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Chennai Home Buyers Guide

Buying a home is a dream for all of us. Apart from the emotional quotient attached to a home
purchase, it also involves the biggest financial transaction you will make in your entire lifetime.
Considering the challenges faced by the end-users in this crucial event of your life, we bring you
our compilation of articles that will help you make a better decision for purchasing your home.
This Home Buyers guide will help you find answers to your questions/queries on the following:


Best Locations in Chennai
Best Time to purchase a House
o Should you purchase property in a Pre-Launch?
o Is 2016 the right time to take the leap?
o Is it prudent to buy property at a young age?
Important Checklists
o Things to check before buying a house
o Things to check before taking possession of a new house
Help-guide to a perfect Home Loan Application
Real Estate Glossary
o Complete Glossary of all Real Estate terms you need to know

Best Location for a Home in Chennai

Chennai has been expanding rapidly and residential property prices in Chennai have escalated the
fastest among the cities in India, witnessing an appreciation of almost three times of what they
were in 2007. Traditionally, buyers in Chennai have been hesitant to move to the suburbs,
however in the recent times areas like Old Mahabalipuram Road (OMR) have become hot spots
for real estate development in Chennai.
OMR is the great Chennai dream. The real estate growth around this 20 km stretch from
Madhya Kailash junction to Siruseri boasts of IT development and good infrastructure. The
stretch developed as a designated IT/ITeS corridor over is the second highest exporter of
information technology in India. The growth has fuelled real estate activity in the region and has
made the region desirable.
Here are top 10 reasons why OMR is the best place to own a home:
1. Infrastructure
The Government has given priority for infrastructure developments like water and sewage
connections on this road. So you will not face any problems of sanitation or water problems that
you would normally face in the city. Apart from this, the following are the major projects
happening on and around OMR.





Financial City – Sholinganallur (All Banks under One Roof)
TCS – SiruseriSipcot (Biggest Building in Asia for TCS)
Sports City – Kalavakkam and Tiruporur (1500 acres)
Railway Link – Taramani to Cuddalore via Tiruporur, Mamallapuram, Pondy
New By Pass – Egatore (Siruseri) to Thaiyur (Beyond Kelambakkam Junction)
Fly Over – 5 flyovers on major places (From Tidel Park to Siruseri)

4. The university complex will house an aquarium. The State government has also considered the possibility of BRTS for the IT corridor. The ministry of shipping is also seeking a public private partnership to build a five-star hotel in the complex. The Chennai airport is just 30 min drive from OMR and the TIDEL Park is just about 10 minutes away. A major advantage of living in OMR is the proximity to the IT hubs and all major growing southern suburbs of Chennai. ECR. Joseph’s College of Engineering. SSN College of Engineering. OMR offers you the best at low-cost living without compromising on quality. Bus and suburban rail services are convenient and the proposed rail line from Chennai to Pondicherry and Cuddalore. St. OMR and surroundings have more reputed schools planned now than any other area. Also. Jeppiaar Engineering College etc. Kelambakkam. Attractive residential projects Buying a property in major locations of Chennai are not affordable to most people due to their exorbitant prices. food courts. will be an added boost to the connectivity of OMR. national maritime museum. Sathyabhama Deemed University. there is a steep demand for living spaces at affordable prices. Japanese Township 2. Some of the attractive projects that Casa Grande offers are:       Casa Grande Cherry Pick– Exclusive 2 & 3 BHK apartments with 40+ amenities Casa Grande Aldea– Thematic Landscaped Luxury apartments in Thoraipakkam Casa Grande Pavilion– Chennai’s Largest Villa community in Thalambur. and a hotel and residential complex. Asian College of Journalism. OMR Casa Grande Lantern’s Court– Luxurious 3 BHK apartments in Thoraipakkam Casa Grande Avalon– Limited-Edition Independent Luxury Villas in Perumbakkam Casa Grande The Address– Luxurious 4 BHK Apartments in Karapakkam. the first in India is currently being built in Shollinganallur.  Padma Seshadri School – Coming up at L&T Eden Park  Gateway – The complete school – Sholinganallur  Abacus Montessori School – Perungudi  Delhi Public School – Nallambakkam  DAV CBSE School – Thiruporur The area also has high quality educational institutions like National Institute of Fashion Technology (NIFT). The National Maritime University. Proximity OMR is the IT/ITES hub of Chennai and has big companies that have offices around the area. with the growing technology and population. OMR is well connected to Mahindra World City. Thiruporur and Mahabalipuram. GST and theELCOT SEZs. 3. OMR . Hindustan College of Engineering. Connectivity The entire stretch of OMR from Madhya Kailash to Navalur has flawless connectivity with the main city. through Sholinganallur.

Also in the pipeline. ECR is currently well connected to OMR through multiple link roads. 8. which has the scenic coastline. Reputed builder like Casa Grande offer affordable and posh flats and villas located at strategic locations in OMR. Padappai. reaping the benefits of OMR’s price appreciation. Mannivakkam and Perungalathur have also seen price appreciation. Mudichur.000 -15.000. recreation and relaxation. which would further enhance connectivity with ECR and other parts of the city. According to real estate experts. So buying a property now at OMR will ensure that your property’s value will get immense appreciation in 10 years. Within the last five years. landscape. now costs more than three times the same price. home buyers and investors. A simple 2-BHK flat earns a rent of about 12. which cost Rs 75 lakh–1 crore in 2010. Renting out your apartment will be lucrative since the demand for properties is always high! 9. it is also not too far away from East Coast Road (ECR). Therefore. Adjoining areas of Kundrathur. 1 acre of land on OMR. Sounds refreshing. Casa Grande Pallagio– Luxurious Mediterranean Villas in Thoraipakkam 5. right? OMR offers just that. Excellent Investment Opportunity Owing to its locality and infrastructure available. 7. Serene Landscapes After a hard day’s work. the amenities add the much needed color to your fast paced life. This makes life easy for home owners since they do not have to go out or worry . lush podium garden area and apartments overlooking the greenery. real estate developers. OMR has become an attractive investment option for multinational companies.even if you are not planning to move in right away. With a space of greenery. Lavish amenities OMR is enriched with properties overloaded with all the amenities that one would wish to have in their dream home. 6. The community boasts of a multi-level grand courtyard in the center with swimming pool. Casa Grande Pallagio are villas that have an irresistible combination of a fantastic location & great price with thematic Italian styled luxury Villas that have private garden space for each house and a large open terrace that doubles up as party area. Regular Rental Income The demand for houses on OMR has gone up drastically due to the IT boom and the fact that the area is home to several big and small companies. imagine driving back to traffic free and pollution free environment that has fresh air. offering breathtaking sights of the sea. OMR has seen a capital appreciation of about 50 per cent and 21 per cent hike in property value. it is a great investment option. Gated community lifestyle Most apartments on OMR are townships and are inclusive of all amenities including ATM and super markets. are two more link roads planned at Neelangarai and Pallavakkam. Moreover. club house.

