Real Estate Glossary


Terms and concepts to improve your real estate understanding.
Browse the glossary using this index

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M

management agreement

An agreement between the owner and a management firm or individual that shows what the owner expects of the property manager and how the property manager will satisfy those expectations.

management plan

This plan includes the owner's goals of the property. This document is detailed and states what the manager wants to accomplish, how and when. They analyze three different factors while putting this plant together: owner goals, regional and neighborhood market, and the specific property. It also has a section on revenue and anticipated expenses.

market

is where buyers and sellers discover information about products and services offered, and voluntarily engage in transactions to buy and sell those products and services. Just about everything that is bought and sold has a market and most markets are defined by the product or service being exchanged such as the petroleum market, automobile market, housing market, etc.

market abstraction

An appraisal technique that allows appraisers to 'break down' real estate transactions into their component parts to identify the values associated with the individual components. Note that market abstraction can be used as a tool in a variety of ways in addition to finding depreciation. For example, it can also be used to find site values from analysis of improved property sales.

market rent

or economic rent, is described as the rent paid by the typical tenant to an owner where:

  • the parties are dealing at arms-length, and
  • the parties are well-informed or well-advised as to the usefulness of the property, and
  • the parties are typically motivated, and
  • where the rent paid is unaffected by special concessions.

market value

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

  1. buyer and seller are typically motivated; 
  2. both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest;
  3. a reasonable time is allowed for exposure in the open market;
  4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
  5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

marketable title

is subject to judicial interpretation but generally means that the property title is free from reasonable doubt as to who the true owner is; free from the probable claims of others; and that it is capable of being insured at standard title insurance rates.

mechanic's lien

A statutory lien created in favor of contractor's, laborer, and materialmen who have performed work or furnished materials in the erection or repair of a building.

meridian

One of a set of imaginary lines running north and south and crossing a base line at a definite point, used in the rectangular (government) survey system.

metes and bounds

means distances and directions. This is a way of describing a parcel of land by describing its boundaries. A metes and bounds description always has a starting point, called the point of beginning, and always ends at the same point of beginning.

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