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Ch.13-16 Florida Real Estate Definitions

Terms

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conforming loans
A standardized conventional loan written on uniform documents that meets the purchase requirements of Fannie Mae and Freddie Mac.
demand deposits
Checking accounts; payable on demand by holder.
discount points
A method for increasing a lender's yield.
discount rate
The amount of interest the Federal Reserve charges to lend money to its eligible banks.
disintermediation
A disengagement process when depositors withdraw money from savings for direct investment in stocks, money market funds, and other securities.
intermediation
the process whereby financial middlemen consolidate many small savings accounts belonging to individual depositors and invest those funds in large, diversified projects.
monetary policy
the actions undertaken by the Fed to influence the availability and cost of money and credit.
mortgage banker
an individual (or company) who makes loans with the expectation of reselling them to institutional lenders.
mortgage broker
One who finds a lender for potential borrower, and vice versa.
mortgage company
A mortgage loan company that originates, services, and sells loans to investors.
Office of Thrift Supervision (OTS)
A branch of the U.s. Treasury department that replaced the Federal Home Loan bank Board as regulator of the thrift industry.
Open market operations
Purchase and sale of U.S. treasury and federal agency securities.
primary market
A source for the purchase of a mortgage loan by a borrower.
reserve requirements
The amount of funds that an institution must hold in reserve against deposit liabilities.
secondary mortgage market
An investor market that buys and sells existing mortgages.
arrears
The state of being behind in the discharge of an obligation; paid at the end of the period for which due (the opposite of in advance)
credit
As a verb, to make an entry on the right or credit side of an account; as a noun, payment or value received.
debit
as a verb, to make an entry on the left or charge side of an account; as a noun, a charge or expense.
level-payment plan
A method for amortizing a mortgage whereby the borrower pays the same amount each month.
principal
The party employing the service of a real estate broker; amount of money borrowed in a mortgage loan, excluding interest and other charges.
pre-closing inspection
Before the closing date, a buy does a walk-through of the property with the sales associate.
profit
The amount one makes over and above one's cost.
prorate
To divide or assess proportionate shares of charges and credits between the buyer and the seller according to their individual period of ownership.
appraisal
Professional service provided by a registered, licensed, or certified appraiser or real estate licensee to produce an estimate of value.
assemblage
The combining of two or more adjoining properties into one tract.
curable
when the correction of a defect results in as much added value as the cost to correct the defect.
depreciation
a loss in value for any reason; a deduction for tax purposes.
economic life
the period of time a property may be expected to be profitable or productive; useful life.
effective age
the age indicated by a structure's condition and utility.
effective gross income (EGI)
The resulting amount when vacancy and collection losses are subtracted from potential gross income.
gross income multiplier (GIM)
a rule of thumb for estimating the market value of commercial and industrial properties; the ratio to convert annual income into market value.
gross rent multiplier (GRM)
a rule of thumb for estimating the market value of income-producing residential property; the ratio to convert rental income into market value.
highest and best use
A principle of value that focuses on the most profitable legal use to which a property can be put.
income capitalization approach
a method for estimating the market value of a property based on the present and future income the property can be expected to generate.
incurable
when the cost to correct a defect is great than the value added by the cure.
investment value
The worth of a property to a particular investor based on his or her desired rate of return, risk tolerance, etc.
net operating income (NOI)
The resulting amount when all operating expenses are subtracted from effective gross income.
overimprovemnt
an addition or change to the property not in line with its highest and best use, or a betterment that exceeds that justified by local conditions.
plottage
The added value as a result of combining two or more properties into one large parcel.
potential gross income (PGI)
the total amount of income a property would produce with 100 percent occupancy and no collection or vacancy losses.
principle of substitution
the basis for all three approaches to market value.
progression
the principle that states that the value of an inferior property is enhanced by its association with superior properties of the same type.
reconciliation
The process of weighting the estimates of value derived from sales comparison, cost, and income approaches to arrive at a final estimate of market value.
regression
The principle that states that the value of a superior property is adversely affected by its association with an inferior property of the same type.
replacement cost
the expenditure of constructing a building with current materials and techniques that has the same functional utility as the structure being apraised.
reproduction cost
Amount required to duplicate the property exactly.
sales comparison approach
A method for estimating the market value of a property by comparing similar properties to the subject property.
situs
relationships and influences created by location of a property that affect value (e.g., accessibility, personal preference)
subject property
The real property under discussion or appraisal.
vacancy and collection losses
A deduction from potential gross income for (1) current or expected future space not rented due to tenant turnover and (2) loss from uncollected rent due from delinquent tenants.
corner
a lot bounded with streets on two sides (intersecting).
cul-de-sac
a lot located where a street is open at one end only and the street has circular turnaround at the other end.
dormer
A projection built out from the slope of a roof, used to house windows on the upper floor and to provide additional light and ventilation.
double-hung
A window consisting of two sashes that move up and own in a pair of channels and are held open by tension springs.
flag
A lot characterized by a long access road or driveway leading back to the main part of the lot.
gable
A roof design that peaks at the center ridge and extends downward on two opposite sides.
hip
pitched roof with sloping sides and ends.
interior
A lot that is bounded on either side by another lot (lots in the middle of the block - not on the corner)
key
a long skinny lot similar to the shaft of a key that is often bounded by as many as five or six lots (the term also refers to a lot that has added value because of its strategic location)
r-value
a special rating or method of judging the insulating effectiveness of insulation products.
single-hung
A window characterized by a movable lower sash.
t-intersection
an interior lot that suffers from its location at the end of a t-intersection (a street ends in front of the lot)

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