Abstract of Title: A historical summary of the recorded instruments and proceedings on the title of a property.
Agent: An authorized person who manages or transacts business for another.
Buyer Agent: An agent who represents the buyer in a real estate transaction. A buyer agent may be paid by the buyer, seller, or listing agent at closing, provided all parties consent.
Dual Agent: An agent representing both parties in a transaction. In almost every state, dual agency is illegal and unethical without the written consent of both the buyer and the seller.
Listing Agent: The agent who represents the seller.
Selling Agent: The agent who obtains a buyer. A selling agent may represent the buyer, or may be a subagent of the seller.
Subagent: A salesperson that works for an agent of a Broker.
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: Features that enhance the value or desirability of a property.
Amortize: To pay a debt in periodic amounts until the total amount, including any interest is paid in full.
Appraisal: A qualified party’s opinion of the value of a property. This may include examples of sales of similar properties.
Appreciation: An increase in value of the property.
Arbitration: A process where disputes are settled by referring them to a fair and neutral third party (arbitrator). The disputing parties agree in advance to agree with the decision of the arbitrator.
ARM (Adjustable Rate Mortgage): A financing technique in which the lender can raise or lower the mortgage interest rate according to a set index, such as six-month Treasury bills.
Assessment / Assessed Value: An official valuation of property for tax purposes. Payments made by condominium or cooperative owners for their share of building maintenance expenses.
Assignment: The process by which a right or contract is transferred from one party to another.
Balloon Payment/Mortgage: A mortgage with monthly payments often based on a 30-year amortization schedule, with the unpaid balance due in a lump sum payment at the end of a specific period of time (usually 5 or 7 years). The mortgage may contain an option to “reset” the interest rate to the current market rate and to extend the due date if certain conditions are met.
Bankruptcy: Legally declared unable to pay your debts. Bankruptcy can severely impact your credit and your ability to borrow money.
Broker: An independent businessperson, who sets real estate office policies, hires employees, determines their compensation, and supervises their activities.
Brownstone: This was built as single-family home. Many now offer very interesting and gracious apartments. They usually have charming spaces as well as beautiful details such as fireplaces, high ceilings, detail moldings and decorative wood floors. These are also called walk up buildings. Some may offer gardens or terraces. For rental property-many do not have laundry rooms or live in supers.
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.
CLO (Computerized Loan Origination): A computer network of major lenders that allows agents to initiate mortgage applications in their office. HUD has approved the procedure as long as 1) full disclosure is made of the fee; 2) multiple lenders are displayed on the computer screen to give borrowers a basis for comparison; 3) the fee charged is a dollar amount rather than a percentage of the loan.
Closing: The point at which real estate formally changes ownership. Closing costs are fees paid for services associated with a home’s closing such as title insurance, surveying fees, recording fees, deeds, and affidavits.
CMA (Competitive Market Analysis): A method of determining the value of a property by comparing the prices paid for similar properties.
Code of Ethics: A written standard of ethical conduct embraced by the Real Estate Board of New York (REBNY), a trade organization.
Co-Broke: This is the term used when an exclusive broker sends out the listing to other brokers. The brokerage community then receives the listings and the commission will now be split between the seller’s/landlords broker and the firm that provides the buyer/tenant of the property.
Commission: Compensation paid to a real estate Broker (usually by the seller) for services rendered in connection with the sale, exchange, or lease of property.
Commission Split: The sharing of commissions between the listing broker and the broker of the buyer/tenant.
Common Area: The area on the property or in the building that is available for use to all occupants of the building.
Comparable: 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 (Condo): Individual ownership of a portion of a building, with common areas shared by all owners. Common charges are paid to the condominium association to maintain, repair, or improve the property.
Contract: A legally binding agreement between two parties.
Conventional Loan: A fixed-rate, fixed term loan that is not insured by the government.
Conversion: Property changing to a different form of ownership, such as a rental building to a cooperative or condominium building.
Convertible: Apartment that has space to add another bedroom. The other bedroom can be made with the construction of a wall; however, the new bedroom must have a window and be a certain size in order for it to be legal.
Cooperative (Co-op): A corporation is made up of residents that own a building. The Owner of an apartment owns a proprietary lease, rather than real property, and a corresponding number of shares in the corporation.
Counter Offer: A new offer as to price, terms, and conditions, made in response to a prior, unacceptable offer. A counter offer terminates an original offer.
Deed: A legal document transferring ownership of a property from one party to another.
Deed in Lieu of Foreclosure: The voluntary surrender of property by an owner or borrower to a lien holder (such as a bank) that eliminates the need to continue foreclosure action by the lien holder. The lien holder can refuse to accept the Deed in Lieu and file a Notice of Non Acceptance with the County Recorder.
