The material of the earth, whatever it may be such as soil, rock or other substance and it includes the free or unoccupied space for an indefinite distance upwards as well as downwards.

A loan obtained by the builder-developer for the purchase of land and to cover expenses for subdividing.

A contract used in a sale of real property whereby title to the property remains vested in the seller until the buyer who receives the right to possession has paid in installments over a long period of time a preset amount or all of the purchase price and upon default by the buyer all payments may be forfeited. Also known as a Conditional sales contract, an Installment sales contract and a Real property sales contract. See definition of Security interest.

A gift of government land to a university, public utility or railroad or for a purpose that would be in the best interest and benefit of the general public; also, the original granting of land from the public sector to the private sector commonly used in the early history of the United States.

The physical alterations to or construction of a relatively permanent nature attached to or appurtenant to land and of such a character as to increase its utility and or value.

A lease covering only the ground. See Ground lease. Example: Abel arranges a land lease from Baker for 50 years at a net annual rent of $5,000. Abel builds a shopping center on the land. At the end of 50 years the entire property will revert to Baker.

The designing of land use areas, road networks and layout for utilities to achieve efficient utilization of real estate resources.

An income approach method of appraisal used in estimating the value of the land as separate from the building that is used for feasibility studies and highest and best use purposes.

An instrument used in financing larger real estate transactions where the investor receives a trust certificate as evidence of his or her share in the trust which serves as the investment vehicle.

An activity, generally conducted by a local government and used to guide decisions on zoning, that proposes public and private land use recommendations that are consistent with community policies.

The condition of a lot that has no access to a public thoroughfare except through an adjacent lot. See Egress. Compare with Easement and Right-of-way.

A party who is called a lessor that rents property to another when done under a lease.

A monument or erection placed on the boundary line of two adjoining parcels to establish the boundary mark.

A professional who designs subdivisions, building sites, and other projects that require grading, drainage, utility installation and site improvements and plant placement selection and layout.

The utilization of a lawn and plantings to improve the appearance of a lot.

A charge assessed by a party against another party for failing to make agreed to payments when due. See Penalty.

The physical weaknesses or construction defects not noticeable even after a reasonable inspection of the property.

1. A contract between owner and tenant setting forth conditions upon which a tenant may possess and use the property and the term of the occupancy. 2. Sometimes used as a method of financing as an alternative to purchasing property outright.

See Lease with an option to purchase.

An arrangement whereby a portion of the rent may be applied toward an established down payment or purchase price. Upon payment of the down payment the tenant, using borrowed funds, purchases the property and becomes the owner outright rather than a mere lessee.

A lease in which the lessee (tenant) has the right to purchase real property under certain conditions such as a stipulated price or within a stipulated time frame either during or at the end of the lease term.

The interest, that can be valued, in a property that has been leased to others that the owner has such as the right to receive ground rent over a period of time and also the right to repossess the property at the termination of the lease.

See Leasehold estate.

A less-than-freehold estate or personal property interest that a tenant has in property which is obtained through the lease.

The fixtures that are generally acquired or installed by a non-residential tenant and which can normally be removed upon lease expiration provided no damage is done to the property and the removal does not conflict with the lease terms.

The value of a tenant's interest in a lease which can be significant when the rent is below market and the lease has a considerable term remaining. Example: When land rent for an acre of Manhattan was $10,000 per year, a knowledgeable investor bought the rights of a 99-year lease. A comparable TRACT today commands $150,000 annual rent. The lease-hold value of the subject property is the present value of the bargain rent ($140.000) over the remaining lease term.

A description of land recognized by law by which property can be positively located by reference to government surveys or approved recorded maps such as Lot, Block, and Tract; U.S. Government Survey; and Metes and Bounds.Legal description - A means of identifying the exact boundaries of land by metes and bounds, by a plat or by township and range survey system. Metes refer to measures; bounds refer to direction. Metes and bounds descriptions are means of describing land by measurement and direction from a known point or marker on land. A plat is a recorded map of land that identifies a parcel by a number or other designation in a subdivision. A township and range survey system is a system of legal description of land with a township as the basic unit of measurement. Abase line is a parallel that serves as a reference for other parallels. Meridians are the north-south lines of survey, 6 miles apart. Parallels are the east-west lines of survey, 6 miles apart. A principal meridian is a meridian that serves as a reference for other meridians. A range is a north-south row of townships; the 6-mile strip of land between meridians. A section is a 1-mile square in a township. A tier is an east-west row of townships; the 6-mile strip of land between parallels. A township is a 6-mile square of land bounded by parallels and meridians and composed of 36 sections.

The information required to be given by law.

An entity which is usually a corporation that has the legal powers and duties of a natural person.

