1. Strict adherence to and accomplishment of professional (especially fiduciary) responsibilities, duties, and tasks; attention to detail in research or the performance of legal and professional obligations, especially by one acting as agent or attorney.
2. The obligation of a buyer (or prospective buyer) of real or personal property to verify and substantiate all claims and representations made by the seller and/or his or her agents. Due diligence on the part of the buyer is often accomplished by retaining qualified, licensed professionals to conduct various inquiries or perform various duties on his or her behalf. Examples of such professionals include, but are not limited to:
   Real estate brokers, agents and salespersons
   Licensed home inspectors
   Real estate attorneys
Title research and title insurance companies
   Licensed real estate appraisers

Definition:
1. An iterative auction format in which the auctioneer starts the bidding at a high price, with each successive bid one bid increment lower than the last. The first bidder wins the auction, paying the last announced price at the time of the bid. Also known as a descending clock auction or open descending price auction.

2. An auction format for selling multiple identical items, based on a clearing price. The auctioneer or issuer of the securities begins at a high initial price, lowering the price incrementally until bids are received and the clearing price is established. Bidders may sometimes submit demand curves rather than a single bid. In this case, each bidder wins the quantity of the item demanded at the clearing price, and paying that amount for each item won. This type of auction is commonly used in the trading of securities, especially U.S. Treasury Department notes and inflation-indexed securities. Also known as a uniform price auction.

Terms, Definitions, and Concepts: Auction, Economy, Finance and Investment, Real Estate

Definition: In auction theory, a dynamic auction is an auction sale that allows for multiple bids by an individual bidder, either continuously or in separate, distinct rounds of bidding. The bidding may be either continuous, as in a clock auction, or it may occur in distinct rounds, as in a multiple-round auction or iterative auction. Dynamic auctions are the most popular and widely-used auction format in the world; the most common type of dynamic auction is the English auction.

Terms, Definitions, and Concepts: Auction, Real Estate

Definition: A dynamic, single-item auction sale with open and competitive bidding that utilizes an iterative bidding process. The most common type of English auction is the open outcry auction, where the auctioneer places items on the auction block and bidders make verbal offers. Bids increase in increments determined by the auctioneer. However, a reverse auction may also be an English auction if it follows an iterative process where sellers' bids decrease in set increments.

Terms, Definitions, and Concepts: Auction, Real Estate Also known as an open outcry auction or open ascending price auction.

The right of a mortgagor who has defaulted on the mortgage note to redeem or recover the title to the property by paying off the entire mortgage note prior to the foreclosure sale.

The reversion of property to the state when a decedent dies intestate and there are no heirs capable of inheriting, or when the property is abandoned.

Definition:
1. All the property, possessions, and capital one owns, both real and personal, tangible and intangible.
2. The degree, level, quantity, quality, nature, characteristics, duration, and extent of the possessory interest one owns in real property.
3. In the feudal era, any of the three political classes: the Lords Spiritual (the clergy), known as the first estate; the Lords Temporal (nobility, royalty, tenants-in-chief, etc.), known as the second estate; and the Commons (bourgeoisie), known as the third estate. In contemporary usage, journalists are known as the fourth estate.
4. The assets and liabilities of a deceased person, or one that is bankrupt.
5. A parcel of real property, varying in size but generally larger than a standard lot, with a residence (often a large house or mansion) and several outbuildings consisting of guest and servant quarters, barns, storage facilities, or the like.


Terms, Definitions, and Concepts: Real Estate, Legal (Law), Management, Appraisal, Auction, Finance and Investment, Taxes and Taxation, Title and Title Insurance

Definition:
An estate in fee simple absolute is a type of freehold estate; it is the highest and most complete form of land ownership under the common law system. Fee simple estates are limited only by the governmental rights of taxation, eminent domain, escheat, and police power. Holders of estates in fee simple may transfer, give, sell, will (devise), or otherwise dispose of real property in any way they wish, within the confines of the law. Fee simple estates may be held indefinitely; in legal terms, they are said to run forever.
Also known as estate in fee simple, fee simple, fee, fee ownership, or estate of inheritance.


Terms, Definitions, and Concepts: Real Estate, Title and Title Insurance, Appraisal, Auction, Legal (Law), Management

Definition:
An estate in fee simple defeasible is a freehold estate with a less-than-absolute interest in real property and is subject to certain conditions or contingencies, such as the occurrence (or non-occurrence, as the case may be) of certain specified events. There are two types of fee simple defeasible estates: qualified fee conditional (also known as subject to condition subsequent) and qualified fee determinable. Defeasible estates allow for recovery of fee simple ownership of the property by the grantor if the grantee either commits certain acts (qualified fee conditional), or fails to comply with a special limitation (qualified fee determinable). Estates in fee simple defeasible are of unlimited duration, but only if the conditions or special limitations specified by the grantor are not violated or are continually met. An estate in fee simple defeasible differs from one in fee simple absolute in that it has a clearly defined potential endpoint, and the property interest is less than fee ownership.
Also known as an Estate in qualified fee or an Estate in fee simple qualified.


