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Damages – The payment to a party who has suffered a loss or has been harmed by a sustained injury either to his or her person, property or relative rights through an act or default of another which is used to make up for the wrong.

Data assembly – A process of gathering analyzing and classifying data pertaining to a subject property.

Data plant – A collection of information about real properties that is usually maintained by an appraiser, mortgage lender or title company.

Date of appraisal – See Appraisal date.

Date of closing – The date on which the buyer pays for the property and the seller delivers the deed.

Datum – The horizontal plane from which heights and depths are measured.

DBA – See Doing Business As.

Dealer – In taxation, a party who buys and sells merchandise for his or her own account which is his or her own inventory and consequently any gain on the sale is considered ordinary income by the IRS.

Dealer property – A property classification in the Internal Revenue Code, identifying property that is owned and used in a trade or business such as a builder’s office building or computer.

Dealer-builder – A builder who is usually the local representative of a prefabricated or manufactured houses and who places those homes on lots.

Debenture – A bond issued without security or an obligation not secured by a specific lien on property.

Debit – A bookkeeping entry on the left side of an account, recording the creation or addition to an asset on a balance sheet or an expense on a profit and loss statement or the reduction or elimination of a liability or item of equity or revenue.

Debt – An obligation or liability which is usually money and must be repaid from one person to another.

Debt capital – The money borrowed for a particular business purpose.

Debt service – The annual amount paid by a debtor to repay borrowed money.

Debt service coverage – The requirement that earnings be a percentage or dollar sum higher than debt service.

Debtor – A party who is in debt and owes money to another.

Debtor in possession – A situation arising out of a foreclosure or bankruptcy where the money owing party remains in possession and controls the use of the property.

Debt-to-equity ratio – The relationship of the loan and equity components which for example if the debt is $80,000 and the equity is $20,000 there would be a debt to equity ratio of 4:1 or the equivalent to a 80% loan to value ratio.

Decedent – A deceased person.

Decentralization – The dispersion from a center point or figure.

Deciduous trees – The trees which do not keep their leaves throughout the autumn and winter.

Decimal point – A period that sets a whole number apart from the fractional part of the number

Declaration 1. A recorded document that legally creates a condominium. 2. A statement made out of court. 3. A formal pleading by a plaintiff in a lawsuit as to the facts and circumstances that gave rise to his cause of action.

Declaration of abandonment – A recorded document used to terminate a homestead.

Declaration of condominium ownership – A legal document that legally creates a condominium and allows it to be built or sold under relevant state law. See Condominium declaration.

Declaration of homestead – A legal document that is recorded and protects a homeowner from foreclosure by certain judgment creditors.

Declaration of trust – A written statement by a trustee acknowledging that a property is being held for the benefit of another.

Declining balance depreciation – An accelerated straight line depreciation method allowed by the IRS and used for income tax purposes in certain circumstances.

Decree – The final determination by a court of the rights of the parties to a suit.

Decree of distribution – A probate court decree which determines how the estate of a decedent shall be distributed.

Decree of foreclosure – A decree by a court ordering the sale of mortgaged property to pay out of the proceeds an obligation found to be due and owing to the lender.

Dedication – An offering of land for some public use made by an owner and accepted for such use by or on behalf of the public by authorized officials.

Deductions – Those expense items that can be deducted from income to arrive at a net basis for income tax purposes.

Deed – A written document which transferrs an estate or interest in real property from one person called the grantor to another person called the grantee. Deed examples are grant deeds, administrators’ deeds, executors’ deeds, quitclaim deeds, etc.

Deed – A written instrument which when properly executed signed and delivered accepted conveys title to real property from one party, the grantor to another party, the grantee.

Deed books – The books, files or record storage of the records in which a county government keeps the filed deeds and other significant real estate-related documents.

Deed covenants – The warranties made by a grantor seller of property to protect the grantee buyer against items such as liens, encumbrances or title defects.

Deed in lieu of foreclosure – A deed to real property from a defaulting borrower and accepted by the lender to avoid the necessity of having the lender go through formal foreclosure proceedings.

