Glossary of Real Estate Terms

Lease Option

Definition A lease option, also called rent-to-own, is a real estate contract that allows a tenant to lease a property with the option to purchase it at a predetermined price before the lease term expires. The tenant typically pays an opti...

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Lien

Definition A lien is a legal claim or right that a lender, government agency, or creditor places on a property as collateral for unpaid debt. A lien must be settled before the property can be sold or refinanced, as it gives the lienholde...

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Lien Waiver

efinition A lien waiver is a legal document that releases a property from a lien, typically issued by contractors, subcontractors, or suppliers after they have been paid for work done on a property. It ensures that the property owner or b...

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Lis Pendens

Definition Lis pendens is a legal notice filed in public records indicating that a property is subject to a pending lawsuit. This serves as a warning to potential buyers, lenders, and investors that the property may have legal claims against...

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Loan-To-Value (LTV)

Definition: Loan-to-Value (LTV) ratio is a financial term used by lenders to assess the risk of a mortgage loan. It represents the percentage of a home's purchase price or appraised value that is financed through a loan. The higher the LTV rati...

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Loss Mitigation

Definition Loss mitigation refers to strategies used by lenders to help borrowers avoid foreclosure by modifying loan terms, offering repayment plans, or providing alternatives such as short sales or deed-in-lieu agreements. It aims to mini...

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Market Absorption Rate

Definition The Market Absorption Rate is a real estate metric that measures the speed at which homes are selling in a specific market. It is calculated by dividing the total number of homes sold in a given period by the number of active lis...

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Market Value

Definition Market value is the estimated price a property would sell for in an open and competitive market under normal conditions. It represents the fair price that a willing buyer and a willing seller would agree upon, assuming neither ...

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Market Value vs. Assessed Value

Definition Market Value and Assessed Value are two different property valuation methods: Market Value is the estimated price a property would sell for in the open market, based on buyer demand, comparable sales, and current economic ...

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Mortgage Rate Lock

Definition A mortgage rate lock is an agreement between a borrower and a lender that guarantees a fixed interest rate on a mortgage for a specified period, regardless of market fluctuations. This ensures that the borrower is protected from...

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