber.
Panes of window glass are divided into panes by thin vertical strips in the sash of the window.
Metal strips that run the length of a window line at regular intervals. They're made to receive a wall divider in such a way that the connection is seamless and soundproof.
A residential construction that has more than one living unit.
Structures with four or more units.
A high-rise, low-rise, or garden apartment is a structure containing at least five residential units.
Apartments are included in the residential property categorization.
Multifactor asset pricing model
Models for calculating needed discount rates that presume the economy has several sources of macroeconomic (no diversifiable) risk for which investors must be rewarded with a higher going-in internal rate of return.
The phrase was created by Harris and Ullman in a key research that outlined the consequences of the motor car, along with new manufacturing technology, that liberated the city from its shackles to CBD.
Multiple asset exchange
This is a tax-advantaged property exchange in which the valuations of a number of connected assets - such as land and buildings and machinery and goodwill - are combined to arrive at a final composite figure on which the exchange can be calculated.
Any gain realized from a multiple-asset exchange can be delayed even if individual component values are different, as long as the composite values are equal. Like-for-like assets can be swapped for like-for-like assets, for example, between companies A and B.
A would be taxed on $75,000 worth of boot if it were traded asset per asset, which is the difference of $25,000 in building values and $50,000 in goodwill values. A multiple-asset exchange, on the other hand, has no boots on the ground because the composite values of both assets are the same. Be aware that multiple asset swaps are complex and subject to numerous tax regulations and rules that this discussion can't cover.
A tenement house. Any building where two or more families or households can live in their own separate units. A place with apartments.
Multiple listing service (MLS)
Sharing of property sales listings by a group of real estate brokers with an agreement on how costs and commissions would be split.
A service in which brokers who are members pool their listings and offer to work with and pay other brokers who are also members. The MLS is usually run by a local group of REALTORS®, but this isn't always the case. The contracts between the brokers who are part of a multiple listing service are very different. Most of them say that the commission is split between the listing broker and the selling broker when the property is sold. The terms for how the commission is split can be different from one broker to the next.
Most multiple listing services require the broker who gets the listing to give it to the MLS within a certain amount of time so that it can be sent to the other member brokers. There are many different rules about how long the listing broker has to sell the property without telling the other member brokers.
The multiple listing service is good for both the broker and the person selling the house. The broker has a large number of properties to sell and properties to sell, and she is guaranteed a part of the commission if she lists the property or helps sell it. The seller also benefits because all of the members of the multiple listing service learn about the property and can tell their potential buyers about it.
The belief that after a metropolitan city's big central business district has been fully built, a slew of micro central business districts would sprout up around the area.
A statistical approach for determining the relationship between a dependent variable and many independent variables.
A mathematical technique for estimating the value of a subject property using known variables and comparable property prices. Frequently used in mass appraisals of single-family homes.
Multivariate regression analysis (MRA)
A statistical approach for investigating the link between a dependent variable and several independent, "explanatory" factors.
Muniment of title
Certificate of ownership of real property. Deeds and contracts are examples of proof of ownership and the ability to defend a person's title. With the application to register property in the Torrens system, an applicant must submit a file plan, an abstract of title, and all original muniments of title within his or her control.
The thin vertical strip that separates two window sashes that are next to each other.
Agreement is when everyone agrees to the terms of a contract. Mutual rescission is when both sides of a contract agree to end it on their own.
An exchange-traded fund that invests in other exchange-traded funds.
Mutual Mortgage Insurance Fund
The FHA insurance premium depository and the source of repayment for lenders in the event of foreclosure losses on FHA-insured homes.
Insurance premiums and other FHA earnings are paid into this fund, and any losses are reimbursed from this fund as well.
Mutual savings banks
Institutions for saving money that don't sell stock and are owned by all of their investors and pay dividends instead of interest. These institutions are mostly in the northeastern part of the United States and work similarly to savings and loan associations. Mutual savings banks have limited checking account options, but their main purpose is to save money. They are also active in the mortgage market and invest in both residential and income property loans. Now, most of their real estate investments are in mortgage-backed securities instead of VA and FHA loans. In the 1980s, when savings associations failed, the mutual savings banks and federally chartered savings banks grew up. One difference is that the FDIC, not the FSLIC, has always insured savings banks, just like commercial banks.
Mutual water company
The goal of a water company is to ensure an adequate water supply for a reasonable price for residents of a particular district. Users buy and distribute stock.
Mutuality of consent
When both parties agree on the terms of a contract, they are said to have "met in the middle."