421a<\/strong>: A New York property tax abatement that is granted to real estate developers who are developing new multi-family residential housing buildings. In order to qualify, developers must build affordable housing units. The program is administered by the New York City Department of Housing Preservation and Development (HPD).<\/p>\n Abandonment<\/strong>: Lack of use of a property can lead to abandonment which causes a loss of rights.<\/p>\n Abatement<\/strong>: A legal term meaning, the ending, lessening, reduction, removal of something.<\/p>\n Abutting Property<\/strong>: Properties that share at least one common border.<\/p>\n Abstract of Title<\/strong>: A brief summary of the recorded history of all recorded documents and proceedings related to a property. An abstract of title is usually prepared by an attorney or title company in order to make sure there aren\u2019t any liens, easements or other problems associated with the property.<\/p>\n Acceleration Clause<\/strong>: A provision in a contract that allows a lender to require a borrower to repay all or part of an outstanding loan if the borrower does not meet certain requirements. The acceleration clause in a contract will outlined the requirements the borrower needs to meet.<\/p>\n Acceptance<\/strong>: Agreement to the terms in a clause which makes a contract binding.<\/p>\n Accession<\/strong>: Gives property owners the right to everything produced by their land.<\/p>\n Actual Income<\/strong>: Also known as gross income or gross pay, this is an individual\u2019s total income before taxes and other deductions.<\/p>\n Adjustable Rate Mortgage (ARM)<\/strong>: A loan with a varying interest rate that is periodically adjusted based on an index, usually the LIBOR or prime rate. Also known as a variable rate mortgage.<\/p>\n Adjusted Sales Price<\/strong>: An appraisal practice used to indicate the price of a comparable property after adjustments have been made to account for the differences between the original and comparable property.<\/p>\n Ad Valorem Tax<\/strong>: Tax that is calculated based on the assessed value of a property.<\/p>\n After Tax Cash Flow (ATCF)<\/strong>: Cash flow available after taxes.<\/p>\n Agency<\/strong>: Outlines the legal relationship between a real estate professional and their clients. Each state has their own agency laws so it\u2019s important to double check what the laws are in your state. The most common types of agency in real estate are the seller agency, buyer agency, dual agency, and designated agency.<\/p>\n Agency Disclosure Statement<\/strong>: A form that discloses whether the agent is representing the seller, buyer or both in a transaction.<\/p>\n Agent<\/strong>: A licensed real estate professional who represents another person in a real estate transaction. An agent is a member of the National Association of REALTORS.<\/p>\n Air Rights<\/strong>: Rights that guarantee the undisturbed use and control of space above land without interference from others. Air rights can be transferred separately from the land.<\/p>\n Alcove Studio (ALC)<\/strong>: An \u201cL Shaped\u201d studio that is larger than a standard boxed shaped studio. The extra alcove is usually used for sleeping. Some will convert these spaces into a bedroom space or use a partition to break up the sleeping area from the main living area.<\/p>\n Alteration Agreement<\/strong>: A written agreement that allows for any renovations, modifications, repairs, etc. This agreement must be signed by the co-op shareholder-tenants before any actions outlined in the agreements occur.<\/p>\n Amenities<\/strong>: Enhancements that buildings offer its residents. The term amenities typically encompass any facilities, common areas or services available to residents within and sometimes even beyond the property. Examples of amenities include a doorman, gym (aka fitness center\/health club\/etc.), garage, children\u2019s playroom, package-receiving, common lounge, rooftop, etc.<\/p>\n Amenity Fees<\/strong>: Some buildings may charge an amenity fee to residents for access\/usage of amenities. The fee can be charged on an annual or monthly basis. The cost can also vary depending on the building.<\/p>\n Americans with Disabilities Act (ADA)<\/strong>: A civil right law established in 1990 that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public. The purpose of the law is to ensure that people with disabilities have the same rights and opportunities as everyone else.<\/p>\n Amortization<\/strong>: The decrease in a loan balance because of periodic installments that pay down both principal and interest.<\/p>\n Amortized Loans<\/strong>: Loans that are paid off in monthly payments instead of leaving the borrower with a large balloon payment at the end of the loan term.<\/p>\n Annual Percentage Rate (APR)<\/strong>: The amount of interest on your total loan amount that you\u2019ll pay on an annual basis. The APR is expressed as a percentage and it includes the interest rate and other charges such as points, mortgage broker fees, etc.<\/p>\n Appraisal<\/strong>: An unbiased opinion of the value of a property calculated based on object data such as the property\u2019s condition, location and features as of a specific date. Appraisals are important in the buying and selling of a property.