having a better social life and staying fit. there are employees from different parts of the country. The residential projects at OMR are filled with classy and sophisticated architecture as well. you would have made up your mind towards investing in OMR. The prices are soaring every day with growing businesses and job opportunities! So take your family to the most ideal destination of the city and enjoy life at affordable cost! Best Time to Purchase a Home Why should you buy Property in Pre-Launch Pre-launch of a realty project is the launch before the project is officially offered in the market. OMR also now has posh restaurants that have mushroomed over the course of time.about the basic requirements. 10. by now. OMR is the place for you! We hope. . This leads to the possibility of a cosmopolitan lifestyle. Top hangout places & food lovers paradise With big companies like TCS and CTS having big offices. Some of the popular restaurants to visit in the vicinity are:  The Farm – Semmancherry  Barbeque Nation – Thoraipakkam  Moti Mahal Delux – Kalaingar Karunanidhi Salai  Golden Dragon – Padur  Buzz – The Gateway Hotel – Sholinganallur With many posh restaurants and new-age amenities. so if you prefer sophistication. OMR is guaranteed to give an elegant touch to your home. These apartments also give you the opportunity of to mix and mingle with neighbors.

2. 4. ensures that your investment is safeguarded & risk-free. More Time to Pay By purchasing in pre-launch. can provide you multi-fold returns. you are investing in a property that is still a couple of years away from handover. Established and respected players in the real estate industry generally take these risks into account and ensure the project goes through without hiccups. the option to select your preferred unit is an added advantage. More Options to select their preferred unit Apart from the price benefits. A thorough research on the builders and developers behind the project can help you make a wise choice that mitigates all risks. You can make a choice based on factors like the preferred orientation or proximity to certain project amenities. Sriperumbudur. After the pre-launch.The pre-launch is generally offered to the preferred or inner circle of investors and potential buyers. all remaining units are opened to the market during the launch. The initial down-payment to book an apartment or villa in pre-launch is only nominal. . There is a differential amount to be paid in different phases till the project handover. you might wonder if purchasing in pre-launch property sale is a good idea. Are you accustomed to getting messages and mails from real estate builders to buy properties in pre-launch events? With super-attractive offers at stake. areas like Oragadam. your choices become constrained. For investors looking for investments with large return on investments. This can provide you ample time to organize your finances. Discounted Price Benefit A project pre-launch is accompanied by lower than market prices offered with builders providing discounts even upto 20-25%. Here’s 4 reasons why you should buy property in pre-launch events: 1. 3. Return On Investment There is a huge potential for appreciation of property prices if the purchased property lies in an area that is currently underdeveloped with a potential for rapid development. Prelaunch purchase of properties is the way to go for investors who intend to make multifold gains from real estate investments. Hence. Buying an apartment or a villa in pre-launch from a reputed builder who has a strong track record of completion of products. etc.

you can claim the entire interest amount for deduction. this is the best year to take the leap. now is the time when investments are a hot topic around us – be it tax saving investments or reorganization of finances or a new plan for the upcoming financial year. . Higher the interest rate. 2) Tax Benefits – Deduction on Interest Payment Home loan finance not only allows you to realise your dream of owning a beautiful home. 2 lakh for deduction. 2016 can turn out to be a good year to make the most out of the opportunity with more rate cuts expected to follow. After a couple of rate cuts by RBI. 3) Tax Benefits – Deduction on Principal Repayment The principal component of your Home Loan is available for deduction under the Section 80C of the Income Tax act. then you can claim upto Rs. Here are 5 reasons to buy a house in 2016: 1) Attractive Home Loan Rates One of the most important factors that determine the cost of your loan is the interest rate. If you were in two minds about buying a new house.Is 2016 the right time to take the leap? With the Budget session close on our heels. In case of a rented property. the home loan rates have come down in a long time. The interest on your Home Loan EMIs qualify for deduction. You can claim upto a maximum of Rs. If you use the house for your own residence. 1. they also help you gain attractive tax benefits. higher is your cost of long-term property purchase.5 Lakhs under this provision.

gym. it does not become yours. living spaces that are technologically sound a well. Even if you invest the rent in a simple Recurring Deposit. The long-term Return on Investment can be in terms of capital appreciation on property sale as well as the regular capital inflow from rent. 7) Financial Security In case. The stretch developed as a designated IT/ITeS corridor over is the second highest exporter of information technology in India. houses are no longer seen as a place to board and lodge.in one’s own house is the best. With the fast appreciation in land prices. lot of attractive projects are coming up. purchasing a house can be the next multi-bagger investment. you can still purchase a house and let it out for rent. Casa Grande Arena is a dream for any sports-lover. The growth has fuelled real estate activity in the region and has made the region desirable. it will fetch you approximately 8-9% per annum. You can check out some attractive projects here: Casa Grande Aldea Casa Grande The Address 6) Attractive projects Riding on the infrastructure growth story. The pleasure of having all your amenities like swimming pool. With the increase in rental rates. accompanied with growth in infrastructure. Metro cities like Chennai provide the opportunity to invest in high-potential growth hotspots. If you are paying a substantial amount as your house rent. The rental income can complement your monthly income. This can enable you to provide a stronger financial security for your family. form your biggest investment from a long-term perspective. you already own a house. and play area etc. why not convert it into your home loan EMI that will give you your own home and at the same time. the best possible solution is to move in to your own house.Even if you had been living in a house for five years straight. OMR is one such area that represents the great Chennai dream. Thematic houses are also a craze now-a-days. .There is a growing demand for aesthetically built ultrasmart. For example. 5) Long-term Appreciation Real Estate Investment can yield one of the best long-term returns in a fast-developing country like India.4) Why rent when you can Own The most important reason for most people to be investing in a house has to be this. With the advancement in technology and aesthetics.

