Based on network logic and any timetable limitations, the earliest potential time for a Project Management: Principles, Processes, and Practice activity (or the project) may be completed.
It means to let the buyer take possession of the property before the closing. Because of the risk of mechanics’ liens, insufficient insurance coverage, and “buyer’s remorse” that could lead to a lawsuit, this kind of thing should be carefully thought through. Also, a buyer who moves in is usually not subject to landlord-tenant rules. This means that if the buyer doesn’t buy, the seller may have a hard time getting rid of the buyer. To cover these risks, the parties should sign a written agreement about moving in early.
The practice of permitting the buyer to take ownership of real estate prior to closing. Because of the hazards of mechanics’ liens, inadequate insurance coverage, and “buyer’s remorse” with the possibility of a lawsuit, such a method should be carefully considered. Furthermore, because the buyer who moves in is not normally subject to landlord-tenant restrictions, the seller may have a difficult time evicting the buyer if the buyer fails to buy. To mitigate these risks, the parties should enter into a written early-occupancy agreement.
Loans in which the borrower makes extra payments to lower the outstanding principle faster than planned.
Making extra debt service payments before the due date is essential.
Based on network logic and any timetable limitations, the earliest potential time an activity (or project) can begin.
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The deposit paid by the buyer when a purchase contract is signed, demonstrating the buyer’s seriousness.
Money paid as proof of good faith or true intent to finish a deal, which is generally forfeited by purposeful failure to execute the agreement.
A monetary deposit made by a buyer at the time of the offer to establish the offer’s legitimacy and to give recourse to the seller if the buyer defaults.
The monetary deposit (including initial and additional deposits) paid by a potential buyer of real estate as proof of good faith to complete the transaction; also known as bargain money, caution money, hand money, or a binder. Earnest money is negotiated between the parties, and its principal purpose is to act as a source of payment for damages if the buyer defaults.
Earnest money is not required to bind a purchase agreement if the buyer and seller exchange mutual promises of performance (that is, the buyer’s promise to purchase and the seller’s promise to sell at a given price and terms) serves as the contract’s consideration. Consider putting the money in an interest-bearing account for the advantage of the buyer, which can be accomplished by the parties agreeing in writing to place it with a neutral third party such as an escrow business, according to state law. When the sales contract is signed, the deposit, or earnest money, may be retained by the listing broker, the purchasers’ broker, or a neutral third party. Because such authorization is not assumed by law, the broker’s authority to hold this money on behalf of the seller should be expressly stated in the listing. This money may never be mixed with the broker’s own general funds.
It is unclear who owns the earnest money once it is deposited. The money is the buyer’s until the offer is accepted. The seller does not have the right to it until the transaction is completed. The earnest money is applied to the down payment after the deal is completed.
When either party defaults, problems develop. However, after the seller accepts the offer, the funds may be disbursed only with both sides’ knowledge and approval. Because of the unpredictable nature of earnest money deposits, such funds must be securely safeguarded before a final decision on how they will be released.
To show the buyer’s level of commitment, the seller receives a payment from the buyer.
A deposit made in good faith into an escrow account (or into a broker’s trust account), usually accompanied with a purchase offer.
The down payment a buyer puts down to show that they are serious about buying a house.
Used to keep water heaters from falling when there is an earthquake.
A right, privilege, or interest that allows the holder to utilize something for a certain purpose.
Nonpossessory interest in someone else’s land that allows for restricted use. Only conveys the right to utilize the land.
A right-of-way given but not dedicated to allow for the restricted use of private land for public or quasi-public purposes.
The emergence of situations in which the growth of deposits in banks and savings organizations turns negative as a result of alternative, more appealing direct investment options.
One person’s contractual right to use a piece of another person’s land, commonly as a drive for access or as a water run-off.
To have a restricted right of use or pleasure over another’s land that does not give the holder of the interest possession of that other person’s property, a nonpossessory (incorporeal) property interest (instead of an estate). When one property’s requirements are met at the expense of another’s, an easement is created. An express grant of an easement must be in writing, typically in the form of a separate deed or a reserve within a deed. As a result, an easement is a right to land rather than a contract. Landlocked situations, implication, or prescription can also lead to the creation of easements.
