Definition: An informal method of estimating the value of real estate based on a cursory examination of the property and neighborhood, such as can be done from a vehicle. A drive-by appraisal is usually done by a real estate professional other than a licensed appraiser, such as a broker or salesperson. Note that a drive-by appraisal includes only the exterior of any structures on the property, and the person conducting the drive-by appraisal generally does not enter the parcel of real property being examined. Similar to a Broker's price opinion.

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

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

The cash deposit (including initial and additional deposits) paid by the prospective buyer of real property as evidence of his good faith intention to complete the transaction; called hand money or a binder in some states.

Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title.

Note the spelling of this term. It is commonly misspelled "encumberance".

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. The process by which money and/or documents pertaining to a contract are held by a disinterested third party (i.e., a trustee to a deed of trust) until the satisfaction of the terms and conditions of the escrow instructions (as prepared by the parties to the escrow).
2. A trust account maintained by a lender (mortgagee or beneficiary of a deed of trust) containing money collected from a borrower (mortgagor or trustor of a deed of trust), the purpose of which is to pay for recurring expenses such as homeowner's insurance, private mortgage insurance, and property taxes.

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

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

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.

A specific geographic area in which a real estate broker or salesperson chooses to specialize. In rural markets, farm areas may be quite large in size. In urban real estate markets, farm areas tend to be smaller, often individual neighborhoods or even single buildings or complexes.

Definition: An agency of the government of the United States that insures bank deposits, oversees financial institutions, and manages receiverships. The self-stated mission of the FDIC is to "maintain stability and public confidence in the nation’s financial system". Federal deposit insurance protects the first $100,000 of deposits that are payable in the United States.

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

An agency of the United States government created to investigate and eliminate unfair and deceptive trade practices in business.

System of real estate title based in English law. All lands are owned and taxed by the king or other sovereign, who grants the right to possess real estate. Real estate is held as a life estate only, and ownership reverts to the king or other sovereign upon the death of the grantee.

System of title based in English law. All lands are owned and taxed by the king or other sovereign, who grants the right to possess real estate. Real estate is held as a life estate only, and ownership reverts to the king or other sovereign upon the death of the grantee.

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.

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.

1. Title to real property that is free from liens, encumbrances, or defects aside from those which the buyer has agreed to accept (mortgage to be assumed, ground lease of record, etc.)
2. Title to real property that is established, marketable, and without clouds.

1. Title to real property that is free from liens, encumbrances, or defects aside from those which the buyer has agreed to accept (mortgage to be assumed, ground lease of record, etc.)
2. Title to real property that is established, marketable, and without clouds.

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.

A present right to, share or ownership of, participation in, or claim to real property that will not take effect until some point in the future.
Examples of future interests include the reversionary interest retained by the grantor of a life estate without a remainderman, the possibility of reverter of an estate in qualified fee determinable, and the right of reentry of an estate in qualified fee conditional.

1. Title to real property that is free from liens, encumbrances, or defects aside from those which the buyer has agreed to accept (mortgage to be assumed, ground lease of record, etc.)
2. Title to real property that is established, marketable, and without clouds.

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