RA Resident Architect.

RAM Reverse annuity mortgage.

RANGE LINES Lines parallel to a principal meridian, marking off the land into 6-mile strips known as ranges; they are numbered east or west of a principal meridian in the Government Rectangular Survey

RATE OF INTEREST Same as interest rate.

RATE OF RETURN The percentage return on each dollar invested. The percentage relationship between the earnings and the cost of an investment. Also known as, yield.

RATE OF RETURN OF INVESTMENT Same as recapture rate.

RAW LAND LAND IN ITS NATURAL STATE. Land that has not been subdivided into lots, does not have water, sewers, streets, utilities or other improvements necessary before a structure can be constructed.

READY, WILLING, AND ABLE Capable of an action and disposed to act

REAL ESTATE In law, land and everything more or less attached to it. Ownership below to the center of the earth and above to the heavens

REAL ESTATE COMMISSION State agency that enforces real estate license laws.

REAL ESTATE INVESTMENT TRUST (REIT) A real estate mutual fund, allowed by income tax laws to avoid the corporate income tax. It sells shares of ownership and must invest in real estate or mortgages. It must meet certain other requirements, including minimum number of shareholders, widely dispersed ownership, asset and income tests.

REAL ESTATE MARKET The potential buyers and sellers of real property at the current time, and the current transaction activity for real property. It includes markets for various property types, such as housing market, office market, condominium market, land market.

REAL ESTATE MORTGAGE INVESTMENT CONDUIT (REMIC) The Tax Reform Act of 1986 created a new entity, the REMIC. The purpose of a REMIC is to hold a fixed pool of mortgages and issue interests in itself to mortgage investors. A REMIC may be a partnership, corporation, trust, or separate pool of assets. REMICs are intended to become the exclusive means for issuing multiple-class mortgage backed securities in a form that avoids the corporate double tax.

REAL ESTATE OWNED (REO) All real estate directly owned by a lender, including real estate taken to satisfy a debt. Includes real estate acquired by lenders through foreclosure, or in settlement of any other obligation to the lender.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) A law that states how mortgage lenders must treat those who apply for federally related real estate loans on property with 1-4 dwelling units. Intended to provide borrowers with more knowledge when they comparison shop for mortgage money.

REALIZED GAIN In a tax-free exchange, a gain that has occurred financially, but is not necessarily taxed.

REAL PROPERTY (1) Land and anything permanently affixed to the land, such as buildings, fences, and those things attached to the buildings, such as light fixtures, plumbing and heating fixtures, or other items which would be personal property if not attached. (2) May refer to rights in real property as well as the property itself.

REALTOR A professional in real estate who subscribes to a strict Code of Ethics as a member of the local and state boards and of the National Association of Realtor?s

REALTOR'S ASSOCIATE A licensed salesperson (not broker) who is a member of the National Association of Realtors.

REALTY Same as real estate.

REAPPRAISAL LEASE A lease where the rental level is periodically reviewed by independent appraisers. Often, the lessor and lessee will each select an appraiser; if they do not agree on a value, they will choose a third appraiser.

REASSESSMENT The process of revising or updating the value estimate of property for ad valorem tax purposes.

REBATE A refund resulting from a purchase or tax.

RECAPTURE That portion of the gain from the sale of real estate that is taxed at ordinary income tax rates. Calculated as the difference between the accelerated depreciation taken and the straight-line depreciation that would have been allowed.

RECAPTURE OF DEPRECIATION Same as depreciation recapture.

RECAPTURE RATE In appraisal, a term used to describe the rate of recovery of an investment in a wasting asset. This rate is added to the discount rate to derive a capitalization rate in appraisal terminology. May be based on the straight-line, sinking fund, or annuity method.

RECASTING The process of adjusting a loan arrangement, especially under the threat of default.

RECIPROCITY Mutual agreement to accept, such as a state's acceptance, as valid the real estate license one has earned in another state.

RECOGNIZED GAIN In a tax-free exchange, the portion of gain that is taxable. A realized gain will generally be recognized to the extent of boot received.

RECONCILIATION In appraisal, the process of adjusting comparables to estimate the value of the subject being appraised.

RECONVEYANCE Occurs when a mortgage debt is retired. The lender conveys the property back to the equity owner, free of the debt.

RECORDING The act of entering in a book of public records instruments affecting the title to real property. Recording in this manner gives notice to the world of facts recorded.

