Elegran Real Estate

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A COMPREHENSIVE GLOSSARY TO EDUCATE OUR CIENTELE ABOUT THE
REAL ESTATE MARKET IN NEW YORK CITY AND BEYOND...


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ABSTRACT OF TITLE
A historical summary of the recorded instruments and proceedings on the title of a property.

AIR RIGHTS
The right to use or control the space above a property. Air Rights can also be sold, rented or leased to another party.

AGENCY
Relationship wherein an agent is employed by a principal to perform certain acts on the principle's behalf.

AIR RIGHTS
The right to use the open space above a property, without the right to use the surface of the property.

AMENITIES
The benefits from home ownership, such as a feature that enhances value.

AMORTIZATED LOAN
A loan for which the principal and the interest are payable in monthly or other periodic installments over the term of the loan.

APPRAISAL
An estimate of a property's value by an appraiser who is presumed to be an expert. One may have an appraisal to determine the offering price during a sale.

ASSESSMENT
Tax charge or levy against real estate according to established rates.

ASSIGNMENT
The process by which a right or contract is transferred from one party to another. Assigned contracts include mortgages, leases and deeds of trust

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BALLOON MORTGAGE PAYMENT
A large payment of a mortgage loan, larger than the regular required payment, often at the end of the loan term.

BROKER
A state licensed sales agent who acts for property owners and prospective purchasers in Real Estate transactions.

BROWNSTONE
A 19 th century house which shares a common wall with the neighboring property.

BUILDING AMENITIES
The assets that buildings offer its owners or tenants. These can include a doorman, health club, club, garage etc.

BUILDING RESTRICTIONS
Requirements in building codes that affect the size and appearance of the building.

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CANCELLATION CLAUSE
Proviso in contract or lease that confers the right to terminate obligations upon occurrence of the condition or contingency set forth in clause.

CAPITAL EXPENDITURE
an improvement that will have a life of one year or more and will increase the value of the property.

CAPITAL GAIN
Tax term involved with selling or exchanging a capital asset.

CAPITAL IMPROVEMENT
Any major structural improvement to real estate, which normally extends the life and value of the property.

CAPITAL LOSS
Amount by which the proceeds from the sale of a capital asset are less than the cost of acquiring it.

CAVEAT EMPTOR
Latin phrase for Let the buyer beware.

CERTIFICATE OF OCCUPANCY
In New York City, each building is required to have a Certificate of Occupancy which permits the structure to be occupied by members of the public. This means that the building is in compliance to health and building codes.

CLIENT
The broker's employer.

CLOSING DATE
Date on which the buyer takes ownership of the property.

CLOSING STATEMENT
A detailed accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.

CLOUD ON THE TITLE
Outstanding claim or encumbrance which, if valid, affects or impairs owner's title.

CO-BROKE
This is the term used when a broker sends out their listing to other brokers and other firms. The brokerage community then receives the listings and the commission will now be split evenly between the seller's broker and the firm that provides the buyer of the property.

COMMISSION
Payment to broker for services rendered; usually a percentage of the selling price.

COMMON AREA
The area on the property or in the building that is available for use to all owners and tenants.

COMPARABLES
Used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities.

COMPARABLES
Properties listed in an appraisal report that are similar to the subject property.

CONDITIONAL SALES CONTRACT
Contract for sale of property which states that the contract can be cancelled unless conditions of the contract have been fulfilled. A contract is usually condition for only a defined period of time.

CONDOMINIUM
An apartment or other unit, held in fee ownership, in which owners pay common charges for the maintenance of common areas.

CONDOP
A mixed use building subdivided into two or more condominium units, one of which is a co-operative.

CONTRACT
A legally binding agreement between two parties. To have a valid contract for the sale of Real Estate there must be:

  • an offer
  • an acceptance
  • competent parties
  • consideration
  • legal purpose
  • written documentation
  • description of the property
  • signatures of the principals

CONVERSION
Property changing to a different form of ownership, such as a condominium to a cooperative or a commercial building to a residential building.

CONVERTIBLE
A one or two bedroom apartment that has space to make another bedroom. The other bedroom can be made with the construction of a wall; however, the new bedroom must have a window in order for it to be legal.

CO-OPERATIVE
An apartment or other unit owned by a corporation specifically formed to own the building or buildings which form the co-operatives. Unit residents, called tenant shareholders, own stock and a proprietary lease which confer upon them the exclusive use of the unit they have purchased.

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DEED
a written document by which title of property is expressed from one party to another.

DUPLEX APARTMENT
An apartment that has two levels.

DEBT SERVICE
Annual monthly amount to be paid by debtor to repay borrowed money.

DEVELOPER
One who improves land with buildings, usually on a large scale, and sells to homeowners and/or investors.

