Real Estate Glossary

Clear, plain-English definitions of the 157+ terms buyers, sellers, landlords, and renters run into — so the paperwork and jargon never catch you off guard.

Buying a Home

Pre-Approval: A lender's written assessment of how much you may be able to borrow, based on a review of your income, assets, debts, and credit. It is stronger than a pre-qualification and signals to sellers that financing is likely available, though it is not a final loan guarantee.
Pre-Qualification: An informal early estimate of how much a buyer might be able to borrow, based on information the buyer provides without full verification. It gives a rough budget range but carries less weight than a pre-approval.
Down Payment: The portion of a home's purchase price the buyer pays upfront in cash, rather than financing through a loan. The amount is typically expressed as a percentage of the purchase price.
Earnest Money: A deposit a buyer puts down to show good faith when making an offer on a home. It is usually held by a neutral third party and applied toward the down payment or closing costs at settlement.
Mortgage: A loan used to buy a property, where the property itself serves as collateral. The borrower repays the lender over time, usually in monthly payments that include principal and interest.
Principal: The amount of money borrowed in a mortgage, not including interest. As the loan is repaid, the principal balance decreases over time.
Interest Rate: The percentage a lender charges for borrowing money, applied to the loan's outstanding balance. It directly affects the size of monthly mortgage payments.
Annual Percentage Rate (APR): A broader measure of the cost of a loan that includes the interest rate plus certain fees and other charges, expressed as a yearly percentage. It is meant to help compare the total cost of different loan offers.
Fixed-Rate Mortgage: A home loan with an interest rate that stays the same for the entire term. Monthly principal and interest payments remain constant, making them predictable over the life of the loan.
Adjustable-Rate Mortgage (ARM): A home loan with an interest rate that can change periodically based on market conditions after an initial fixed period. Payments may rise or fall over time depending on the terms.
Closing Costs: The fees and expenses, beyond the down payment, that buyers and sellers pay to finalize a real estate transaction. These can include lender fees, title charges, taxes, and prepaid items.
Closing: The final step in a home purchase when ownership is legally transferred from the seller to the buyer. At closing, documents are signed, funds are exchanged, and the buyer typically receives the keys.
Escrow: An arrangement where a neutral third party holds funds or documents until the conditions of a transaction are met. It is also used after closing to hold money for ongoing expenses such as property taxes and insurance.
Contingency: A condition written into a purchase contract that must be met for the sale to proceed. Common examples include financing, home inspection, and appraisal contingencies, which can allow a buyer to exit the deal if conditions are not satisfied.
Home Inspection: A professional examination of a home's condition, covering systems and structures such as the roof, foundation, plumbing, and electrical. It helps buyers understand the property's condition before completing the purchase.
Appraisal: An independent estimate of a home's market value performed by a licensed appraiser. Lenders typically require one to confirm the property is worth the loan amount.
Title: The legal right to own and use a property. A clear title means there are no unresolved claims or liens that would interfere with the transfer of ownership.
Title Insurance: A policy that protects buyers and lenders against financial loss from defects in a property's title, such as undisclosed liens or ownership disputes. It covers issues that may have existed before the purchase.
Deed: A legal document that transfers ownership of real property from one party to another. It is signed at closing and typically recorded in public records.
Private Mortgage Insurance (PMI): Insurance that lenders often require when a buyer makes a down payment below a certain percentage of the purchase price on a conventional loan. It protects the lender, not the borrower, and can usually be removed once enough equity is built.
Equity: The portion of a property's value that the owner actually owns, calculated as the market value minus any outstanding loan balances. Equity generally grows as the mortgage is paid down or the property's value rises.
Amortization: The process of paying off a loan over time through regular payments of principal and interest. Early payments go mostly toward interest, while later payments apply more toward the principal balance.
Loan-to-Value Ratio (LTV): A comparison of the loan amount to the appraised value or purchase price of a property, expressed as a percentage. Lenders use it to assess risk, with a lower ratio generally meaning more equity upfront.
Property Taxes: Taxes assessed by local governments based on a property's value, used to fund services such as schools and infrastructure. They are often collected as part of the monthly mortgage payment through an escrow account.
Comparative Market Analysis (CMA): An evaluation of recently sold and currently listed comparable properties used to estimate a home's market value. It is commonly used to help guide pricing decisions when buying or selling.

