Archives: Glossary Terms

A sum of money or other consideration tendered by a prospective purchaser as evidence of good faith in conjunction with an offer to purchase rights in real property.

A right, privilege or interest limited to a specific use or control purpose which one party has in the land of another party and which runs with the land and is not a personal right of an individual.

An easement which is annexed to the ownership of one parcel of land that allows one party the use of his or her neighbor’s land and which runs with the land when is the title is transferred to another party.

An easement created by the government or a governmental agency upon exercising its right under eminent domain..

An easement granted by a court to give the right of ingress and egress over a grantor’s land as being necessary to permit the full enjoyment of a parcel of real estate..

An easement acquired by open, notorious, hostile and continuous use of a property for the period of time as prescribed by law.

A personal easement which does not run with the land and therefore is not transferred through the conveyance of the title.

A loss in value due to factors outside the property lines of the subject property that adversely affect the usability and value of the subject property or its actual or potential income. Also known as Social obsolencence and Environmental obsolencence.

The reasonable rental expectancy the property could command if it were available for rent at the time of its valuation.

In appraisal, a technique used to estimate the present value of mortgaged income property where the appraiser determines and discounts to a present value the annual cash flow to the equity owner and the expected resale proceeds. Those amounts are added together to derive the equity value, then added to the mortgage balance to offer a property value estimate. The late L. W. Ellwood provided capitalization rate tables that accelerate the process. Example: An equity owner expects to receive $10,000 of annual cash flow for 10 years. then $100,000 upon resale. A $500,000 mortgage is currently on the property. Using 12% as the appropriate equity yield rate.