Appraisal- An appraisal is the evaluation of a property by a licensed appraiser on its price based on previous sales of similar properties. The appraised value is used by a bank to determine the lending limit on a given property. A seller may also have a property appraised to determine the offering price during a sale.
Appraiser- A professional who conducts an analysis of the property, including examples of sales of similar properties in order to develop an estimate of the value of the property. The analysis is called an “appraisal.”
Appraisal Review- A report that comments on the completeness and accuracy of an appraisal report. Lenders frequently employ in-house review appraisers as a check on the accuracy and honesty of third-party appraisals.
Assessed Value- The value of real property for the purposes of calculating property taxes and other similar charges such as school taxes and fire district dues; the tax appraiser will establish a fair market value for the property. The assessed value is then frequently calculated as a specific percentage of the appraised value. Oftentimes the percentage will vary depending on the use of the property and any applicable exemptions. In some states, for example, property is assessed at 20 percent of its fair market value. Persons residing on their property, and claiming a homestead exemption, may be entitled to an assessment of 10 percent of fair market value.
Assessor- A public official who establishes the value of a property for taxation purposes.
Bank Market Share- CRS Data can help community banks look at all of the loans made for properties in a particular area, seeing both their own share of the current market and that of other banks. This data can be viewed in easy-to-read charts and graphs, stratifying data based on the geographic area, loan amounts and maturity date.
Bank-Owned Properties- In recent years, an increased number of consumers and investors have been taking advantage of low-priced bank-owned properties. However, purchasing a bank-owned property can be a complex process, especially since some of the previous homeowners' debt may need to be settled before a potential buyer can take hold of a property deed.
Big Data- term for data sets that are so large or complex that traditional data processing application softwares are inadequate to deal with them. Big data refers to advanced data analytics methods that extract value from data, and seldom to a particular size of data set.
Broker (i.e. real estate broker)- A person duly licensed under the laws of their state to act as an agent for another, and negotiate the purchase, sale and lease of real property. A broker has full authority to run a real estate company, whereas a real estate agent must have their license held under the auspices of a broker.
Collateral Evaluations- Collateral evaluations are a critical tool in the review of a bank's overall financial picture, particularly following the impact of the housing crisis, and give an up-to-date picture of lenders' current financial standing in relation to the outstanding loans in their portfolios.
Commercial Real Estate- Typically refers to office or retail space, or multifamily residential properties such as apartments. May include industrial real estate, but sometimes the phrase is meant to exclude industrial properties and must be read in context.
Community Bank- Many investors and homebuyers may choose to take mortgages out with community banks instead of opting for national lenders. Because community banks are invested in the neighborhoods they work in, they may have a better understanding of area and the particular needs of homebuyers within it.
Comparable- In an appraisal, recently sold or leased properties similar to the property under analysis, such that a review of the sales prices of the comps will assist in determining a value of the subject property. The properties need not be identical, as long as they are reasonably similar and the appraiser can make adjustments for features that differ. These may include property amenities, age of the improvements, traffic counts and market area, time and conditions of the sale, and anything else recognized by the market as having value.
Comparative Market Analysis (CMA)- An analysis of the value of property by taking only a very few market indicators, such as price per square foot for land or price per unit for apartments, and then extrapolating to the property under analysis. This does not constitute an appraisal, but may give prospective sellers a basis for setting a sales price for listing purposes.
Deed- A written document properly signed, acknowledged, and delivered, and bearing a description of specific property and words of conveyance for that property.
Demographic- Pertaining to characteristics of the population, such as race, age, household income, median home price, and number of inhabitants per household. The U.S. Census Bureau (www.census.gov) collects a wealth of demographic data.
Dodd-Frank- The Dodd-Frank Wall Street Reform and Consumer Protection Act is a piece of legislation specifically designed to oversee the mortgage markets and ensure that banks are practicing sound lending and minimizing risk both to themselves, investors and to homeowners.
Evaluation- A study of potential property uses, but not value.
Fair Market Value- A median price based on the highest price a willing buyer would be willing to pay and the lowest price a willing seller would be willing to accept in a competitive market.
Federal Emergency Management Agency (FEMA)- Formerly an independent federal agency that became part of the Department of Homeland Security on March 1,2003. FEMA’s mission statement is to “lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident.” FEMA (www.fema.gov) also initiates proactive mitigation activities, trains first responders, and manages the National Flood Insurance Program.
Financial Regulators- In the wake of the mortgage complications that plagued American economic markets during the fiscal crisis, financial regulators have become far more stringent when it comes to approving home loans.
Flood Insurance Rate Maps- Maps maintained by the Mitigation Division of the Federal Emergency Management Agency. They locate and describe areas having a 1 percent risk of flooding in any given year. They can be viewed online at the FEMA’s Map Service Center Web site, http://msc.fema.gov.
Flood-Prone Area- An area that has a 1 percent probability of flooding in any given year. Although popularly known as an area that will flood sometime in a 100-year period, this characterization is technically inaccurate.
Foreclosed Houses- Some of the best real estate investment opportunities on the residential and commercial markets are often distressed properties. It's generally recommended all investors looking to buy a foreclosed house do their homework to ensure they know everything about the home.
Geographic Information System (or GIS)- is a system designed to capture, store, manipulate, analyze, manage, and present spatial or geographic data.