<\/p>\n Appraisal Report<\/strong>: A report that includes the results of an appraisal.<\/p>\n Appraiser<\/strong>: A trained person who works on providing an unbiased value of a property.<\/p>\n Appreciation<\/strong>: The increase in value of a property over time.<\/p>\n Asbestos<\/strong>: Refers to six naturally occurring fibrous minerals that are extremely durable and able to resist heat, fire, and electricity. Due to its durable properties, asbestos has been used for many years in a number of different commercial and industrial settings, as well as in a wide range of consumer products. Sadly, asbestos is best known for its role in causing mesothelioma, a rare and deadly cancer that can develop in the linings of the lungs, abdomen or heart after inhalation. Though its use has diminished, there are still many products that contain asbestos, especially in older homes.<\/p>\n Asbestosis<\/strong>: This degenerative respiratory condition results from the formation of scar tissue plaques on the surface of the pleura (lung linings). It can be a precursor to the onset of mesothelioma.<\/p>\n As Is Clause<\/strong>: A provision in a purchase agreement that states the buyer accepts the property in its present condition.<\/p>\n Assigning a Contract<\/strong>: The transfer of a contracts obligations and rights to a property to another party prior to the closing.<\/p>\n Assignment<\/strong>: The action of transferring rights or interests from one party (the assignor) to another party (the assignee). All contracts are assignable unless the contracts states otherwise.<\/p>\n Associate Broker<\/strong>: A real estate broker who works for another broker.<\/p>\n Assumption<\/strong>: When on party takes over responsibility of a loan for another party. Generally speaking, the lender must approve.<\/p>\n Bachelor Apartment<\/strong>: Similar to a Studio apartment, the bachelor apartment combines the living room, kitchen and sleeping area into one space. However, a bachelor apartment is often times much smaller than a studio apartment and can be found with kitchenettes vs a full kitchen.<\/p>\n Bait and Switch<\/strong>: The action (generally illegal) of advertising a listing that is an apparent bargain (too good to be true), with the intention of substituting inferior or more expensive listings.<\/p>\n Balcony<\/strong>: An outdoor space connected to your apartment that can be private or shared with adjacent neighbors.<\/p>\n Balloon Mortgage<\/strong>: Loans with small, periodic payments that still leaves the loaner with a single, lump payment that includes both the balance of principal and interest not yet paid off at the end of the loan term.<\/p>\n Basement<\/strong>: Considered a story and defined as, that portion of a building below the first floor joists where at least half of its clear ceiling height is above the average elevation of the finished grades along the perimeter of the building. A basement is not the same as a cellar, which is not counted as a story and its clear ceiling height is below the average elevation.<\/p>\n Basis<\/strong>: A key factor in calculating the capital gain or loss after the sale of a property.<\/p>\n Before Taxes Cash Flow (BTCF)<\/strong>: Gross amount of income before consideration of taxes.<\/p>\n Bearing Wall<\/strong>: A wall that carries the load for the roof, ceiling, and\/or floors.<\/p>\n Bedroom<\/strong>: Laws vary by state but there are features that define a bedroom. 1.) The minimum square footage of a bedroom must be at a minimum around 80 square feet. 2.) A bedroom must also measure at least 8 feet in any horizontal direction unless the apartment contains three or more bedrooms in which case the minimum dimension drops to 7 feet. 3.) Minimum ceiling height has to be at least 8 feet. If the bedroom is in a basement then the ceiling height requirement drops to 7 feet. 4.) Two means of egress: There have to be two ways out of a bedroom. Traditionally, these would be a door and window. 5.) The window opening must be a minimum of 5.7 square feet. At least one window needs to open up to a street, yard, garden or court on the same lot. Contrary to popular belief, a bedroom does not have to have a closet.<\/p>\n Bill of Sale<\/strong>: The document which is used to transfer the title to property from one party to another.<\/p>\n Bi-Weekly Mortgage<\/strong>: A fixed rate mortgage that you pay on a bi-weekly basis rather than monthly.<\/p>\n Blanket Mortgage<\/strong>: A mortgage that covers a whole building rather than an individual unit.<\/p>\n Blind Advertisement<\/strong>: Requirement that all advertisements placed by an agent\/broker must indicate that the advertiser is an agent\/broker, or give the name of the agent\/broker and his\/her telephone number and firm affiliation.<\/p>\n Blockbusting<\/strong>: An illegal practice of persuading owners to sell their property often at a lower price by suggesting that property values in the neighborhood are going to decrease due to the change of the neighborhood racial and ethnic composition.<\/p>\n Board Package<\/strong>: A package presented to a co-op or condo board of managers and directors. The board package includes financial qualifications, reference letters, employment verification, and other information necessary in the board application. Condo boards are much more informal and will generally require less information as a co-op board.