DISCOUNT POINTS
An added loan fee charged by a lender to make the yield on a lower-than-market-value loan competitive with higher-interest loans.

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EGRESS
A way out.

EQUITY
Interest or value that an owner has in his or her property over and above any mortgage debts.

ESCROW
Written agreement between two or more parties providing that property be placed with a third party to be delivered to a designated person upon fulfillment or performance of some act or condition.

ESTATE
The word used to describe the collection of all assets of a deceased person. Also, the extent of interest a person has in real property.

ESTATE FOR LIFE
The interest of real property that ends with the death of a person.

EXCLUSIVE AGENCY LISTING
Listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission.

EXCLUSIVE RIGHT TO SELL
A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner or another broker.

EXECUTOR
Person or corporate entity designated in a will to carry out its provisions.

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FIDUCIARY
Person who acts on behalf of another and transacts business or handles money regarding property not the persons own. The relationship is characterized by trust and confidence.

FIXED-RATE MORTGAGE
A loan where the interest rate remains constant over the entire term of the loan.

FIXTURES
Personal property attached to the land or improvements that become part of the real property.

FLIP TAX
An amount of money paid by either buyer or seller at closing of co-operative apartment. Often it is a percentage of sale or it can be based on a per share basis.

FORECLOSURE
A procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default in payment or terms.

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GRACE PERIOD
Additional time allowed to perform an act or make a payment before a default occurs.

GRANDFATHER CLAUSE
If a new law is passed or an old is changed those people whose activity was legal under the previous law are allowed to continue because of this condition. This law is common with pets; some buildings that do not allow pets now, did in past, therefore, those owners are allowed to keep their pets.

GROUND LEASE
A lease of land only, on which the tenant usually owns a building or constructs a building as specified in the lease.

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HOLDOVER TENANT
A tenant who remains in possession of the leased property after the expiration of the lease term, and the landlord, by continuing to accept rent, agrees to the tenant's continued occupancy.

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INTEREST RATE
The percentage of a sum of money charged for its use.

INVOLUNTARY LIEN
A lien imposed against property without the consent of the owner, such as taxes and special assessments.

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LESSEE
Tenant

LESSOR
Landlord

LIEN
Right given by law to certain creditors to have their debt paid out of the property of a defaulting debtor.

LISTING
A contract between principal and agent, authorizing the agent to perform services for the principal within a given time, for which the principal agrees to pay a commission.

LITIGATION
The act of carrying on a lawsuit.

LOFT
A loft refers to open living space that was converted from commercial space to residential space. Lofts contain very high ceilings, large windows and open space. In New York City, most lofts and converted commercial space is located downtown.

LOT
A measured section of land.

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MAINTENANCE
Monthly charges paid by the owner or tenant of a cooperative building for that person's share of costs of keeping the common-use portions of the building in good condition. This includes the daily cost to operate the building and it is calculated based on each individual unit.

MANAGING AGENT
An independent company that is hired to manage a property. In New York City, most of the cooperative and condominium buildings are managed by a company which is responsible for the building operations.

MARKET VALUE
The probable price a ready, willing, able, and informed buyer would pay and a ready, willing, able, and informed seller would accept, neither being under any pressure to act.

MARKETABLE TITLE
A title which a court of equity considers to be so free from defect that it will enforce its acceptance by a purchaser.

MEETING OF THE MINDS
Whenever all parties to a contract agree to the exact terms thereof.

MORTGAGE
A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.

MORTGAGE COMMITMENT
A formal indication, by a lending institution that it will grant a mortgage loan on property, in a certain specified amount and on certain specified terms.

MORTGAGEE
A lender in a mortgage transaction.

MORTGAGOR
A borrower who conveys his or her property as security for a loan.

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NEGOTIATION
The process of discussing an issue between two parties who are working towards the same goal. Successful negotiation usually leads to a contract and then a sale.

NOTARIZE
To verify the authenticity of a signature by a certified Notary Public.

NEGATIVE PLEDGE
A co-operative apartment loan given in a building whose Board of Directors does not permit financing. Instead of pledging the shares to the lending institution, which requires recognition of the lien in writing by the Co-op Board, the purchaser agrees not to pledge the shares for any other purpose, hence the name �negative pledge.� Other collateral may be required for a loan of this nature.

NET LISTING
A price below which an owner will not sell the property and a broker will not receive a commission. Net listings are illegal in New York State. The broker keeps any amount above the net price.

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OFFER AND ACCEPTANCE
Two essential components of a valid contract; a meeting of the minds when all parties agree to the exact terms.

OPEN LISTING
A listing given to any number of brokers without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer; the sale of the property automatically terminates the listing.

OPTION
An agreement to keep open for a set period of time an offer to sell or purchase property, usually for consideration.

