Dictionary of Terms - D

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Data: Information pertinent to a specific appraisal assignment. Data may be general (relating to the economic background, the region, the city and the neighborhood) or specific (relating to the subject property and comparable properties in the market).
Datum: A horizontal plane from which heights and depths are measured.
Debit: On a closing statement an amount charged; that is an amount that the debited party must pay.
Debt Investors: Investors who take a relatively conservative approach, typically taking a passive role in investment management while demanding a security interest in property financed.
Debt: Any amount one person owes to another.
Debt-to-Income Ratio: The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.
Decedent: A person who has died.
Declaration Of Restrictions: Document filed by a subdivision developer and referenced in individual deeds to subdivision lots that lists all restrictions that apply to subdivision properties. (See also deed restrictions.)
Decreasing Returns Laws Of: The situation in which property improvements no longer bring a corresponding increase in property income or value.
Dedication: The voluntary transfer of private property by its owner to the public for some public use such as for streets or schools.
Deed In Lieu Of Foreclosure: A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. This is a way for the mortgagor to avoid foreclosure.
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. The beneficiary controls the trustee's use of these powers under the provisions of the trust agreement.
Deed Of Trust: A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan. See Trust Deed
Deed Restriction: A clause in the deed of a property that limits the property's use.
Deed Restrictions: Clauses in a deed limiting the future uses of the property. Deed restrictions may impose a vast variety of limitations and conditions-for example they may limit the density of buildings dictate the types of structures that can be erected or prevent buildings from being used for specific purposes or even from being used at all.
Deed: A written instrument that when executed and delivered conveys title to or an interest in real estate.
Default: The nonperformance of a duty whether arising under a contract or otherwise; failure to meet an obligation when due.
Defeasance Clause: A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition such as cancellation of a mortgage upon repayment of the mortgage loan.
Defeasible Fee Estate: An estate in which the holder has a fee simple title that may be divested upon the occurrence or nonoccurrence of a specified event. There are two categories of defeasible fee estates: fee simple on condition precedent (fee simple determinable) and fee simple on condition subsequent.
Deferred Maintenance: Items in need of repair because the maintenance has been postponed.
Deficiency Judgment: A personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full.
Delinquency: Failure to make mortgage payments on time. Severe delinquency can lead to foreclosure.
Delinquent Mortgage: A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days the lender may begin foreclosure proceedings.
Demand: The amount of goods people are willing and able to buy at a given price; often coupled with supply.
Demised Premises: Property conveyed for a certain number of years, most often by a lease.
Demography: The statistical study of human populations, especially in reference to size, density and distribution. Demographic information is of particular importance to people involved in market analyses and highest and best use analyses in determining potential land uses of sites.
Density (Land Development): The ratio between improvement size (or units) and the site area. Allowable density is often controlled by zoning ordinances and subdivision restrictions.
Density Ratio: The ratio of the area of the building to the area of the site. Also known as floor area ratio. It can be expressed as a percentage reflecting the percentage of land occupied by the footprint of the improvements.
Density Zoning: Zoning ordinances that restrict the maximum average number of houses per acre that may be built within a particular area, generally a subdivision.
Department Of Veterans Affairs (VA): An independent agency of the federal government which guarantees long-term, low or no down payment mortgages to eligible veterans.
Deposit: Funds provided by the buyer with an offer to purchase property. Also referred to as "earnest money".
Depreciated Cost: For appraisal purposes the reproduction or replacement cost of a building, less accrued depreciation to the time of appraisal.
Depreciation: (1) In appraisal, a loss of value in property due to any cause including physical deterioration, functional obsolescence and external obsolescence. (2) In real estate investment, an expense deduction for tax purposes taken over the period of ownership of income property.
Depth Factor: An adjustment factor applied to the value per front foot of lots that vary from the standard depth.
Descent: Acquisition of an estate by inheritance in which an heir succeeds to the property by operation of law.
Designated Agent: A licensee authorized by a broker to act as the agent for a specific principal in a particular transaction.
Deterioration: The physical wear and tear on property caused by weather, time or other environmental conditions.
Developer: One who attempts to put land to its most profitable use through the construction of improvements.
Development (growth): Improvements are made, and properties experience a rising demand.
Development Cost: The cost to complete a project including direct costs and indirect costs.
Devise: A gift of real property by will. The donor is the devisor and the recipient is the devisee.
Direct Capitalization: In the income approach, the method used to convert a single year's income into an estimate of property value by dividing the income by a capitalization rate.
Direct Costs (hard Costs): Costs for labor and materials usually including builder's overhead and profit.
Direct Market Comparison Approach: (See sales comparison approach.)
Disclosure: A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.
Discount Points: Fees charged by a lender to provide a lower interest rate. One discount point equals one percent (1%) of the loan amount.
Discount Rate: (See interest rate.)
Discount: (i) Points - The fee paid to the lender at closings to increase the lender's yield. (ii) Discounting of cash flow or reversions - Reversion of future payments or a future receipt of a lump sum into a present value with the use of a discount (interest) rate. (iii) The difference between the price paid and the outstanding balance of an investment.
Disintegration: (See neighborhood life cycle.)
Document Needs List: A list of documents required by a lender from a potential borrower submitting a loan application. Documents requested can range from paycheck stubs to bank statements.
Documentation Preparation Fee: A fee charged by lenders, brokers and/or settlement agents to prepare the necessary documents for closing.
Dominant Tenement: A property that includes in its ownership the appurtenant right to use an easement over another person's property for a specific purpose.
Dormer: A hip or gable roof extension, usually with a window, added to the second level or attic level of a dwelling. Shed dormers have flat roof and usually add living floor area as well as additional light.
Dower: The legal right or interest recognized in some states that a wife acquires in the property her husband held or acquired during their marriage. During the husband's lifetime the right is only a possibility of an interest; upon his death it can become an interest in land.
Down Payment: The difference between the purchase price and the portion financed by a mortgage lender.
Downspout: The vertical pipe that carries the water collected in the gutters to ground level.
Draw: A payment made to contractors, subcontractors, home builders or suppliers from the proceeds of a construction loan.
Dry Rot: Decay in wood or timber caused by fungus rather than concentrated moisture.
Drywall: Sheet rock finish for the interior.
Dual Agency: Representing both parties to a transaction. This is unethical unless both parties agree to it and it is illegal in many states.
Duct: Conduit for conveying heat or cooling to the various parts of a structure. Various materials are used but sheet metal and flexible plastic tubing are most common.
Due-on-sale Clause: A provision in the mortgage that states that the entire balance of the note is immediately due and payable if the mortgagor transfers (sells) the property.
Duress: Unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against his or her will. A contract entered into under duress is voidable.

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