If you want to be rich down the line. 4. And we are not denying that. Forgo 1 vacation planned next year to make up for a couple of . throw the “busy” excuse out of the window. Need more time in your young. you should be able to land up an EMI based home loan. That partially explains the trend to wait until the forties or fifties to start investing in real estate. In short.Is it prudent to buy Property at a Young Age? Investing in real estate for most young people sounds like an old man’s game. 1. Until and unless you have done some real bad work with your credit early on. nobody said that that money should be yours. you bet you wouldn’t get any more free time than now. So. busy life? As you grow older. the older you become. get started fast and exploit one advantage that you have over the older generationthe ability to learn fast. This article would break these myths along with ideas to start investing in real estate. the busier you are. you would definitely be required to sacrifice some lowhanging fruits in the present. Career. 2. Home. Need to get experience before burning your hands in fire? Knowledge forms the basis of any investment. Family. There are millions of books out there as well as umpteen investment gurus who have shared tips on investing in real estate. The other explanation can be attributed to the perception that you need to learn swimming (read garner experience) before you jump into the sea. 3. Learn to sacrifice the lollies for the gem. But. So. You need to have a fat bank balance to start investing in real estate? Money is definitely important to invest in real estate. Kids.

This start can give your ample returns over a period of time. Also.down-payments. the more you lose out on the power of compounding over the long time frame. Doesn’t matter if they are small. Hence. Make the right moves. In short. the more you delay. Okay. You cannot score a goal without knowing to kick the ball. Go to the drawing board or pull out a spreadsheet and set down your monthly budget. It helps to have a map with you on your journey. investing in real estate at a young age is actually better than investing at a later age. you can avoid the thorns. Get the plan ready. the best time to take risk is when you have 20-30 years of our job left than when you have 5 years to your retirement. 6. Similarly. why don’t you get started now? There’s never a better time than “now”. Or purchase a car at a cost level below than what you can afford. when the question of risks comes into investing in real estate. what about the risks? Roses do not come without the thorn. 7. quite contrary to the popular notion. After all. But if you are alert. Important Checklists Things to check before buying a house . If you cannot afford a Luxury Villa at the start of your career. Push out a couple of luxuries you can afford to forgo and plan the budget that can fulfil your monthly EMIs for real estate investing. financial freedom comes at a cost. But. you can definitely start by investing in a 2 BHK apartment. you want to invest. Start small but definitely make the start. 5.

who develops quality livings spaces. Here is a guide on 10 things to check before you buy a property. you cannot ignore the importance of a good location. makes sure you only fall in love with the ones you can afford. The best idea is to come up with a maximum limit on budget and not exceeding the same no matter how attractive the property is. Real estate is one of the biggest investment you make in a lifetime and you need to your homework before you take the plunge. UDS . Research in Location/Area Location of the house is an important point for consideration. Whether you are buying the house as an investment or planning to move in there. Pricing The price band for your real estate investment needs to be fixed before you start scouting for the property. Research well about the builder and the best way to go about this is to look for past projects of the builder. the first thing you need to do is make sure the land has cleared all legal procedures. Check the following documents and clearance certificates to avoid getting into any legal tangle in future:       Land Record Construction Clearances Approved Planning Land Use Certificate Master Plan of the property No Objection Certificates Builder credibility Selecting a credible builder is an extremely important step in buying a property. Ensure the growth of the area is good and the location has good schools. Ensure you personally inspect the land before you buy it. You need to make sure that the title deed of the land is in the name of the seller. Choose a credible builder like Casa Grande. supermarkets and other essential amenities close by. Legal due diligence Buying a house involves a lot of documentation and it's best to go through the documents yourself as well as consider legal consultation in case you are not acquainted with the terms involved. Also. Ask for copies of all necessary permissions prior to making any financial transactions.Buying a piece of land or a flat is a cherished dream for many. you need to verify that the sellerhas full right to sell the land and that he is the sole owner of the land. About the land If you are buying a land. It saves a lot of time by helping you narrow down on your choices and at the same time.

Recreational amenities Most apartments these days come with recreational amenities for residents such as club house. Some of the important things to check are fire alarms. lifts. Percentage of common areas The actual usable area of a flat you are buying may differ from the one you are charged for. parking. Things to check before taking possession of a new house . For example. etc. swimming pool and gym. There are plenty of financing options out there so make sure you research them all and pick the right option that suits you the best. You can target a real estate project that caters to your needs and preferences. power backup. buyers focus on flat area but completely forget about the land ownership-Undivided share of land. An Undivided share is a share of land allotted to the flat buyer while purchasing a property and it is registered in the name of the owner.While buying an apartment. The common areas are the shared spaces on a single floor. Make sure you have enough savings. Casa Grande Arena is a heaven for sports lovers. Ensure you check for your share of UDS before making the purchase. garbage chute system. Civic amenities You must inspect amenities offered along with the property. How to calculate UDS? UDS = Built-up area of individual flat / Sum of all flats’ built-up area X Total land area. and within a building in its entirety. Finance/Loan Planning your finances before you invest in a property is a wise idea. Special theme projects can offer a wider range of amenities based on your preferences. before you apply for the loan.

