Glossary of Real Estate Terms

Abstract of Title: A historical summary of the recorded instruments and proceedings on the title of a property.

Air Rights: The right to use or control the space above a property. Air Rights can also be sold, rented or leased to another party.

Amenities: The benefits from home ownership, such as a feature that enhances value.

Appraisal: An estimate of the value of the property. One may have an appraisal to determine the offering price during a sale.

Assignment: The process by which a right or contract is transferred from one party to another. Assigned contracts include mortgages, leases and deeds of trust.

Broker: A state licensed sales agent who acts for property owners and prospective purchasers in Real Estate transactions.

Brownstone: A 19th century house which shares a common wall with the neighboring property.

Building Amenities: The assets that buildings offer its owners or tenants. These can include a doorman, health club, club, garage etc.

Building Restrictions: Requirements in building codes that affect the size and appearance of the building.

Capital Expenditure: an improvement that will have a life of one year or more and will increase the value of the property.

Certificate of Occupancy: In New York City, each building is required to have a Certificate of Occupancy which permits the structure to be occupied by members of the public. This means that the building is in compliance to health and building codes.

Closing: The transfer of ownership of a property from the seller to the buyer according to the sales contract.

Co-Broke: This is the term used when a broker sends out their listing to other brokers and other firms. The brokerage community then receives the listings and the commission will now be split evenly between the seller's broker and the firm that provides the buyer of the property.

Combination: Refers to when an owner combines two adjoining apartments into one to enhance the value and the space.

Commission: Payment to the broker for his or her efforts on marketing and selling the property it is usually a percentage of the total purchase price.

Commission Split: the sharing of commissions between the listing agent and the broker of the buyer.

Common Area: The area on the property or in the building that is available for use to all owners and tenants.

Comparables: Used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities.

Condominium: A building where individuals own individual units but share common areas with the other unit owners of the building. A more liberal type of ownership than Coops, Condominiums also have more lenient policies regarding subletting and pets.

Contract: A legally binding agreement between two parties. To have a valid contract for the sale of Real Estate there must be:

  • an offer
  • an acceptance
  • competent parties
  • consideration
  • legal purpose
  • written documentation
  • description of the property
  • signatures of the principals

Conversion: Property changing to a different form of ownership, such as a condominium to a cooperative or a commercial building to a residential building.

Convertible: A one or two bedroom apartment that has space to make another bedroom. The other bedroom can be made with the construction of a wall; however, the new bedroom must have a window in order for it to be legal.

Deed: a written document by which title of property is expressed from one party to another.

Duplex Apartment: An apartment that has two levels.

Escrow: A state where consideration, benefits, legal rights, money, documents or other valuables are transferred to another party in advance of that party's legal claim to them, on the basis that the legal claim will arise at a given point in the future. It is a form of trust.

Estate: The word used to describe the collection of all assets of a deceased person. Also, the extent of interest a person has in real property.

Estate for Life: The interest of real property that ends with the death of a person.

Excellent Condition: This is used to describe the condition of the apartment; mint is another word for excellent meaning the apartment is in great shape.

Exclusive Listing: A contract whereby the owner of a property grants a single broker the right to market the property for sale.

Fa├žade: The exterior front wall of a building.

Financing: Borrowing money to purchase a property.

Firm Price: An asking price for a property that is not open for negotiation.

Fixed-Rate Mortgage: A loan where the interest rate remains constant over the entire term of the loan.

Flip Tax: Tax imposed on the cooperative apartment by the cooperative, this tax can either be paid by the seller or purchaser and is usually a percentage of the purchase price.

Floating Rate: A loan where the interest rate is not fixed over the term but is allowed to vary according to the change in a specified index.

Floor Plan: A scale diagram of the arrangement of rooms and their sizes drawn by an architect.

Foreclosure: An enforcement process in which the lender under a defaulted mortgage takes title to the property for the purposes of selling it to recoup moneys owed under the mortgage.

Full Bath: A bathroom with a bath or a shower.

Grandfather Clause: If a new law is passed or an old is changed those people whose activity was legal under the previous law are allowed to continue because of this condition. This law is common with pets; some buildings that do not allow pets now, did in past, therefore, those owners are allowed to keep their pets.

Half Bath: A bathroom without a bath or a shower.

Interest Rates: The cost of borrowing money from a lender. Rates change over time and are set by the Federal Reserve.

Lease: A written agreement to rent a property or part of a property from the owner.