Terms, Definitions, and Concepts: Real Estate, Title and Title Insurance, Appraisal, Auction, Legal (Law), Management

Definition:
A freehold estate with a less-than-absolute interest in real property, subject to certain conditions or contingencies such as the occurrence (or non-occurrence, as the case may be) of certain specified events. Also known as an Estate in fee simple defeasible or Estate in fee simple qualified.

There are two types of estates in qualified fee: qualified fee conditional (also known as subject to condition subsequent) and qualified fee determinable. Estates in qualified fee allow for recovery of fee simple ownership of the property by the grantor if the grantee either commits certain acts (qualified fee conditional), or fails to comply with a special limitation (qualified fee determinable). Estates in qualified fee are of unlimited duration, but only if the conditions or special limitations specified by the grantor are not violated or are continually met. An estate in qualified fee differs from one in fee simple absolute in that it has a clearly defined potential endpoint, and the property interest is less than fee ownership.


Terms, Definitions, and Concepts: Real Estate, Title and Title Insurance, Appraisal, Auction, Legal (Law), Management

The degree, characteristics, quantity, quality, nature, and extent of the present or future possessory interest one owns in real property. There are different types of estates in land; each is distinguished by the characteristics of its interest and by its potential or actual duration.

The highest monetary price a property would bring, if offered for sale in an arm's-length transaction for a reasonable period of time in a competitive market. Also known simply as market value.

Raw land that has been prepared for the construction of buildings, including the installation of improvements such as sewer and electric lines, streets, public facilities and common areas, and so on. This phrase may refer to any unit of real property such as a lot, parcel, complex, or development.

Definition: A single-round auction where all bidders submit their bids simultaneously and without knowledge of the offers made by competing bidders; usually the bids are in writing and delivered to the auctioneer in a sealed envelope. The highest bid wins the auction. The sealed-bid auction method does not allow for open, competitive bidding and is therefore not a true auction.
Also known as a sealed-bid auction or a sealed first-price auction.

Terms, Definitions, and Concepts: Auction, Real Estate

An article which was once personal property but has been so affixed to real estate that it has become real property (stoves, bookcases, trees and landscaping, etc.). If determined to be a fixture, then ownership of the article transfers with the real property even though it is not mentioned in the deed.

Definition:
In English feudal law, the term freehold signified an estate held by a free man - the highest form of land tenure available at the time to commoners, or those without royal blood. In contemporary common law countries, a freehold estate is an interest in real property that is free of interests held by others and can best be described as full and complete ownership, although certain conditions or limitations may apply. The two kinds of freehold estates are those with a right of inheritance, and those without. Freehold estates with a right of inheritance include estates in fee simple absolute and estates in fee simple defeasible. Freehold estates without a right of inheritance include legal life estates, conventional life estates, and estates pur autre vie.


Terms, Definitions, and Concepts: Real Estate, Title and Title Insurance, Legal (Law), Appraisal, Auction, Management

Normally used in real estate with business or commercial applications such as bed and breakfasts, this term can also apply to personal, non-commercial items. Articles considered to be FF&E are personal property unless they are permanantly attached or affixed to real estate. Under the terms of most commercial leases, FF&E are to be removed by the tenant upon expiration of the lease, and are therefore personal property. Examples of FF&E include computers, office furniture, shelving, beds, etc. Synonymous with trade fixture.

Definition:
1. One form of a shell lease, a gray shell is a commercial or residential building with an unfinished interior and lacking heating, ventilating, and air conditioning (HVAC), and usually without lighting, plumbing, ceilings, elevators, or interior walls. A gray shell is ready for warm shell or vanilla shell improvements (VSI) as well as tenant improvements (TI's), which are to be completed by the tenant once the lease agreement has been negotiated and executed. In many cases, the landlord will offer financial incentives in the form of a tenant improvement allowance (TIA), which pays for or at least partially defrays the cost of any improvements necessary for the tenant to occupy the building itself. Tenant improvement allowances do not usually include furniture, fixtures, and equipment (FFE) or trade fixtures necessary for the tenant to conduct business. Usually vanilla shell improvements (VSI), or those improvements necessary to upgrade the building from a gray shell or base shell state, are not completed until the lease agreement between the tenant and landlord has been negotiated and executed. This ensures that the landlord does not pay for improvements that are unnecessary or that the tenant does not want.

2. The lease agreement or contract for a gray shell building. A proper gray shell lease should describe in detail the vanilla shell improvements (VSI) and tenant improvements (TI's) that are to be completed, and any other information necessary for construction of the building to be completed (commonly known as build-out) prior to tenant occupancy.

Same as Gray box. More or less the same as Arctic shell, Bare shell, Base shell, Cold dark shell, Cold dark box, Dark shell, Dark box, or Cold shell.


Discussion: Like many real estate terms and phrases, practical use and meanings of those terms associated with shell leases (e.g., vanilla shell, base shell, cold shell, warm shell, etc.) differ by location and situation, sometimes even within the same region or municipal area. As they say, the devil is in the details. The lease or sales contract should clearly and exactly specify the degree to which construction of any sort of "shell" or "box" building has been or will be completed prior to tenant occupancy. As either a tenant or landlord, you should not assume that the other party's definitions of shell lease terminology are the same as yours. Get it in writing, and make sure you understand and agree with all the terms and conditions of the shell lease agreement before you sign. If necessary, have a real estate attorney review the contract prior to its execution.

