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Maintenance expenses. Costs incurred for day- to-day upkeep, such as management, wages and benefits of building employees, fuel, utility serv- ices, decorating and repairs.

Marital property. (See community property and tenancy by the entirety.)

Markers. (See monuments.)

Market. A place or condition suitable for selling and buying.

Market comparison approach. (See sales comparison approach.)

Market comparison method of depreciation. (See sales comparison method of depreciation.)

Market data approach. (See sales comparison approach.)

Market extraction method of depreciation. (See series comparison method of depreciation.)

Market price. (See sales price.)

Market rent. The amount for which the competitive rental market indicates property should rent. An estimate of a property's rent potential.

Market value. The most probable price real estate should bring in a sale occurring under nor- mal market conditions.

Mean. 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.

Mechanic's lien A lien created by statute that exists in favor of contractors, laborers or material men who have performed work or furnished materials in the erection or repair of a building. meridian. (See principal meridian.)

Metes and bounds description. A method of legal description specifying the perimeter of a parcel of land by use of measured distances from a point of beginning along specified boundaries, or bounds, using monuments, or markers, as points of reference.

Mile. A measurement of distance, being 1,760 yards or 5,280 feet.

Mobile home. A structure transportable in one or more sections, designed and equipped to contain not more than two dwelling units to be used with or without a foundation system; does not include a recreational vehicle. Also called a manufactured home.

Monuments. Natural or artificial objects used to define the perimeter of a parcel of land using the metes and bounds method of legal description.

Mortgage. A conditional transfer or pledge of real property as security for the payment of a debt; also, the document used to create a mort- gage lien.

Mortgagee. The lender in a loan transaction se- cured by a mortgage.

Mortgagor. An owner of real estate who borrows money and conveys his or her property as security for the loan.

Narrative appraisal report. A detailed written presentation of the facts and reasoning behind an appraiser's estimate of value.

Neighborhood. A residential or commercial area with similar types of properties, buildings of similar value or age, predominant land-use activities, and natural or fabricated geographic boundaries, such as highways or rivers.

Neighborhood life cycle. The period during which most of the properties in a neighborhood undergo the stages of development, equilibrium and decline. decline. Properties require an increasing amount of upkeep to retain their original utility and become less desirable. development (growth). Improvements are made, and properties experience a rising demand. equilibrium. properties undergo little change; also called stability.

Net income ratio. The ratio of net operating income to effective gross income.

Net lease. A lease requiring the tenant to pay rent and part or all of the costs of maintenance including taxes, insurance, repairs and other expenses of ownership. Sometimes known as an absolute net lease, triple net lease or net, net, net lease.

Net operating income. Income remaining after operating expenses are deducted from effective gross income.

Non-conforming use. A once lawful property use that is permitted to continue after a zoning ordinance prohibiting it has been established for the area; a use that differs sharply from the prevailing uses in a neighborhood.

Observed condition depreciation. A method of computing depreciation in which the appraiser estimates the loss in value for all items of depreciation. (See also incurable depreciation and cur- able depreciation. )

Obsolescence. Lessening of value from out-of- date features as a result of current changes in property design, construction or use; an element of depreciation. (See also external obsolescence and functional obsolescence.)

Occupancy. Possession and use of property as owner or tenant.

Occupancy rate. The percentage of total rental units occupied and producing income.

Operating expense ratio. The ratio of total operating expenses to effective gross income.

Operating expenses. The cost of all goods and services used or consumed in the process of obtaining and maintaining income. (See also fixed expenses, maintenance expenses and reserves for replacement. )

Operating statement. The written record of a business's gross income, expenses and resultant net income.

Operating statement ratio. Relationship of a property's expenses to income, found by dividing total operating expenses by effective gross in- come.

Opportunity cost. The value differential be- tween alternative investments with differing rates of return.

Option. A right given for a valuable consideration to purchase or lease property at a future date, for a specified price and terms. The right may or may not be exercised at the option holder's (optionee's) discretion.

Orientation. Positioning a structure on its lot with regard to exposure to the sun, prevailing winds, privacy and protection from noise.

Overage rent. Rent paid over a base amount in a percentage lease.

Overall capitalization rate. A rate of investment return derived by comparing the net in- come and sales prices of comparable properties.

Overall rate. The direct ratio between a property's annual net income and its sales price.

Over-improvement. An improvement to property that is more than warranted by the property's highest and best use and thus not likely to contribute its cost to the total market value of the property.

Ownership in severalty. Individual ownership of real estate, not to be confused with the use of the word several to mean "more than one"; also called tenancy in severalty, sole tenancy or separate ownership.

Paired sales analysis. A method of estimating the amount of adjustment for the presence or absence of any feature by pairing the sales prices of otherwise identical properties with and with- out the feature in question. A sufficient number of sales must be found to allow the appraiser to isolate the effect on value of the pertinent factor (also called paired data set analysis and matched pairs analysis).

Parameter. A single number or attribute of the individual things, persons or other entities in Population.

Partial interest. Any property interest that is less than full fee simple ownership of the entire property.

Partnership. An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law a partnership is regarded as a group of individuals rather than as a single entity.

Percentage lease. A lease commonly used for commercial property that provides for a rental based on the tenant's gross sales at the premises. It generally stipulates a base monthly rental, plus a percentage of any gross sales exceeding a certain amount.

Personal property. Items that are tangible and movable and do not fit the definition of realty; chattels.

Physical deterioration-curable. Loss of value due to neglected repairs or maintenance that are economically feasible and, if performed, would result in an increase in appraised value equal to or exceeding their cost.

Physical deterioration-incurable. Loss of value due to neglected repairs or maintenance of short-lived or long-lived building components that would not contribute comparable value to a building if performed.

Physical life. The length of time a structure can be considered habitable, without regard to its economic use.

Planned unit development(PUD). A subdivision consisting of individually owned residential and/or commercial parcels or lots as well as areas owned in common.

Plat. A map representing a parcel of land subdivided into lots, showing streets and other details or a single site.

Plottage value. The subsequent increase in the unit value of a group of adjacent properties when they are combined into one property in a process called assemblage.

Point of beginning. Place at which a legal description of land using the metes and bounds method starts.

Police power. The right of the government to impose laws, statutes and ordinances to protect the public health, safety and welfare. Includes zoning ordinances and building codes.

Possession. The right of the owner to occupy property. When property is occupied by a tenant, the owner has constructive possession by right of title.

Potential gross income. A property's total potential income from all sources during a specified period of time.

Prepaid items of expense. Expense items, such as insurance premiums and tax reserves, that have been paid in advance of the time that the expense is incurred. Prepaid expenses typically are prorated and credited to the seller in the preparation of a closing statement.

Price. The amount of money set or paid as the consideration in the sale of an item at a particular time.

Principal. (1) A sum lent or employed as a fund or investment--as distinguished from its income or profits; (2) the original amount (as of a loan) of the total due and payable at a certain date; or (3) a party to a transaction--as distinguished from an agent.

Principal meridian. One of 35 north and south survey lines established and defined as part of the U.S. government or rectangular survey system.

Profit-and-loss statement. (See operating statement.)

Property residual technique. A method of capitalization using the net income remaining to the property as a whole.

Prorations. The adjustment of taxes, interest, insurance and/or other costs on a pro-rata basis as of the closing of a sale. (See also closing statement.)

Purchase money mortgage. A note secured by a mortgage or trust deed given by the buyer, as mortgagor, to the seller, as mortgagee, as part of the purchase price of real estate.

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