Real Estate Glossary G [Part 2]

CONTINUED-FROM

Continued from…

:point_right: Real Estate Glossary G [Part 1]

Grace period

A set amount of time after an obligation is due that a party can still meet it without being in default. For example, if a mortgage payment is due on March 1, but the mortgage has a ten-day grace period, the mortgagor is not in default as long as the payment is made by March 10. Sometimes called “days of grace.”

Most of the time, the debtor does not need to be given written notice before a financial default. But when the default isn’t about money, like when a property isn’t kept clean or insured, the grace period usually doesn’t start until written notice is given.

The amount of time a party has before being regarded in default.

The period of time during which a borrower must make a payment in order to avoid going into default.

A time when a mortgage payment or other debt is overdue but not yet in default. Most mortgages have a set amount of time during which they can be paid without penalty or going into default.

Grade

The difference in height between a hill, road, sidewalk, or slope and level ground. Most of the time, the slope of a road or lot is given as a percentage of the level or horizontal distance. For example, a 5 percent grade means that for every 100 feet of level distance, 5 feet rise. The grade level of a lot is how high the land is in general. Rough grade is a surface where topsoil is spread to bring the level of the lot up to where it will be when it is finished.

The elevation at any given time or ground level. The process of levelling soil or the specified quality of a piece of manufactured wood.

Grade beam

At a level with or just below ground level, a foundation is poured for a building.

Gradient

The inclination or slope of the terrain; this term is frequently used for systems such as streams and roadways.

The slope or rate of elevation increase or reduction of a surface, road, or pipe. Gradient is measured in inches per horizontal linear foot of ascent or decrease.

Grading permit

Approval to alter the land’s topography.

Graduated lease

During the period of the lease, the rent is subject to fluctuation. In the case of a new business tenant, a graduated lease is typically used.

A lease that says the rent will be a certain amount for a certain amount of time, and then the rent will go up or down over a certain amount of time.

Graduated lease payment

A lease payment that rises by a certain amount over the length of the lease.

Graduated payment mortgage (GPM)

A mortgage with lower payments at the beginning and rising payments over a certain period of time.

A mortgage that permits a borrower to borrow extra money during the initial years of the mortgage in order to minimize the monthly mortgage payment requirement during those initial years. This additional loan is added to the mortgage and is repaid over time through increasing debt service requirements.

A type of mortgage in which the monthly payment for principal and interest goes up by a certain amount each year for a certain number of years, and then stays the same for the rest of the mortgage’s term. The FHA-245 programme is only for people who live in their own homes. There are five different versions of the plan.

The FHA-245 programme is especially good for people who are just starting out in their careers and expect their incomes to go up. It lets them buy a home with lower monthly payments at first than they could get with a fixed payment plan. This plan helps people get loans by making repayment plans based on how much money they expect to make and how much the value of their home will go up. Because FHA underwriting rules are based on how much principal and interest must be paid each month for the first year, people who use FHA-245 can qualify for larger loan amounts than they would normally be able to with other types of financing.

There are three things that are unique to the graduated-payment mortgage:

  • The size of each payment is smaller than it would be with a fixed-payment loan.
  • The first few years of the loan have negative amortization.
  • The note’s face value is more than the money that was given out at closing.

A mortgage with a graduated payment schedule includes smaller payments in the early years, but increases on a regular basis until it reaches an amortisation level.

Graduated rent

Describes a lease in which the contract rental rate is subject to predetermined increases.

Graduated rental lease

A lease in which the rent starts out at a fixed, often low rate, but goes up at regular times as the lease term goes on. Such increases could be based on a percentage of how much the land has gone up in value since the last appraisal. This gives long-term commercial tenants a chance to start a business without having to spend a lot of money in the beginning. It may also be better for the owner from a tax point of view, if he or she wants to reduce cash flow during a high-tax time. A graduated rental lease can be a great way to find tenants in a tough market or for a building that is hard to rent. Also known as a tiered lease.

