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Quantity survey method. A method for finding the reproduction cost of a building in which the costs of erecting or installing all of the component parts of a new building, including both direct and indirect costs, are added.

Quit Claim deed. A conveyance by which the grantor transfers whatever interest he or she has in the land, without warranties or obligations.

Range. A measure of the difference between the highest and lowest items in a data set.

Real estate. Land; a portion of the earth's surface extending downward to the center of the earth and upward into space including fixtures permanently attached thereto by nature or by man, anything incidental or appurtenant to land and anything immovable by law; freehold estate in land.

Real estate broker. Any person, partnership, association or corporation that, for a compensation or valuable consideration, sells or offers for sale, buys or offers to buy, or negotiates the purchase, sale or exchange of real estate, or who leases or offers to lease, or rents or offers for rent any real estate or the improvement thereon for others. Such a broker must secure a state license. For a license to be issued to a firm, it is usually required that all active partners or officers be licensed real estate brokers.

Real estate investment trust (REIT). Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits to the investors free of corporate income tax.

Real estate salesperson. Any person who, for a compensation or valuable consideration, is employed either directly or indirectly by a real estate broker to sell or offer to sell, or to buy or offer to buy, or to negotiate the purchase, sale or exchange of real estate, or to lease, rent or offer for rent any real estate, or to negotiate leases thereof or improvements thereon. Such a sales- person must secure a state license.

Real property. The rights of ownership of real estate, often called the bundle of rights; for all practical purposes, synonymous with real estate.

Recapture rate. The percentage of a property's original cost that is returned to the owner as income during the remaining economic life of the investment.

Reconciliation. The final step in the appraisal process, in which the appraiser reconciles the estimates of value received from the sales comparison, cost and income capitalization approaches to arrive at a final estimate of market value for the subject property.

Reconstruction of the operating statement. The process of eliminating the inapplicable ex- pense items for appraisal purposes and adjusting the remaining valid expenses, if necessary.

Reconveyance deed. A deed used by a trustee under a deed of trust to return title to the truster.

Rectangular survey system. A system established in 1785 by the federal government, which provides for the surveying and describing of land by reference to principal meridians and base lines; also called U.S. government survey system and section and township system.

Regional multipliers. Adjustment factors by which standard cost figures can be multiplied to allow for regional price differences.

Remainder. The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate; for instance, when an owner conveys a life estate to one party and the remainder to another. (For the case in which the owner retains the residual estate, see reversion.)

Remainderman The party designated to receive a remainder estate. There are two types: vested remainderman (one who is known and named) and contingent remainderman (one whose identity is not certain or who is to be selected).

Remaining economic life. The number of years of useful life left to a building from the date of appraisal.

Renewal option. Lease provision that allows the lessee to renew the lease for the same term or some other stated period, usually with a rent increase at a stated percentage or based on an index or other formula.

Rent. Payment under a lease or other arrangement for use of a property.

Rent loss method of depreciation. (See capitalized value method of depreciation. )

Replacement cost. The current construction cost of a building having exactly the same utility as the subject property.

Reproduction cost. The current construction cost of an exact duplicate of the subject building.

Reserves for replacement, Allowances set up for replacement of building and equipment items that have a relatively short life expectancy.

Residual. In appraising, the value remaining after all deductions have been made.

Resolution trust corporation (RTC). Federal agency created by the Financial Institutions Re- form, Recovery and Enforcement Act of 1989 to oversee management and liquidation of assets of failed savings and loan associations.

Reverse annuity mortgage (RAM). An instrument designed to aid elderly homeowners by providing them a monthly income over a period of years in exchange for equity they have acquired in their homes. RAM borrowers typically may obtain up to 80 percent of the appraised value of free-and-clear property.

Reversion. The remnant of an estate that the grantor (as opposed to a third party) holds after he or she has granted a limited estate such as a leasehold or life estate to another person and that will return or revert back to the grantor. (See also remainder.)

Right-of-way. The right that one has to travel over the land of another; an easement.

Riparian rights. Rights of an owner of land that borders on or includes a stream, river, lake or sea. These rights include definition of(and limitations on) access to and use of the water, ownership of streambed, navigable water and uninterrupted flow and drainage. (See also accretion. )

Risk rate. (See interest rate.)

Rod. A measure of length, 16 feet.

Safe rate. (See interest rate.)

Sales comparison approach. The process of estimating the value of property through examination and comparison of actual sales of comparable properties; also called the direct market comparison or market data approach.

Sales comparison method of depreciation. Way of estimating loss in value through depreciation by using sales prices of comparable properties to derive the value of a depreciated item. Also called the market data method and the market extraction method.

Salesperson. (See real estate salesperson.)

Sales price. The actual price that a buyer pays for a property.

Sandwich lease. The ownership interest of a sublessee.

Scheduled rent. Rent paid by agreement be- tween lessor and lessee; also called contract rent.

Second mortgage. A mortgage loan secured by real estate that has previously been made security for an existing mortgage loan. Also called a junior mortgage or junior lien.

Selling price. The actual price that a buyer pays for a property.

Settlement. The process of closing a real estate transaction by adjusting and prorating the required credits and charges.

Shared appreciation mortgage (SAM). A loan designed for borrowers whose current income is too low to qualify for another type of mortgage. The SAM loan makes the lender and the borrower partners by permitting the lender to share in property appreciation. In return, the borrower receives a lower interest rate.

Sheriffs deed. Deed given by a court to effect the sale of property to satisfy a judgment.

Sinking fund method. Use of a factor by which a property's annual net income may be multi- plied to find the present worth of the property over a given period at a given rate of interest.

