Real Estate Definitions
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Fair Market Value The highest price that a buyer would pay for a property and the lowest price a seller is willing to accept. FAQ An acronym for frequently asked questions. Most Web sites have an FAQ page to provide their customer's with answers to commonly asked questions. Fee Simple Outright ownership of real estate meaning the property is free of any liens or other claims against title. Fee Simple Defeasible When a person has outright ownership of real estate (free of any liens or other claims against title), but the use of the property is restricted. Fiduciary An individual, company, or association that manages assets for another party. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy, and those responsible for managing the finances of a minor. Fiduciary Duty A requirement that someone in a position of trust, such as a banker, real-estate agent, or title agent, must act in good faith and trust on behalf of a client. Field Changes Modifications that are made to a building or structure while on-site as opposed to planned changes that are incorporated into building plans. Filing Extension A filing extension gives an individual more time to file his or her tax return, but it does not give the person more time to pay taxes. Finance Canada A Federal Department that is responsible for Canada's economic performance and the regulation of financial institutions. Finance Charge Charges that include all of the interest expected to be earned over the life of a loan, in addition to the service charges, mortgage insurance premiums, and other loan-related charges. Finder Fee A fee that is paid to a person who finds a financial backer, who brings people together for business reasons, or for services rendered. Firm Commitment A promise made by a lender to give a borrower a loan based on certain terms and conditions at a specific time. First Lien A primary claim made by the lender for satisfaction of outstanding debt. A first mortgage creates a first lien. First Mortgage A mortgage loan that is the first or primary lien against a property. Fiscal Deficit When the government spends more money than it receives in revenue over the course of one year. Fiscal Policy The use of government spending and taxation policies to influence the economy. Fiscal Surplus When the government receives more in revenue than it spends over the course of the year. Fixed Assets Assets that are not consumed or changed into money during the current accounting period. Such assets can include machinery, land, buildings, or property used to operate a business. Fixed Expenses Fixed business costs that do not change regardless of business volume, such as property rental, insurance payments, utilities, etc. Fixed Installment A set payment that is made towards the balance of a loan. Fixed installments are set amounts that do not change and are typically made once a month. Fixed Rate Mortgage (FRM) A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination. Fixed-Return Instruments or Vehicles Instruments that pay a fixed rate of interest for an agreed-upon length of time such as term deposits, Treasury bills, and Guaranteed Investment Certificates. Fixed Time The dates during the year when a timeshare owner is scheduled to occupy the property being shared. Fixer-upper A house that is sold for less than market value or for a discounted price because it requires significant maintenance or repairs. Fixture Personal property that becomes real property when it is attached to a structure. For example, chandeliers, built-in bookcases, cabinets, and drapery rods are all considered fixtures. Flat Fee A dollar amount requested by a broker instead of being paid commission, which is usually a percentage of the sale. Float 1. The amount of time banks take to clear or reject (bounce) cheques for payment. 2. The amount of time at which funds are debited from the issuer's account. Flood Insurance A policy that pays the homeowner for damage caused by flood waters. The policy does not cover damage from falling water, such as rain that may cause a roof to leak. Flood Plain Land that is prone to inundation (being covered by water). Florida Room An enclosed porch that is built on the back or side of a dwelling and is often air-conditioned. For Sale By Owner When a homeowner tries to sell his or her property without help from a realtor. Many homeowners attempt to sell on their own to avoid paying a high commission to a realtor. Forbearance When foreclosure on a property is delayed because the borrower has arranged to pay the amount in arrears. Foreclosure The legal process that takes place when a borrower defaults on his or her loan and is deprived of the interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the loan debt. Foreign Currency The metal (coin) or paper medium of exchange that is used in other countries. For example, the US dollar is considered foreign currency to those living in Canada. Foreign Currency Surcharge A fee charged by a credit card company for purchases made in a foreign currency. Foreign Exchange Instruments (such as paper currency, notes, and cheques) used to make payments between individuals, organizations, or countries that use different currencies. Foreign Exchange Rate The value of one nation's currency in comparision to another nation's currency. Forfeiture Something that is lost or surrendered as a penalty because of a fault, mistake, or failure to meet legal or contractual obligations. Four Pillars Refers to the main types of financial institutions: banking, trust, insurance, and securities. Franchise An contract between a company and another party in which the company gives the other party the right to use the company's name and to sell or rent its products. This right is usually purchased for cash in addition to a royalty fee or a percentage of all sales. Selling franchise rights is a popular method for expanding a business quickly with a minimum of capital. Fresh Start After a bankruptcy, the debtor is essentially given a clean slate or fresh start to rebuild his or her credit with little or no debt. Fringe Benefit Compensation that is given to employees in addition to wages, tips, or salaries. Such benefits can include health insurance, life insurance, and pension plans. Full Income Verification Refers to a requirement where a potential borrower must show complete and accurate proof of income when applying for a loan. These types of loans usually offer lower interest rates than no-income or "no-doc" verification loans. Full Market Value In reference to property taxes, refers to the tax rate that is applied to 100 percent of the property's value. Also known as full cash value. Futures Contracts to buy something in the future at a price agreed upon in advance. Futures first developed in the agriculture commodity markets, but often involve foreign exchange, Eurodollar deposits, and government bonds. |
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