RECOURSE The right of a lender or holder of a note secured by a mortgage to look to the personal assets of the borrower or endorser for payment should, not just to the property.

RECOVERY FUND Generally, administered by the Real Estate Commission. Requires licensees to contribute, then reimburses aggrieved persons who are unable to collect from brokers for wrong-doings.

RECTANGULAR SURVEY Same as government rectangular survey method.

REDEMPTION, EQUITY OF Same as equity of redemption.

REDEMPTION PERIOD The period during which a former owner can reclaim foreclosed property.

REDEVELOP The process of demolition of the existing improvements and construction of new improvements on a site. The new improvements are often of a different type from the old.

RED HERRING A proposed prospectus that has not been approved by the Securities and Exchange Commission (SEC) or state securities commission.

REDISCOUNT RATE The rate of interest charged to member banks when they borrow from the Federal Reserve System. Also called discount rate.

REDLINING The illegal practice of refusing to originate mortgage loans in certain neighborhoods on the basis of race or ethnic composition.

REDUCTION CERTIFICATE A document in which the mortgagee (lender) acknowledges the sum due on the mortgage loan. Used when mortgaged property is sold and the buyer assumes the debt.

REEVALUTION LEASE Same as reappraisal lease.

REFERRAL The act of suggesting the use of a certain broker.

REFINANCE To replace an old loan(s) with a new loan(s).

REGIONAL SHOPPING CENTER A type of shopping center containing approximately 300,000 to 900,000 square feet of shopping space and at least one major department store.

REGRESSION A statistical technique used to estimate mathematical models of economic and other processes. It is used to find a mathematical expression which best fits the relationship between a group of random variables as indicated by a sample of data.

REGULATION D A regulation of the Securities and Exchange Commission that sets forth conditions necessary for a private offering exemption.

REGULATION Z A federal regulation requiring creditors to provide full disclosure of the terms of a loan. Compliance is compulsory for anyone who arranges credit for more than 5 sales of residential real estate in a year. Terms of the loan must be disclosed. The interest rate must be stated as an annual percentage rate (APR).

REHAB A building undergoing extensive renovation in order to cure obsolescence. Some rehab projects are so extensive that tenants may not be in the building during the work period.

REHABILITATE To restore a structure to a condition of good repair.

REHABILITATION TAX CREDIT The Tax Reform Act of 1986 provides a 20% tax credit for rehabilitating certified historic structures, and a 10% credit for other buildings that were placed in service after 1936.

REINVESTMENT RATE The interest rate an investor is assumed to be able to earn on intermediate cash flow in the projection of a terminal value.

REIT Real estate investment trust.

RELEASE CLAUSE In a mortgage, a clause that gives the owner the privilege of paying off a portion of the mortgage indebtedness, thus freeing a portion of the property from the mortgage.

RELEASE OF LIEN To free real estate from a mortgage.

RELICTION Gradual subsidence of waters, leaving dry land.

RELOCATION CLAUSE A lease stipulation that allows the landlord to move the tenant within the building.

RELOCATION NETWORK A geographically diversified group of independent real estate brokerage companies, generally not members of a franchise, that share information with one another concerning potential customers.

RELOCATION SERVICE A company which contracts with other firms to arrange the relocation of employees from one city to another. The service generally handles the sale of the employee's home and purchase of a new home. Furniture-moving services may be included also.

REMAINDER An estate that takes effect after the termination of a prior estate, such as a life estate.

REMAINDERMAN The person who is to receive possession of the property after the death of a life tenant.

REMIC Real Estate Mortgage Investment Conduit.

REMODEL To change the appearance and functional utility of a building. This may include painting, repairing, and replacing of fixtures and equipment.

RENEGOTIATE To legally revise the terms of a contract.

RENEWAL OPTION The fight, but not the obligation, of a tenant to continue a lease at specified term and rent.

RENOVATE General term applied to the process of upgrading an existing improvement. Usually there is an attempt to keep the same general appearance of the building with new materials or to return the building to its original appearance.

RENT Consideration paid for the occupancy and use of real property. A general term covering any consideration (not only money).

RENTABLE AREA Same as net leasable area.

RENT COMMENCEMENT DATE The date on which a tenant begins paying rent. Depending upon the nature of the marketplace, it may coincide with the lease commencement date or it may be several months after. It will never begin before the lease commencement date.