Grain

Wood’s fibres, in terms of their size, direction, arrangement, look, or quality.

Grain rent

Paying rent with grain or other crops in exchange for the right to farm the land. It’s more often called “sharecropping.”

Grandfather clause

A common way to say that something is still allowed even though the law has changed. For example, a developer who already has county planning approval to build on minimum-size lots of 10,000 square feet can still build on those lots even if the current zoning rules are changed to require minimum-size lots of 12,000 square feet. The developer is protected by the subdivision plan that was first approved. This is similar to use that doesn’t follow the rules.

Under state laws about the education needed to get a real estate license, current licensees may be “grandfathered” out of these new requirements.

A provision that allows acts that were permitted under a previous legislation to continue under the new law.

A clause that allows an action that was previously legal and acceptable to continue notwithstanding a change in the rules or regulations.

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Granny flats

A slang word for extra apartments in areas where only one family can live. Most zoning laws don’t allow these separate rental units, which can be found above a garage, in an attic, or in a basement. They are also known as “in-law apartments.”

Grant

The act of giving someone else ownership of a piece of real estate. In the past, the most important words in a real estate transfer were grant, bargain, sell, warrant, and convey. The grantor gives the grant to the grantee in the form of a deed. If there is a leasehold, an assignment of lease is used to change the title of the leasehold.

A deed conveying ownership of real estate.

Grant deed

A deed that contains an implicit assurance that the grantor possesses title and that it is not burdened in any manner except as specified in the deed. A warranty deed is quite similar to a grant deed. It is the most common type of deed in California.

A type of deed in which the grantors promise that they haven’t given the property to anyone else before, that they haven’t put any liens on it other than what’s written in the deed, and that they will give the grantee any title to the property that they may get in the future. In California, grant deeds are often used, especially when the buyer also gets a title insurance policy.

Grantee

The recipient of a grant; the purchaser.

The holder of a real estate interest who has received a transfer of such interest.

The individual who receives a real estate conveyance from the grantor. The grantee must be a natural or legal person who exists at the time of the conveyance and is capable of taking title. Grantors cannot usually impart title to themselves alone. However, they may impart ownership to themselves and others; for example, John Park may convey title to John Park and George Ant as joint tenants.

The following are some general uses of these principles:

  • If the grantee dies before the deed is delivered, the deed is null and void. (Delivery is considered to have occurred when the executed deed is placed in escrow, rather than when it is actually given to the grantee.)
  • If the grantee is a corporation, an informal club, or a society that did not file its incorporation documents prior to the deed’s delivery, the deed is null and void due to a lack of a competent grantee.
  • A deed transferring an estate to the heirs of a live person is null and void since no one can be an heir during the lifetime of his or her ancestor. (The right phrase is "to Joe Young and his heirs and assigns… ")
  • When the grantee’s name is missing, the deed is often ineffectual in conveying complete title until the name is filled in with the grantor’s agreement.

There are numerous variations of title ownership when title is transferred to different grantees. If a mother and father purchase a home with their daughter and son-in-law, title may be held as follows: “To James Lynch and Carolee Lynch, husband and wife, as joint tenants, an undivided one-third interest and Paul Jones and Mary Jones, husband and wife, as tenants by the entirety, an undivided two-thirds interest of Lot 123…” As a result, following James Lynch’s death, Carolee will acquire a one-third undivided interest as tenant in common with Paul and Mary Jones, who retain their two-thirds undivided stake as tenants by the entirety.

An individual who gains a property stake by a deed or grant.

Grantor

The seller is the individual who transmits real estate via deed.

The person or entity transferring the grantee’s real estate interest.

The individual who transfers title to or an interest in real estate. A grantor must be competent to convey; consequently, a mentally retarded individual cannot convey real estate title. A deed executed by a minor is normally voidable (not void) and may be revoked before or within a reasonable time after the grantee attains majority. A corporate grantor must be legally formed, have the authority to possess and impart title to real property, and be represented by a duly authorized official of the corporation.