Lien: A legal claim against property for money owed.

Listing: The agreement that allows a real estate professional to market a property. Available apartments are also referred to as listings.

Loft: A loft refers to open living space that was converted from commercial space to residential space. Lofts contain very high ceilings, large windows and open space. In New York City, most lofts and converted commercial space is located downtown.

Lot: A measured section of land.

Maintenance: Monthly charges paid by the owner or tenant of a cooperative building for that person's share of costs of keeping the common-use portions of the building in good condition. This includes the daily cost to operate the building and it is calculated based on each individual unit.

Managing Agent: An independent company that is hired to manage a property. In New York City, most of the cooperative and condominium buildings are managed by a company which is responsible for the building operations.

Market Value: An estimation of the price for a property in relation to the current real estate market.

Mortgage: Money borrowed from a lender in order to purchase a piece of property. Mortgages vary in terms of length as well interest rates.

Negotiation: The process of discussing an issue between two parties who are working towards the same goal. Successful negotiation usually leads to a contract and then a sale.

Notarize: To verify the authenticity of a signature by a certified Notary Public.

Offer: An expression of the desire to purchase a property at a specific price. Once an offer is made and then accepted it leads to the purchase of the property.

Offer Accepted: The term refers to when the owner of the property agrees and accepts the offer and terms of the purchaser.

Open House: A specified time when a property that is for sale is advertised by opening its doors to prospective buyers. A broker advertises an open house to help the sale of the property.

Open Listing: A listing where the owner of the property hires more than one broker and only pays commission to the one that provides the purchaser.

Ordinance: A law enacted by the local government.

Penthouse: A luxury apartment in a high rise building.

Pied a Terre: A French term that refers to an apartment that is not the primary residence of the owner. A Pied a Terre is used when a person lives in another location and comes to New York several times a month or a few weeks a year to either work or enjoy this great city.

Post War: A post war building is one that was built after 1941.

Pre War: A pre war building is one that was built before 1941. Common characteristics of a pre war apartment are fireplaces, moldings and hardwood floors.

Property Tax: The tax issued on the ownership of property.

Points: A charge levied by the lender on the borrower for the mortgage for prepaid interest. Each point is equal to 1% of the principal of the mortgage.

Powder Room: Also known as a half bath. A powder room is a bathroom without a shower or a bath.

Quadraplex: An apartment that has four levels.

Referral: A recommendation made to a client about the services of a particular agent or firm.

Rental Building: A building where the apartments are only rented and not sold.

Rent Control: Laws that regulate the amount of money that is charged to rent out space.

Reserve Fund: An account reserved to provide funds for future expenses in order to maintain the cooperative or condominium building.

Sale Price: The amount of money paid by the purchaser to the seller. Also known as the purchase price.

Security Deposit: A payment required by a landlord to guarantee that the tenant meets his or her obligations under the lease and to guard against any potential damages that may be incurred during the term of the lease.

Shares: When one purchases an apartment in a cooperative building he or she is actually purchasing the shares in the cooperative. They represent the proportion of the building owned by the unit owner based on the size and value of the apartment.

Square Footage: The area measured in square feet of a certain property. Square footage can be measured in different ways and is usually considered approximate. Condominium apartments have specific laws that determine the way which the apartment is measured therefore condominium measurements are more accurate.

Sublet: The term used when an owner of an apartment decides to rent the apartment to a tenant.

Tax Deductible: An expense that reduces taxable income. Each year, shareholders in cooperatives apartments are able to deduct a certain amount from their personal taxes. The amount is determined by the amount of shares that are owned.

Term: A specified period of time.

Term, Amortization: The term in which the interest and principal payments of a loan must be made.

Title: The legal term for the evidence that the owner is in lawful possession of the land and property.

Townhouse: A townhouse is a private residence where at least one wall is shared with another residence. In New York City, townhouses are a very popular and a more private way of living.

Triple Mint: Refers to the condition of the residence. Triple mint condition means that the residence is in immaculate condition.

Triplex: An apartment that has three levels.

Unit: A single residence within a building.

Utilities: Services such as water, gas, electricity, telephone and television. Utilities in some buildings throughout the city are included in the maintenance charges.

Vacate: To move out and leave the property.

Walk Up Building: A building that does not have an elevator. Most walk up buildings are four to six floors.

Walk Through Inspection: The inspection of a property immediately before the closing to ensure that the property does not have any new damages.

Zone: An area set by local law for specific use with certain rules and regulations.