parental documents. are to be checked and any defects should be brought to the builder’s notice. the licensing authority issues the approval for the same. Sliding doors. if any. we have put down a ready checklist with all the points you should check before you take final possession of your new home. the doors and windows are to be placed properly especially in the kitchen and bathrooms and too much sunlight can have its negative effects as well. It Is advisable to get a copy of these and a complete breakup of the common area as well. It is also . concerned authority approvals and other similar documents are generally submitted to the association. water connection is provided to the newly built home. Sometimes the excitement of the moment may cause you to miss out on some important checks that you must make prior to possession. whenever the need arises. Interiors: a) Doors & Windows Air circulation is very important to lead a hale and hearty life in your dream home. drawings. 1. To help you make sure that taking possession of your new home is as smooth and hassle-free as possible. Documents: This is by far the most important of all checks as the set of documents is what will help you verify ownership and legality of construction in future. d) Original registration deed and other documents Original registration documents. 2. For proper air circulation and sunlight. b) Building Completion Certificate (BCC) Once the project consultant audits the entire project and submits the report. the licensing authority issues the BCC (Building Completion Certificate) c) Occupation Certificate This is the final certificate issued by the licensing authority and only after the issue of this Occupation Certificate. It is also important to be able to sell or transfer your home to another person. Here is the list of documents you must ensure you have received from the builder prior to/at the time of possession: a) Approved Plan Layouts After studying the plan layout submitted by builder and architect.Taking possession of one’s new home is a moment of ultimate happiness and pride.

4. It is better to check all the walls for a double coat. Hence it is of prime importance to check its functionality and that the MCB with the right range that is appropriate for your home has been fitted. kitchen and balcony to ensure smooth water drainage. . d) Switches &AC Ducts Placement of switches and proper electrical connection to all switches would need to be checked. If any non-functional plug points or switches are found. The balcony grills and gates are also to be checked for a proper finish. Another thing to check for would be AC ducting – bad ducting can cause seepage in the wall as well. It would also be prudent to check for loose patches in the wall and look for fan hooks in the ceiling. that enter your kitchen are to be monitored for proper functioning. In the kitchen. if fitted. they should be brought to the builder’s notice. check the functioning of hot and cold water mixture knobs in the taps. Also. c) Floor & Tiling Flooring and tiles would need to be checked for cracks and cleanliness.important to check that your main door is fitted with a door eye/magic eye as this is one of the most basic features that a home must have. The slope of the tiles would need to be checked in the toilet. Also look for the specifications of the facilities offered and it is good to ensure that there is no deviation from what was stated earlier. Other Safety Precautions: The guidelines and safety measures specified by the Government are to be followed by the builder. Amenities: A lot of amenities are usually promised at the pre-construction stages and it is vital to check whether all these are in place as mentioned. f) Miniature Circuit Breaker (MCB) When there is an overload/short-circuit in your home’s electrical circuit. an MCB is the one that saves you from a possible overload/short-circuit. Sanitary fittings are to be checked for cracks and ensure that the drainage system is in order. The piped gas lines. e) Plumbing & Sanitation Check the pressure of water from the taps to ensure it is at optimum level. 3. b) Walls & Ceilings Some builders might leave your wall with a single coat of paint which may cause it to lose its shine within a very short period. Any promised security measures such as CCTV cameras or intercom must also be tested for functionality. the finishing/polishing of the counter and any leakage in the same should be checked as well.

1. We hope this checklist will help simplify the process and make your life easier as you take possession of your new home so you can focus on enjoying the moment and celebrating with your family and friends. it is difficult for most people to afford to pay the amount upfront thereby making home loans a much more viable option. Accounts going delinquent owing to delayed/no payment of EMIs. applying for a home loan isn’t a cake walk as there are a lot of factors that need to be taken into consideration for a lender/bank to approve one’s home loan application.) score. you should ensure that you have received the possession letter and the other documents that are to be received from the builder as per point number 1 above. There are several reasons why one might have a bad CIBIL score. Help-guide to a perfect Home Loan Application Buying a home today involves a lot of processes especially if one is applying for a home loan. Banks check this score to decide whether or not a particular applicant is eligible for a home loan and is one of the most crucial deciding factors. Here are a few factors that play a crucial role in the rejection of one’s home loan and which you should pay close attention to. Maintain a good CIBIL score Every person who has previously taken a loan or used a credit card has a CIBIL (Credit Information Bureau of India Ltd. to ensure your application sails through smoothly. Even the simplest imperfection in the application can lead to rejection. .Once all the above checks have been satisfactorily made. Some of the reasons include   Not paying/late payment of outstanding dues. Given the current prices of properties. However.

4. In most cases the minimum age bracket is 23-24 and the maximum age is around 60 for applicants. 3. Non-payment of penalties. This means that if a person’s monthly take home is around 1 lakh then the monthly EMIs shouldn’t exceed Rs. it is important one ensures timely payment of dues and avoid taking too many unsecure loans. 35. Also the property must have a proper marketable title and approval.000. For salaried applicants the bank or the lender will look at the steady flow of income or in other words job stability. 6. 2. Ensure Job Stability For any lender. Hence it is important to know this and not over apply. To ensure a healthy credit score. If the locality has had a history where projects have suffered lack of clearance. Changing jobs is considered to create a negative impression to the lender. 5. In case of any discrepancies the lender in most cases will keep sanction letter valid till the applicant is able to find another property satisfying the title and approval norms. Banks normally take this as a benchmark to approve the loan. Hence proper analysis of a property before applying for a loan is sensible. Know the Salary vs EMI thumb rule The thumb rule for applying for home loans is to ensure that the monthly EMIs are somewhere around 30 – 35% of your monthly take home pay. Verification of personal profile . To satisfy this priority the lender will look at the repayment capability of the applicant. then the lender might reject the application. Verify property details Home loan lenders approve loans based on the location of the property. the utmost priority is the repayment of the loan. Know the age limit Age is undoubtedly one of the most important factors for evaluation of a home loan application. It is important to ensure that this criterion is satisfied before applying a loan as the probability of turning down the application is very high otherwise. acquisitions disputes etc. Most home loan repayment is normally sanctioned for 15-20 years making income stability for the future an important criterion. For the ones who already have a bad credit score it is pertinent he or she works towards improving it and then think about applying for a home loan. Also if you are planning to take a home loan in the near future it is advised that one does not change jobs even though it might give a higher income level.