In order to understand the extent of the easement, it is important to know how it impacts both the holder and the servient property owner. The drafter should explicitly define the rights and responsibilities associated with the easement, as most easements originate from an express grant. For example, a right-of-way to traverse the land or a restriction on fence height are examples of an easement. In addition, it can be set up for a specific amount of time, such as months, years, or even life.
If an easement is attached to a property, it is called an appurtenant easement. If you have an easement appurtenant, you have a right to use another person’s property (the servient estate) in exchange for the owner’s benefit (dominant estate). Because it does not benefit or attach to a dominant estate, an easement is inherently personal and does not pass with the land.
As shown in the illustration, the owners of lots 5 and 6 may come to an agreement that the owner of lot 5 will not erect a structure that will obstruct his or her neighbor’s view of the lake. It’s referred to as a “negative easement.” Navigation easement is a term used to describe the right of aeroplanes to operate below particular altitudes over or near property adjoining an airport (aerial navigation).
As a result of the “floating easement” problem, many easement disputes end up in court due to a lack of clarity about the scope of the easement and who is responsible for maintaining it. If utility lines are to be laid to the land in the future, an access easement may not be acceptable. An easement or right-of-way is deemed to be of a suitable and convenient width if it is located by a grant that does not specify its particular width.
The terms “easements” and “profits” should not be used interchangeably. The right to take soil, minerals, or other land products is known as a profit. A license isn’t a right to use someone else’s land; it’s just permission to do so for a certain reason, and it can be withdrawn at any time.
- A merger occurs when the dominant estate’s owner acquires control of the servient one.
- If a fence is erected across an easement right-of-way, the owners of the dominating estate are demonstrating their intent to abandon the easement.
- Release: When the dominant estate owners release their interest in the servient estate, usually through a quitclaim deed.
- When a reason for which an easement was created is no longer relevant.
- Easements can be seized by eminent domain or lost through adverse occupancy in cases of eminent domain.
- When the grantee uses the easement for an improper purpose, it is referred to as overburdening.
When a servient tenement owner can’t develop his property without incurring additional costs, he can’t cancel an easement. A private right to eminent domain would be infringed upon if the owner of the servient tenement tried to move the easement for personal reasons.
A formal agreement that lets one person use the property of another person for a certain reason.
A contract that says someone else can use a property for a certain reason.
A person’s right to use someone else’s land in a certain way that doesn’t involve taking any of the land’s natural products or any of the soil, or a person’s right to stop the owner of that land from using that land in a certain way. Most easements are rights of way, easements for light, or easements for water to flow over or through someone else’s land.
An easement that runs alongside the property. Property 3 in the diagram includes a 30-foot highway easement over lot 1. This easement is attached to and passes with 3 regardless of whether the owner of 3 expressly transfers the easement when 3 is sold. It also binds the succeeding owner of 1 regardless of whether the title to 1 mentions the easement. The right to travel over another’s land, party barriers, and shared roadways are all instances of easements apparent. In a condominium, easements appurtenant include the right to walk over the parking lot, have utility lines go through the walls, or have a sewer pipe run beneath the property surface. The owners of the lots in the cul-de-sac (dominant tenements) in the figure have access to the lake via lots 2 and 4. (servient tenements).
An easement formed on one parcel of property (the servient tenement) for the benefit of another parcel of land (the dominant tenement).
A continuing right of use including a connection between two pieces of land: a dominant parcel that benefits from a servient parcel.
Easement that stays in place even after the owner of an asset changes.
The right of use is generated when a landowner grants another landowner permission to rely on her land.
A special agreement between the concerned parties creates an easement.
An easement created as a result of a landowner selling property to which access requires crossing other land owned by the landowner. By implication, easements are formed when they are reasonably necessary, when the need is obvious at the time the land is ceded, and when the need appears to be permanent in nature.
An easement granted by a court of law when justice and necessity demand it, particularly in a classic landlocked scenario (see lot 3 in the preceding figure). This form of easement requires two basic components: There must have been a common grantor of the dominant and servient properties, and the reasoning for the easement must be reasonable necessity, not merely convenience. For example, if George Brown possessed lots 1-6 (as shown in the diagram) and then ceded lot 3 to Jane Lee without mentioning any easement of passage across lot 1, most courts would presume an easement by necessity. This easement is based on the parties’ anticipated intentions. The statute of frauds does not apply because the easement is created by operation of law, and no written agreement is required. Also known as an implied gift easement.
