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Monday, November 8, 2010

Real estate terminologies

The common and simple terminologies used (in fact misused)  and often discussed in real estate industry generally end up into lots of confusion.Our aim is to provide an information for a common man  having some kind of interest in sale /purchase or renting of properties.Surely you will find it useful:
1. Built-up area: It refers to the entire floor area including carpet area, walls, lobbies and corridors, atrium areas and basement.
2. CAM: CAM stands for Common Area Maintenance. It includes maintenance of hallways, pathways and utilities.
3. Cap rate: This is also known as Capitalization Rte. It is the return on investment (ROI) on the property. It is measured by the formula: Purchase Price / Net Operating Income from the Property.
4. Carpet area: It is the actual usable area within the walls of the floor.
5. Cash on cash: It is the annual percentage return of your down payment not including appreciation.
6. CPI: The Consumer Price Index is used to calculate the annual rental increase so as to compensate for inflation.
7. Efficiency ratio: Efficiency ratio is generally expressed as a percentage of carpet to super areas of the property.
8. FSI: FSI stands for Floor space index is the quotient of the ratio of the combined gross floor area of all floors excepting areas specifically exempted under these regulations to the total area of the plot.
9. Full service lease: This is a lease where the tenant pays rent to cover everything including utilities.
10. GLA: GLA stands for Gross Leasable Area. This is the total rentable area.
11. Gross lease: This is a lease where the renter pays only rent and the landlord pays the taxes, insurance and maintenance.
12.  LOI: LOI stands for Letter of Intent. It is a non-binding offer letter to buy a commercial property.
13. Maintenance charges: These are charges taken by the maintenance society towards the maintenance of the property.
14. Market value: Market value of the property is the price that the property commands in the open market. It is calculated by the valuation process which works on “demand and supply” principle.
15. Mixed use: These are commercial properties with retail on the first floor and apartments on upper floors.
16. Registration charges: These are the fees associated with getting the legal title registered in your name. This legal activity is conducted in the sub-registrar office.
17. Stamp duty: Real Estate Stamp duty is a tax collected by the Government of India. Stamp duty is based on the market value or the agreement value whichever is greater.
18. Sale deed: Sale deed is the process by which the seller transfers all the rights on property to the buyer.
19. Super area: Super area is the entire area of the building including carpet area, walls, lobbies and corridors, lifts, staircases basements, and other atrium and utility areas.


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