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PENTHOUSE
A luxury apartment in a high rise building.

PERFORMANCE BOND
A bond used to guarantee the specific completion of an endeavor in accordance with a contract.

PIED A TERRE
A French term that refers to an apartment that is not the primary residence of the owner. A Pied a Terre is used when a person lives in another location and comes to New York several times a month or a few weeks a year to either work or enjoy this great city.

POINTS
Discount charges imposed by lenders to raise the yields on their loans. A charge levied by the lender on the borrower for the mortgage for prepaid interest. One point equals one percent of the amount of the loan.

POWER OF ATTORNEY
A written instrument duly signed and executed by an owner of property, which authorizes an agent to act on behalf of the owner to the extent indicated in the instrument.

PREPAYMENT CLAUSE
A clause in a mortgage which gives a mortgagor the privilege of paying the mortgage indebtedness before it becomes due.

PRINCIPAL
The employer of an agent or broker; the broker's or agent's client.

PROPRIETARY LEASE
A written lease in a cooperative apartment building, held by the tenant/shareholder, giving the right to occupy a particular unit.

PROSPECTUS
A printed statement disclosing all material aspects of a real estate project.

PURCHASE MONEY MORTGAGE
A note secured by a mortgage given by a buyer, as mortgagor, to a seller, as a mortgagee, as part of the purchase price of the real estate.

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QUIET ENJOYMENT
The right of an owner or a person legally in possession to the permitted use of property without interference of possession.

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RACIAL STEERING
The unlawful practice of influencing a person's housing choice based on his race.

READY, WILLING AND ABLE BUYER
One who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

REAL PROPERTY
Land, and generally whatever is erected upon it or affixed thereto.

RECOGNITION AGREEMENT
The agreement between the co-operative building and the bank lending money for purchase of shares of stock in the co-operative.

RECORDING
The act of recording or entering in a book of public record instruments affecting the title to real property.

REDEMPTION
The right of a mortgagor to redeem the property by paying a debt after the expiration date and before sale at foreclosure the right of an owner to reclaim the owner's property after the sale for taxes.

RED HERRING
Preliminary offering plan for a cooperative or condominium project submitted to the attorney general and to tenants and subject to modification.

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SECURITY DEPOSIT
A payment required by a landlord to guarantee that the tenant meets his or her obligations under the lease and to guard against any potential damages that may be incurred during the term of the lease.

SHARES
When one purchases an apartment in a cooperative building he or she is actually purchasing the shares in the cooperative. They represent the proportion of the building owned by the unit owner based on the size and value of the apartment.

SPECIAL ASSESSMENT
An assessment made against a property to pay for a general improvement by which the assessed property is supposed to be especially benefited.

SPECIFIC PERFORMANCE
A legal action brought in a court of equity in special cases to compel a defendant to carry out the terms of an agreement or contract.

SPONSOR
The developer or owner organizing and offering for sale a condominium or cooperative development.

STATUTE OF FRAUDS
State law which provides that certain instruments, such as deeds, real estate sales contracts, and certain leases must be in writing in order to be legally binding.

STATUTE OF LIMITATIONS
Law pertaining to period of time within which certain actions must be brought to court, in New York, 6 years for contracts.

SUBLETTING
A leasing by a tenant to another for part of the lessee's remaining term.

SURROGATE'S COURT (PROBATE COURT)
A court having jurisdiction over the proof of wills and the settling of estate.

SQUARE FOOTAGE
The area measured in square feet of a certain property. Square footage can be measured in different ways and is usually considered approximate. Condominium apartments have specific laws that determine the way which the apartment is measured therefore condominium measurements are more accurate.

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TAX DEDUCTIBLE
An expense that reduces taxable income. Each year, shareholders in cooperatives apartments are able to deduct a certain amount from their personal taxes. The amount is determined by the amount of shares that are owned.

TIME IS OF THE ESSENCE
A phrase in a contract that requires the performance of a certain act within a stated period of time, terminating irrevocably on a certain date.

TITLE
Evidence that owner of land is in lawful possession thereof; evidence of ownership.

TITLE SEARCH
An examination of the public records to determine the ownership and encumbrances affecting real property.

TRANSFER TAX
A tax charged under certain conditions on the transfer of property. Both New York State and New York City impose transfer taxes.

TRIPLE MINT
Refers to the condition of the residence. Triple mint condition means that the residence is in immaculate condition.

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UNEARNED INCREMENT
An increase in value of real estate due to no effort on the part of the owner; often due to increase in population.

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WALK UP BUILDING
A building that does not have an elevator. Most walk up buildings are four to six floors.

WALK THROUGH INSPECTION
The inspection of a property immediately before the closing to ensure that the property does not have any new damages.

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ZONE
An area set by local law for specific use with certain rules and regulations.

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