An easement obtained via the open, continuous, and unfavourable use of real property over a predetermined time period.
The acquisition of an easement right via open, public, and continual assertion of the right, which is detrimental to the subordinate land owner’s interest. The time it takes to get the right of easement by prescription varies by state.
An adverse user’s right to use another’s land. The use that results in an easement by prescription, like obtaining title by adverse possession, must be unfavorable, hostile, open, notorious, and continuous throughout the statutory duration. Generally, an easement by prescription cannot be obtained on public land or property registered under Torrens. An easement by prescription, unlike an express or implied grant, may be cancelled by nonuse during the prescribed period without evidence of actual abandonment.
An implied right of use that permits the owner of a landlocked piece to use an existing passage across another property for entry and egress.
The restricted right of one person to use the land of another (servient estate) when such right is not formed for the benefit of any land owned by the owner of the easement. There is no dominant estate in this scenario since the easement attaches to the owner personally rather than to the property.
The vast easement is an encumbrance on the servient estate. Utility easements, power line easements, billboard-site easements, and other similar situations are common instances. When it is unclear whether an easement is appurtenant or in gross, most courts construe it as appurtenant.
An easement in gross is similar to a license, except it is irrevocable for the duration of the owner’s life. For example, in the previous illustration, the owner of lot 3 may grant his buddy a non revocable right to cross over lot 3 and fish in the lake. This right, or gross easement, expires with the death of the friend or the transfer of lot 3 to a new owner, whichever comes first. The buddy may not transfer his right to another person. A personal easement in gross may not be assigned to a third party by the owner. However, commercial easements in gross, such as rights granted to utility firms to establish pipelines and electrical lines, are a more substantial property interest that can be assigned.
An easement that is apart from any linked land interest and comprises personal property.
The right to utilize property for a single, defined purpose that is unconnected to any adjacent lot.
Having the right to use land that belongs to someone else without having to own land next to it.
A established implied right of use that grants the owner of a landlocked parcel the right to utilize a way across mother property for entry and egress.
A sloped roof overhang that goes beyond the house’s walls. Also known as roof projection.
Roof overhang that extends past the structure’s perimeter.
The discharge of water from a structure’s eaves onto the land of another. If such drainage continues for the required time, a prescriptive easement right may arise.
A channel, usually made of metal pipe, is installed at the eaves to transport rainwater to the downspout.
Earnings before interest, taxes, depreciation and amortization.
The study of economic data and problems using statistical approaches.
Studies of the impact that a new development will have on the region’s economy or environment.
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The industry that supports a community by providing job opportunities within a geographic market region.
A city’s set of economic activities for the world beyond its borders.
Part of a local or regional economy’s income that comes from exporting goods and services.
A research that splits economic activity into domestic and export sectors and aims to identify the extent to which domestic activity is dependent on export activity.
The study of the relationship between basic and non-basic employment patterns as a technique of predicting population, income, and other variables having an effect on real estate and land use is described by the appraisal phrase “external economic activity.” The means through which members of a community earn a living are described by this word.
Studies that look at how changes in basic employment (such as export-oriented activities and the wage income they bring) affect the growth of the local or regional economy, the number of jobs, and the population.
The ratio of total employment to basic employment is a measure that gives a rough estimate of how changes in basic employment will affect total employment in a given region, assuming that everything else stays the same.
A theory of urban growth that holds that overall economic activity in a city is proportional to the degree of activity in its export industry.
The complete advantages of an investment, including equity growth, cash flow, and resale profits, excluding tax benefits.
Workforce characteristics, such as production and job activities.
The loss of a property’s value as a result of external causes.
Physical wear and tear on an asset.
Industries that generate growth and create job opportunities in a region. Because their products or services are exported beyond the local region, they are sometimes referred to as export industries.
An in-depth examination of the economic and financial aspects of a proposed real estate investment.
The amount of time that a structure may be employed to create a service or an asset.
the amount of years that a property could be profitable.
The expected period during which an improved property can be profitably used to provide a return greater than the economic rent related to the land itself; the period during which an improvement has value greater than its salvage value. Economic life refers to the remaining period during which improvements to real property (not land) are depreciated for tax reasons in the case of an older structure or improvement. Such advancements typically have shorter economic lives than they do physical lives. Also known as service life.