<\/p>\n Bona Fide<\/strong>: A Latin term meaning good faith.<\/p>\n Breach of Contract<\/strong>: When one parties breaks the terms outlined in a contract.<\/p>\n Bridge Loan<\/strong>: A short-term loan that covers the period between two transactions, such as the selling of one property and the buying of another. The period covered by a bridge loan can vary from two weeks to three years.<\/p>\n Broker<\/strong>: An individual employed on a fee or commission basis as an agent to bring two parties together and assist them in a real estate transaction. A real estate broker can work independently and\/or hire real estate salespersons. The broker\u2019s exam is generally longer and more difficult than a salesperson\u2019s exam. Brokers are held to higher standards of knowledge.<\/p>\n Broker Protection Clause<\/strong>: A clause that protects brokers by ensuring that they will earn their commission if the property was sold under certain circumstances within a certain period of time.<\/p>\n Broker\u2019s Agent<\/strong>: An agent that works directly for the broker. The broker\u2019s agent still owes the same amount of fiduciary duty that the broker does to either the buyer or seller.<\/p>\n Brokerage<\/strong>: The business or establishment of a broker.<\/p>\n Brownstone\/Townhouse (BSTN, TWHHSE, TH)<\/strong>: A brownstone is a townhouse that is usually a 3 to 5 story building, named for traditional \u201cbrown stone\u201d used in the fa\u00e7ade. It may be a single family building or have been converted into multiple apartments. The original structures were built in the 19th or early 20th centuries. Brownstones are usually desirable for their unique architecture; fireplaces and \u201chomey\u201d feel. However, standard brownstones tend to lack elevators and other \u201cluxury\u201d type amenities.<\/p>\n Budget Mortgage<\/strong>: A mortgage that allows where insurance and tax payments are consolidated into the principal and interest payments. This allows the loaner to write only one check for all expenses.<\/p>\n Building Code<\/strong>: The Uniform Fire Prevention and Building Code, as modified by local amendments. Governs the construction details of buildings and other structures in the interest of the safety of the occupants and public.<\/p>\n Building Department<\/strong>: Protects a municipality\u2019s residents by seeing that code restrictions are followed, and construction and renovation are done by licensed professionals.<\/p>\n Building Inspection<\/strong>: The process whereby government authorities, usually state or local, are charged with ensuring compliance with prevailing building codes.<\/p>\n Building Insurance<\/strong>: Insurance that covers the structure (such as walls, roofs, and floors), fixtures, and fittings of your home.<\/p>\n Building Manager<\/strong>: Oversees the management of a building for a property owner.<\/p>\n Building Permit<\/strong>: Official documents from a local government or other authority that allow the beginning of a construction or remodeling project.<\/p>\n Bump Clause<\/strong>: A clause that allows the seller to keep the property for sale on the market until a certain condition stated in the contract is met.<\/p>\n Bundle of Rights<\/strong>: All the rights associated the ownership of a property. The rights include the right of possession, right of control, right of exclusion, right of enjoyment, and right of disposal.<\/p>\n Buydown<\/strong>: A technique where a loaner lowers a loan\u2019s interest rates and monthly payment by paying additional funds to a lender at the beginning of a loan term.<\/p>\n Buyer\u2019s Broker Contract<\/strong>: A contract that states that the buyer will pay the broker a commission once the buyer purchases a property.<\/p>\n Buyer\u2019s Agent<\/strong>: An agent who represents and owes their fiduciary duties to the buyer.<\/p>\n Buyer\u2019s Broker<\/strong>: A broker in an exclusive agency relationship with the buyer.<\/p>\n Buyer\u2019s Market<\/strong>: A market which includes a large selection of options at favorable prices for the buyer.<\/p>\n By-Laws<\/strong>: The rules by which the co-operative and condominium association operates. This includes the purpose of the building, rules for elections and voting, and frequency of board of directors or shareholders meetings.<\/p>\n Call Provision<\/strong>: A clause that lets the lender demand full payment of a loan.<\/p>\n Cancellation<\/strong>: The action of terminating a contract. Termination does not undo the actions already taken under the contract.<\/p>\n Cancellation Clause<\/strong>: A provision in a lease or other contract which confers upon one or more of the parties to the lease the right to terminate the party\u2019s or parties\u2019 obligations thereunder upon the occurrence of the condition or contingency set forth in the said clause.<\/p>\n Capacity<\/strong>: The ability to perform acts, such as entering a contract.<\/p>\n Capital Expense<\/strong>: An expense used to improve the property.<\/p>\n Capital Gain<\/strong>: The profit you make off of a property\u2019s increase in value.<\/p>\n Capital Loss<\/strong>: The monetary loss you incur from a property\u2019s decrease in value.