Business / Real Estate Glossary

Financial Management Rate Of Return (FMRR): A multi-year analysis of rate of return. Used by investors in medium and large properties (occasionally on small properties). Multi-year cash flows and net sale proceeds are analyzed using d . . . View Full Definition

Financial Statement: A brief summary of a persons assets, liabilities and earnings records.

Financing Statement: Security interests in chattels (personal property) are created by an instrument known as a security agreement. To give notice of a security interest, a financing statement must be recorded.

Finders Fee: A fee paid to someone for finding either the buyer to purchase or the seller to list a property.

Fire Insurance Requirement Form: A statement signed by the borrower agreeing to comply with the lenders requirements for fire insurance coverage.

Fire Rating: A rating of the length of time it takes a fire to penetrate a barrier. Designates the ability of a material to contain a fire in a carefully controlled test setting for a specified period of . . . View Full Definition

Fiscal Policy: The governments policy in regarding to taxation and spending programs. The difference between these two areas determines the amount of money the government will withdraw from or feed into th . . . View Full Definition

Fixed Expenses: Those recurring expenses that have to be paid regardless of whether the property is occupied, for example, real property taxes, hazard insurance and debt service. These expenses contrast wit . . . View Full Definition

Fixed-Fee: A contractor submits a bid proposing a fixed amount to do a job. Most construction bids are made on this basis.

Fixed-Rate Loan: A loan with the same rate of interest for the life of the loan.

Fixtures: An article that was once personal property but has been so affixed to real estate that it has become real property. Whether an article is a fixture depends on the intention of the parties an . . . View Full Definition

Flashing: Sheet metal or other impervious material used in roof and wall construction as a barrier to water seepage.

Flat Fee: A property management fee expressed as a dollor amount per year or month.

Flood Hazard Areas: Locations specified on Federal Emergency Management Agency (FEMA) maps indicating areas that are subject to flooding. The sellers agent is required to inform potential buyers if the agent ha . . . View Full Definition

Flue: The pipe or conduit that allows combustion gasses to exit the house.

Flush: To open a cold-water tap to clear out all the water that may have been sitting for a long time in the pipes. In new homes, to flush a system means to send large volumes of water gushing thro . . . View Full Definition

For Sale By Owner (FSBO): Some owners choose to sell their own property without the aid of a real estate broker. For Sale By Owner properties are often a source of listings when the owner is unsuccessful finding qual . . . View Full Definition

Forbearance: The act of refraining from taking legal action despite the fact that payment of a promissory note in a mortgage or deed of trust is in arrears. It is usually granted only when a borrower mak . . . View Full Definition

Foreclosure: A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage d . . . View Full Definition

Foreign Investment In Real Property Tax Act (FIRPTA): Enacted by the United States Congress in 1985, the act requires buyers to withhold estimated taxes equal to 10% of the sale price of a property sold or exchanged by a foreign person. The wit . . . View Full Definition

Formaldehyde: A colorless, pungent, and irritating gas, used chiefly as a disinfectant and preservative and in synthesizing other compounds like resins.

Four Zero One 401(K) Retirement Plan: 401(k) retirement plans allow an individual to contribute part of their pre-tax income to an investment account. Pre-tax contributions are not tax-free, they are tax-deferred, meaning the pe . . . View Full Definition

Fractional Basis: Each property in the improvement district is charged a prorated share of the total amount of the special tax assessment. The share is determined either on a fractional basis (four houses may . . . View Full Definition

Fractional Section: A parcel of land less than 160 acres, usually found at the edge of a rectangular survey. Undersized or oversized sections are classified as fractional sections. Fractional sections may occur . . . View Full Definition

Franchise: 1. A privilege granted to conduct certain service businesses, such as a franchise real estate brokerage. 2. The private contractual right to operate a business using a designated trade name . . . View Full Definition

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