If you are in the business as a landlord, property manager, lawyer or real estate, it is nice to know some of the words associated with the business of real estate.
Here is our guide to mostly residential real estate terms . Enjoy.
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Fair Market Value: The sale price at which a property would change hands between a willing buyer and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts of the property. See Appraisal
Fannie Mae (FNMA): The Federal National Mortgage Association – A quasi-governmental corporation authorized to sell debentures in order to supplement private mortgage funds by buying and selling FHA (Federal Housing Administration) and VA (Veterans Affairs) loans at market prices.
Federal Housing Administration (FHA) A federal agency that insures first mortgages, enabling lenders to lend a very high percentage of the sale price.
Fee Simple Interest: When an owners owns all the rights in a real estate parcel
Finance charge: The amount paid for the privilege of deferring payment of goods or services purchased, including any charges payable by the purchaser as a condition of the loan
First Mortgage: The senior mortgage that, by reason of its position, has priority over all junior encumbrances. The holder has a priority right to payment in the event of default.
First Refusal Right, or Right of First Refusal: A lease clause giving a tenant the first opportunity to buy a property or lease additional space in a property at the same price and on the same terms and conditions as those contained in a third-party offer that the owner has expressed a willingness to accept.
Fixed Rate: An interest rate that remains constant over the term of the loan
Fixer-Upper: A house that needs refurbishment or remodeling It usually sells at a below-market price.
Force Majeure: A force that cannot be controlled by the parties to a contract and prevents them from complying with the provisions of the contract. This includes acts of God such as a flood or a hurricane, or acts of man such as a strike, fire or war. Typical in Insurance and Real Estate.
Foreclosure: The process by which the trustee or servicer takes over a property from a borrower on behalf of the lender. See more on Foreclosure
Full recourse: A loan on which an endorser or guarantor is liable in the event of default by the borrower