Archives: Glossary Terms

A financial obligation which is in default, such as an overdue loan.

The number of loans with delinquent payments divided by the number of loans held in a portfolio.

A note which is payable on the demand of the lender or holder.

The transfer of interest or conveyance of an estate primarily by lease.

The property that is subject to a lease..

The necessary destruction and removal of an existing structure from a site in order to prepare it for new construction. Example: A block of old houses in the city is to be converted into a new shopping mall. This conversion will require demolition of the houses, site preparation, and construction of the mall.

The money commonly used with sales contracts and leases that is paid in good faith to assure performance of a contract. If the party who put up the deposit fails to perform, the deposit is forfeited, unless conditions in the contract allow a refund. Brokers are to put deposits in a separate checking account pending completion of the contract See Earnest money. Example: Whitman presented a $1,000 check as an earnest money deposit on a home she would buy provided she could get a 10% rate, 30-year loan for 80% of the price. The broker deposited the check in an Escrow account, and refunded it when Whitman could not arrange said loan.

An arrangement whereby an individual or organization may place cash under the safekeeping of a financial institution which may invest the cash and pay the depositor a specified amount of interest and that the depositor can reclaim the full value of the account according to the agreed-upon procedures governing it.

In taxation, real estate that is subject to deductions for depreciation which includes income producing property as well as property used in a trade or business. Example: Abel buys an apartment complex for $1 million. Of the purchase price, $100,000 is the value of the land, the remaining $900,000 is the value of depreciable real estate. Abel uses the straight-line depreciation method and a 27 ½ -year remaining depreciable life.

In appraisal, a loss of value due to any cause which can occur due to physical deterioration, functional obsolescence or economic obsolescence.