Supervising the functioning of real estate for others. Renting space, collecting rentals, managing upkeep, budgeting, and so on are all part of the job.
Property activities are directed on a daily basis.
A real estate agent administers properties for landlords, ensuring that they always comply with legislation and regulations. They are also in charge of selecting tenants, collecting rentals, and coordinating upkeep, among other things.
The management of real estate as a company.
That part of the real estate business that deals with renting, managing, selling, and taking care of other people’s property. The property manager works hard to protect the investment and income from the property and to keep the building in good shape. In some states, people who do these things for other people and get paid for it must either have a real estate license or a special license to be a property manager. This usually doesn’t include janitors or security guards who only work for one property.
A property manager may work for a real estate office or a company that manages properties for many different owners. The main jobs of a property manager are to find and keep tenants, keep financial records and accounts, and take care of and maintain the property. The property manager’s main job is to rent out space. The property manager is in charge of three main tasks:
Budgeting and financial matters
Structures and grounds for physical management
Managing files and records for administrative tasks
The individual building manager is usually paid a straight salary and works for a property manager or the building’s owner. He or she is in charge of the building’s daily operations. Most of the time, resident managers live in one of the apartments on the property.
The property manager has a fiduciary duty to the owner, but he or she also has a duty to be honest, fair, and responsible to the people who live in the building. The owner wants the best net return on investment, while the tenants want the building to work as well as possible. To do all of these things, the property manager needs to know about property maintenance, renting, accounting, income tax, insurance, real estate law (especially contracts and agency principles), and dealing with people.
Most of the time, a property manager’s fees are based on a percentage of gross income (after taking into account vacancies and other rent losses) and not on operating costs.
Some of the most important parts of a well-written management agreement are the management agency’s responsibilities, the manager’s authority to rent and run the property, the length of the agreement, the fee, and the names of the parties and the property (usually not a legal description).
A charge paid to a management business in exchange for services given, generally based on a portion of the revenue earned.
An individual or company that runs better real estate. Lease and maintenance supervision are two of the things that managers do.
Those in charge of a property’s daily operations.
A document that is required by the federal Interstate Land Sales Full Disclosure Act when subdivided lots are sold across state lines. The property report is in the form of questions and answers, and it talks about things like the land’s topography, how easy it is to get to public transportation and schools, the state of the soil, the existence of liens and encumbrances, recreational facilities, whether or not there will be special assessments, and other similar things. A potential buyer must get a copy of the property report at least 48 hours before making a decision to buy, unless the buyer acknowledges in writing that they have received the report and inspected the property. If the buyer doesn’t get a property report at least 48 hours before the purchase, they have seven calendar days to change their mind and back out. If the buyer isn’t given a copy of the property report, the buyer has the right to back out of the deal at any time and get his or her money back with interest.
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A method for determining the worth of a property based on expected future income and the reversionary value of improvements and land in assessment.
A way to figure out how much a property is worth is similar to the building residual technique and the land residual technique of capitalization, except that the net income is thought to come from the whole property. The income is turned into a total value based on the idea that the land and the improvements on the land are a balanced economic unit that generates income as a whole.
Possession, use (enjoyment), and disposition of property are all rights in property.
The “bundle of rights” refers to the legal rights and duties that come with ownership.
A managed fund that invests in a range of listed property trusts and, on occasion, other property assets.
A legal entity that is formed to invest in a real asset for a specified period of time. Property management businesses manage large public syndicates.
The government puts a tax on either real property or personal property. Real estate has always been a popular thing to tax because it doesn’t move and is therefore easy to find, value, and tax. State and local governments are the only ones with the power to tax real estate in the United States. The Constitution of the United States says that the federal government can’t sell land.
The general real estate tax is made up of the taxes that different government agencies and cities charge on real estate. There’s the city, the town, the village, and the county. School districts or boards are also taxing bodies. These include elementary and high schools, junior colleges, and community colleges in the area. A taxing body can also be a drainage district, a water district, or a sanitary district. The legislatures of the different states have also given municipal authorities that run parks and forest preserves the power to charge real estate taxes.
