Real Estate Glossary

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M1, M2, M3:
Three measurements of the United States money supply. M1, or the basic money supply, consists of cash in public hands, private checking accounts, credit union share accounts and demand deposits at thrifts. M2 includes all of M1 plus money market mutual fund shares, and savings deposits of less than $100,000 at all depository institutions. M3 includes M2 plus large time deposits at all depository institutions.
The maker of a check is known as the drawer. (See payee)
Manifest system
Tracking of hazardous waste from "cradle to grave" (generation through disposal), with accompanying documents known as "manifests." (See hazardous waste)
Maintenance charges:
Monthly or annual charges assessed in a condominium, planned united development, or cooperative development to cover operational costs.
Refers to the amount of personal or hired time, it takes to run the investment.
Management agreement:
A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority.
Management plan:
The financial and operational strategy for the ongoing management of a property. It is based on market analysis, a property analysis and the owner's goals. (See market analysis, property analysis)
Manufactured home:
A structure (transportable in one or more sections) when in the traveling mode, is eight body feet or more in width, or 40 body feet or more in length, or, when erected on site, is 320 or more square feet. It is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein. (H & S Code § 18007)
In an adjustable-rate loan, the amount added to the index rate that represents the lender's cost of doing business (including costs, profits and risk of loss of the loan). Generally the margin stays constant during the life of the loan. (See adjustable-rate loan, index rate)
A place where goods can be bought and sold and a price established.
Market analysis:
A regional and neighborhood study of economic, demographic and other factors made to determine supply and demand, market trends, and otherfactors important to leasing and operating a specific property.
Market approach:
A method of pricing single-family rental homes and condos using comparable market data. When pricing multiple unit rental properties, the income approach is probably better. (See comparative market analysis, net income approach)
Market-data approach:
Estimating a property's value based on a comparison of the property with similar properties in the same locale that have sold recently. Also known as the direct sales comparison approach. (See appraisal)
Marketable title:
Good or clear title, reasonably free from the risk of litigation over possible defects.
Market value:
The most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale. Such such conditions include the assumption that the buyer and seller acted prudently and knowledgeably and that the price is not affected by undue stimulus.
Any construction material involving bricks/blocks and mortar or related materials.
Master deed:
The principal conveyance document used by the owners of land on which condominiums are located. (See fictitious deeds of trust)
Master plan:
A comprehensive plan to guide the long-term physical development of a particular area.
Material fact:
Any fact that is relevant to a person making a decision. Agents must also disclose to buyers material facts about the condition of the property, such as known structural defects, building code violations and hidden dangerous conditions. Brokers are often placed in a no-win situation of trying to evaluate whether a certain fact is material enough that it needs to be disclosed to a prospective buyer, such as the fact that a murder occurred on the property 10 years ago or the fact that the neighbors throw loud parties. It is sometimes difficult to distinguish between "fact" and "opinion." The statement "real property taxes are low" is different from "real property taxes are $500 per year." Even though brokers act in good faith, they may still be liable for failure to exercise reasonable care or competence in ascertaining and communicating pertinent facts that the broker knew or "should have known." Many state laws provide that the fact that an occupant of property has AIDS is not deemed to be a material fact. A broker who fails to disclose this fact is not liable for concealment of a material fact.
The average of all items included within a group, calculated by dividing the sum of the individual items, or variates, by the number of variates. (See variate)
Mechanics' lien:
A statutory lien in favor of a building contractor (architects and designers in some states) to secure payment for materials supplied and services rendered in the improvement, repair or maintenance of real property. (See lien)
The middle figure in a set of numbers.
A process where a neutral third party intervenes between the disputing parties to reach a satisfactory solution.
Mello-Roos Bonds:
Based on passage of the Mello-Roos Community Facilities Act of 1982, certain housing tracts may be within what are called "community facilities districts" where special taxes are assessed to finance designated public facilities and/or services. Mell-Roos liens are usually municipal bonds issued to fund streets, sewers and other infrastructure needs before a housing development is built. These special assessments are paid by the seller and will be assumed by the buyer.
Mentor program:
A training program in a real estate office wherein newly-hired agents assist successful, knowledgeable salespersons for a period of time.