RENTABLE SQUARE FEET Usable square feet plus a percentage (the core factor) of the common areas on the floor, including hallways, bathrooms and telephone closets (sometimes main lobbies). Rentable square footage is the number of square feet on which a tenant?s rent is based.

RENTABLE/USABLE RATIO The number resulting from dividing the Total Rentable Area in a building by the Usable Area. The inverse of this ratio describes the proportion of space that an occupant can expect to utilize.


RENTAL RATE The periodic charge per unit for the use of a property. The period may be a month, quarter, or year. The unit may be a dwelling unit, square foot, or other unit of measurement.

RENT BID MODELS A conceptual tool used to explain how land is allocated in competitive markets. The model is based on the assumption that space is controlled by the activity which offers the highest bid for the site.

RENT CONTROL Laws that govern the rate that may be charged for space.

RENT-FREE PERIOD A portion of the term of a lease when no rent is required. It is offered by a landlord as a rental concession to attract tenants.

RENT-UP PERIOD The period of time following construction of a new building when tenants are actively sought and the project is approaching stabilized occupancy.

REPAIRS Work performed to return property to a former condition without extending its useful life, as distinguished from capital improvements. In income property, repairs are an operating expense for accounting and tax purposes.

REPLACEMENT COST The cost of erecting a building to replace or serve the functions of a previous structure.

REPLACEMENT RESERVE An amount set aside from net operating income to pay for the eventual wearing out of short-lived assets.

REPRODUCTION COST The cost of exact duplication of a property as of a certain date. Reproduction differs from replacement in that replacement requires the same functional utility for a property, whereas reproduction is an exact duplication.

RESALE PRICE In a projection of real estate investment performance, the assumed selling price a property could fetch at the end of the projection period.

RESALE PROCEEDS The amount a former owner receives upon a sale after paying transaction Costs, remaining debt, and, sometimes, income taxes. Same as proceeds from resale.

RESCIND To withdraw an offer or contract. Regulation Z allows a 3-day period in which to rescind certain credit transactions.

RESCISSION The act of canceling or terminating a contract. Rescission is allowed when the contract was induced by fraud, duress, misrepresentation, or mistake. Regulation Z allows one to rescind certain credit transactions within 3 business days (not applicable to first mortgages on a home); purchasers of certain land that must be registered by Department of Housing and Urban Development (HUD) may rescind within 3 business days.

RESERVE FUND An account maintained to provide funds for anticipated expenditures required to maintain a building. A reserve may be required by a lender in the form of an escrow to pay upcoming taxes and insurance costs. A replacement reserve may be maintained to provide for replacement cost of short-lived components, such as carpets, heating equipment or roofing. Deposit of money into such a fund does not achieve a tax deduction.

RESERVE PRICE In an auction or other bidding procedure, an established amount below which the seller is not obligated to accept a winning bid.

RESIDENTIAL pertaining to housing.

RESIDENTIAL BROKER One who lists and sells houses or condominiums. Contrast with commercial broker.

RESIDENTIAL PROPERTY In real estate brokerage terminology, owner-occupied housing.

RESIDENTIAL SERVICE CONTRACT An insurance contract or home warranty, generally for one year, covering the plumbing, mechanical, and electrical systems of a home. It is available in most areas upon the purchase of an existing home. Either the buyer or seller can pay for the contract.

RESIDENT MANAGER One who supervises the care of an apartment complex while living in one of the units in the complex.

RESIDUAL Value or income remaining after deducting an amount necessary to meet fixed obligations.

RESIDUAL TECHNIQUES A method of estimating the value of a building or land, given values of one and rate of return.

RESOLUTION TRUST CORPORATION (RTC) A federal agency created by FIRREA to manage and resolve insolvent savings and loan associations placed into its conservatorship or receivership. The agency is/was supervised by the Federal Deposit Insurance Corporation.

RESPA Real Estate Settlement Procedures Act.

RESPONDEAT SUPERIOR in agency law, the doctrine that a principal is liable for the acts of an agent.

RESTORE To return a building to its original quality and appearance. While modern materials are used, the emphasis is on faithful reproduction of the original style.

RESTRAINT ON ALIENATION A limiting condition on the right to transfer property. If the condition is against public policy or is unreasonable, courts will void the condition.