Grantors must be identified clearly in a deed. Misspellings do not render a deed ineffective unless the difference is so large that the grantor cannot be readily identified. Grantors should impart title under the same name that they obtained title under. If the grantor’s name has changed, the transfer should indicate the change, such as "Joan Henry, who gained title under the name Joan H. Adams… "

Both the grantor and the grantee must be living individuals and cannot be the same person. A husband, for example, cannot convey his stake in a joint tenancy to himself as a tenant in common. However, even if Gomez and Jackson were deceased at the time of the conveyance, a conveyance to “Joe Gomez and Fred Jackson, their heirs and assigns” would be valid.

When title is vested in two or more people, they must each convey their own independent interest. Typically, all co-owners will sign a single deed, however separate deeds are entirely legitimate for transferring complete title to the grantee.

Even if one spouse is not a co-owner, that spouse should sign the deed conveying the other spouse’s property in order to release dower, courtesy, and/or homestead rights (if applicable). As a result, the grantor’s marital status should be included in the deed. In fact, the recorder may refuse to accept a deed for recording unless it includes the grantor’s marital status and residence.

A person who, by a deed or grant, conveys an interest in a property to a grantee.

Grantor-grantee index

Public record books kept in the official recorder’s office, listing all recorded instruments as well as the liber (book) and page numbers where the whole and exact document can be obtained. Separate index books are kept for grantors and grantees, allowing a document to be found by searching under either name. These books are alphabetically indexed by grantor in the grantor index and grantee in the grantee index. They include the following information: the type of instrument, the grantor’s and grantee’s names, the date of the instrument, the book, page, and date of recording, and a description. Also known as name-indices.

One way for searching a title using the grantor-grantee indexes is as follows: Abe Adams had a property on Interstate 890. Adams conveyed the farm to Bill Benny by deed in 1925. Benny deeded the land to Clarice Carver in 1950. Carver borrowed $50,000 from the Commercial Bank and mortgaged the property in 1960. Carver deeded the farm to Diane Dealer in 1974, and now Dealer has a contract to sell the land to Elbert Edwidge.

The fundamental title search process is to track each owner back via the grantee index to the source of his ownership, commencing with the most recent. In the preceding scenario, the title searcher would begin by searching the grantee index under Dealer’s name from the present back to 1974, when he would find the deed to Dealer from Carver. He would then search under Carver’s name from 1974 to 1950, where he finds the deed from Benny to Carver; then search under Benny’s name from 1925 to 1890, where he finds the deed from Adams to Benny; and finally search under Adams’s name from 1925 to 1890. The searcher would next seek in the grantor index under Adams’ name from 1890 to 1925, then Benny’s name from 1925 to 1950, Carver’s name from 1950 to 1974, then Dealer’s name from 1974 to the present. In this manner, the searcher will locate the mortgage to the Commercial Bank, which is listed in the grantor’s index under Carver’s name in 1960.

Granularity

When an underlying pool of loans is made up of smaller loans, this is achieved. Pools with a few higher-value loans are considered to be lumpier or less granular.

Gratuitous agent

An agent who is not paid for his or her services. Real estate agents are often compensated based on the sale of a property. Even if unpaid, the agent still owes the principal full fiduciary or statutory duties. This may be true even if a licensed agent offers to assist a buddy.

Gravity model

According to Reilly’s Law of Retail Gravitation, shoppers will gravitate toward the largest retail location that is easily accessible.

Newton’s gravity equation defines gravity, or the flow potential (between two sites or locations), as directly proportional to the product of their masses (or size), and inversely proportional to the square of the distance between them: gravity = (mass mass) distance2. This model is used to account for a wide range of flow patterns in human and economic systems.

GRI

REALTORS® Institute graduate

Grid

Before the ceiling panels are put, the main and cross tees of a suspended ceiling system are constructed.

