Glossary - R
- Real estate
- Real estate, also known as realty, refers to a piece of land and any buildings or structures on it. In other words, real estate denotes land and all developments on it - immovable or permanently attached items such as accessories, fences, fixtures, roads, shrubs, trees (cultivating crops excluded), buildings, structures, sewers, utility systems and walls. In fact, the ownership to a real estate usually incorporates title to the air rights, mineral rights and surface rights that may be purchased, sold, leased or transferred collectively or individually. In brief, real estate denotes the raw land provided by nature and all man-made improvements on it that are permanently attached to the land.
- Real estate market
- Real property
- Real property is basically an alternative term for real estate or realty and includes the ground or land and any constructions on it - homes, garages, barns, tool sheds and any other structure that are permanently affixed to the land.
- Strictly speaking, the term realtor is defined as a real estate agent who is an associate of the National Association of Realtors (NAR) in the United States. In Canada, the term denotes a real estate agent, broker or a partner who is an active member in a neighborhood real estate board, which is affiliated to the Canadian Real Estate Association (CREA).
- In general, the term recapture denotes inclusion of an amount or quantity that had been excluded from a calculation earlier or recovery of funds invested. However, in the context of real estate, recapture refers to a contract prerequisite that enables a seller of a real estate asset to recover at least a part of the possession of the property. For instance, an individual selling a block of share is able to buy back some share if he or she desires or the seller of a real estate property could obtain at least a quantity of the income produced by the property concerned. In fact, a recapture agreement is normally applicable or valid only for a particular period of time.
Usually real estate investors study the outlay aspects in terms of return on their investment or return on the investment. While approximating the value of investments, commercial real estate practitioners take into account both to establish the capitalization rates as a whole or predicting cash flow under yield capitalization. From the tax point of view, recapture denotes the surplus of the value over deflated value permitted by the Canada Customs and Revenue Agency vis-à-vis the sale of a capital asset. The Income Tax Act allows a partial subtraction of the capital expenditure against the earnings of a business. The sale or any other type of arrangement of investment assets of value surpassing the depreciated value of such capital assets would normally signify a recapture that ought to be stated as income during the year of the sale of the capital asset.
- In common terms, reconciliation denotes item by item scrutiny of two associated sets of figures acquired from diverse sources. In matters pertaining to real estate, this refers to a process adopted by appraisers to evaluate select two or more alternative inferences and suggestions to arrive at a single-value approximation. All through the reconciliation, it is essential to assess and verify all computations and the consistency and bearing of the information, scrutiny and deductions made use of to arrive at the requisite approximation. In fact, reconciliation is necessary in an assortment of circumstances all through the evaluation procedure. For instance, the reconciliation of capitalization or funding rates acquired from the market or the reconciliation of equivalents in the direct evaluation method.
- In the lending industry, the term refinance, also called 'refi', refers to obtaining a new and usually larger loan to repay an older and normally smaller loan over a longer term using the same asset as guarantee. In other words, the term denotes taking a new credit at a lower interest rate to pay off an old credit at a higher rate of interest. However, refinancing is not a mechanical process, neither is it guaranteed. In fact, refinancing may often prove to be a costly botheration and hence, one ought to cautiously weigh the expenses and advantages of refinancing. Before taking a decision on whether refinancing is worthwhile, one needs to weigh the savings in interest against the fees related to refinancing.
- The term registry denotes a public record of specific items of information, such as company records and land deeds or the act of registering somebody or something. In matters pertaining to real estate, registry refers to a method of land listing arrangement for keep a record of instruments (agreements and certificates) involving real estate assets and legalized by the provincial decrees. Besides registry, another system called the land titles are prevailing in Canada.
- Reinvestment rate
- The term reinvestment rate denotes the rate received from an income that may be reinvested. In real estate context, reinvestment rate is usually made use of in computing the rate of return on investments. In effect, the reinvestment rate is a rate of interest controlled by the market as a result of which any surplus funds may be invested in characteristic savings subsequent to deductions of taxes in excess of the safe rate. The money that is invested at the reinvestment rate are considered to be surplus at present and not required to fulfill any urgent cash obligations.
The commercial real estate practitioners use the reinvestment rate while computing the modified internal rate of return (MIRR) or the financial management rate of return (FMRR). The use of a reinvestment rate is beneficial as it not only sweeps away the drawbacks related to the internal rate of return (IRR), but also brings in peripheral factors to an otherwise internal perception on rate of return on investment. As a result, the use of reinvestment rate has been criticized for this reason.
- The term remedies refer to a legal way of implementing a right or of proffering redress. In matters pertaining to real estate, remedies denote different types of recompense, like money or actions that are awarded by a court of law in response to any unlawful situation or circumstance.
- Reverse mortgage
- The term reverse mortgage denotes a special type of home equity loan for elderly persons who borrow against the equity in his or her home and receives regular periodic tax-free payments from the lender. Also known as reverse-annuity mortgage or home equity conversion, usually the loan secured through a reverse mortgage does not have to be paid during the home owner's lifetime. Reverse mortgage offers retirement earning to elderly borrowers whose mortgages are fully paid and the loan does not affect the home owner's social security or Medicare benefits.
- The term risk refers to the measurable probability of loss or returns below expectations. Broadly speaking, risk denotes insecurity, exposure, gamble and susceptibility imposed on an investor with specific consideration to any monetary loss that may accumulate from a venture. In the context of real estate, risk is generally related to resolutions to purchase investment-grade property. In fact, the risk factor is applicable to all investments. Risk focuses on fluctuation in flow of income and the susceptibility of those earnings to outside pressures like market tendencies, ease of use and aptness of financing, the extent of positive or negative influence and the financial situations as a whole.