The joining of a lesser right with a greater right so that the lesser right is lost.
One of a set of imaginary lines running north and south used by surveyors for reference in locating and describing land under the government survey method of property description.
Metes-and-bounds description:
A legal description of a parcel of land that begins at a well marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning. (See legal description)
Military ordinance location:
Certain military bases contain live ammunition for various reasons. A seller of residential property located within one mile of such a hazard must give the buyer written notice as soon as practicable before transfer of title.
One-tenth of one cent. Some states use a mill rate to compute real estate taxes; for example, a rate of 52 mills would be $0.052 tax for each dollar of assessed valuation of a property.
Someone who has not reached the age of majority and therefore does not have legal capacity to transfer title to real property.
Mineral rights:
Rights to subsurface land and profits. Nornally, when real property is conveyed, it includes everything above and below the surface of the land, except where specified by the grantor.
Offenses less serious than felonies and generally punishable by a fine or imprisonment less than one year.
A false statement or concealment of a material fact made with the intention of inducing some action by another party.
An error or misunderstanding. A contract is voidable if there is a mistake that is mutual, material, unintentional and free from negligence, such as both parties honestly contracting for a different lot in a subdivision (mistake of fact). Innocent mistakes seldom serve to void a contract. A party cannot claim "mistake" to get out of a contract on the basis that he or she did not read the contract he or she signed and was therefore mistaken as to its material terms; neither ignorance nor poor judgment is a mistake of fact. Nor can a party claim mistake in not knowing the legal consequences upon signing the contract (mistake of law). When there is an ambiguity known by one party who fails to explain the mistake to the innocent party, the innocent party's interpretation generally will prevail.
Measures taken to reduce adverse impacts on the environment. To make less severe, as in the "mitigation" of enviromental hazards.
Mixed-use developments (MUDs):
MUDs combine office space, stores, theaters and apartment units in a single community. MUDs usually contain and offer laundry facilities, restaurants, food stores, valet shops, beauty parlors, barbershops, swimming pools and other attractive and convenient features. (See highrise developments)
Prefabricated trailer-type housing units that are semipermanently attached to land, which is either the owner's fee land or a leasehold, such as in a mobile-home park. Mobile homes are usually affixed to a concrete foundation and connected to utilities. Although they may not be as mobile as the word implies, they may be removed from such attachments and hauled to a new location. In this respect mobile homes possess the features of both real and personal property. They are like real property when the units are attached to the earth's surface, and like personal property when they are detached and moved. The courts, however, generally consider a mobile home as a fixture and thus treat it as real property.
Mobile-home loan:
A mortgage loan on a large mobile-home, usually drawn for a shorter term than conventional mortgages.
Mobile-home park:
An area zoned and set up to accommodate mobile homes by providing water hookups and sewage disposal for each home. The mobile-home park contains all utilities, streets, parking and amenities. Mobile-home parks are also called trailer parks.
The most frequently occurring variate. (See variate)
Modular housing:
A relatively recent concept in home construction, aimed at producing housing more economically and faster through prefabricating processes; also called prefabricated housing. Modular methods expedite construction because the house itself can be built in the factory while the building site is being prepared, thus potentially eliminating costly delays. Some courts have held that the sale of an unattached modular home is the sale of personal property, and thus no written listing or real estate license is required to earn a commission.
Molds are simple, microscopic organisms that are present virtually everywhere both indoors and outdoors. Molds are fungi and are needed to break down dead material and recycle nutrients in the environment. For molds to grow and reproduce they need only a food source such as leaves, wood, paper, or dirt - and moisture.
Monetary policy:
Governmental regulation of the amount of money in circulation through such institutions as the Federal Reserve Board. (See Federal Reserve)
Month-to-month tenancy:
A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written) a tenancy is generally considered to be month to month.
A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description.
1.A temporary suspension of payments due under a financial obligation in order to help a distressed borrower recover from financial difficulties and avoid default and foreclosure. 2. A temporary suspension of issuing building permits. (See workout)
A legal document used to secure the performance of an obligation. The term mortgage, which is derived from the French words mort meaning "dead" and gage meaning "pledge," is appropriate in that the pledge is extinguished only after the debt is paid. In the usual real estate transaction, the buyer seeks to borrow money to pay the seller the difference between the down payment and the purchase price. When the lender (mortgagee) lends the money, the buyer/borrower (mortgagor) is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The purpose of the mortgage note is to create a personal liability for payment on the part of the mortgagor; the purpose of the mortgage is to create a lien on the mortgaged property as security for the debt.