Disclosure: Revealing what previously was private knowledge. Any statement of fact that is required by law.
Down Payment: A percentage of the purchase price the buyer pays in cash.
Duplex Apartment: Having two levels.
Earnest Money: A buyer’s partial payment to the seller for a property.. This is a show of good faith in completing the transaction.
Elevator Buildings: These are small buildings that offer elevator service but not a doorman. They usually have laundry facilities and a live in super.
Equity: The difference between the current market value of a property and the claims–such as the unpaid portion of a mortgage–that exist against it.
Escrow: The closing of a real estate transaction through a neutral third party who holds funds and/or documents for delivery after specific conditions have been met. Exclusive Listing: A written agreement in which the seller appoints only one agent to market the property for a specific period of time. If the owner sells the property himself, he is not required to pay a commission.
Exclusive Right of Sale Listing: A written agreement between an agent and a property owner stating that the owner will pay a commission to the agent if the property is sold during a specific time period–whether or not the agent is responsible for the sale.
Façade: The exterior wall of a building.
Fannie Mae (Federal National Mortgage Association): Fannie Mae purchases home mortgages, thus serving as a source of funds for mortgage lenders. It is a privately owned corporation whose shares are traded on the New York Stock Exchange, but it is subject to the strict supervision of the secretary of the U.S. Department of Housing and Urban Development (HUD).Federal Fair Housing Law Refers to Title VIII of the Civil Rights Act, and stipulates that discrimination based on race, color, sex, familial status, handicap, religion, or national origin is illegal in connection with the sale or rental of most dwellings.
FHA (Federal Housing Administration): A federal agency established to improve housing standards and conditions. The FHA provides mortgage insurance to approved lending institutions.
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 showing the arrangement of rooms within the property.
Forbearance Agreement: An agreement between a mortgage holder and a borrower that specified a loan payment plan and halts the foreclosure action if borrower meets requirements and terms of the agreement. The payment plan generally includes provisions for repayment to the mortgage holder of all delinquent interest and fees and could include extending the life of the mortgage beyond the original term.
Foreclosure: The legal process by which property that is mortgaged as security for a loan may be sold to pay a defaulting borrower’s loan.
Freddie Mac (Federal Home Loan Mortgage Corporation): A federally chartered corporation established to purchase mortgages in the secondary, or resale, market. Freddie Mac’s policies are designed to serve the needs of savings and loan associations. It is subject to oversight by the U.S. Department of Housing and Urban Development (HUD).
Full Bath: A bathroom with a bath or a shower.
Grandfather Clause: If a new law is passed or an old is changed in a building, those people whose activity was legal under the previous law are allowed to continue with the prior law.
Guaranty: A pledge made by one person (the guarantor) to ensure that another person (the obligor) will fulfill an obligation to a third party (the obligee).
High-rise Building: These high-rise buildings have been constructed since the late 1980’s and have many amenities. Some are built with hotel like features. Many offer concierge services, doorman, roof deck, fitness room; children’s play room, meeting room, parking garage, storage room, bike room, pool, and party room.
Half Bath: A bathroom that does not have a bath or shower, also called a powder room.
HUD (U.S. Department of Housing and Urban Development: A federal department active in a variety of national housing programs including urban renewal and public housing.
Improvements: Additions intended to increase the value of a property.
Inspection: An examination of a property by the buyer, agent, title insurance company, or other interested party.
Interest Rates: The cost of borrowing money from a lender.
Lease: A written agreement to rent a property signed by landlord and tenant.
Lien: A charge or claim by one party on the property of another as security for the payment of a debt.
Listing: A written agreement between a property owner and a real estate broker authorizing the broker to find a buyer.
Lofts: These were once commercial buildings that have now been converted to residential use. Most offer quite large living spaces that are open and airy. They have a very different interior feeling that a traditional apartment. Most offer elevator service but some are also walk up. Many offer washer and dryer within the apartment. They may also offer a roof deck, sometimes a live in super. The exterior of the building is usually a prewar built the interior is quite contemporary without the prewar details. These buildings can be found in areas that were once zoned for commercial pace as opposed to residential areas. However, the neighborhoods now have become residential because of the loft conversions. Some neighborhood examples are Soho and Tribeca.
Loss Mitigation: Banks and lenders look to limit losses on delinquent mortgages by working out solutions with borrowers through a Loss Mitigation Department, generally operated by the bank or lender to deal specifically with delinquent accounts.
Lot: A measured section of land.
Maintenance: Monthly charges paid by the owner cooperative apartment 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 units shares.
Managing Agent: An independent company that is hired to manage a property.
Market Value: The price a property will command on the open market.
MLS (Multiple Listing Service): A means by which agents are informed of the
properties offered for sale by other agents.