Home Appraisal- Home appraisals can be an integral part of the home buying process. Mortgage lenders require a home to be surveyed by a licensed professional before they will sign off on a home loan, and the process can uncover potentially costly repair issues that may affect a home's value.
Investment Property- A property purchased to generate rental income, taxbenefits, or profitable resale rather than to serve as the borrower’s primary residence. Contrast with “second home.”
Investor- One who uses his or her money to purchase property in the expectation of earning periodic cash flows from the property, making a profit on the eventual resale of the property, or both.
Legal Description- The written description of a piece of land giving all pertinent information such as land lot, subdivision name, Block, parcel, acreage, etc. that comprises a legal and sufficient description of a particular property. For a real estate contract to be binding it must include an accurate legal description.
Lending Regulation- One aspect of the mortgage market lenders, brokers, agents and other real estate professionals are constantly keeping a keen eye on is changes to lending regulations. In the wake of the recession, the government has significantly tightened the regulatory environment on lenders and real estate professionals in efforts to protect consumers.
Market Value- A subjective estimate of what a willing buyer would pay a willing seller for a given asset, assuming both have a reasonable knowledge of the asset's worth. Market value is important in determining the market value of an asset (e.g. after depreciation) is important to determining the amount of tax owed on it. Value investors look for companies with market values below their book values, believing these companies to be undervalued.
MLS- Short for Multiple Listing Service. A service whereby real estate brokers agree to make information about their listed properties available to each other and to split a commission with any other broker who provides the buyer. Most local boards require an exclusive listing agreement with a broker as a prerequisite for placement in the multiple listing service.
Mortgage Banker- A lender that originates mortgage loans through mortgage brokers for sale to investors such as Fannie Mae, Freddie Mac, or Ginnie Mae.
Mortgage Broker- An individual or firm that brings borrowers and lenders together for the purpose of loan origination. A mortgage broker typically takes loan applications and may process loans. A mortgage broker also may close the loan.
Mortgage Justification- Mortgage justification is a key element of determining the soundness of any home loan. Banks and other lenders need to fully research information on a home to ensure that the mortgage applicants can afford to take on such a substantial debt and that the property is a good investment.
Mortgage Records- Mortgage records can show real estate professionals the past loans paid for a property in a certain area and other comparative market data related to mortgages, which can be useful when looking for the right property.
National Association of Realtors (NAR)- An organization made up of realtors, brokers, appraisers, and other real estate professionals who are involved in the residential and commercial real estate industries. A real estate agent can only be called a Realtor if he or she belongs to the National Association of Realtors.
Plat- A map that is drawn to scale of a specific piece of land that shows the shape, acreage, etc. The plat illustrates the geographic boundaries of the property.
Property Data- When looking at available residential or commercial properties on the market, real estate professionals research as much as they can to accurately evaluate homes and buildings clients may purchase. Analyzing property data is typically a top priority for these investors when conducting research.
Property Tax Records- A property tax search is an essential aspect of home buying. Property taxes can have an impact on monthly mortgage payments and unpaid taxes may be carried over to a new owner. Because of this, it is essential that a home's tax history is clearly outlined with a property tax search.
Public Property Records- Public property records can be a helpful asset when it comes to homebuying. It can help consumers to determine how much they should bid on a home what expenses, such as taxes, may come along with owning that home.
Real Estate Property Records- When buying a home, it is essential that real estate agents, lenders, buyers and other involved parties fully research a piece of property before negotiations begin. Information about a home can influence selling price, mortgage rates and whether a potential buyer wishes to go through with a purchase.
Real Estate Information System (REIS)- A computerized system for tracking property location, description, ownership, and any other information considered important by the entity creating the system. Today, almost any major and midsize city in the United States has online REIS access for property taxes, past and current property ownership, and recent sales prices.
Real Estate Records- In order to ensure a piece of real estate is a safe bet for potential buyers, it is important that full real estate records are obtained. Without this detailed history, buyers may miss crucial information about a home that may affect their decision to buy and the price they are willing to pay for a home.
Realtor- (also known as Realtor® or REALTOR®) A real estate broker or a real estate agent who holds active membership in a local board of Realtors that is affiliated with the National Association of Realtors® (or NAR). The NAR has a Code of Ethics that all members are to adhere to. All Realtors are real estate brokers and real estate salespeople, but not all real estate brokers and real estate salespeople are Realtors (members of the National Association of Realtors.)
Safety and Soundness- Safety and soundness in lending is an important topic when it comes to lending. Because some loan practices have been blamed for the economic downturn, many banks and other lenders have found a renewed focus in conservative lending practices.
Small Banks- Because mortgage lending is now subject to more stringent verification processes, lenders may have to do even more research to ensure they are abiding by safe lending practices. Small banks are often tasked with doing the legwork when it comes to justifying mortgages without the considerable resources of a larger entity.
Survey- A precise measurement of a property/parcel by a licensed surveyor, showing legal boundaries of a property and the dimensions and location of improvements.
Tax Maps- An official document showing the locations and parcel identification numbers for all property located within an ad valorem (property) tax jurisdiction.
Title- The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land.
Warranty Deeds- Warranty deeds may help protect a homebuyer in the event that previous ownership of a property is contested. It makes certain guarantees to buyers when the deed to a home is passed between buyer and seller.
“The quality of our work would not be as good without CRS. And it would take hours to get the work done without CRS."
CHARLIE HARPER - Sunmark Community Bank