Mortgage-backed security (MBS):
A security guaranteed by pools of mortgages and used to channel funds from securities markets to housing markets. Ginnie Mae has a popular MBS program recognized for its low risk and high yield. The Ginnie Mae MBS security is a pool of VA and FHA mortgages put together as a bond. Freddie Mac and Fannie Mae also have MBS programs. (See FHA, Fannie Mae, Freddie Mac, Ginnie Mae, VA loan)
Mortgage banker:
A person, corporation or firm (not otherwise in banking and finance) that normally provides its own funds for mortgage financing as opposed to savings and loan associations or commercial banks that use other people's money - namely that of their depositors--to originate mortgage loans. Although some mortgage bankers do supply permanent long-term financing, the majority specialize in supplying short-term and interim financing, either through their own resources or by borrowing from commercial sources. Mortgage Bankers Association of America Website
Mortgage broker/company:
A person or firm that acts as an intermediary between borrower and lender; one who, for compensation or gain, negotiates, sells or arranges loans and sometimes continues to service the loans; also called a loan broker. Loans originated by the mortgage broker are closed in the lender's name and are usually serviced by the lender. This is in contrast to mortgage bankers, who not only close loans in their own names but continue to service them as well. Many mortgage brokers are also licensed as real estate brokers and provide these financing services as supplements to their realty services.
Mortgage insurance:
A kind of insurance policy that will pay off the mortgage balance in the event of death, and in some policies, disability. Premiums are paid with the regular monthly mortgage payment.
Mortgage insurance premiums (MIP):
Most FHA loans require the borrower to pay two mortgage insurance premiums: one upfront paid at closing; the second is an annual premium based on the loan balance each year.
Mortgage lien:
A lien or charge on the property of a mortgagor that secures the underlying debt obligations. (See lien)
Mortgage loan disclosure statement:
Borrower disclosure mandated by Article 7 of the Real Estate Law. (See Article 7)
Mortgage revenue bonds:
A type of tax-exempt industrial development bond offered by state and local governments through their housing financing agencies. (See industrial development bonds)
In a mortgage transaction, the party who receives and holds a mortgage as security for a debt, the lender. A lender or creditor who holds a mortgage as security for payment of an obligation.
Mortgagee's title insurance:
An insurance policy protecting the lender for the amount of the loan in the event of a future title dispute. (See owner's title insurance, title insurance)
In a mortgage transaction, the buyer/borrower is the mortgagor. The mortgagor is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The mortgage note creates a personal liability for payment on the part of the mortgagor. (See mortgage, promissory note)
Mrs. Murphy's Exemption:
The common description of the exemption that applies to an owner-occupied building with four or fewer units.
Multiclass mortgage securities:
Short- and long-term mortgage securities, with or without pass-through privileges. (See pass-throughs)
Multi-lender rule loans:
Loans involving 10 or fewer investors regulated by the Corporation Commissioner.
Multiperil policies:
Many insurance companies offer multiperil policies for apartment and commercial buildings. Such a policy offers the property manager an insurance package that includes standard types of commercial coverage, such as fire, hazard, public liability and casualty. Special coverage for earthquakes and floods is also available.
Multiple-listing clause:
A provision in an exclusive listing for the authority and obligation on the part of the listing broker to distribute the listing to other brokers in the multiple-listing organization.
Multiple-listing service (MLS):
A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on their own. Most multiple-listing services accept exclusive-right-to-sell or exclusive agency listings from their member brokers.
Municipal bonds:
Bonds issued to finance public improvements such as parks, schools and urban renewal projects.
Must-buy buyers:
Buyers looking for properties that meet specific needs.
Must-sell sellers:
A highly motivated or desperate seller.
Mutual consent:
A meeting of the minds; a mutual assent of the parties to the formation of the contract.
Mutual mortgage insurance:
Insurance premiums and other specified FHA revenues are paid into one of four FHA funds. Losses due to foreclosure are met from these funds.
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