Selling a Home

Listing Agreement: A contract between a home seller and a brokerage that authorizes the brokerage to market the property for sale. It sets the terms of the arrangement, including duration and how the brokerage is compensated.
Listing Price: The price at which a home is publicly advertised for sale. It is the seller's asking figure and is often different from the final sale price.
Multiple Listing Service (MLS): A database that real estate brokerages use to share information about properties for sale. Listings entered into an MLS are distributed to participating agents and many public real estate websites.
For Sale By Owner (FSBO): A property that the owner markets and sells without hiring a listing agent to represent them. The seller handles tasks such as advertising, showings, and paperwork themselves or with limited outside help.
Flat-Fee Listing: A service in which a seller pays a fixed, one-time fee to have their home listed, rather than a percentage of the sale price. The specific services included vary by provider.
Offer: A written proposal from a buyer stating the price and terms under which they are willing to purchase a home. The seller can accept it, reject it, or respond with a counteroffer.
Counteroffer: A seller's or buyer's response that changes one or more terms of a previous offer. It restarts the negotiation, and the other party can accept, decline, or counter again.
Purchase Agreement: The signed contract that sets out the agreed price and terms for buying and selling a home. It becomes binding once both the buyer and seller accept and sign it.
Seller Disclosure: A document in which a seller reports known information about a property's condition and history. Disclosure requirements vary by state and by the type of property.
Days on Market (DOM): The number of days a property has been actively listed for sale before going under contract. It is a common measure of how quickly homes are selling in an area.
Staging: The process of preparing and arranging a home to make it more appealing to potential buyers. It can involve cleaning, decluttering, rearranging furniture, or adding decor.

Mortgages & Financing

Debt-to-Income Ratio (DTI): A comparison of your total monthly debt payments to your gross monthly income, shown as a percentage. Lenders use it to evaluate your ability to take on and repay a mortgage.
Conventional Loan: A mortgage that is not insured or guaranteed by a government agency. These loans follow guidelines set by private lenders and secondary-market entities and often have specific credit and down-payment requirements.
FHA Loan: A mortgage insured by the Federal Housing Administration, designed to make homeownership more accessible to qualifying buyers. It often allows smaller down payments but requires mortgage insurance.
VA Loan: A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible service members, veterans, and certain surviving spouses. It often allows financing with little or no down payment and no private mortgage insurance.
VA Funding Fee: A one-time fee most VA loan borrowers pay in place of monthly mortgage insurance, calculated as a percentage of the loan amount that varies with down payment size and prior use of the benefit. Veterans receiving VA disability compensation and certain other borrowers are exempt; current rates are published on VA.gov.
Certificate of Eligibility (COE): The VA document that confirms a borrower meets the service requirements for the VA home loan benefit and shows available entitlement. Lenders can usually retrieve it electronically; it verifies eligibility for the program but is not itself a loan approval.
VA Entitlement: The amount of a VA loan the Department of Veterans Affairs will guarantee on a veteran's behalf. Borrowers with full entitlement face no VA-imposed loan limit; entitlement can be restored after a VA loan is paid off and the home sold, allowing the benefit to be reused.
VA Loan Assumption: The transfer of an existing VA loan — its balance, term, and interest rate — to a qualified buyer, who need not be a veteran, subject to loan-servicer approval. Assumptions carry a reduced VA fee, and sellers typically seek a formal release of liability and, when applicable, substitution of entitlement.
Minimum Property Requirements (MPRs): The baseline safety, soundness, and sanitation standards a home must meet for VA financing, checked during the VA appraisal. Items that fall short generally must be corrected before closing; the review is narrower than a full home inspection.
Points (Discount Points): Fees paid to a lender at closing, with one point equal to one percent of the loan amount, to lower the loan's interest rate. Paying points raises upfront costs in exchange for a reduced monthly payment.
Refinance: Replacing an existing mortgage with a new loan, often to change the interest rate, term, or loan type. Homeowners may refinance to lower payments, shorten the term, or access home equity.
Home Equity: The portion of a property's value that the owner truly owns, calculated as the market value minus any outstanding loan balances. Equity grows as the loan is paid down and as the property's value rises.
Loan Term: The length of time over which a mortgage is scheduled to be repaid, commonly 15 or 30 years. A longer term usually means lower monthly payments but more interest paid overall.
Prepayment Penalty: A fee that some loans charge if the borrower pays off all or part of the mortgage early. Not all loans include this charge, so reviewing the loan terms shows whether one applies.