Deed in trust – An instrument that grants a trustee under a land trust full power to sell, mortgage and subdivide a parcel of real estate where the beneficiary controls the trustee’s use of these powers under the trust agreement provisions.

Deed money escrow – An agreement where money is held by a third party to be delivered to a seller of real estate upon the receipt of the deed to the sold property.

Deed of Trust – See Trust Deed

Deed restrictions – The limitations in a deed to a property that dictate specific ways that a property may or may not be used.

Deed Restrictions – The limitations in the deed to a property which dictate the uses or limitations that may or not be made with a property.

Default – The failure to fulfill a duty or promise, to discharge an obligation or the failure or omission to perform an act.

Default judgment – A court order issued as a result of a defendant in a lawsuit failing to show up or to respond to a complaint.

Defeasance clause – A clause in a mortgage that gives the mortgagor, borrower, the right to redeem and get back his or her property by paying the mortgagor’s obligations to the mortgagee, lender.

Defeasible fee – A fee simple absolute interest in land that is capable of being defeated or ended or terminated upon the happening of a specified event. Also know as Qualified fee.

Defect – In real estate a defective title is one that is irregular and faulty and having a blemish, imperfection or deficiency.

Defective Title – 1. A title which would be impaired if an outstanding claim proved to be valid. 2. The title to a negotiable instrument obtained by fraud. 3. The title to real property which lacks some of the elements necessary to transfer good title.

Defects in title – Any imperfections that cast a reasonable doubt on the marketability of a title.

Defendant – 1. A person against whom legal action has been initiated for the purpose of obtaining appropriate judicial relief or criminal sanctions or damages.

Deferred charges – The nontangible costs which are anticipated to provide value over a number of years and for accounting or tax purposes are amortized over the life to which they are expected to provide value.

Deferred gain – The gain that does not have to be recognized for tax purposes in the current tax year and gets deferred to a subsequent year(s).

Deferred maintenance – An existing need for maintenance repairs and rehabilitation that has been postponed, unfulfilled or delayed causing a decline in a building’s physical condition and thus value.

Deferred payment options – A privilege used to take advantage of statutes granting tax benefits of deferring or holding back from receiving income payments.

Deferred payments – The monetary payments which will be made at some future date.

Deficiency – In a foreclosure sale of a secured property, those funds still needed to completely release the defaulting borrower after the lender has been paid, the accrued interest, the foreclosure expenses and any damages incurred have been paid. See Deficiency judgment.

Deficiency judgment – A judgment awarded by a court when the proceeds from the sale of the security pledged for a loan is insufficient to pay off the debt of the defaulting borrower.

Deficit financing – A purchase of income property where the net income is not sufficient to cover the all payments required of the property.

Definite and certain – These precise and clearly-stated acts that need to be performed.

Delegation of authority – A transfer of authority by one party to another.

Delegation of powers – The conferring of all or certain powers that have been conferred by a principal to an agent on to another agent.

Delinquency – A financial obligation such as a loan which is in overdue or in default.

Delinquency rate – The number of delinquent payments loans in a portfolio divided by its total number of loans.

Delivery – 1. The implication of the transfer of the actual contract or document to the possession of the another in contracts and leases. 2. The transfer from one party to another of an item, a right or an interest therein which means more than just the physical transfer of possession.

Demand – One of the four essential elements of value which motivates consumers to buy goods or services at various prices and under varying conditions.

Demand note – A note which is payable but is payable upon on the demand of the lender or holder.

Demise – The transfer of interest or conveyance of an estate primarily by lease.

Demised premises – The property that is the subject of a lease.

Demographic – The characteristics pertaining to a population such as age, race, sex, household size, population growth and density.

Demographic characteristics – The specific political, social and economic characteristics common to identifiable groups of people.

Demolition – The necessary destruction and removal of an existing structure from a site in order to make way for new construction.

Demurrer – A legal objection made by one party to the opponent’s pleading, alleging that it should not be answered due to some defect in law or the pleading.