General real estate taxes are collected by the government agency that has the right to do so. The money from these taxes is used to run or support the agency. These taxes are called “ad valorem taxes” because the amount of the tax depends on how much the property being taxed is worth. About 45 percent of real estate taxes go to education. The rest goes to welfare, roads, and public services (police, fire, hospitals).
Most state laws say that you don’t have to pay taxes on some kinds of property. Property owned by the government, religious groups, schools, and hospitals are common examples, as long as the property is used for tax-exempt purposes. Other state laws give homeowners, veterans, and the elderly special exemptions that lower their real estate taxes. Some states give tax breaks to businesses or to encourage farmers to use their land.
The tax makes things worse for the poor. That is, the tax rate has nothing to do with how much the owner makes or how much money they can pay. So, low-income families usually spend a bigger portion of their money on property taxes.
The general tax rate can be given in either dollars per $1,000 of assessed value or mills ($0.001) per dollar of assessed value. For example, if a property is worth $20,000 and the tax rate is $2.10 per $100 of assessed value, then the tax will be $420.
$20,000 + $100 = 200
Rx $2.10 = $420
At a millage rate of 21 mills per dollar, the same tax is $21 for every $1,000 of assessed value.
Taxes are based on how much a property is worth, which is what county and township assessors do. Most of the time, the land is valued separately from the building. Most of the time, the value of a building is found in a guide or set of rules that covers unit cost prices and rates of depreciation. Some states require that the assessed value of a property be a certain percentage of its true or market value and that it be reassessed every so often. If a property owner thinks that mistakes were made when figuring out how much their property is worth, they can usually appeal to the local board of appeal or board of review.
In some places, an equalization factor can be used to make sure that everyone pays the same amount of taxes when it is necessary to fix general differences in tax assessments across the whole state. In counties or districts where taxes need to be raised or lowered, this kind of factor could be used. The tax rate is applied to the equalized assessment when the equalization factor is used. For example, to raise the assessed value of a property that has been valued by the assessor at $10,000, the original assessment is multiplied by the equalization factor for the county where the property is located, which is 1.4 in this case. If the tax rate was $3.10 per $100 of equalized value, the tax would be $434.
$1 0,000 X $1.40 = $14,000
$14,000 + $100 = 140
140 X $3. 10 = $434
On January 1 of each tax year, the general real estate tax becomes a lien in most states. In some states, once the tax becomes a lien, it must be paid within a month or two. In a lot of states, you can pay the tax in two parts.
The taxes for a condo unit are added up for each unit separately. It is not necessary to assess and tax the common areas separately because the market value of each unit reflects not only the value of the unit itself but also the proportional value of ownership in the common areas.
When figuring out your income tax, you can deduct your real estate taxes. But special assessment taxes for improvement districts are not covered by the deduction. Before taking any deductions, you should talk to a tax authority because tax laws change and some situations are unique.
Local governments use an automatic lien to ensure that property taxes are paid.
A local government tax based on the assessed value of a piece of property.
Buying properties for less than market value and reselling for a profit is a profitable strategy.
a property investment that is well-managed. The Australian Stock Exchange lists the majority of trusts.
With a trustee and beneficiaries, collective investment plans in a vehicle or wrapper type based on UK trust law (investors).
the discrepancy between the market value of your property and the amount owed on it
The document used to make an offer; in some states, this is called a “proposed offer to purchase.”
Associated with a cooperative, an indefinite lease in which the lessee pays expenses but not rent.
A written lease between the owner/corporation and the tenant/stockholder of a cooperative apartment building that gives the tenant the right to live in a certain unit. It’s different from a typical lease between a landlord and a tenant because the tenant also owns stock in the company that owns the building.
In contrast to a typical rental agreement, there is no set amount for rent. The renter pays a fair share of the costs of running the corporation. When a unit is sold, the proprietary lease and the seller’s stock certificate are given to the new owner.
A document that grants a cooperative shareholder the right to occupy a unit under specified circumstances.
Own a business or property that brings in money.