Closing & Legal

Closing Disclosure: A Closing Disclosure is a standardized document that lists the final loan terms, projected monthly payments, and closing costs for a mortgage. Lenders are generally required to provide it to the borrower at least three business days before closing.
Title Search: A title search is an examination of public records to confirm a property's legal ownership and identify any liens, claims, or other issues affecting it. It is typically performed before a sale to verify the title can be transferred cleanly.
Settlement Statement: A settlement statement is an itemized document that lists all the financial details of a real estate transaction at closing. It shows the amounts owed by and credited to both the buyer and seller.
Lien: A lien is a legal claim against a property that secures payment of a debt or obligation. Liens generally must be resolved before the property can be sold with clear title.
Recording: Recording is the process of filing a deed or other document with the appropriate government office to make it part of the public record. This creates an official, searchable history of property ownership and claims.
Disclosure: A disclosure is information a seller is required to share about a property's known condition, defects, or history. Disclosure requirements vary by state and type of property.
Contingency Period: The contingency period is the window of time during which a buyer can complete contingencies, such as inspections or financing approval, before the contract becomes firm. If conditions are not met, the buyer may be able to withdraw under the contract terms.
Power of Attorney: A power of attorney is a legal document that authorizes one person to act on another's behalf, including signing closing documents. It can be used when a party cannot attend the closing in person.
Proration: Proration is the division of ongoing property expenses, such as taxes or homeowners association dues, between buyer and seller based on the closing date. Each party pays for the portion of the period they own the property.
Lease Agreement: A lease agreement is a legally binding contract between a landlord and tenant that sets the terms for renting a property. It typically covers rent, duration, deposit, and the responsibilities of each party.
Security Deposit: A security deposit is money a tenant pays a landlord at the start of a lease to cover potential damages or unpaid rent. State and local laws govern how it must be held and when it must be returned.