Acquisition fees may be paid up front by the buyer or lessee or added to the loan amount and paid over the term of the loan. The amount of inventory or units of a specific commercial property type that become occupied during a specified time period (usually a year) in a given market. A Absorption The number of months it would take to sell the currently listed homes in the market. Here’s our comprehensive real estate glossary to help you understand the real estate jargons well. All these points are crucial in the approval of a home loan and it is prudent to ensure that they are followed properly to avoid a rejection. One can avail a credit report for a nominal fee and cross check the details entered to ensure that the loan application is not rejected. and development/construction fees. such as closing costs. real estate commission. . Acquisition Fee A fee charged by a lessor to cover the expenses incurred in arranging a lease.It is important that the application has all the right personal details without any inconsistency. In case of a change in details it is important to update the lender with the same. typically reported as the absorption rate. Real Estate Glossary There are many abbreviations used in real estate industry. The credit report has all the personal details of the applicant and the lender/bank will go through these details on the lookout for any mismatch. Acquisition fees may also refer to charges and commissions paid for the acquisition or purchase of property.

It is calculated by dividing the annual base rent by the negotiated percentage applied to the tenant’s gross sales.Adangal An Adangal is an extract from A – register which is maintained at the VAO office. it is a fixed amount. In a poorly designed building. hallways. The annual base rate is the amount upon which escalations are calculated. quoted. Base rent The minimum rent due to the landlord. Add-On Factor The number of usable square feet divided by the number of rentable square feet in a commercial real estate lease. stairwells. B Balloon payment The final payment of the balance due on a partially amortized loan. The result of this calculation will be 1 if the two numbers are identical. Breakpoint The sales threshold over which percentage rent is due. Once the property is sold then the bridge loan is repaid. Board Approval Board approval is a condition in the standard cooperative sales contract requiring that the buyer obtain approval from the board of directors of the cooperative corporation as a prerequisite to completing the sale. This record gives detailed information on the type of land and the use of this land. Bond A sum of money paid by a tenant and held by the Tenancy Services to ensure against defaulting on payment and damage to the property. Alienation Clause A clause in a contract that gives the lender specific rights in the event that the mortgaged property is sold or transferred Amortization Amortization is the periodic payment of principal and interest on a liability (including a mortgage). or the write-off of a non-depreciable asset over a scheduled term. This is a face. Bridge Loan A bridge loan is a loan for a short duration of time and can be used when one is purchasing one property but is dependent on the equity from another property that has not yet been sold. Typically. elevators and restrooms) or occupied by structural components (such as support poles and interior walls). the usable area may be considerably less than the rentable area. Broker An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services. but it is usually slightly lower than 1 because some square footage in a building will be partly or totally non-unusable. Non-usable square footage includes space shared with other tenants (such as lobbies. contract amount of periodic rent. C CAM cap .

cleaning service and more. an acceptance. Cooperative . Conveyance also refers to the written instrument. Condotel A condominium project that is operated as a hotel with a registration desk. Comparative advantage The principle that cities or regions tend to produce those items or support those activities for which they have the greatest advantage over other areas as defined by the factors of production. and opportunity costs—costs expressed in terms of opportunities foregone. recording fees and taxes. exterior lighting. loan proceeds. as well as the obligations and responsibilities of both parties. Contract A contract is a legally binding agreement between two parties. competent parties. sale revenues. Cost approach A method of determining the market value of a property by evaluating the costs of creating a property exactly like the subject. and physical resources. Some examples of closing costs are title insurance. The owner pays for any CAM expenses exceeding that amount Cash flow The net cash received in any period. The units are individually owned. and signatures of the principals. as defined in relation to human. taking into account net operating income. Unit owners also have the option to place their unit in the hotels rental program where it is rented out like any other hotel room. written documentation. description of the property. Patta number. The term arises most frequently in real estate. Common Area Maintenance This is the amount of additional rent charged to the tenant to maintain the common areas of the property shared by tenants. Conformity Conformity is the homogeneous uses of land within a given area which results in maximizing land value. Closing Costs Closing costs are the expenses incurred in the purchase and sale of real property paid at the time of settlement or closing. such as a deed or lease that transfers legal title of a property from the seller to the buyer. and in order to have a valid Contract of Sale in real estate there must be: an offer. Typical examples include such work as landscaping.The maximum amount for which the tenant pays its share of common area maintenance costs. where a conveyance refers to the written contract between the seller and the buyer stating the agreedupon purchase price and the date of actual transfer. Information like Village Taluk. consideration. as well as insurance and property tax. legal purpose. Conveyance The act of transferring an ownership interest in real property from one party to another. and quality of life considerations. and any other sources and uses of cash. financial. District. snow removal. appraisal fees. Owner’s name and their father’s name can be found in this record. supporting industries. debt service. attorney fees. capital expenses. Chitta A Chitta is an extract from Patta that contains information related to the ownership details of the land. demand.