To divide or distribute proportionately. With the exception of principal payments on a mortgage, most real estate costs are paid in advance. This includes rent, insurance (which is often paid for several years in advance), and other costs. But some bills, like real estate taxes and mortgage interest, are paid after they are due. At the end of a real estate deal, all of these costs are split between the buyer and the seller so that each person is responsible for the costs of running the property while they own it. For example, if a seller pays for fire insurance for three years and then sells the property after the second year, they would get a credit for the cost of the remaining year. The buyer then has to pay for the property’s insurance and gets the benefits of the policy for that last year. Most of the time, expenses are divided up based on the date of closing or the date of possession.
In some cases, a seller may be able to negotiate a clause into the sales contract that says any credits from the buyer will be used to pay off the balance of a purchase-money mortgage that the seller is taking back.
Some of the most common things that need to be prorated are sewer fees, loan interest, insurance premiums, rent, mortgage impounds, utilities, and real estate taxes.
At closing, costs and income are split between the buyer and seller of real estate, based on how long each party has owned the property.
The buyer and seller divide the prepaid or accumulated expenditures that are payable at the time of sale.
A potential buyer or seller of real estate; a potential client or consumer.
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The document contains all of a security’s material information.
A document that discloses the entire nature of a securities offering.
A piece of paper that describes a business, venture, project, or stock issue and gives information about it ahead of time. If a real estate project is being sold as a security, the prospectus must include all important details and investment aspects that could affect an investor’s decision about whether or not to buy. Usually, the term only applies to a security that is available to the public (registered). A private placement memorandum is the disclosure statement for a private offering.
A document that outlines the specifics of a particular investment opportunity.
Any group of people that federal, state, or local laws protect from discrimination. Some of these laws are about equal housing, employment, and credit. Protections in federal laws can be added to by state and local laws, but they can never be taken away.
In agreements such as credit default swaps, one party transfers the credit risk associated with particular assets to another in exchange for payment. A premium is usually paid up ahead.
The person who agrees to take up the credit risk of particular assets (often seen in transactions such as credit default swaps, as mentioned above). The protection seller offers credit protection payments to the protection buyer if the asset losses surpass a certain threshold.
A person who is temporarily allowed to act or do business for someone else. A power of attorney is a document that gives someone the right to act on behalf of someone else.
Condo association meetings often use proxies to vote or make sure there is a quorum. The proxy is not a binding agreement, and all it does is make sure that the owner’s vote will be cast at the meeting if the owner can’t be there.
For advanced market segmentation, a data-intensive, multivariate statistical technique is used.
Information about the lives, interests, hobbies, consumer preferences, and purchasing behaviors of a market area’s households; utilized in retail tenanting and housing design.
Consumption of economic commodities or services by one person does not affect the amount available for consumption by others. Also known as communal commodities.
The mechanisms used to supply public services to a place in real estate. Streets, sidewalks, sewer lines, water pipes, and so forth are all included.
Securities are being offered for sale to the general public. Such an issuance necessitates the filing of a prospectus with the Securities and Exchange Commission. A public offering is another term for this.
The federal government owns land that a private citizen can buy when it is no longer needed for government purposes. The Bureau of Land Management in the U.S. Department of the Interior is in charge of taking care of public land. The General Services Administration helps sell public land that has been fully built on.
Insurance purchased by businesses and individuals to protect themselves from claims made by members of the public who may have been hurt in some manner while on the premises.
A limited partnership with shares available to the general public, allowing for a large number of investors.
The document made by a sub-divider in accordance with state subdivision laws that say all important information about a subdivision must be made public before it can be sold to the public. No sale is legal unless the buyer gets a copy of the most recent public offering statement, has enough time to read it, and signs a receipt for it.
A public offering statement isn’t up-to-date until all changes have been added. So, if the project changes in a way that is important, the sub-divider must stop all sales until the right regulatory agency accepts the change and adds it to a new public offering statement.
The broadening of the public use notion by courts in eminent domain cases, no longer required actual physical use by the condemning agency to sustain condemnation.