Grid system

The state-sponsored survey from which metes-and-bounds surveys can be drawn. It is extremely useful for surveying vast tracts of remote area land. It is also known as a coordinate system.

Gridiron

A phrase that refers to the rectangular street grid found in cities or subdivision projects.

Grievance period

A specific day or set of days during which the public may file complaints regarding tax assessments or other municipal issues.

Gross area

It is the overall floor area of a building, excluding spaces like courtyards and patios, measured from the exterior of its walls. Generally, the gross floor area in commercial leasing is the whole perimeter of the floor, measured to the inner finish of the permanent outer building walls or to the glass line in newer structures, with no provision for structural projections and a minimum ceiling height of 71/2 feet.

In a building context, the total square footage of a given floor.

Gross asset value

The appraised value of a REIT’s or a real estate fund’s properties.

Gross floor area

A retail agency’s gross floor area is equal to the entire gross leasable space plus the square footage of the shared areas.

All shared areas are included in the overall floor area.

Gross income

For income tax purposes, any revenue earned from any source, unless explicitly excluded under Internal Revenue Code restrictions.

Amount of money you make before taxes.

The entire amount of rent earned from an investment property.

The complete income obtained from a business, wages, or income producing property before adjustments or deductions for expenses, depreciation, taxes, and similar allowances - that is, all income, referred to as “the top line.”

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Gross income multiplier (GIM)

A strategy for evaluating the link between the most likely sales price and gross income. A gross rent multiplier is a term that is used sometimes.

A number that shows the relationship between gross income and sales price or value. It is used to figure out the market value of industrial and commercial properties. GIM is a ratio that shows how much an annual income is worth on the market. It is found by dividing price by gross annual income.

Gross leasable area (GLA)

The GLA is the standard for measuring retail space. It is just the sum of the space occupied by the tenant, and is thus comparable to the usable area of office tenants.

The overall floor area of a leased business facility, which may include restrooms, stairwells, elevators, and basements.

The whole floor space planned for tenant occupancy and exclusive use for which rent is paid, including any basements, mezzanines, or upper floors, measured in square feet from the midline of connecting partitions and exterior wall faces.

Measured from the centre line of joint partitions and the exterior wall faces, the gross leasable area includes all floors (basement, mezzanine, and upper) and is intended for the sole use of the tenant. Gross leaseable area (GLA) is the rented space that generates revenue from tenants.

Gross lease

The landlord pays all of the property’s operational expenditures under a lease.

An agreement in which the landlord pays for the tenant’s truces, insurance, repairs, and other expenditures (including some or all utilities and garbage removal).

A property lease in which the lessee pays a fixed rent while the lessor pays the taxes, insurance, and other obligations that come with ownership; sometimes known as a fixed or flat lease. The lessee pays some or all of the operational expenditures under a net lease. The vast majority of residential and commercial office leases are gross leases. The majority of residential ground leases, as well as commercial and industrial building leases, are net leases.

A lease in which the landlord covers all of the costs ordinarily associated with property ownership.

A rental agreement in which the renter pays a fixed quantity of money each month to cover all of the home owner’s expenses, including taxes, insurance, maintenance, utilities, and so on.

An arrangement in which the landlord is responsible for covering all of the costs of property maintenance and upkeep.

Gross leasing activity

It’s the total of all leases signed over a certain amount of time. This includes leases that are renewed and leases that are signed in a new building.

Gross operating income

Total income from a property’s operations before deducting all necessary operating costs. It is determined by subtracting vacancy and credit losses from potential rental income and any other income affected by vacancy. To determine a property’s gross operating income, use either the Cash Flow Analysis Worksheet or the Annual Property Operating Data form.

Gross potential income (GPI)

The quantity of rental income that would be generated if a building were to be completely occupied.

Gross profit ratio (GPR)

The net revenue is split by the contract value in an installment transaction.

Gross rent multiplier (GRM)

The ratio of a property’s sale price to the gross rentals collected.