Density – In zoning, the number of units present per area such as dwellings per acre or persons per square mile.

Department of Veterans Affairs, DVA – The current name of the federal government agency that administers GI or VA loans. Formerly known as the Veterans Administration or VA.

Depletion – The exhaustion of a resource such as the removal of a mineral deposit.

Deposit – 1. The money that shows good faith that is commonly used with sales contracts and leases that is paid in good faith to assure a performance which if not done, the depositing party forfeits. 2. A natural accumulation of resources such as coal, oil, gas, etc. which can be commercially removed and marketed. Also called earnest money.

Deposit account – An arrangement whereby an individual or organization may place cash under the safekeeping of a financial institution which may invest the cash and pay the depositor a specified amount of interest and that the depositor can reclaim the full value of the account according to the agreed-upon procedures governing it.

Deposit receipt – A term used in real estate in certain areas of the country to describe a written offer to purchase real estate upon specific terms and conditions that is accompanied by a deposit toward the purchase price which becomes the sales contract for the property upon its acceptance by the owner. See Sales contract.

Depositary – The party receiving a deposit whose obligation it is to hold the item with reasonable care and upon request, restore it to the depositor or otherwise deliver it according to the original agreement.

Depreciable real property – That income producing property or property used in a trade or business which is elegible for the owner to take a deduction for depreciation on ones federal income tax return.

Depreciation – 1. In appraisal, a loss of value due to any cause which can occur due to physical deterioration, functional obsolescence or economic obsolescence. 2. In accounting, a method of decreasing the value of an asset for tax purposes by which the cost of improvements are reduced at a constant rate and in equal amounts throughout the estimated useful life of the improvement.

Depreciation allowance – The amount that can be claimed or is allowed for depreciation on ones federal income tax return.

Depreciation base – The cost of acquiring a depreciable asset.

Depreciation methods – 1. In appraising, the methods used which generally are the annuity, the sinking fund and the straight-line methods to measure decreases in the value of an improvement. 2. In accounting, the declining balance method and the variations thereon such as weighted rate and accelerated by which capital impairment is computed.

Depreciation rate – The periodic amount or percentage at which the usefulness of a property is used up and especially in regard to the percentage at which amounts are computed to be set aside as an accrual for future depreciation.

Depression – An economic conditions that causes a severe decline in business activity which is reflected by high unemployment, excess supply and public fear.

Depth – The depth of a lot is the distance between the curb and the rear property boundary line and typically the first dimension stated is the frontage and the second is the depth. The depth of a building is the distance between its front and rear walls.

Depth table – A statistical table used in appraising that is based on the theory that added depth increases the value of land and which can be used to estimate the actual value that the depth added to a lot. Also known as the 4-3-2-1 Rule.

Deregulation – A process where financial institutions which had previously been legally restrained in their lending activities get permitted to compete freely in the marketplace for profits.

Dereliction – A wearing away. See Reliction.

Descent – The process by which a decedent’s property passes to his or her legal heirs.

Description – The exact location of a parcel of real property in a deed, mortgage, trust deed, etc. whose boundaries are shown using a lot, block, tract; metes and bounds; recorded instruments; or U.S. Government survey method. Also known as legal description.

Designated agent – A form of agency used to avoid dual agency that is practiced in some states where by a broker authorizes a licensee to act as the agent to represent a specific principal in a specific transaction.

Desist and refrain order – An order issued by a state real estate commissioner directing a person to stop an action that is in violation of the real estate law. See Cease and desist.

Detached housing – A residential dwelling unit which is surrounded by freestanding walls and is sited on a separate lot. See Duplex, Double, Row house, Townhouse.

Deterioration – A worsening of the condition of a property.

Determinable fee – An estate which is subject to end on the happening of an event that might or might not occur.

Developer – A party who prepares land for income production by making improvements to land and by selling completed projects.

Development – 1. The process of creating improvements on or to a parcel of land which may include subdividing, access, sewer and drainage lines, utilities, buildings and any combination of these elements. 2. A real estate project where improvements are or have been made.