Shell leasing and its various forms (warm, cold, base, etc.) are used primarily in commercial real estate, but are gaining popularity in upscale condominiums and townhouses and other high-end residential real estate transactions. The idea is to attract either tenants or buyers, or both, by offering customizable living units. Financial incentives in the form of tenant (or buyer) improvement allowances afford new residents the opportunity to select nearly all aspects of interior decor, including relatively large projects such as plumbing and fixtures, wiring, and interior walls.


Terms, Definitions, and Concepts: Real Estate, Construction and Building, Appraisal, Auction, Finance and Investment, Management

Definition:
1. One form of a shell lease, a grey shell is a commercial or residential building with an unfinished interior and lacking heating, ventilating, and air conditioning (HVAC), and usually without lighting, plumbing, ceilings, elevators, or interior walls. A grey shell is ready for warm shell or vanilla shell improvements (VSI) as well as tenant improvements (TI's), which are to be completed by the tenant once the lease agreement has been negotiated and executed. In many cases, the landlord will offer financial incentives in the form of a tenant improvement allowance (TIA), which pays for or at least partially defrays the cost of any improvements necessary for the tenant to occupy the building itself. Tenant improvement allowances do not usually include furniture, fixtures, and equipment (FFE) or trade fixtures necessary for the tenant to conduct business. Usually vanilla shell improvements (VSI), or those improvements necessary to upgrade the building from a cold shell or grey shell state, are not completed until the lease agreement between the tenant and landlord has been negotiated and executed. This ensures that the landlord does not pay for improvements that are unnecessary or that the tenant does not want.

2. The lease agreement or contract for a grey shell building. A proper grey shell lease should describe in detail the vanilla shell improvements (VSI) and tenant improvements (TI's) that are to be completed, and any other information necessary for construction of the building to be completed (commonly known as build-out) prior to tenant occupancy.

Same as Grey box. More or less the same as Arctic shell, Bare shell, Base shell, Cold dark shell, Cold dark box, Dark shell, Dark box, or Cold shell.


Discussion: Like many real estate terms and phrases, practical use and meanings of those terms associated with shell leases (e.g., vanilla shell, base shell, cold shell, warm shell, etc.) differ by location and situation, sometimes even within the same region or municipal area. As they say, the devil is in the details. The lease or sales contract should clearly and exactly specify the degree to which construction of any sort of "shell" or "box" building has been or will be completed prior to tenant occupancy. As either a tenant or landlord, you should not assume that the other party's definitions of shell lease terminology are the same as yours. Get it in writing, and make sure you understand and agree with all the terms and conditions of the shell lease agreement before you sign. If necessary, have a real estate attorney review the contract prior to its execution.

Shell leasing and its various forms (warm, cold, base, etc.) are used primarily in commercial real estate, but are gaining popularity in upscale condominiums and townhouses and other high-end residential real estate transactions. The idea is to attract either tenants or buyers, or both, by offering customizable living units. Financial incentives in the form of tenant (or buyer) improvement allowances afford new residents the opportunity to select nearly all aspects of interior decor, including relatively large projects such as plumbing and fixtures, wiring, and interior walls.


Terms, Definitions, and Concepts: Real Estate, Construction and Building, Appraisal, Auction, Finance and Investment, Management

A lease agreement, usually residential, in which the tenant (lessee) pays a fixed periodic rent, and the landlord (lessor) pays all other expenses related to ownership of the property including taxes, insurance, maintenance, utilities, and assessments.

Definition: A type of auction or sale in which the winning bidder (also known as the high bidder) chooses a property from among a grouping of similar or like properties. The remaining properties are offered in subsequent rounds of bidding, with the high bidder in each round choosing a property. This process continues until all properties are sold or there are no more bids.
Also known simply as bidder's choice.

Terms, Definitions, and Concepts: Auction, Real Estate

Definition: "In its present condition" describes property offered for sale in its current state, with no warranties or promises made as to its value or suitability for a specific use. Buyers must take care to practice due diligence when purchasing property offered "In its present condition".
Sometimes referred to as "As is, where is" or simply "As is".

Terms, Definitions, and Concepts: Appraisal, Auction, Legal (Law), Management, Real Estate

Real or personal property that exists in concept rather than having physical form; usually incorporeal property is represented by physical muniments that document ownership.
Examples of incorporeal property include rights, relationships (e.g., community property), patents, easements, estates, royalties, and appurtenances.
Same as Intangible property.

Intangible, abstract, or non-possessory rights in real property such as easements, licenses, profits, estates, community property, and the like.
Same as Incorporeal property or Intangible property.

Real or personal property that exists in concept rather than having physical form; usually intangible property is represented by physical muniments that document ownership.
Examples of incorporeal property include rights, relationships (e.g., community property), patents, easements, estates, royalties, and appurtenances.
Same as Incorporeal property.