A good starting point for determining the market value of income-producing residential property. To arrive at an acceptable average, the multiplier is calculated by dividing similar sales by actual or expected monthly rentals. A rough estimate of the property’s market worth can be obtained by multiplying the estimated rent of the property under consideration by the multiplier. Because gross rent does not account for variations in vacancies, uncollectible rents, property taxes, management, and other unforeseeable events, only an approximate estimate of value is given. The estimate should normally be based on unfurnished rentals to be most accurate.

The gross rent multiplier, also known as the gross income multiplier, has been gradually dropping in recent years since it is a fairly basic guideline that does not take into account the tax implications of different types of investors and does not acknowledge other sources of financing.

A technique that can be used by financiers to estimate a company’s worth. With this technique, the investor’s projected gross rents at the end of the first year are multiplied by a set factor to determine the property’s market value (known as the gross rent multiplier extracted from the marketplace).

Ground

The quickest method to the planet’s surface using electricity.

Ground area

The area of a building calculated from the ground floor’s exterior dimensions. The ground covering area is the ratio of a building’s floor space to its land area.

Ground cover

Grass, ivy, and other plants are grown to prevent soil erosion.

Ground data

Data collected on the ground, and information derived from it, as an aid to the interpretation of remotely recorded surveys, such as airborne imagery; in general, this survey should be conducted concurrently with the airborne surveys; data collected on weather, soils, and vegetation types and conditions are typical.

Ground fault circuit interrupter

A device that monitors and interrupts the flow of electrical current when a dangerous event occurs is fitted in outlet plugs.

Ground iron

Underneath the basement floor, plumbing and waste lines were built.

Ground lease

A lease of either undeveloped property or land that does not include any buildings or structures.

Leases of vacant land or a piece of an upgraded plot of real estate.

A long-term lease on a piece of land that is distinct from and exclusive of the improvements on that site.

A land lease on its own, sometimes secured by improvements made to the land. The ground lease, sometimes known as a land lease, is a method of separating ownership of the land from ownership of the buildings and improvements built on the land. In most cases, a net lease generates a long-term tenancy, generally for 55, 75, or 99 years. Ground leases are often not for more than 99 years because early state laws considered leases of 100 years or more to be transfers of fee simple title rather than leases.

The lease rent (also known as ground rent) is typically established for a period of 30 years (determined as a percentage of the assessed valuation of the land on the day of lease execution), with the balance of the rent to be renegotiated on or before the specified term’s expiration date. The new rent is usually based on a fixed percentage of the property’s appraised value minus the cost of on-site and off-site upgrades. The rent rise is often determined at the time of lease execution, and a graduated lease with fixed increases at specified intervals is agreed to.

A ground lease is employed in both residential and condominium buildings in some areas, but it is also prevalent in commercial property development. Because land ownership and improvement ownership are separated, capital gains taxes on land transactions can be avoided, and financing requirements can be reduced.

A lease arrangement in which a lessor leases a piece of property for a certain period of time in exchange for a price.

A long-term lease of undeveloped land, typically for development purposes, is possible.

Lease of the property alone. Typically, a tenant who plans to build a structure on the leased land will sign a long-term lease agreement with the landlord. A land lease decouples land ownership from building and improvement ownership.

Ground resolution

The region of the terrain covered by a detector’s instantaneous field of vision; ground resolution is governed by the remote sensing system’s altitude and the detector’s instantaneous field of view.

Ground truth

The name was coined for data and information gathered on surface or subsurface characteristics to help in the interpretation of remotely sensed data; the recommended words are “ground data” and “ground information.”

Groundwater

The mass of water occupying the subsoil and upper bedrock zone; the water occupying the saturation zone below the soil-water zone.

There is always water under the surface of the earth, no matter how it is standing or moving geologically. Water that flows in underground streams with beds and banks that can be seen is not considered groundwater.

The water comes from a well or aquifer beneath the ground.