money. Dual Agent A dual agent is a broker or salesperson who represents both the buyer and seller in the same transaction. Credit Score A credit score is a numerical rating provided on a credit report that establishes creditworthiness based upon a person’s past credit/payment history and their current credit standing D Declaration Declaration is the master deed containing legal description of the condominium facility. 2) adjustments based on the Consumer Price Index (cost-of-living increases). The amount of shares owned is determined by the value and size of the apartment. on the basis that the legal claim will arise at a given point in the future. and the degree of ownership in the common areas available to each owner. plans and specifications for the building and units. Escalation Clause A clause in a lease which allows the landlord to increase the rent in the future to reflect changes in expenses paid by the landlord. This is when the individual unit owners own shares in the cooperative building and do not own the actual property. Also see system and market dynamics. and failure to adequately maintain property. etc. documents or other valuables are transferred to another party in advance of that party’s legal claim to them. operating costs. It is a form of trust. legal rights. money. Dual Occupancy A block of land which is zoned so that there two distinct dwellings are permitted by the Local Territorial Authority. Dynamic system A complex and ever-changing or evolving set of diverse and interrelated entities and agents which are organized into a coherent and working totality which serves multiple and/or common purposes or objectives. energy. and materials.A type of ownership of property. The discount rate reflects both the market risk-free rate of interest and a risk premium. Escrow A state where consideration. benefits. Discount rate The percentage rate at which money or cash flows are discounted. a plat of the property. a description of the common areas. The cooperative building owns all of the units and the purchaser is buying stock in the building. to be constructed. This can take three forms: 1) fixed periodic increases. Also see opportunity cost. such as real estate taxes. Efficiency A measure of the capacity or effectiveness of space to produce the desired results with a minimum expenditure of time. damage caused by natural or other hazards. and/or 3) an increase tied to the increased costs of operating the property. Estate . E Economic Depreciation Economic depreciation is the physical deterioration of property caused by normal use.

can get the borrower out of the debt obligation. the lender can go after the borrowers personal assets to collect if the loan is defaulted. The flip tax is usually a percentage of the purchase price. Expansion A phase of the real estate or business cycle characterized by the dramatic short-term increase in the supply of available units in a given market (due to economic growth and increasing construction activity) as a response to increasing and/or pent-up demand and rising price levels. also called flat. typically. Full Recourse Debt A guarantee that no matter what happens. Typically with a full recourse loan no occurrence. Eviction may be actual or constructive. This agreement does not preclude the owner from effectuating a sale on his own. Expenditure patterns The tendencies or propensities of individuals/households to spend disposable income on a given good or service in comparison to other goods and services (typically defined as a percentage of disposable income) in relation to income level or range and/or other demographic or socioeconomic characteristics. F Fair Market Value The fair market value is the price for a property agreed upon between a buyer and seller in a competitive market. straight or gross lease. or changes in market standards. Eviction An eviction is a landlord’s action that interferes with the tenant’s use or possession of the property. the best site for a given use.. poor design. through the examination of linkages. and market conditions. Flip Tax A levy issued on the transfer of ownership by a cooperative corporation or condominium association against the seller. though it may be against the buyer. The reduced capacity of a property or improvements to perform their intended functions due to new technology. G . the borrower will repay the debt. demographics. Functional obsolescence A form or source of accrued depreciation considered in the cost approach to market value. Fixed Lease A fixed lease is when the rental amount remains the same for the entire lease term.Estate refers to the collection of all assets of a deceased person. In this situation. It is also the extent of interest a person has in real property. Functional feasibility Considerations made in the site selection process which assist in the evaluation of site potential as defined in terms of the practicality of a site. Exclusive Agency Agreement (Exclusive Listing) An exclusive agency agreement is between a broker and a seller designating the broker as the seller’s sole agent for the purpose of selling his or her property. such as loss of job or sickness. or the determination of a site’s best use. competition. if there is no collateral for the loan.

allowing for a normal level of vacancy). transactions might be avoided when supply exceeds demand (or when a negative gap occurs). Gross leasable area (GLA) The total floor area designed for tenant occupancy and exclusive use. However. an important consideration in retail trade area analyses as growth patterns are known to affect sales/revenue potential within a market given the tendency of retail to follow population movement and income concentrations over time. taxes. It is also referred to as top ratio. Note that if demand exceeds supply. maintenance. from representing the number of foreclosures to the spreads of credit default swaps. Growth patterns In reference to the patterns of urban or population growth in a geographic market. Gross area The entire floor area of a building or the total square footage of a floor. interest. it is the area that produces income. H Heatmap A visual representation of data using colors. mezzanines. defined as occupied household units divided by one minus the vacancy allowance for that market (where demand is affected by the rate at which new households are being added to the market. and it is measured from the center line of joint partitions and from outside wall faces. as there is an oversupply of available space in the market. including basements. you can better forecast your monthly expenses and also avoid potentially high bills associated with these operating costs. A heatmap can be used with all sorts of data. ventilation and air conditioning. insurance. A positive gap indicates that potential opportunities exist for successful commercial real estate transactions. Graduated Lease A graduated lease is a lease in which the rent changes from period to period over the lease term. expressed as a percentage. By having all these costs thrown in. Housing demand The total number of housing units demanded in a given market. utilities. GLA is that area on which tenants pay rent. the gap will be positive. HVAC HVAC is an acronym that stands for heating. insurances and other applicable housing expenses) divided by gross monthly income. including taxes.Gap analysis An evaluation of the difference in the demand and supply of space (measured in terms of square footage) for a particular type of commercial property in a given market area where gaps are expressed as the amount of square footage demanded less the amount of square footage available in a given time period. Housing Expense Ratio The housing expense ratio is the relationship of a borrower’s monthly payment obligation on housing (principal. General Agent A general agent refers to the entity that has full authority over a property of the principal. such as a property manager. etc. Gross Lease A type of lease in which the tenant pays a flat sum for rent. This type of lease is usually used by a new business tenant whose income will increase over time. covering all landlord-paid expenses. and upper floors. .