RESTRICTION A limitation placed upon the use of property, contained in the deed or other written instrument in the chain of title or in local ordinances pertaining to land use.

RESTRICTIVE COVENANT A covenant or deed restriction that limits the property rights of the owner.

RETAIL GRAVITATION The drawing power of a shopping center; generally, the larger the center, the greater its ability to draw from distant areas.

RETAINAGE In a construction contract, money earned by a contractor but not paid to the contractor until the completion of construction or some other agreed-upon date.

RETALIATORY EVICTION The requirement that a tenant vacate a unit in response to a complaint from the tenant concerning the condition of the buildi6g. Landlord-tenant laws in many states forbid such evictions if proper channels are taken to lodge the complaint.

RETIRE (A DEBT) To pay off the principal on a loan, thereby fulfilling the obligation under the loan contract.

REVENUE STAMPS Stamps that are affixed to deeds (and, in some states, other documents affecting real estate) and that indicate the payment of the state's deed transfer (or other transfer) tax. Federal revenue stamps have not been used since 1968, but many states have substituted their own.

REVERSE ANNUITY MORTGAGE A type of mortgage, designed for elderly homeowners with substantial equity, by which a lender periodically (monthly, for example) pays an amount to the borrower. The loan balance increases with interest and periodic payments, causing negative amortization.

REVERSE LEVERAGE A situation in which financial benefits from ownership accrue at a lower rate than the mortgage interest rate. The borrowed funds are invested at a rate of return lower than the cost of the funds to the borrower.

REVERSION (1) The cash received upon the sale of an investment. (2) The right of a lessor to possess leased property upon the termination of a lease.

REVERSIONARY INTEREST The interest a person has in property upon the termination of the preceding estate.

REVERSIONARY VALUE The value of property at the expiration of a certain time period.

REVOCATION An act of recalling a power of authority conferred, as a revocation of a power of attorney, a license, an agency, etc.

REZONING An action to change the designation of a subject parcel or group of parcels on the zoning map. The effect of a rezoning is to change the permitted uses for the affected parcels.

RIDER An amendment or attachment to a contract.

RIGHT OF FIRST REFUSAL The opportunity of a party to match the terms of a proposed contract before the contract is executed. See FIRST REFUSAL RIGHT.

RIGHT OF REDEMPTION Same as equity of redemption.

RIGHT OF SURVIVORSHIP The right of a surviving joint tenant to acquire the interest of a deceased joint owner.

RIGHT-OF-WAY (1) The right to use a particular path for access or passage; a type of easement. (2) The areas of subdivisions dedicated to government for use for streets, roads, and other public access to lots.

RIPARIAN OWNER One who owns land bounding upon a lake, river, or other body of water.

RIPARIAN RIGHTS Rights pertaining to the use of water on, under, or adjacent to one's land. May be qualified to avoid nuisance and pollution. Riparian rights are recognized in most eastern states but rarely in western states, where they recognize usufructory rights.

RISK The possibility that returns from an investment will be greater or less than forecast. The probability that actual cash flows will vary from those anticipated.

RISK-FREE RATE The interest rate on the safest investments, such as federal government obligations.

ROD A linear unit of measurement equal to 16.5 feet.

ROLLOVER LOAN A type of mortgage loan, commonly used in Canada, in which the amortization of principal is based on a long term but the interest rate is established for a much shorter term. The loan may be extended, or rolled over, at the end of the shorter term at the current market interest rate.

ROYALTY Money paid to a property owner for extraction of some valuable resource from the land.

RPA Real Property Administrator.

RULE OF 72's An approximation of the time it takes for money to double when earning compound interest. Divide the percentage rate into 72 to derive the number of years to double the principal.

RULE OF 78's A method for computing unearned interest used on installment loans with add-on interest. The number 78 is based on the sum of the digits from I to 12.

RUN WITH THE LAND This term is generally synonymous with and usually used in reference with easements and covenants. It also means passing with the transfer of the land. RURAL Pertaining to the area outside the larger and moderate- sized cities and surrounding population concentrations. Generally characterized by farms, ranches, small towns, and unpopulated regions. Compare with suburb.

RURBAN AREAS On the fringe of urban development, that are in the process of being developed for urban uses.

R VALUE A measure of the heat conductivity of material. The higher the R value, the better the material serves as insulation from heat transfer.
R/W Right of way.