Site. Land suitable for building purposes, usually improved by the addition of utilities or other services.

Special assessment. A charge against real estate made by a unit of government to cover the proportional cost of an improvement, such as a street or sewer.

Special-purpose property. Property that has unique usage requirements, such as a church or a museum, making it difficult to convert to other uses.

Square-foot method. A method for finding the reproduction cost of a building in which the cost per square foot of a recently built comparable structure is multiplied by the number of square feet in the subject property.

Standard deviation. A measure of the difference between individual entities, called variates, and an entire population, in which the square root of the sum of the squared differences be- tween each variate and the mean of all the variates in the population is divided by the number of variates in the population.

Statistics. The science of collecting, classifying and interpreting information based on the number of things.

Straight-line method of depreciation. (See economic age-life method of depreciation. )

straight-line recapture. A method of capital re- capture in which total accrued depreciation is spread over the useful life of a building in equal amounts.

Subdivision. A tract of land divided by the owner into blocks, building lots and streets by a re- corded subdivision plat. Compliance with local regulations is required.

Subdivision development method. A method of valuing land to be used for subdivision development. It relies on accurate forecasting of market demand, including both forecast absorption (the rate at which properties will sell) and projected gross sales (total income that the project will produce); also called the land development method.

Sub-leasehold. The interest of a sublessee under a sandwich lease.

Subletting. The leasing of premises by a lessee to a third party for a part of the lessee's remaining term.

Substitution, principle of. The basic appraisal premise that the market value of real estate is influenced by the cost of acquiring a substitute or comparable property.

Summation method. Another name for the cost approach to appraising.

Supply and demand, principle of. A principle that the value of a commodity will rise as demand increases and/or supply decreases.

Survey. The process of measuring land to deter- mine its size, location and physical description; also, the map or plat showing the results of a survey.

Tax deed. The instrument used to convey legal title to property sold by a governmental unit for nonpayment of taxes.

Tax-stop clause. A clause in a lease providing that the lessee will pay any increase in taxes over a base or an initial year's taxes.

Tenancy by the entirety. The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. On the death of one spouse the survivor becomes the owner of the property.

Tenancy in common. A form of co-ownership by which each owner holds an undivided interest in real property as if he or she were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have the right of inheritance.

Tenancy in severalty. (See ownership in severalty. )

Tenant. One who has possession of real estate; an occupant, not necessarily a renter; the lessee under a lease. The estate or interest held is called a tenancy.

Time-share. Estate or use interest in real property for a designated time period each year.

Title. The evidence of a person's right to the ownership and possession of land.

Topography. Surface features of land; elevation, ridges, slope, contour.

Trade fixtures. Articles of personal property in- stalled by a commercial tenant under the terms of a lease. Trade fixtures are removable by the tenant before the lease expires and are not true fixtures.

Triple net lease. (See net lease.)

Trust. A fiduciary arrangement whereby property is conveyed to a person or an institution, called a trustee, to be held and administered on behalf of another person or entity, called a beneficiary. The one who conveys the trust is called the truster.

Trust deed. An instrument used to create a mort- gage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called a deed of trust.

Trustee. The holder of bare legal title in a deed of trust loan transaction.

Truster. The borrower in a deed of trust loan transaction.

Under-improvement. An improvement that is less than a property's highest and best use.

Uniform Standards Of Professional Appraisal Practice (USPAP). Minimal criteria for appraisal competency promulgated by the Appraisal Foundation at the direction of Congress, to be applied to appraisals that require the services of a state-licensed or certified appraiser.

Unit-in-place method. A method for finding the reproduction cost of a building in which the construction cost per square foot of each component part of the subject building (including material, labor, overhead and builder's profit) is multiplied by the number of square feet of the component part in the subject building. useful life. (See economic life.)

Use-value. The value of a property designed to fit the specific requirements of the owner but that would have little or no use to another owner. Also referred to as value-in-use.

Usury. Charging interest in excess of the maxi- mum legal rate.

Vacancy and collection losses. (See allowance for vacancy and collection losses.)

Valuation principles. Factors that affect market value, such as the principle of substitution, highest and best use, supply and demand, conformity, contribution, increasing and decreasing returns, competition, change, stage of life cycle, anticipation, externalities, balance, surplus productivity, opportunity cost, and theory of distribution.

Value. The power of a good or service to command other goods or services in exchange; the present worth of future rights to income and benefits arising from ownership.

Value in exchange. The value of goods and serv- ices in exchange for other goods and services, or money, in the marketplace; an economic concept of market value.

VA mortgage. A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the Department of Veterans Affairs to limit possible loss by the lender.

Variance. (See zoning variance.)

Variate. In statistics, an individual thing, person or other entity.

Vendee. Buyer.

Vendor. Seller.

Warranty deed. A deed in which the grantor fully warrants good clear title to the property.

Yield. Income produced by an investment. Usually used to refer to equity investments.

Yield capitalization. Method used to estimate value from annual net operating income by ap- plying a capitalization rate derived by analyzing each of the rate's component parts to provide both return on and return of the investment.

Zoning. Municipal or county regulation of land use within designated districts or zones. Zoning is an application of a state's police power to regulate private activity by enacting laws that benefit the public health, safety and general welfare. Zoning may affect use of the land, lot sizes, type of structure permitted, building heights, setbacks and density.

Zoning ordinance. Regulation of the character and use of property by a municipality or other government entity through the exercise of its police power.

Zoning variance. An exemption from a zoning ordinance or regulation permitting a structure or use that would not otherwise be allowed.

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