Renting & Leasing

Tenant: A person who rents and occupies a property under the terms of a lease or rental agreement. The tenant agrees to pay rent and follow the rules set out in the agreement.
Landlord: The owner of a property who rents it out to a tenant in exchange for rent. The landlord is generally responsible for maintaining the property in a habitable condition.
Rent: The regular payment a tenant makes to a landlord in exchange for the right to occupy a property. The amount and due date are specified in the lease or rental agreement.
Month-to-Month Tenancy: A rental arrangement that renews automatically each month rather than running for a fixed term. Either party can usually end it by giving the required advance notice.
Sublease: An arrangement in which a current tenant rents out all or part of their rented space to another person, called a subtenant. The original tenant typically remains responsible to the landlord under the main lease.
Eviction: The legal process by which a landlord removes a tenant from a rental property, usually for reasons such as nonpayment of rent or violating the lease. It must follow the procedures required by applicable law.
Renter's Insurance: An insurance policy that protects a tenant's personal belongings and may provide liability coverage within a rented home. It does not cover the building structure, which is the landlord's responsibility to insure.
Lease Renewal: The process of extending a lease for an additional term once the original term ends. The renewal may keep the same terms or include changes agreed to by both parties.
Rental Application: A form a prospective tenant completes so a landlord can evaluate them for a rental, often including income, rental history, and references. It is used to help the landlord decide whether to offer a lease.
Co-Signer: A person who signs a lease alongside the tenant and agrees to be responsible for rent and obligations if the tenant does not pay. Co-signers are often used when a tenant has limited rental or credit history.
Lease Term: The length of time a lease is in effect, such as six months or one year. It defines the period during which both the tenant and landlord are bound by the agreement.
Notice to Vacate: A written notification, given by either the tenant or landlord, stating that the tenant will or must leave the property by a certain date. The required amount of advance notice is usually set by the lease or applicable law.
Habitability: The legal standard requiring a rental property to be safe and livable, including working utilities, structural soundness, and sanitary conditions. Landlords are generally required to maintain this standard throughout the tenancy.
Normal Wear and Tear: The gradual, expected deterioration of a property that happens through ordinary use over time, such as minor carpet wear or faded paint. Landlords typically cannot charge a tenant's deposit for this kind of aging.
Guarantor: A party who guarantees the tenant's financial obligations under a lease and agrees to pay if the tenant defaults. The role is similar to a co-signer and provides the landlord added assurance.
Pet Deposit: A fee or refundable amount a tenant pays for the right to keep a pet in a rental, intended to cover potential pet-related damage. Whether it is refundable depends on the terms of the lease and applicable law.
Prorated Rent: Rent calculated for only part of a rental period, used when a tenant moves in or out partway through a month. The amount is based on the number of days the tenant actually occupies the property.
Joint and Several Liability: A lease term making each tenant individually responsible for the full rent and obligations, not just their share. This means the landlord can seek the entire amount owed from any one of the co-tenants.

Property & Valuation

Fair Market Value: The price a property would likely sell for on the open market between a willing buyer and a willing seller, with neither under pressure to act and both having reasonable knowledge of the relevant facts. It reflects typical market conditions rather than a forced or rushed sale.
Comparables (Comps): Recently sold properties that are similar to a subject property in location, size, age, and features, used as reference points to estimate value. Adjustments are made for differences between each comparable and the subject property.
Assessed Value: The dollar value a local government assigns to a property for the purpose of calculating property taxes. It is set by a tax assessor and can differ from the property's market value.
Appreciation: An increase in a property's value over time. It can result from market conditions, improvements to the property, or changes in the surrounding area.
Depreciation: A decrease in a property's value over time, often due to wear, age, or changing market conditions. In some contexts it also refers to an accounting method for spreading an asset's cost over its useful life.
Square Footage: A measurement of a property's floor area, commonly used to compare homes and estimate value. Measurement standards can vary, so listed square footage may differ from a survey or appraisal figure.
Price Per Square Foot: A property's price divided by its total square footage, used as a quick way to compare the relative cost of similar properties. Because it ignores features like condition, lot size, and location, it is only one of several factors in valuing a property.
Sale Price: The final amount a buyer and seller agree to for a property, as recorded when the transaction closes. It may be higher or lower than the original listing price.
Property Tax: A recurring tax charged by local governments based on a property's assessed value, typically used to fund services like schools, roads, and emergency services. The amount owed depends on the assessed value and the local tax rate.
Lot Size: The total land area associated with a property, usually expressed in square feet or acres. It can influence a property's value and the potential uses of the land.
Capitalization Rate (Cap Rate): A measure used to evaluate income-producing property, calculated as the property's annual net operating income divided by its value or purchase price. It is one way investors compare the relative return of different rental or commercial properties.
Net Operating Income (NOI): The income a property generates after subtracting operating expenses such as maintenance, insurance, and property management, but before mortgage payments and income taxes. It is a common figure for evaluating the performance of rental or investment property.