Development method – An appraisal method used to value raw land whereby an appraiser locates comparable improved property having a known value and deducting the cost of the improvements to arrive at the value of the raw land and then estimates the gross sales of the developed lots and deducts the costs of development and expenses leaving the indicated present value of the land.

Devise – A gift or disposal of real property by last will and testament.

Devisee – A person who receives a gift of real property by last will and testament.

Devisor – A person who disposes of real property by last will and testament.

Diameter – A straight line passing through the center of a circle or a sphere going from one side to the other.

Direct capitalization – A process of dividing the net operating income by an overall capitalization rate to establish value.

Direct costs – Those readily identified costs in the construction of real estate – labor, materials, and a contractor’s overhead and profit. Also known as Hard Costs. See Indirect costs.

Direct reduction mortgage – A secured real estate loan which is to be repaid by periodic, usually equal, amounts that include part of the principal plus the interest that is due on the unpaid balance.

Directional growth – The path or direction in which the residential sections of a city are destined or determined to expand.

Disability – 1. The lack of legal capacity to perform an act. 2. The lack of physical capacity to perform an act.

Disaffirm – To reject or to withdraw a consent once given or to deny the intention of being bound by an previous or earlier transaction.

Discharge – The release of or the performance of a contract or other obligation.

Disciplinary action – An administrative procedure taken by the state’s real estate commissioner against a licensee which could result in the suspension or revocation of his or her real estate license.

Disclaimer – 1. A statement whereby responsibility is rejected. 2. A renunciation of property ownership.

Disclosure statement – A legally-required statement in which the sellers of specific types of real property or under certain circumstances must reveal specified material facts to potential buyers.

Discount – 1. To sell a promissory note before its maturity at a price that is less than the outstanding principal balance of the note at the time of sale. 2. An amount deducted in advance by the lender from the nominal or stated principal amount of a loan that is a cost to the borrower for obtaining the loan.

Discount broker – A licensed broker who provides brokerage services for a lower commission, or for a flat fee rather than for a percentage of the selling price, than what is typical asked in the market and which typically provide less extensive brokerage services than full-service brokers. See Flat fee broker.

Discount points – An amount of money called points where 1 point equals 1 percent of the original principal loan amount which a borrower or a seller must pay to a lender in order to get a loan at a stated lower interest rate.

Discount rate – A rate that expressed the correlation between the dollars transmitted from a lender to a borrower and the dollars that must be repaid by the borrower.

Discounting – A concept which is a means of converting cash flow into present value at a selected rate of return that is based upon the premise that one would pay less than $1 today for the right to receive $1 at some future time.

Discretionary powers of agency – Those powers that a principal confers upon and empowers the agent to have under specific circumstances in order to make decisions based on the agent’s own judgment.

Discrimination – The illegal application of generally-unfavorable special treatment to an individual based solely on the person’s race, religion, sex, or sexual orientation, etc.

Disintegration – The last decline or decay stage in the life cycle of the value of a property.

Disintermediation – The relatively sudden withdrawal by savers of substantial sums of money deposited in savings institutions for reinvestment in other markets that are paying higher rates of return resulting in the financial intermediaries losing billions of dollars within a short period of time.

Displacement – The involuntary movement of people by converting their homes to other uses due to causes such as highway condemnation, urban renewal, redevelopment or natural disasters.

Disposable field – A drainage area not close to a water supply where septic tank refuse is dispersed into the ground through a tile and gravel filtration system.

Disposable income – The after-tax income that a household has left which is available for spending on personal consumption items.

Dispossess – The act of depriving a party of the rights of possession and use of real estate.

Distrain – See Distress.

Distraint – The legal right of a landlord to obtains a court order to seize a tenant’s personal property to satisfy payment of back rent.

Distress – The act of causing pressure or stress by a landlord on a person by taking possession of a tenant’s personal property to satisfy in whole or in part a claim for rent in arrears. Also know as distrain.

Distributee – A party who receives property from a person who died intestate.

Distribution – The division and transfer of the property of a decedent.