Mortgage: A legal document pledging property as security for the payment of a loan.
Mortgage Insurance: An insurance plan that protects the lender if the borrower does not repay a loan. Mortgage insurance is required when a home buyer makes less than a 20% down payment at the time of purchase. Private mortgage insurance (PMI) covers conventional (fixed-year, fixed-rate) loans. The Federal Housing Administration charges a mortgage insurance premium (MIP) on FHA loans.
Notarize: To verify the authenticity of a signature by a certified Notary Public.
Net Effective Rent: Calculated by taking the total amount of concession, dividing it by the term of the lease, then deducting that amount from the month rent.
NOD: Abbreviation for Notice Of Default.
Notice of Default: An official notice filed and recorded by a designated trustee at the request of a lender indicating lender has commenced foreclosure action.
Offer: A proposal to purchase property at a specified price and terms.
Offer Accepted: The term refers to when the owner of the property agrees and accepts the offer and terms of the purchaser.
Open House: The common real estate practice of showing “For Sale” homes to the public during established hours.
Open Listing: A listing where the owner of the property does not give a brokerage firm an exclusive on listing the property. More than one brokerage firm may have the same listing.
Origination Fee: A lender’s charge for establishing and processing a new mortgage loan. It is generally computed as a percentage of the loan and may be tax deductible.
Owner of Record: The person named in the public record as the owner of a property or mortgage.
Pied a Terre: Term that refers to an apartment that is not the primary residence of the occupant.
Points: A one-time charge paid to the lender for issuing a loan. Each point equals one percent of the loan amount and is used to obtain revenue in addition to the interest rate.
Post War Building: A building constructed after World War II and have a modern feel to them. This building may have central air, in wall a/c, doorman, parking garages, laundry rooms, roof decks, and cleaner simpler room layouts without ornamentation that you would find in a prewar building.
Pre-War Building: A building constructed prior to World War II. This building usually boast details such as high ceilings, moldings, fireplaces, and detail designs in the wood floors. The rooms usually have gracious layouts.
Principal: The amount of money upon which interest is paid.
Property Tax: The tax issued on the ownership of property.
Purchase Price: The amount paid by buyer to seller for a property.
Qualified Buyer: A buyer who has demonstrated the financial ability to afford the asking price of a home. Prequalifying with a lender can expedite the home buying transaction.
Refinance: Obtaining a new loan to pay off an existing loan. Refinancing is a popular practice when interest rates drop.
Rental Building: A building where the apartments are only available to rent.
Rent Stabilized: The rent can only increase by a percentage determined by the Rent Guidelines Board,
Reserve Fund: An account reserved to provide funds for future expenses in order to maintain the cooperative or condominium building.
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.
Serious delinquency: A single-family mortgage that is 90 days or more past due, or a multifamily mortgage that is two months or more past due.
Shares: In a cooperative you purchase purchasing the shares. Shares 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 sublease (in a co- op) the apartment to a subtenant (in a co-op). For a condo, the term is tenant.
Short Refinance: Short refinance is the replacement of a mortgage, usually with a reduced mortgage, when the borrower is already in default. This is done to transition the borrower to a more affordable payment structure. The lender has to write off the difference between the old mortgage and the new mortgage, but in some cases this may be preferable to foreclosure.
Short Sale: To sell a home through negotiation with the bank or lender, who agrees to accept less than the full amount owed to satisfy the debt allowing the debt to be ‘paid off’, short. Short sales are subject to bank approval and are often used as options in lieu of foreclosure.
Tax Deductible: An expense that reduces taxable income for a shareholder of a cooperative. The amount is determined by the amount of shares that are owned.
Term: A specified period of time.
Title: Lawful ownership of property.
Title Insurance: An insurance policy that protects against losses arising from title defects such as forged or misfiled documents.
Title Search: An examination of the public records to determine whether the current title is clear or defective.
Town House: Also known as a row house, brownstone and generally refers to a type of dwelling having multiple floors. Town houses share a common wall between units.
Triplex: An apartment with three levels.
Unit: One residence within a building.
Utilities: Example: water, gas, electricity.
VA (Veterans Administration): A federal agency designed to help veterans enter the housing market.
VA Loan: A loan guaranteed by the U.S. Department of Veterans Affairs (VA). VA loans are made to honorably discharged veterans or their unremarried widows or widowers. Such loans require a minimal or no down payment and offer lower interest rates.
Vacate: To move out of a property.
Walk-Up Buildings: Buildings built prior to WW ll. They are also prewar construction. However, they are smaller buildings that may have up to six floors. These do not have an elevator and you walk up the flight of stairs.
Walk-Through: A final inspection of a property before it changes ownership.
Zone: Local law for specific area with certain rules and regulations.