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Real Estate Glossary
- Absorption Period: The quantity of space or units occupied within a market in a specific time frame, usually one year. Absorption takes into account both the creation of new space and the demolition of older space and/or units.
- Appraisal: It is a professional estimate of the fair market value of a piece of property.
- Appreciation: It is described as an increase in the value of a property over time.
- Base Rent: It is the minimum rent for a lease.
- Bankruptcy: A legal process that is initiated in response to a person failing to pay outstanding debts.
- Common Area: It is an amenity that shareholders or owners of units in a common interest development (CID) share. Common spaces in CIDs for housing could be things like a yard, a basketball court, a pool, a laundry facility, or a postal room.
- Concessions: These are the closing costs or non-reality items of value that the seller offers the buyer to close the deal.
- Conveyance: The transfer of property from one person to another.
- Equity: This represents a homeowner’s investment in their house. Take the home’s market worth and deduct any mortgages or liens from it to determine equity.
- Fixed Rate Mortgage: The interest rate is fixed for the life of the loan when somebody gets a fixed rate mortgage. They frequently come in 10, 15, 20, and 30-year financing options.
- iBuyer: It is an application that makes the process of selling easier by making online offers on your property instantly.
- Realtor: They are different from real estate agents because they are members of the National Association of Realtors unlike real estate agents, who may and may not be a member of the group.
- Purchase and Sale Agreement: A written agreement between the buyer and seller which states all the necessary details about the purchase.
- Seller Concession: In order to seal the deal, concessions that are offered by the sellers to the buyers.
- Pre-Approval: It is an application that is filled out by the buyer and helps the seller in determining their financial condition.
- Rent Back: It is an arrangement between the buyer (now the owner) and the seller (now tenant) in which the former lets the latter stay in the house in exchange for daily/monthly rent.
- Rent Back: It is an arrangement between the buyer (now the owner) and the seller (now tenant) in which the former lets the latter stay in the house in exchange for daily/monthly rent.
- Principal: It is the actual balance amount of a mortgage loan that is owed to the lender, excluding any interest amount on it.
- Annual Percentage Rate: It represents the annual cost of a loan. Due to the fact that it includes interest, loan origination expenses, loan discount points, and other credit costs paid to the lender, it may be higher than the note rate.
- Assigned: When one party to a contract (the assignor) transfers their rights and obligations under the contract to a second party, this is known as an assignment of contract.
- Breach of Warranty: A seller or supplier failing to uphold the conditions of a promise or representation made during the contracting process.
- Capitalization Rate: It is a measure of the anticipated rate of return on an investment property in real estate. It represents the net gain or loss over a 12-month period as a percentage of the original purchase price.
- Comparable: These are used for estimating the value of a property by comparing it to another one which has recently been sold.
- Competitive Space: The space in offices or buildings that are created for more than one occupant.
- Consumer Price Index: It is a gauge of prices changes for a market of consumer goods and services on average over time for urban consumers.
- Cumulative Discount Rate: It is a factor that is applied to the rental rate that takes into effect all landlord lease concessions expressed as a percentage of base rent.
- Days on Market (DOM): It is the period of time between the day a property is advertised for sale and the day the seller and buyer enter into a contract to sell the property.
- Debt-to-Income Ratio: It is a calculation of the buyer’s financial condition to determine the amount of money that he can pay every month.
- Due Diligence: It is the time period that is given to the buyer to make any form of examinations related to the property.
- Escrow Holder: The escrow holder is the agent and depositary (impartial third-party) who gathers the funds, written instruments, documents, personal property, or other valuables to be held until the occurrence of specific events or the performance of described conditions, typically set forth in mutual, written instructions from the parties.
- Earnest Money Deposit: When a seller accepts a buyer’s offer, the buyer will be required to make an earnest money deposit (EMD), sometimes known as good faith deposit depicting their serious interest in buying.
- FHA Loan: A set of loans that are insured by the federal government which insures banks and other private lenders against potential losses they might sustain in the event when the borrower does not repay the loan in full or on time.
- FHA 203k Rehab Loan: This type of loan, known as a fixer-upper, combines a mortgage loan with a loan to assist pay for improvements or repairs, like structural or energy-related changes. It is not meant to make loans based on luxuries like tennis courts or swimming pools.
- Hard Money Loan: It is a method of lending money by considering the condition of the property unlike traditional methods that consider the financial condition of the borrower.
- Homeowner’s Association (HOA): It is an association that is responsible for managing certain communities and making the rules for them.
- Home Sale Contingency: Using a house sale contingency, a buyer might tell a seller that one of the requirements for buying their property is that they can successfully close on their existing home.
- Inspection: It is done by a professional inspector who is paid by the buyer to analyze the condition of a property and needed repairs if any.
- Inspection Contingency: It is a clause that provides the right of inspection to the buyer during a pre-determined time mentioned in the contract.
- Land Lease: It is a special case in which the buyer owns the house but not the land on which it is built. Thus, paying rent to the landowner for the land.
- Loan Contingency: It is a clause added to the contract offer which allows the buyer to back out of the deal till a specific amount of time, if they fail to get the mortgage.
- Mortgage Pre-Approval Letter: Before the actual approval of the mortgage, it is a letter issued to the buyer to provide an estimate about their financial affordability.
- Multiple Listing Service (MLS): It is a database that enables the agents to access and add all the information related to a property.
- Natural Hazards Disclosure (NHD) Report: It is a report that entails information about the possible natural disasters that could be faced in the location where the property is situated.