Offers & Negotiation

Multiple Offer Situation: A scenario in which a seller receives more than one offer on a property at roughly the same time. The seller may accept one, counter one or several, or ask buyers to submit their highest and best terms.
Highest and Best Offer: A request from the seller asking interested buyers to submit their strongest terms, typically by a set deadline. Buyers usually have one chance to revise their offer before the seller decides.
Escalation Clause: A provision in an offer stating that the buyer will automatically increase their offer above competing offers, up to a stated maximum. It is often paired with proof that a genuine higher competing offer exists.
Backup Offer: A secondary offer that a seller accepts in writing while a primary offer is already under contract. It moves into first position only if the primary contract falls through.
Concession: Something one party agrees to give the other to help close the deal, such as covering certain closing costs, completing a repair, or adjusting the timeline. Concessions are negotiated and written into the purchase agreement.
Contingency Removal: The point at which a buyer formally waives or satisfies a condition in the contract, such as financing, inspection, or appraisal. Once removed, the buyer generally loses the protection that contingency provided.
Kick-Out Clause: A contract provision that lets a seller keep marketing the home after accepting an offer that depends on the buyer selling their current property. If another buyer makes an acceptable offer, the first buyer must remove the home-sale condition within a set time or release the contract.
Seller's Disclosure: A document in which the seller reports known information about the property's condition and history. Buyers often review it before finalizing an offer, and its contents can influence negotiations over price or repairs.
As-Is Sale: A sale in which the seller states they will not make repairs or improvements, and the property is sold in its current condition. Buyers may still inspect the home, but they accept responsibility for known and discovered issues.
Offer Expiration: A deadline written into an offer by which the other party must respond before the offer is no longer valid. If the deadline passes without acceptance, the offer typically becomes void.
Inspection Period: A defined window after an offer is accepted during which the buyer can examine the property and raise concerns. Depending on the contract, the buyer may request repairs, renegotiate, or withdraw within this period.
Repair Request: A buyer's formal ask, usually after an inspection, for the seller to fix specific issues or provide a credit instead. The seller can agree, decline, or propose an alternative, which can reopen negotiations.
Closing Date Negotiation: The process of agreeing on when ownership officially transfers and the transaction is finalized. Parties may adjust this date to fit moving plans, financing timelines, or the sale of another property.

Title, Deeds & Ownership

Chain of Title: The complete historical sequence of ownership transfers for a property, from the earliest recorded owner to the current one. Title professionals review this chain to confirm each transfer was valid and that ownership can be traced without gaps.
Cloud on Title: Any unresolved claim, lien, or irregularity in the public record that raises a question about who rightfully owns a property. A cloud generally needs to be cleared before ownership can transfer cleanly to a new buyer.
Quitclaim Deed: A deed in which the grantor transfers whatever interest they may have in a property without promising that their title is valid or free of other claims. It is often used between family members or to correct a name or recording error rather than in a typical arm's-length sale.
Warranty Deed: A deed in which the seller guarantees they hold clear title and have the right to transfer it, and agrees to defend the buyer against future ownership claims. It offers the buyer more protection than a quitclaim deed.
Grant Deed: A deed in which the grantor promises that the property has not already been sold to someone else and is free of undisclosed encumbrances created by the grantor. It provides a middle level of assurance between a warranty deed and a quitclaim deed.
Encumbrance: Any claim, restriction, or liability attached to a property that may affect its use or transfer, such as a lien, easement, or deed restriction. An encumbrance does not necessarily prevent a sale but is disclosed so the buyer understands what they are taking on.
Easement: A legal right allowing someone other than the owner to use a portion of a property for a specific purpose, such as a utility company maintaining lines or a neighbor accessing a shared driveway. Easements typically stay with the land even after ownership changes.
Marketable Title: Ownership that is sufficiently free of defects, liens, and disputes that a reasonable buyer would accept it without objection. Establishing marketable title is typically a condition of completing a sale.
Joint Tenancy: A form of co-ownership in which two or more people hold equal interests in a property with a right of survivorship, meaning a deceased owner's share automatically passes to the surviving owners. It is one of several ways multiple parties can hold title.
Tenancy in Common: A form of co-ownership in which two or more people each hold a separate, potentially unequal share of a property and there is no automatic right of survivorship. Each owner can generally sell or pass on their individual share.
Abstract of Title: A condensed written history summarizing the recorded documents that affect a property's ownership, including past deeds, liens, and legal actions. It is used to review the property's title history in one place.
Deed Restriction: A limitation written into a property's deed that governs how the land may be used, such as restrictions on building type or lot use established by a developer or prior owner. These restrictions usually remain in effect for future owners unless legally removed.