Indirect property investments in real estate exchange-traded firms or exchange-traded bonds backed by real estate assets.
A public auction sale is one where people who have been invited or told about the auction have the chance to bid against each other at a place where the public can go.
A public notice auction sale of a property.
The need for actual physical usage by the condemning agency to warrant condemnation in eminent domain.
Exaggerated or overly positive comments or opinions, like “This property is a really good buy,” are not made as statements of fact, so they are not grounds for misrepresentation. One test is whether or not a reasonable person would have believed what was said. Saying something like, “The apartment has a great view,” is bragging because the potential buyer can see the view for themselves. On the other hand, saying something like, “The apartment has a great view of the lake,” when all of its windows face the street, would be lying.
A list of construction flaws that need to be addressed to bring the building in line with the specifications and designs. During a final examination of the structure, the property owner or the original architect can make a punch list to document any discrepancies in the construction plans or other issues. The building contractor can next begin correcting the flaws with the help of a punch list.
Prior to a sale, a list of items that need to be finalized or fixed.
The court gives punitive or exemplary damages to a person who has been hurt, as opposed to compensatory damages, which are given to make up for real losses. Punitive damages are meant to punish the person who did wrong, not to compensate the person who was hurt. As a general rule, you can’t get money damages for just mental pain caused by a breach of contract. Also, punitive damages aren’t covered by errors and omissions insurance, and you can’t get them unless you’ve actually been hurt.
A broker may have to pay punitive damages to a client who was scammed if the broker hired a salesperson who was known to scam real estate consumers.
For someone else’s life. A life estate pur autre vie is a life estate that is measured by the life of someone other than the grantee. George gives Harry the right to live in his mansion as long as Sally lives. Even though an estate pur autre vie is not a true estate of inheritance, it is usually thought of as a freehold estate that can be passed on to heirs, at least until the measuring life dies.
A prediction of a property’s future performance.
The right to acquire a property within a set time frame and at a set price.
A mortgage given to the seller at the same time as the purchase of real estate to protect the remainder of the purchase price that has not been paid.
A mortgage offered to a seller by a buyer to secure a portion of the purchase price. When a deed is granted, a purchase-money mortgage is often registered, confirming its priority over all other claims.
A mortgage that is formed at the same time as the transfer of ownership. Typically, when a seller lends a portion of a property’s selling price to the buyer, but it may also apply to any mortgage used to fund a purchase.
A mortgage that is given to the buyer as part of the price for a piece of real estate and is given to the buyer at the same time that the property is transferred. It is often a mortgage that a seller takes back from a buyer in place of the buyer’s cash. The purchase-money mortgage can be used to buy the property, but it is usually used to bridge the gap between the buyer’s down payment and a new first mortgage or a mortgage that the buyer is taking over. For example, if the buyer pays 10% in cash and gets an 80% first mortgage from a bank, the seller will usually take back a 10% purchase-money mortgage to cover the remaining 10%.
When a seller agrees in a contract of sale to take back a purchase-money mortgage for part of the purchase price, the terms and conditions of the mortgage, such as the interest rate and length, must be set out in detail. If they are not, the contract might not be enforceable because it is not clear or complete.
Depending on state law, if you don’t pay your purchase-money mortgage, you may or may not be able to get a deficiency judgment. In some states, a purchase-money mortgage doesn’t count toward the state’s maximum rate of interest on loans.
Technically, a purchase-money mortgage is any mortgage on real property that is signed by the buyer to secure the purchase money at the same time that the buyer gets the legal title to the property. Even if a mortgage is given to someone other than the seller, it can still be a purchase-money mortgage.
A title insurance policy, also called an owner’s policy, is usually given by a seller to a buyer as part of a real estate sales contract or contract for deed. It protects the property against problems with the title to the property on record.
People’s financial ability to purchase both durable and nondurable products.
A zoning law that lets a more restricted zone type (light industrial) be built in a less restricted zone (heavy industrial).
A way to buy more properties by refinancing the ones you already own and then putting the money from the loan into more properties.
Real Estate Glossary P [Part 6]