Property Glossary

Below, is a comprehensive list of Real Estate terms, which will be updated regularly. Readers are encouraged to become familiar with the terminologies used in context of Real Estate Transactions.

A long-term loan, often a mortgage that has one large payment due upon maturity. A balloon loan will often have the advantage of very low interest payments, thus requiring very little capital outlay during the life of the loan. Since most of the repayment is deferred until the end of the payment period, the borrower has the flexibility to utilize the available capital during the life of the loan. The major problem with such a loan is that the borrower needs to be self-disciplined in preparing for the large single payment, since interim payments are not being made. Balloon loans are often undertaken when refinancing or when a major cash flow event is anticipated.

A bare shell usually includes basic flooring and plastered walls. Apart from this, pantry and toilet facilities may also be operational in such condition.

Reserve Bank of India replaced Benchmark Prime Lending Rate (BPLR) system with Base Rate system with effect from July 1, 2010. Base rate is the interest rate below which banks cannot lend. The Base Rate includes all those elements of the lending rate that are common across all categories of borrowers. Banks are allowed to determine their actual lending rates on loans and advances with reference to the Base Rate and by including such other customer specific charges as considered appropriate. All categories of loans are priced only with reference to the Base Rate.

Bridge loan is a type of gap financing arrangement wherein the borrower can access short-term loans to meet short-term liquidity requirements.

This type of financing allows the user to meet current obligations by providing immediate cash flow. The loans are short-term, normally up to one year, with high interest rates and are backed by some form of collateral such as real estate or inventory.

A broker is a person or a company who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.

Local authority control of building standards aimed to regulate and control the usage of land, property and areas in cities and towns.

Based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.

A contract between an owner or occupier of land and a building contractor, setting forth the terms under which construction is to be carried out, basis of remuneration, time scale, and penalties, if any, for failure to comply with terms of the contract.

Built Up Area or Plinth Area is the total covered area of the apartment or commercial property unit i.e. area within & including outside walls of the unit. It can be calculated by adding carpet area, areas of utility ducts within property unit and internal & external walls of the unit.

Any short-term, financing option (5 to 7 years) that requires a balloon payment at the end of the term and anticipates that the loan will be refinanced in order to meet the balloon payment obligation.

These loans are riskier because the homeowner’s equity in the property doesn’t increase over time.