Taxes & Insurance

Property Tax Assessment: The value a local taxing authority assigns to a property to calculate the property taxes owed on it. The assessed value may differ from the market value and is set by a county or municipal assessor.
Millage Rate (Mill Levy): The rate used to calculate property taxes, expressed in mills, where one mill equals one dollar of tax per one thousand dollars of assessed value. Local governments set this rate to fund services like schools, roads, and emergency services.
Homestead Exemption: A reduction in the taxable value of a primary residence that lowers the property tax owed by the homeowner. Eligibility rules and the amount of the exemption are set by each state or local government.
Tax Proration: The division of property taxes between the buyer and seller at closing based on the portion of the tax year each party owns the home. This ensures each party pays only for the days they hold the property.
Special Assessment: An additional charge levied by a local government or homeowners association to pay for a specific improvement or project, such as new sidewalks, sewers, or shared building repairs. It is separate from regular property taxes or dues.
Tax Lien: A legal claim placed on a property by a government when the owner fails to pay taxes owed on it. The lien must typically be resolved before the property can be sold or refinanced.
Homeowners Insurance (HO-3 Policy): A common type of homeowners insurance policy that covers the structure of the home, personal belongings, and liability, subject to the policy's terms and exclusions. It is often required by lenders as a condition of financing.
Replacement Cost Coverage: An insurance valuation method that reimburses the cost to rebuild or replace damaged property without deducting for depreciation. It contrasts with actual cash value coverage, which factors in wear and age.
Flood Insurance: A separate insurance policy that covers flood damage, which is typically excluded from standard homeowners insurance. It may be required for properties located in designated high-risk flood zones.
Hazard Insurance: Coverage within a homeowners policy that protects the physical structure of a home against specified perils such as fire, wind, or hail. Lenders commonly require it to safeguard the value of the collateral securing a loan.
Mortgage Escrow Account (Impound Account): An account a lender uses to collect and hold portions of a borrower's monthly payment to pay property taxes and insurance premiums when they come due. It helps ensure these recurring obligations are paid on time.

Property Types & Construction

Townhouse: A multi-floor home that shares one or more walls with adjacent units but has its own separate entrance. Owners typically own both the interior and the land beneath their unit, unlike a condo.
Condominium (Condo): A privately owned individual unit within a larger building or community, where the owner holds title to the interior space. Common areas like hallways, roofs, and grounds are shared and maintained collectively, usually through a homeowners association.
Duplex: A single building divided into two separate living units, each with its own entrance. The two units may sit side by side or stacked on different floors, and they can be owned together or separately.
Manufactured Home: A home built entirely in a factory to a federal HUD construction code and then transported to its site. It differs from a modular home, which is built to local or state building codes.
Modular Home: A house constructed in sections at a factory, then transported and assembled on a permanent foundation at the building site. These sections are built to the same state and local building codes as site-built homes.
Bungalow: A small, typically one-story or one-and-a-half-story house, often with a low-pitched roof and a front porch. The style emphasizes compact, efficient living space on a single level.
Split-Level: A home design where the floors are staggered, so a short set of stairs connects living areas set at different heights rather than full stories. This layout often separates living, sleeping, and lower-level spaces into distinct zones.
Accessory Dwelling Unit (ADU): A secondary, self-contained living space located on the same lot as a primary residence, such as a basement apartment, converted garage, or detached cottage. It includes its own kitchen, bathroom, and sleeping area.
Slab Foundation: A foundation made of a single thick layer of concrete poured directly on the ground, with no basement or crawl space beneath. The home is built directly on top of this concrete pad.
Crawl Space: A shallow, unfinished area beneath a house that raises it off the ground, leaving room to access plumbing, wiring, and ductwork. It is too low to stand in but allows maintenance underneath the structure.
Stick-Built (Site-Built): A home constructed piece by piece on its permanent lot using lumber framing, rather than assembled from factory-made sections. This is the traditional method for building houses on location.
Mixed-Use Property: A building or development that combines more than one type of use, such as retail or office space on lower floors with residential units above. This design blends commercial and living spaces within the same property.