How long it takes for a property to start making money for its owner.
An external event, such as the relocation of a significant industry, that has a negative impact on the local economy and hence lowers the property’s value.
Value loss as a result of an inconvenient placement.
The drop in a property’s value caused by things like new laws or changes in how other nearby properties are used.
In 1981, Congress passed a substantial modification to the Internal Revenue Code.
Profit created by a good or service that is greater than the profit required to entice enterprises to manufacture the good or service. Pure profit is a term that is used sometimes.
What real estate can command in an open, competitive market at any given time (market rent), as opposed to the income actually obtained under a lease arrangement (contracted rent). Appraisers must take into account the fact that rents will rise as a result of supply and demand when a new facility is being built but no new housing is being constructed.
In real estate, the term “market rental” refers to the rent that a property would most likely get on the open market at a certain time. It’s a rental rate for properties that are similar to the one you’re looking at.
There are different parts of a local or regional economy where certain things happen.
People who run a bigger business get more money because they have more money. People use this term when they talk about a market trend that happens when the cost per unit goes down as the operation gets bigger.
A community of organisms and their surroundings that is tied together by a flow of energy.
The zone of transition between two vegetation groupings or zones.
A sum left over after concessions, allowances, and costs have been taken into account and added to a base amount.
A building’s apparent age (improvement) is based on observable condition rather than chronological age. The effective age of improvements to real property at the time of inspection differs from the actual age due to variables such as depreciation, maintenance quality, and so on.
Thus, remodeling can extend a structure’s economic life by minimizing or neutralizing the influence of actual age, as well as enhance the structure’s life expectancy.
The age of a property is determined by its wear and tear rather than its chronological age.
An appraiser’s opinion of a building’s physical condition.
The physical state of a building, not its actual age, is what determines its “effective age.” In general, the better the condition of a building, the younger its “effective age” is. For example, some 35-year-old buildings that have been well taken care of may have a “effective age” of 20 or 25 years.
The real borrowing cost, taking into account all upfront financing fees. It is comparable to the annual percentage rate, but it takes into account the effect of early pay-out.
The real cost of taking out a loan.
The projected income coming from a rental property’s estimated potential gross income less a vacancy and bad debt allowance.
Vacancy rate minus planned gross revenue + any miscellaneous income.
Potential gross rental revenue, less vacancy and uncollectible account losses, plus income from associated sources.
The total yearly revenue generated by the rental property after deducting vacancy losses and adding miscellaneous income.
The ratio of the revenue-producing property’s sale prices to its yearly effective gross income.
A loan’s true rate or yield, regardless of the amount listed on the debt instrument.
Actual interest rates charged for the utilization of borrowed cash. The effective rate is determined by the amount borrowed as well as the amount and date of the needed payback.
The amount of money paid in interest on a loan.
A property’s average lease rate per square foot after negotiating discounts such as free rent, construction allowances over the cost of building standard goods, or the costs of the landlord assuming a tenant’s current lease.
A payment amount on certain mortgage notes, typically buydown varieties, that allows lower payment amounts computed with an “effective rate” less than the face rate.
The genuine rate of return after all costs and discounts have been deducted.
in contrast to the nominal rate, the actual rate of return or repayment
Rental income less financial incentives such as no-rent periods during the lease term.
Income taxes diminish the going-in IRR on a property acquisition or development by a percentage amount.
The tax liability divided by the market due or selling price of the property.
An investment’s return is calculated by taking into account the price paid, the length of time held, and the interest charged. This means that the effective yield on a discounted mortgage is more than the interest rate. Consider a one-year, IO percent simple interest loan for $ 1,000,000 with four discount points charged by a lender. However, the borrower is still required to pay back the original $10,000 plus interest, even though they only received $9,600. As a result, instead of receiving a 10% return, you’ll receive a 14.6 percent return on your investment of $1,400 plus $9,600.
A measure of how well or efficiently a space can get the job done with the least amount of time, money, energy, and materials.
How much of a property you can use and how much you can rent out. See also add-on factor, load factor, and rentable-to-useable ratio. Formula: Efficiency% = Useable square feet/Rentable square feet
A studio apartment is a small, secluded housing unit. Living area, bedroom, and kitchenette are all in one space.