- Offer/ Counteroffer: It is an offer made by the sellers, through the agent, to the buyers, through their agents, it can either be accepted or the party makes another offer known as counteroffer.
- Preliminary Report: It is a report for the seller that shows any issues with the title of the property before selling so that the seller can take care of them.
- Pre-Qualification: It is the quick assessment of the buyer’s financial situation that the lender does, solely based on the information provided by the buyer.
- Probate Sale: If a deceased fails to write a will or transfer the ownership of a property to anyone, or sometimes there are no legal heirs, in such cases the property is handed over to the authorized representative to sell it.
- Proof of Funds: Any document that shows that the buyer has sufficient funds available is referred to as proof of funds.
- Real Estate Owned (REO): It is a title given to the properties that are owned by a lender due to an unsuccessful sale at an auction. Due to this, they might be on sale for a much lower price.
- Seller Disclosure: The disclosure of all the information related to the property that could impact the decision of buying that property, by the seller.
- Short Sale: A short sale occurs when the property is sold for less than the debt it has secured. Since the proceeding of the sale will fall only short of the debt amount so, short sales will need the lender(s) of the seller’s lender(s) to approve them.
- Subject to Inspection: It means that due to privacy concerns or uncooperative tenants, sometimes the seller is not willing to show the property site without any offer being accepted.
- Tenancy in Common (TIC): TIC describes a type of property that is commonly owned by people, either due to the will of the deceased or any prevailing laws.
- Termite Report: It is a detailed report that shows the diagram and location of the property along with possible preventive methods from termites (small wood insects).
- Title Search: A search that explores the public records of the history of any property stating the sales, purchases, taxes, or any other types of linens.
- Trust Sale: It is a sale that is made by a person who is given ownership of a property as a result of someone passing away.
- VA Loan: A loan that is granted by the government, Department of Veteran Affairs, to retired or active military servants, with competitive benefits including none to low down payment.
- AKS SHAJR: A copy of a shajra, drafted on drawing paper for individual property owners. It’s a map that shows all the fields (land) in the possession of a property owner with their khasra numbers marked and boundaries specified. It is prepared on the demand of a property owner. Aks Shajra is primarily needed in dealings concerned with agricultural land.
- BIGHA: A 4-kanal piece of land, equal to half of an acre. The real estate term is primarily used in Punjab and is becoming obsolete.
- FARD: A document that indicates proof of a property’s ownership. This document is primarily needed for the registration of property (also known as ‘registry’). In case of a property being sold, its fard, which is originally issued to the owner (seller), is used to maintain a record for registering a property in the name of the new owner (buyer). Once the new registry is approved by the Revenue Department, the patwari adds new details to his record and issues a transfer letter (locally called Inteqal) based on the fard issued. Fard includes the complete details of the property you own, including its exact location, size, and property type. It is issued under different conditions as specified by the property owner, such as for recording purposes, for selling, or for preparing a general power of attorney. The language of this document, if prepared manually and issued by a patwari, is technical.
- GARDAVARI: A documented proof of land-leasing rights issued by a gardori to the person who attains land on lease with the owner’s consent.
- GARDORI/GARDAVAR: A person, also called Qanoon-go or Kano-go, appointed to scrutinize a land record.
- INTEQAL: Inteqal, translated literally as ‘property transfer,’ is used to denote the transfer of property from one person to another. It is carried out on the basis of the registry issued for a property. If done through a patwari, the said official changes the data available in his record by adding the property in the record of the buyer and then subtracting it from that of the seller. This process is called partaal, following which the inteqal is completed. The record of this transfer is maintained by a patwarkhana or the concerned Revenue Department.
- JAMABANDI: The process of updating land records, generally done after every four years.
- KANAL: A land measurement unit commonly used in the subcontinent. It is also one of the most commonly used property terms in Pakistan. One kanal is equal to 20 marla or 4500 sq. ft. or 500 sq. yd.
- KHASRA: A subdivision of land with a unique number allotted to it, falling under a specific khatuni.
- KHATUNI: A subdivision of a khewat. Differentiated, as such, in the land records maintained by the Revenue Department. A khatuni is comprised of several khasras. The number can vary.
- KHEWAT NUMBER: A number allotted to a particular piece of land comprising of one or more khatunis. This number can be changed after a new jamabandi is done.
- MARLA: A measurement of land – varying in size between 225 to 272 sq. ft. In different parts of Pakistan, the size of marla is different, depending on the distribution of land under the local patwarkhana.
- MOZA: A specific piece of land in an area that is part of a qanoon-goi.
- PARTAL: The process of verifying and updating a property’s records – as and when it changes hands. Partal is overseen by a patwari.
- PATWARI: A government employee tasked with keeping records of land ownership.Patwaris normally work in patwarkhana, a place where patwaris conduct their business. It is a common real estate terminology used by Pakistanis. It is important to mention that earlier this year, the Supreme Court of Pakistan restricted the role of patwari in sale, purchase and transfer of land in urban areas.
- REGISTRY: A document indicating proof of property ownership, issued by the Revenue Department.
- SARSAHI: A land measurement, approximately 25 square feet in size. One marla is equal to nine sarsahis.
- SHAJRA: A detailed map of an area, with numbers mentioned against each particular piece of land or khasra. A shajra includes the complete details of each khasra, in terms of its size, location and surroundings. It is prepared from a ‘Field Book’ and is primarily used for the allotment/categorization of agricultural land.