Listings & Marketing

Active Contingent: A listing status indicating the seller has accepted an offer, but the sale still depends on certain conditions being met before closing. The property may still appear in searches, and some sellers continue to accept backup offers.
Pending: A listing status meaning an offer has been accepted and any major conditions have been satisfied, so the sale is moving toward closing. Pending listings are typically no longer accepting new showings or offers.
Coming Soon Listing: A marketing status that announces a property will be available for sale shortly, before it is open for showings or offers. It is used to build buyer interest ahead of the active listing date.
Curb Appeal: How attractive a property looks from the street, including the exterior, landscaping, and entryway. Strong curb appeal can shape a buyer's first impression before they step inside.
Home Staging: The process of arranging furniture, decor, and lighting to present a home in its most appealing way for showings and listing photos. The goal is to help buyers picture themselves living in the space.
IDX (Internet Data Exchange): A framework that lets brokerages display MLS listings on their own websites under agreed rules. Some or all listings shown through IDX may belong to other firms rather than the website's brokerage.
Listing Syndication: The distribution of a property's listing from one source, such as an MLS or brokerage site, out to multiple public real estate portals and websites. It helps a single listing reach a broader audience across many platforms.
Open House: A scheduled time when a listed property is open for interested buyers to tour without an individual appointment. It is a marketing event used to attract foot traffic and showcase the home to many visitors at once.

Rental & Property Management

Gross Rent Multiplier (GRM): A quick valuation measure found by dividing a property's price by its annual gross rental income. Investors use it to compare income properties at a glance before doing deeper analysis.
Vacancy Rate: The percentage of rentable units or time that a property sits unoccupied over a given period. It helps owners gauge demand and estimate income lost to empty units.
Triple Net Lease (NNN): A commercial lease in which the tenant pays property taxes, insurance, and maintenance in addition to base rent. It shifts most ongoing operating costs from the landlord to the tenant.
Gross Lease: A lease in which the tenant pays a single flat rent and the landlord covers most operating costs such as taxes, insurance, and maintenance. It contrasts with net leases, where the tenant pays those costs separately.
Operating Expense Ratio: The share of a property's gross income consumed by operating expenses, shown as a percentage. It gives a sense of how efficiently a rental property is being run.
Tenant Estoppel Certificate: A signed statement from a tenant confirming key lease facts such as rent amount, term, and any disputes. Buyers and lenders often request it to verify lease details during a sale or financing.
Holdover Tenant: A tenant who stays in a rental unit after the lease term has ended without signing a new agreement. The terms that apply during this period depend on the lease and local law.
Rent Roll: A document listing each unit in a rental property along with details like tenant, rent amount, lease dates, and occupancy status. It gives a snapshot of the income a property currently generates.
Pro-Rated Rent: Rent calculated for a partial rental period, such as when a tenant moves in or out partway through a month. The charge reflects only the days the unit is actually occupied.
Common Area Maintenance (CAM): Charges that cover upkeep of shared spaces such as lobbies, hallways, parking lots, and landscaping. In many commercial leases, tenants pay a share of these costs alongside their base rent.