We are committed to making the purchase or sale of your home as simple and easy as possible. During this process, you may encounter real estate terminology that is new to you. Following is a guideline of real estate terms, as well as financial and architectural terms to help you during the purchase or sale of your home.
A nonconforming use refers to the utilization of land that does not conform to the zoning ordinance for the area.
A nonrecourse note is a type of note in which the borrower has no personal liability for payment.
Some legal documents, including certain leases and contracts of sale, are notarized by a certified Notary Public to verify the authenticity of a signature.
Notice of lis pendens is a public record warning all concerned parties that title to a property is the subject of a lawsuit and any lien resulting from the suit…
An offer is made to purchase a property at a specific price. Once an offer is accepted, then a contract of sale is issued by the seller’s attorney.
An open listing is an apartment for sale for which the owner has not signed an exclusive agreement with a real estate broker. Many brokers may represent the seller, or…
An open-end mortgage is a mortgage that may be refinanced without rewriting the mortgage contract.
An open-ended listing contract is a contract between a seller and a real estate broker that does not have a termination date.
An option to renew is a provision in a lease that states the method and terms of a lease renewal.
An ordinance is a law enacted by the local government.
Origination is the first step in the mortgage loan process consisting of the completion of the application.
The origination fee is a service charge by a lending institution for a mortgage.
Ownership in severalty is title to real property held in the name of one person only.
A parcel is a specific portion of land such as a lot.
Partition refers to the legal proceeding that divides property of co-owners so each will hold title in severalty.
Party wall refers to the wall in common between two adjoining structures, such as in townhouses and brownstones.
A passive loss is a loss generated by investment real estate when real estate is not the taxpayer’s primary business. Loss in excess of income may not be fully recognized…
A penthouse apartment refers to the apartment on the highest floor in a luxury, high-rise building.
A percentage lease refers to a lease that has a rental amount that is a combination of a fixed amount plus a percentage of the lessee’s gross sales.
Percolation is the movement of water through soil.
A perc test determines if the soil is sufficiently porous for the installation of a septic tank.
When a loan is issued against a personal property, it is recorded in the county clerk’s office against the name of the borrower. The recording process perfects a security position…
A periodic tenancy lease automatically renews for successive periods unless terminated by either party. It is also called an estate from year to year.
A sale of real estate in which income is recognized for tax purposes but no money has been received correlating to the gain amount. This can occur when the property’s…
Pied-a-terre is a term that refers to an apartment that is not the primary residence of the owner. The term refers to an apartment that is used only sporadically throughout…
PITI is an acronym for a mortgage payment that includes principal, interest, taxes and insurance.
A plat is a property map that is part of the public record.
Platform framing is the most common type of framing in residential construction in which the framing of the structure rests on a subfloor platform.
Points refer to the payment made to a lender as consideration for issuing a mortgage, usually based on a percentage of the loan amount. Each point is equal to 1%…
A post-war building is one that was built after World War II, typically between the 1950s and 1970s. They vary in size, but are usually taller than pre-war buildings, are…
A powder room is also referred to as a half-bath, and only has a toilet and sink.
A pre-approval is a process in which a conditional commitment is issued after a loan profile is underwritten with all standard documentation except a property appraisal and a title search.
A pre-qualification is a process in which a loan officer calculates the housing-to-income ratio and the total debt-to-income ratio to determine an approximate maximum mortgage loan amount.
A pre-war building is one that was built before World War II, and mainly prior to 1929, since there were few residential buildings built during the 1930s. Buildings are less…
The price-to-earnings ratio is the common metric used to assess the relative valuation of equities. To compute the P/E ratio in the case of a rented house, divide the price…
It is the basic affordability measure for housing in a given area. It is generally the ratio of median house prices to median familial disposable incomes, expressed as a percentage…
Generally, a primary residence of an owner or renter is one that they occupy the majority of time, usually considered to be 6 months and 1 day out of every…
The principal in the mortgage is the amount that is borrowed and on which interest is paid or received.
In relation to a co-op, the pro-rata share is your apartment’s share of the building’s underlying mortgage. The share is determined by dividing the amount of the underlying mortgage by…
Processing is the second step in the mortgage application process which involves the verification of information stated on the application. Credit reports and the appraisal are also ordered at this…
Current tax rules permit the profit on the sale of a primary residence to be tax exempt for up to $250,000 for an individual, or $500,000 for a married couple.
This form is a comprehensive checklist pertaining to the condition of the property including its structure and any environmental issues in and around the property.
The property description is an accurate, legal description of the land.
The tax issued by a municipality on the ownership of a property.
The lease issued by a cooperative corporation to each tenant-shareholder prescribing his or her right to occupy a specific apartment and his or her general obligations as an owner and…
A document issued by a sponsor in the process of converting a building to a cooperative or condominium ownership. It is intended to provide “full disclosure” of all relevant facts…
A quadruplex is an apartment with four levels.
The R-Factor is a rating that measures the degree of resistance to heat transfer.
Radon is a colorless, odorless gas present in soil that enters a home through small spaces and openings.
A rate cap is the limit on interest rates during the term of an adjustable rate mortgage.