A person's permanent home. Example: Although President Gardner lives in Washington, DC, and has a vacation home in New England, he claims Houston as his legal residence because he maintains a permanent home there.

A title which lacks the full bundle of rights commonly associated with ownership and which might be being held by a trustee under a trust deed.

An essential element of every contract is that it involves a lawful object and if not, the contract is void. See Lawful object.

An estate commonly called a leasehold that exists for a definite period of time or for successive periods of time until terminated.

The party commonly referred to as the tenant who has the right to possession and use of real estate for a limited time under a lease agreement.

An owner or landlord who entered into a lease agreement and granted a tenant possession and use.

A mortgage on real estate that is paid off by making a series of nearly-equal payments at regular intervals where a part of the payment goes to interest and the remainder goes to reduce the amount of the unpaid principal on the loan. See Amortized loan or Installment note.

A person to whom a license has been granted.

A written test given to a propective real estate BROKER or salesperson to determine ability to represent the public in a real estate transaction.  Most states offer examinations on at least 5 dates each year.  

        EXAMPLE:  Assessment Systems, Inc. (ASI), Psychological Systems, Inc. (PSI), Applied Measurement Professional (AMP), Experior, and National Assessment Institute     ( NAI) prepare licensing examinations for most states.  Some states prepare their own licensing examination.

A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation such as judgments, taxes, mortgages, deeds of trust, etc.

 In an adjustable rate mortgage this is the ceiling rate that the note cannot exceed over the life of the loan. See Capitalization rate.

A person who is in possession of a life estate.

A contract by which a party employs an licensed real estate broker to assist them in a real estate transaction which usually refers to the sale of property.

The real estate broker who has obtained a signed listing contract from an owner/seller.

See Listing contract.

The licensed real estate broker who has entered into a listing contract with an owner to assist in the selling of his or her property for which the owner agrees to pay certain identified compensation. in a multiple-listing situation from whose office a listing agreement is initiated, as opposed to the cooperating broker, from whose office negotiations leading up to a sale are initiated. The listing broker and the cooperating broker may be the same person. See Cooperating broker.

1. An employment contract between an owner and a licensed real estate broker entered into for the purpose of the broker providing services to find ready, willing and able persons to buy, rent or lease a particular property under the terms specified in the contract for an identified period of time and where the owner agrees to pay certain identified compensation. In addition, it usually authorizes the broker to be the agent of the owner/principal and to perform services for the principal in a fiduciary capacity involving the principal's identified property. 2. The employment of a licensed real estate broker by a prospective purchaser or lessee to locate property to purchase or lease can also broadly be considered a type of listing.

An integral and relatively permanent part of a house which helps support the floors or roof.

A source of information on which a lender bases a decision about making a loan which defines the loan contract, shows the desired loan amount, the repayment terms, the name of the borrower, place of employment, salary, bank accounts, credit references and describes the real estate that is to be mortgaged.

A lender's contractual commitment to make a loan based on the appraisal and underwriting.

A representative who negotiates or services loans for a lender.

A service charge in addition to the required interest made by a lender for granting a loan.

The life of the loan or the amount of time the loan will remain in existence until the debt is paid off such as a 30-year loan having a maturity of 30 years.

A fee charged to the borrower by the lender for the administrative costs of processing and creating a mortgage loan which is usually computed as a percentage of the loan amount and is often expressed in points.

The length of time that the mortgage loan will be in effect.

The amount of mortgage debt that a lender can or may loan to a borrower compared to the market or appraisal value of a property being pledged as collateral expressed as a percentage. The greater the loan-to-value ratio, the greater the financial leverage available to the purchaser.For example, an 80% loan to value ratio on a $100,000 property means a mortgage of up to $80,000 may be obtained.

A value which determines the highest amount a lending institution will lend on a property.

The position of land and improvements in relation to other land and improvements and to local or general economic activity.

A popular statement that is traditionally referred to as the “three most important things in real estate” indicating the great importance of location with respect to the value of real estate.

A specific plot of land.

(Sometimes called a recorded plat.) A method of identifying real property on a recorded subdivision plat that identifies a parcel of land by reference to its lot and block numbers within the subdivision.

A boundary line of a lot as that is identified in a property survey.

The division of an existing small parcel into two separate parcels.

An offer from a prospective property buyer that is much lower than the listing price which may indicate that the buyer believes that the property will not receive many good offers and that the buyer is interested in the property only if it can be purchased at a bargain price. Example: Although the house was listed at $180,000, Lowry made a low-ball offer of $120,000. The seller was at first insulted by the low offer, yet eventually agreed to sell the home to Lowry for $150,000.