Group boycott

A sort of antitrust violation in which many brokers agree to refuse or collaborate on less favorable terms with a third broker, typically in reaction to that broker proposing a cheap brokerage programme.

Grout

A fluid sand-cement mixture used to fill joints and small areas in masonry and tile work.

Cracks between different pieces in masonry or ceramics can be filled with a wet mixture of cement, sand, and water.

Growing equity mortgage (GEM)

A fixed-rate mortgage with an initial payment and interest rate that is normally equivalent to the current conventional market rate. The GEM has options for gradually increasing compensation (from 212 percent to 712 percent per year) depending on either predefined or index-linked increments. The additional payments are applied straight to principal, reducing both the period of the loan and the overall amount of interest paid significantly. The FHA 245 (a) programme is appealing to persons who have a restricted income but expect their monthly earnings to rise. These loans are eligible for FHA Section (b) insurance for one- to four-family homes, Section (k) insurance for properties that require refinancing and renovation, Section (n) insurance for cooperatives, and Section (c) insurance for condos.

The payment on a mortgage that is increased by a predetermined amount each year. The extra payments go toward paying down the main debt. The mortgage will be paid off in a shorter period of time as a result of this principle repayment.

Growth moratorium

A temporary halt on new growth in a community or jurisdiction.

Growth patterns

Because retail tends to follow population shifts and income concentrations over time, understanding how those trends might affect a market’s sales and revenue potential is crucial when conducting retail trade area analyses.

Guaranteed mortgage certificate (GMC)

Freddie Mac’s debt instrument used to raise funds for its secondary market activity. Freddie Mac unconditionally guarantees each GMC, which represents an undivided interest in a broad, geographically diverse group of residential mortgages. Interest is paid to the security holder every six months. The principal is only paid once a year.

Guaranteed sale program (GSP)

Some brokers provide a service in which they commit to pay the owner of a listed property a predetermined amount if the property does not sell within a certain length of time. This allows the owner to buy a replacement property no matter how long it takes to sell the listed property.

In addition to the sales commission, the broker usually charges a fee. Brokers should be aware that the Internal Revenue Service considers property obtained under a guaranteed sales scheme to be dealer property under the IRC. (Contact the dealer.)

The guaranteed sale agreement must be carefully prepared to include all rights and obligations. Due to owner complaints that some brokers fail to deliver on their claims, state licensing officials are closely scrutinizing these programmes.

Guarantor

A third party to a contract who agrees to fulfill the promises if the original promisor fails to do so.

Guaranty

A promise or security made by one person (the guarantor) to make sure that another person (the obligor) will keep his or her promises to a third party (the guarantor) (the obligee). Lenders are becoming more likely to require a mortgagor to find someone to guarantee that a secured loan will be paid back, especially when the borrower is a new or financially weak company.

A borrower’s promise to repay a loan or creditor.

Guardian

A person designated by a court or by will to have lawful custody and care of another’s person or possessions (called a ward). The ward could be a minor, deranged, or even a spendthrift. If it is in the best interests of the ward, the guardian may sell the ward’s property with court consent and without the need for a real estate license. A guardian’s deed would provide the grantee with legal title. A guardian ad litem is a person designated by a court to pursue or defend a legal action on his or her ward’s behalf.

Guest car ratio (GCR)

The number of parking spaces provided to each living unit of guest use for the purposes of high-density housing development.

Guide meridians

The survey lines go due north-south, 24 miles apart, as employed in the government (rectangular) survey method. Guide meridians compensate for the convergence of primary meridians caused by the curvature of the earth.

Gusset

Plywood is a type of flat wood that serves as a connector between wood parts. Wood trusses frequently employ this type of fastener.

Gutter

Drainage system for roof runoff that is installed below or below the fascia of a building.

Gyp board drywall, Wall board or gypsum

Incorporating Gypsum rock, this panel design covers interior walls and ceilings.

Gypsum plaster

Basecoat plaster gypsum. Designed to be mixed with sand and water.