Glossary

Factoring is a form of accounts receivable financing whereby a business will sell its accounts receivable to the factor (a third party) at a discount.

An appraisal term for the price which a property would bring in a competitive market, given a willing seller and willing buyer, each having a reasonable knowledge of all pertinent facts, with neither being under any compulsion to buy or sell.

Land used for agricultural purposes for crop and livestock farming.

Fed Funds is the interest rate charged by those banks with excess reserves on hand (reserves over and above the minimum required by the Federal Reserve) to those banks in need of overnight loans to meet reserve requirements. Since it is set daily, the Federal Funds rate is the most sensitive indicator of the direction of interest rates.

Charges associated with documents that are filed and become public record in connection with a sale (transfer tax, documentary or deed stamps), formation of a company, filing of a mortgage or lien on property.

Clause in a purchase agreement that protects a prospective buyer from legal action should financing for the purchase consideration fall through. Also may refer to whether a buyer_s ability to finance a transaction is subject to certain conditions.

The lender involved in a real estate loan that has the right to payment in full before payments to other lenders are made. Also known as _Third Party Lender_ and _Senior Lien Holder_.

Tenant improvements within a commercial property.

Physical Physical assets that a business owns. Buildings, real estate, machinery and equipment, computers and furniture are examples of fixed or tangible assets.

A mortgage with an interest rate that remains constant for the life of the loan.

Personal property which for some reason, such as the manner of attachment, has become realty. Such property is also referred to as chattel real.

An industrial property, which has both an office and an industrial component.

Identification of whether or not a property that is being acquired by loan applicants or used as collateral for a loan is located on government-designated flood plains.

The relationship between the total amount of floor space in a multi_story building and the base of that building. FAR_s are dictated by zoning laws, in effect, stipulate the maximum number of stories a building may have.

The act of refraining from taking legal action despite the fact the mortgage is in arrears. It is usually granted only when a mortgagor makes a satisfactory arrangement by which the arrears will be paid at a future date.

The process by which a lender takes back a property on which the mortgage has defaulted. A service may take over a property from a borrower on behalf of a lender. A property usually goes into the process of foreclosure if payments are more than 90 days past due.

The concrete slab beneath the property, which holds the property in place.

A business arrangement undertaken for the purpose of marketing a product or service. One party (the franchiser) provides marketing and selling expertise for a fee to another party (the franchisee) who in turn sells the product or service in the marketplace.

The fee is usually an initial purchase requirement plus an ongoing percentage of gross sales of the business.

One commercial building meant to be occupied by a single user.

A building which contains only one retail business. Fast-food franchises and retail stores are often freestanding buildings.

A hotel definition that represents services provided to its guests outside of lodging (i.e. room service, concierge services, and restaurant).

The commercial activity of providing financing and capital.