<\/p>\n Capitalization Rate<\/strong>: Also known as the cap rate, the capitalization rate is the rate of return on a real estate investment property based on the income the property is expected to generate. The cap rate is the ratio of net operating income (NOI) to property asset value. Generally speaking, a cap rate above 3% for a condo unit and a cap rate above 4% for a co-op unit is considered great in New York.<\/p>\n Cash Flow<\/strong>: The amount of money available after removing all expenses. If you have more money coming in than going out, then that\u2019s positive cash flow. If you have more money going out than coming in, then that\u2019s negative cash flow.<\/p>\n Cash on Cash Return<\/strong>: The ratio of cash flow to the total number of cash invested expressed as a percentage. This ratio essentially calculates the cash income earned on the cash invested in a property.<\/p>\n Caveat Emptor<\/strong>: The rule that the buyer alone is responsible at the end of the day for checking the quality of a property.<\/p>\n Cease and Desist List<\/strong>: Once an owner registers to join this list, brokers and agents are prohibited from soliciting them. An owner has to own property in a cease and desist zone in order to file to join the cease and desist list.<\/p>\n Cease and Desist Zone<\/strong>: Areas designated by the New York Department of State in which owners can file indicating that they do not want to sell, list or lease their property out to others.<\/p>\n Central Heating<\/strong>: This system provides warmth to the whole interior of a building (or portion of a building) from one point to multiple rooms. When combined with other systems in order to control the building climate, the whole system may be an HVAC (heating, ventilation and air conditioning) system.<\/p>\n Certificate of Occupancy (C of O)<\/strong>: A document issued by a government authority to a builder after all inspections have been made and the property is deemed fit for occupancy.<\/p>\n Certificate of Title<\/strong>: A document prepared by an attorney or title company after reviewing all public documents associated with a title to a property.<\/p>\n Certificate of Transfer<\/strong>: A court document that verified the transfer of title from a deceased person to his\/her heirs or devisees.<\/p>\n Chain of Title<\/strong>: A chain of deeds and other documents disclosed in public records that show the transfer title to land from one owner to the next.<\/p>\n Classic 6, 7 or 8<\/strong>: The term \u201cclassic\u201d followed by a number (usually starting at six) refers to the number of rooms in an apartment unit. These apartments can be found in buildings built in New York City prior to 1940. For example, a \u201cclassic six\u201d refers to two bedrooms, a living room, dining room, kitchen, and a smaller bedroom that can be referred to as a maid\u2019s room.<\/p>\n Clear Title<\/strong>: A title free from any defects or encumbrances. Also known as a marketable title.<\/p>\n Client<\/strong>: The person who is represented by a broker, lawyer, or other professional they employed. A client can be a buyer, seller or both.<\/p>\n Closing<\/strong>: The final stages in a real estate transaction where the property ownership is transferred from seller to buyer.<\/p>\n Closing Costs<\/strong>: Costs associated with the transfer of property in addition to the sales price. Costs can include the broker\u2019s commission, title insurances, appraisal fees, attorney fees, etc.<\/p>\n Closing Date<\/strong>: The date in which the final step in a real estate transaction is to be completed. The closing date can usually occur several weeks after an offer is officially accepted.<\/p>\n Closing Statement<\/strong>: A document prepared by the closing agent that itemizes all the expenses and costs paid by the buyer and seller to close the transaction.<\/p>\n Clouding the Title<\/strong>: A title that comes with a claim, encumbrance or defect that makes the title unmarketable.<\/p>\n Co-broke<\/strong>: An arrangement between two brokerage firms to share a commission. Normally used when one broker is the exclusive listing agent for a seller and the other broker represents the buyer.<\/p>\n Color of Title<\/strong>: A title that appears to look good and marketable but is not actually. This is why it is important to have your attorney check over the history of the title to make sure it is a clear title.<\/p>\n Commingling<\/strong>: The action of mixing a client\u2019s money held in trust with personal funds.<\/p>\n Commission<\/strong>: Money paid to the broker for services provided.<\/p>\n Common Areas or Common Elements<\/strong>: The common area is the area in the property or in the building that is available for use by all owners. These can including the parking lot, hallways, and recreational facilities.<\/p>\n Common Charges<\/strong>: Monthly charges that cover management fees and operating expenses in a condominium building. Taxes are not included in this charge. See Maintenance Fees for co-ops.<\/p>\n Comparables<\/strong>: Other similar properties located in the same market area as the subject property.<\/p>\n Comparative Market Analysis (CMA)<\/strong>: The method of analyzing the approximate value of a property by comparing the subject property to other comparable properties that have sold.<\/p>\n