Index Index is a benchmark. The seller recognizes gain for tax purposes by the proportion of the profit (determined by the profit divided by the nest sales price of the asset) received on each payment as it is received. Always consult your legal counsel before signing any Letter of Intent. the right of possession is extinguished and reverts back to the landowner. Installment Sale An installment sale is a property sale in which the purchaser pays the purchase price over a period of years. Listing The term used by brokers to market an apartment for sale or rent. Commercial real estate is bought and sold in an imperfect market.I Imperfect market A market in which product differentiation exists. At the time. Index lease A lease in which the rental amount adjusts accordingly to changes and/or movements in a price index. Investment Real Estate Real estate that generates income or is otherwise intended for investment purposes rather than as a primary residence. there is a lack of important product information. and certain buyers or sellers may influence the market. the tenant loses any remaining equity interest in the property. used to calculate the interest rate of an adjustable rate mortgage when rate is scheduled to change. Letter Of Intent This is an informal and preliminary agreement between the tenant and the landlord indicating intent to move forward with negotiations. one of which serves as a primary residence. such as a one-year London Interbank Offered Rate (LIBOR) security yields. while the others are used to generate rental income and profits through price appreciation. a margin stated in loan documents is added to the index to determine the new interest rate. Industrial gap The difference between the demand for an industrial property and the supply of that property in a given market or area. L Land Lease A land lease is a situation in which a building and other land improvement are rented for a term of years. Generally. Landmark Landmark status is the designation given to a building or neighborhood that is under government protection for purposes of preservation. The tax implications for investment real estate are often different than those for residential real estate. It is common for investors to own multiple pieces of real estate. . Leasing A means of obtaining the physical and partial economic use of a property for a specified period without obtaining an ownership interest. usually a published interest rate. At the end of the lease term. commonly the consumer price index.

Typically. Mean A measure of central tendency (for a distribution of values) defined as the average value of a variable in a sample and calculated by adding together all the values observed in a data set and dividing by the number of values observed. in the case of residential mortgages. Loft A loft refers to an open living space that was converted from commercial space to residential space. and the debt service on the building’s underlying mortgage. analyze. and facilitates the mortgage process on behalf of the borrower and the bank. The acronym MATCH represents the activities to market. Lot A lot is a measured section of land. Market analysis The process of examining market supply and demand conditions. assists with the application. The mortgage broker meets with a customer. a borrower would be required to pay a fee for mortgage insurance if their down payment is less than 20%. the mortgage broker is paid a fee by the bank for this service. Mortgage A mortgage is a pledge of real estate collateral to secure a debt. large windows and open space. It is also referred to as a deed of trust. target. The mortgage may also include the terms of repayment of the debt. Lofts contain very high ceilings. Match Second stage of four-stage transaction management process pertaining to gathering and evaluating property information to unite the investor and user.Listing Broker The listing broker represents the interests of the seller or landlord in the sale or rental of his or her property. real estate taxes. N . identifying alternative locations/sites that meet specific objectives or satisfy various criteria. Loan balance The amount of money remaining to be paid on an amortizing loan at a given time. compare. M Maintenance The monthly charge levied on owners by a cooperative corporation to cover the building’s operating costs. it is a legal document describing and defining the pledge. Mortgage Insurance Mortgage insurance is insurance that protects the lender in case the home buyer does not make their mortgage payments. Also. demographic characteristics. and opportunities. Generally. Mortgage Broker A real estate professional who represents an array of banks seeking to issue mortgages. Loan or mortgage value That portion of the value of real property recognized by the lender when used to secure a loan. and assessing the financial feasibility of those locations/sites to facilitate decision making regarding the commercial potential or suitability of various locations/sites to support a given activity or use. and highlight during the match stage.

as appropriate to his contractual or other liabilities. It might be worth considering such a clause to protect your investment for the long term – especially if you are in the service industry and expect a lot of walk-in traffic. Examples of operating expenses include real estate taxes. including certain leases and contracts of sale. Neutral leverage An investment situation in which the cost of borrowed funds is exactly equal to the yield provided by the investment. O Obsolescence In reference to the inadequacy. excess supply). Notarize Some legal documents. usually calculated on a yearly basis. in addition to rent. and maintenance costs. Oversupply In reference to commercial real estate. Also. or cost recovery. outdated. or production technologies due to effects of time. are notarized by a certified Notary Public to verify the authenticity of a signature. Outgoings Costs incurred by the owner of an interest in property. Eg. or decay (a factor considered in depreciation to cover the decline in value of fixed assets due to the invention and adoption of new production technologies. with a stated interest rate . insurance and rent payable to the holder of a superior interest. repairs. management.Net lease A lease in which the tenant pays. products. disuse. Many brokers may represent the seller. all operating expenses such as real estate taxes. Non-Compete Clause This clause prevents the landlord from leasing any other premises on the development to a direct competitor of yours or another tenant operating the same type of business. a phase of the real estate market cycle denoting that period of time in which commercial real estate markets become saturated with units due to overbuilding. property insurance. and legal or accounting expenses. debt service. It is prudent to make annual provision for future items involving expenditure at intervals of more than one year. utilities. property management and maintenance expenses. oversupply is a stock or supply of a given commercial property type that is greater than that which can be cleared under prevailing prices levels and market conditions (for example. or changing consumer demand). Operating expenses Cash outlays necessary to operate and maintain a property. changing market conditions. P Partially amortized mortgage loan The payments do not repay the loan over its term and thus a lump sum (balloon) is required to repay the loan. or nonfunctionality of facilities. Open Listing An open listing is an apartment for sale for which the owner has not signed an exclusive agreement with a real estate broker. rates. infrastructure. insurance premiums. Participation mortgage A loan secured by real property. or the seller can promote the property independently. Operating expenses do not include capital expenditures.

Percentage Lease A percentage lease refers to a lease that has a rental amount that is a combination of a fixed amount plus a percentage of the lessee’s gross sales. (Real Estate Information Standards) Passive Loss A passive loss is a loss generated by investment real estate when real estate is not the taxpayer’s primary business. willingness. Q Quadruplex A quadruplex is an apartment with four levels. financial. Because most brokers receive a commission or fee from the landlord or seller they represent (via a representation . Positive leverage Borrowed funds are invested at a rate of return higher than the cost of the funds to the borrower. A good broker will not only help you find a space. Loss in excess of income may not be fully recognized for tax purposes in the year it was incurred. Proprietary Lease The lease issued by a cooperative corporation to each tenant-shareholder prescribing his or her right to occupy a specific apartment and his or her general obligations as an owner and tenant. and ability to consummate a transaction.that also provides for a share to the lender in annual net cash flow. Perfecting a Loan When a loan is issued against a personal property. latitude. it is recorded in the county clerk’s office against the name of the borrower. intention. Real Estate Broker State-licensed agents with expertise in the leasing process. gain on sale. Principal The portion of a loan payment used toward reducing the original loan amount. usage. and yield involved in the qualify stage. The recording process perfects a security position against the collateral. R Rate Cap A rate cap is the limit on interest rates during the term of an adjustable rate mortgage. Qualify First stage of four-stage transaction management process pertaining to the process of gathering and evaluating information to measure a client’s readiness. or proceeds from refinancing the property. Patta A Patta is an important legal document issued by the government in the name of the owner of a particular land or plot. This land revenue record establishes the ownership or possession of the property. but also help you in all aspects of the lease transaction. The acronym QUALIFY represents the considerations of quantify. authority. high-rise building. Penthouse A penthouse apartment refers to the apartment on the highest floor in a luxury.

