A term used in an exchange of property held for productive use in a trade or business or for investment. Unless cash is received, the tax consequences of the exchange are postponed pursuant to Section 1031 of the Internal Revenue Code.
Line of Credit
An agreement by a lender to extend credit up to a specified amount for a specified time for a specified purpose. See Home Equity Line of Credit.
Liquid Asset
An asset, cash or otherwise, that can be converted into cash.
Listing
1. A written contract between an owner and a real estate agent, authorising the agent to perform services for the principal involving the owners property. 2. The property so listed.
Listing Agreement
An agreement between the owner of a property and a real estate broker giving the broker the authorization to attempt to sell or lease the property at a certain price and terms in return for a commission, set fee or other form of compensation.
Load Bearing
The capacity of an element in a building structure to support a weight in addition to its own, whether vertically or laterally. Thus a load bearing wall is one, which supports part of the structure in addition to its own weight.
Loan
A sum of borrowed money (principal) that is generally repaid with interest.
Loan Application Fee
Also called Establishment Fee. A fee paid to a lender for processing a loan.
Loan to Valuation Ratio
The amount of the loan financed as a proportion of the property value, expressed as a percentage.
Long Term Lease
In most markets, this refers to a lease whose term is at least three years from initial signing until the date of expiration or renewal option.
Low Rise
A building with fewer than 4 stories above ground level.
Lump-Sum Contract
A type of construction contract requiring the general contractor to complete a building or project for a fixed cost normally established by competitive bidding. The contractor absorbs any loss or retains any profit.
Maintenance
In property parlance, the keeping of a building, structure or other physical feature in a specified e.g. Wind and weather tight, condition. The approved cost of maintenance may be deductible for income taxation.
Manhole
An opening which permits access to the space between the roof and the ceiling, or below the floor.
Market study
A forecast of future demand for a certain type of real estate project that includes an estimate of the square footage that can be absorbed and the rents that can be charged. Also called Marketability Study.
Market Value
The price at which a seller is happy to sell and a buyer is willing to buy. This assumes that there is sufficient activity in the marketplace to generate enough buyers and sellers so that neither party controls the price.
Marla
Unit of Area Measurement. 1 marla =502.13 square metre
Mattha
Frontage of a building with the main road.
Metes and Bounds
The boundary lines of land, with their terminal points and angles, described by listing the compass directions and distances of the boundaries. Originally, metes referred to distance and bounds referred to direction.
Mid-Rise
A building with between four and eight stories above ground level although in a Central Business District, this might extend to buildings up to twenty-five stories.
Mixed-Use
Space within a building or project providing for more than one use (i.e., a loft or apartment project with retail, an apartment building with office space, an office building with retail space).
Monthly Reducing Balance of the Principal
A system of interest calculation where total principal repaid in the previous month(s) is deducted from the principal amount of loan at the beginning of every month.
Mortgage
The conveyance of a legal or equitable interest in freehold or leasehold property as security for a loan and with provision for redemption on repayment of the loan. The lender (mortgagee) has powers of recovery in the event of default by the borrower (mortgagor). A mortgage is a form of land charge and can be either legal or equitable.
Mortgage Discharge Fee
A fee charged by some lending institutions for finalising a loan.
Mortgage Insurance
A policy that insures the lender against the borrower defaulting on a loan. Most lenders generally require insurance when borrowing more than 80% of the property value.
Mortgage Offset
A non-interest earning account that is offset against a home loan to reduce the total interest payable.
Mortgagee
The lender in a mortgage agreement.
Mortgagor
The borrower in a mortgage agreement.
Negative Gearing
Where the return on an investment is not sufficient to cover the costs on the investment, e.g. property maintenance and interest on the loan.
Negotiation
Discussion, written or otherwise, between two or more parties no different sides, the aim being to reach a common agreement.
Net Income
Income after taxes are deducted.
Net Present Value Method (NPV)
A method used in discounted cash flow analysis to find the sum of money representing the difference between the present value of all inflows and outflows of cash associated with the project by discounting each at a target yield.
Net Worth
The value of a persons assets minus liabilities.
Nominee
A person who, in a limited sense, acts for or represents another.
Non Confirming Use
The use of a property which does not conform to the allocation of the area for planning purposes. Such a property may have been built in conformity with the planning requirement at the time and a policy change ensued; more usually, the property was constructed before planning control was introduced.
Notice of Default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
Notice to Quit
A notice to a tenant to vacate the property.
Null and Void
That which cannot be legally enforced, as with a contract provision that is not in conformance with the law.
Off the Plan
To purchase a property before it is completed after having only seen the plans.
Offer
Conveyed intent by one party to form a contract, which may have conditions and stipulations, with another party.
Offset Account
An account linked to a mortgage account so that the interest earned is applied to reduce the interest on the mortgage.
Old System Title
Also called Common Law Title. A series of title documents called a 'chain of title'. The overall title is sound only if the every document in the chain is sound. The legal investigations are complicated and expensive. An old system title may be converted .
Ombudsman
The Australian Banking Industry Ombudsman (ABIO) is the avenue through which a customer can make a complaint about their bank and have it dealt with independently.
Ongoing Fee
A loan maintenance fee charged regularly over the life of the loan.
Open Listing
A type of listing agreement in which more than one real estate agent may be employed to sell the property. The owner pays a commission only to the agent who finds the buyer. This listing is also known as a simple listing or a general listing and the owner.
Open Market Value
1. The best price which might reasonably be expected to be obtained at arms' length for an interest in a property at the date of valuation, subject to any statutory assumptions which may be required.
"2. For the purpose of asset valuations this is defined by the Royal Institute of Chartered Surveyors (UK) as the best price which might reasonably be expected to be obtained for an interest in a property at the date of valuation assuming:there is a willing seller
there is a reasonable period in which to negotiate the sale
that values will remain static during that period
that the property will be freely exposed to the market; and
that no account will be taken of any higher price that might be paid by a person with a special interest. "
that no account will be taken of any higher price that might be paid by a person with a special interest.
Open Space
Land which has not had improvements such as buildings and other structures added to it. Such land is often left in a subdivision by a developer or stipulated by a local authority for recreational use or for personal use by the owner.
Operating Cost Escalation
Although there are many variations of escalation clauses, all are intended to adjust rents by reference to external standards such as published indexes, negotiated wage levels, or expenses related to the ownership and operation of buildings.
Outgoings
Costs incurred by the owner of an interest in property, usually calculated on a yearly basis. Eg. management, repairs, rates, insurance and rent payable to the holder of a superior interest, as appropriate to his contractual or other liabilities. It is prudent to make annual provision for future items involving expenditure at intervals of more than one year.
Pacific Security Capital
A leading commercial real estate investment bank. Pacific Security Capital is a direct lender and intermediary offering Acquisition, Development, Construction, Renovation, Bridge, Mezzanine and Permanent