District – A city area with a land use that is different from adjacent areas like commercial, industrial or residential areas.

Dividend – The resulting number of one number divided by another number

Divisor – The number by which an original number is divided

Doctrine of correlative user – A legal belief that permits an owner to use a reasonable amount of the total underground water supply for his or her beneficial use

Doctrine of relation back – A legal concept that holds that the title received by the successful bidder at a foreclosure sale relates back to the time when the borrower first signed the security and which causes mmost intervening liens, except for some tax liens, to be uncollectible due to the foreclosure sale.

Documentary evidence – The evidence supplied by written instruments such as contracts, deeds, etc.

Documentary stamps – The revenue stamps issued for payment of a tax on recorded documents such as deeds.

Documentary transfer tax – A tax that applies on all real property transfers located in a county and which the prop of payment is shown on face of the deed or on another separate paper filed with the deed.

Documents – The written legal real estate instruments like mortgages, contracts, deeds, options, wills and bills of sale.

Doing Business As, DBA – A fictitious name used for business purposes that is not the true name of the business owner.

Domicile – A place where a person has his true, fixed, permanent home and principal establishment and the place where he has the intention of returning whenever he is absent. See Primary residence.

Domicile – A place where people live – their home.

Dominant tenement – The reason for which the benefit of an easement exists or is the land which has the right to the use of a right-of-way over other land.

Donee – A person who receives a gift from another.

Donor – A person who gives a gift to another.

Double – Typically two dwellings that are side by side rather than above one and other. See Duplex.

Double declining balance depreciation – An accelerated straight line depreciation method which is arrived at by doubling the straight line rate.

Double declining balance depreciation – See Declining balance depreciation.

Double taxation – The taxation of the same income at two different levels like a corporation which pays corporate income tax and then its shareholders pay an additional tax on the dividend income.

Doubling up – The occupation of a dwelling unit by two or more families usually out of necessity rather then choice.

Dower – The legal rights a widow possesses in her deceased husband’s real estate.

Down payment – An initial partial payment of the total selling price which is difference between the sale price of a property and the mortgage amount.

Downzoning – A public action by a local government which reduces the allowable density for subsequent legal developments from a high to low use such as multifamily to single-family resulting in fewer housing units, fewer stores, etc.

Drainage – The running off of water from the surface of the land.

Draw – A disbursement of a portion of the mortgage funds and typical with construction loans that is made in advance as improvements to the property occur.

Drive-by appraisal – A value estimate made be an appraiser which was prepared without the benefit of an interior inspection and which may not conform to USPAP Standard 1. See Self-contained appraisal report, Summary appraisal report or Limited appraisal.

Dual agency – An agency relationship in which one person acts as an agent for both of the principals at the same time in the same transaction.

Dual agent – An agent who represents both parties a transaction with client level services.

Dual contract – The illegal or unethical practice of providing two different contracts for the same transaction which could raise isssues of attempted fraud.

Due care – The standard of conduct required of an ordinary, prudent and reasonable person.

Due diligence – 1. A study that often precedes the purchase of property, which considers the physical, financial, legal and social characteristics of the property and expected investment performance; the underwriting of a loan or inverstment. 2.The making of every reasonable effort to perform one’s contractual obligations. 3. The making of every reasonable effort to provide accurate, complete information.

Due process – A legal principle stating that when any governmental powers are to be exercised that notice must be given to all affected parties along with an opportunity to be heard.

Due-on-sale clause – An acceleration clause granting the lender the right to demand full payment of the loan balance upon a sale of the property.

Duplex – Typically two dwelling units with one above the other under one roof. See Double.

Duress – The unlawful pressure placed upon a person whereby he or she is forced to do some act against his or her will.

Dutch Colonial – A style of architecture that features a gambrel roof, exterior walls of masonry or wood and porches at the side which is especially suited to flat sites and difficult to place onto a steep slope.

Dwelling – A place where people live such as apartments, hotels, mobile homes, nursing homes and single-family houses.

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Categories: Real Estate Words Glossary