usually tied to macro-economic or business cycles. Security Deposit A payment required by a landlord to guarantee that the tenant meets his or her obligations under the lease and to guard against any potential damages that may be incurred during the term of the lease. Street-based mapping Relatively easy-to-use GIS applications that allow the user to map objects such as commercial properties or retail establishments by street address. profits. sales. A step lease is a means for the lessor to hedge against inflation and future maintenance or operational expenses. property values and price levels are flat or decreasing. Step-up lease A lease in which the rental amount paid by the lessee increases by a preset rate or set dollar amount at predetermined intervals. and weak economic growth that is not as severe or prolonged as a depression.agreement). which in turn invests the money in real property and then distributes any profits to the investors. Recession A period of reduced economic activity or a general economic downturn marked by a decline in employment. S Sales Comparison Approach The sales comparison approach is an appraisal tool for estimating the value of a property with other similar properties that have sold recently. Real estate investment trust (REIT) An investment vehicle in which investors purchase certificates of ownership in the trust. and there is virtually no construction of new stock given excess supply of units in most real estate markets. production. applying appropriate units of comparison. Suspended losses Passive losses that cannot be used in the current year are suspended for use in future years or at the time of sale. As a result. The trust is not subject to corporate income tax as long as it complies with the tax requirements for a REIT. it’s worth doing your research to find a good one. a real estate lawyer can often offer advice in this regard. T Tax Abatement . Sales comparison value An estimate of value derived by comparing the property being appraised to similar properties that have been sold recently. and making adjustments to the sales prices of the comparable based on the elements of comparison. Real estate trends Long-term movements or tendencies in the demand for commercial real estate (which can typically last for years or decades). Referral Fee A referral fee is a percentage of a broker’s commission paid to another broker for the referral of a buyer or seller. sales in real estate markets are slow.

Tax savings (capital expenditure) Entry on the tenant’s Cash Flow Form. V Vacancy Rate The vacancy rate is the projected rate of the percentage of rental units that will be vacant in a given year. Total Existing Inventory In reference to commercial real state. Useable area = rentable area × building efficiency percentage. The owner of the property and/or the developer has reduced taxes for a specific period of time.A tax abatement is a financial incentive offered by a local or municipal government to stimulate development in a particular area. The sponsor normally gets special rights to rent and/or sell these shares (representing special apartments) without board approval. storage facilities. Useable Area Rentable area. and bathrooms). The Tenant Improvement (TI) Allowance or Work Letter defines the fixed amount that the landlord will contribute towards these improvements. The taxes are raised incrementally to the full tax burden over the period of a few years. If you expect to make lots of improvements to the space. Time value of money (TVM) An economic principle recognizing that a dollar today has greater value than a dollar in the future because of its earning power. Tenant Improvements Defines any improvements to the leased space either by. and costs over this amount are then covered by the tenant (also known as the Tenant Finish Allowance). and interdependent parts and activities aggregated or organized in such a way as to serve a common purpose and/or satisfy the needs and wants of people residing in and dependent upon that system. unusual business expenses incurred to make the new office efficient for the business. typically 10-15 years. It refers to any tax savings associated with any capital expenditure by the tenant in terms of the site or major. U Unsold Shares Shares of stock in a cooperative corporation transferred to the sponsor at the completion of the conversion process. or for. . a tenant. interacting. less certain common areas that are shared by all tenants of the office building (such as corridors. The amount of tax savings is calculated by multiplying the annual deduction amount by the tenant’s tax rate. Title The legal term for the evidence that the owner is in lawful possession of the land and property. Urban System (city as a system) A complex and structured urban environment or system composed of highly diverse. it’s worth negotiating these with your landlord and trying to get as much of these costs covered as you can. it is existing and currently available supply or stock as represented by the total number of units or total amount of space available of a specific commercial property type in a given market at a particular point in time. Also defined in office buildings as the area that is available for the exclusive use of the tenant.

Wage assignments are typically a last resort of a lender to receive repayment from a borrower who has previously failed to pay their debt obligation. square footage. surface and groundwater protection. such as age. etc. W Walk Through Inspection The inspection of a property immediately before the closing to ensure that the property does not have any new damages. Zoning Ordinance Zoning ordinance is a statement settling forth the type of use permitted under each zoning classification and specific requirements. Wetlands Wetlands are federal and state protected transition areas between uplands and aquatic habitats that provide flood and storm water control. location. and pollution treatment. etc. commercial. . Wage Assignment The procedure of taking money directly from an employee’s compensation under the authority of a court order. Zoning Zoning are the laws regulating land use.Valuation Valuation establishes an opinion of value utilizing an objective approach based on facts related to the property. Y Yield The yield refers to the return on an investment. Vesting Options Vesting options are choices buyers have in how to acquire property. Wraparound Mortgage A wraparound mortgage is a junior mortgage in an amount exceeding a first mortgage against the property. erosion control. Words of Conveyance Words of conveyance is a stipulation in a deed demonstrating the definite intent to convey a specific title to real property to a named grantee. in order to pay a debt obligation. cost to replace. such as residential. Z Zone An area of a municipality or specific building that is zoned for a specific use.