AFFORDABILITY ANALYSIS A calculation used to determine an individual’s likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs and on-going mortgage payments.
ADVISER A broker, consultant or investment banker who represents an investor in a transaction. Advisers may be paid a retainer and/or a performance fee upon the close of a financing or sales transaction.
ADJUSTABLE-RATE MORTGAGE (ARM) A mortgage loan with an interest rate that fluctuates in accordance with a designated market indicator — such as the weekly average of one-year U.S. Treasury Bills — over the life of the loan. To avoid constant…
TECHNICAL COMPONENTS Factors that determine whether a location or site is suitable or able to support a given use.
TAG-ALONG RIGHTS A contractual obligation used to protect a minority shareholder. If a majority shareholder sells his or her stake, then the minority shareholder has the right to join the transaction and sell his or her minority stake in the…
SECOND MORTGAGE A loan secured by the equity in a home, when a primary mortgage already exists and has a lien position subordinate to the first mortgage.
SALES POTENTIAL The possible or expected revenue of a retail outlet as defined by conditions within the market or trade area and the forces of competition.
SALES PROCEEDS BEFORE TAX The sale price minus the sale costs and the mortgage loan balance.
SALES PROCEEDS AFTER TAX The sale proceeds before tax minus the tax liability on the sale.
REAL ESTATE PROPERTY TAX DEDUCTION A tax deductible expense reducing a taxpayer’s taxable income.
REAL ESTATE FLUCTUATIONS Short-term variations in real estate prices or rents (usually lasting anywhere from one day to a few months) caused by natural hazards (such as tornadoes, hurricanes, floods, earthquakes, and wildfires) or boosts or shocks to the local…
REAL ESTATE BROKER A real estate professional licensed to negotiate the purchase and sale of real estate for a commission or fee. In most states, a broker is one step up from a real estate agent, having more training and…
RANGE The maximum distance consumers are willing to travel to purchase a good or service from a given establishment or location. Hence, the boundary or outer limits of the market area circumscribed about a location at which a good or…
QUALIFIED PLAN Any employee benefit plan that is qualified by the IRS as a tax-exempt plan. Among other requirements, the plan’s assets must be placed in trust for the sole benefit of the employees covered by the plan.