Markets in which all important information is reflected in market prices instantly and completely. Participants in efficient markets are unable to gain above-average market yields on a continual basis. The strong form of the efficiency hypothesis is the belief that a market is entirely efficient.
In times of flooding or high groundwater levels, feces deposited by a soil-absorption waste system may seep or run onto the ground or into a creek or river.
The number of resource units needed to execute an activity.
A method of leaving a property; the inverse of gaining entry.
Access from a building to a public road or exit.
A way out of a building or piece of land.
Legal action by a property owner to reclaim their property where there is no landlord-tenant relationship.
The removal of a trespasser (possible adverse possessor) or a tenant at sufferance whose lease has ended, or in an action by a mortgagee to obtain possession from a defaulting mortgagor, who is not legally in possession of real property. Expulsion is an example of this (see: eviction).
Short-term responsiveness of the real estate supply in response to rising prices.
Second, the ability to maintain supply or demand regardless of price changes in an economics phrase.
It’s possible to reverse the direction of pipe or conduit with the help of an electrical or plumbing installation.
Housing for those who are at least 62 years old. The federal fair housing statute does not require senior housing to admit families with children. Owners of “near elderly” (i.e., 55-plus-year-olds) housing can, but are not required, to accept a family with children under the Housing for the Older Persons Act (HOPA). At least 80% of the inhabitants of this home must be 55 or older, but there are other standards that must be met as well.
A line of action that can be taken in the event of a violation of contract. Liquidated damages, for example, can be retained by the seller if a buyer defaults on a purchase agreement, but the seller must choose whether to submit the deed and suit for specific performance or damages. Although the seller can choose to pursue all available remedies, he or she is unable to do so.
States that have abolished dower and curtesy have a minimum part of the deceased spouse’s probate inheritance, such as one-third, which a deceased spouse’s surviving spouse can claim instead of any sum specified in the deceased spouse’s will. So, for example, even though she wasn’t mentioned in her husband’s will, the wife might be able to claim an inheritance.
A provision that allows a surviving spouse to inherit the majority of the decedent’s possessions.
Where the service line for the electricity is.
Metal wires that get hot when an electric current goes through them. They are mostly used in baseboard heaters, electric water heaters, and other appliances.
An engineer who specializes in the design and building of electro systems for power generation and distribution, as well as electrical circuits in general.
The point at which electricity enters a system.
Most electrical work necessitates a separate permit.
The Electrical Contractor did some preparatory work before the insulation was applied.
Preparation for and passing municipal electrical final inspection by the electrical contractor.
The house telephone and power lines protrude through the floor at numerous intervals allowing convenient installation of the telephones and power equipment on the first floor of a business building.
A natural or artificial energy field can be found around power lines, electrical appliances in the home, and office equipment with an electric motor. EMFs, despite some evidence to the contrary, do not meet the criteria for being classified as health dangers.
Energy spreads over space as a result of an increasing interplay of electric and magnetic fields. EMR is often referred to as “electromagnetic energy.”
A digital format that confirms the signature of a particular individual on a piece of paper. An encrypted digital signature is also referred to as a “digital signature.”
A mechanism for keeping track of a project’s costs as it is being designed.
In the sales comparison technique, the relevant attributes are utilized to compare and modify the selling prices of comparable properties.
Vertical distance between a datum point, such as mean sea level, and a point or item on the earth’s surface; not to be confused with height, which refers to points or things above the earth’s surface.
Any side of the house shown on a flat piece of paper.
Plans that show how a building’s front and sides will look after it is finished.
The page of the blue prints that shows how the house or room would look if a vertical plane went through it.
Mortgaged income properties can be valued by calculating a capitalization rate based on the debt to equity ratio.
Fruit (called fructus industriales), like grapes or com, that is grown each year and harvested by hand or machine. Before harvest, emblements are considered personal property and can be taken by tenants even if harvest is not until after they’ve finished their tenancy. Forbidden: Landlord can’t terminate lease without tenant having right to reenter land for harvesting crops raised by tenant. If the property is sold before the tenant has finished harvesting, the purchase agreement should clearly address these issues of reentering and harvesting.
Real Estate Glossary E [Part 2]