Real Estate Encyclopedia: Page 14
- The Real Estate Beginners Guide to Appraised Value in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Appraised value is a licensed appraiser’s professional estimate of a property’s fair market value at the time of evaluation.
- Lenders finance based on the appraised value, not the agreed-upon purchase price.
- Comparable sales are the strongest influence on appraised value, followed by location, size, condition, amenities and market conditions.
- Appraised value differs from assessed value, which governments use for property taxes.
Appraised value is the dollar figure a licensed appraiser assigns to a property as its estimated fair market value, based on an inspection and comparable sales.
- The Real Estate Beginners Guide to Appraisal Fees in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An appraisal fee is the payment to a certified appraiser for determining a property’s fair market value.
- Residential appraisals typically cost $300 to $600, while large or unique homes may cost $700 to $1,500 or more and commercial appraisals can cost several thousand dollars.
- Appraisal fees are disclosed in the Loan Estimate and finalized in the Closing Disclosure.
- The borrower typically pays the fee as part of closing costs, and it is typically non-refundable once the appraisal is done.
An appraisal fee is the charge a lender, buyer or homeowner pays a licensed or certified appraiser to inspect a property, analyze comparable sales and report its market value.
- The Real Estate Beginners Guide to Appraisal Contingency in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An appraisal contingency is a purchase-agreement clause that lets the buyer renegotiate, pay the difference in cash or cancel if the appraised value comes in below the purchase price.
- If the buyer cancels under the contingency, the buyer is entitled to recover the earnest money deposit.
- Contracts typically set a deadline, often 10 to 21 days after acceptance, for the appraisal and any objections.
- Waiving the appraisal contingency removes the buyer’s protection and can mean paying any gap in cash.
An appraisal contingency is a clause in a real estate purchase agreement that makes the sale conditional on the property appraising at or above the contract price.
- The Real Estate Beginners Guide to Appraisal in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A real estate appraisal is an unbiased professional opinion of a property’s market value, prepared by a certified appraiser.
- Appraisals are required for most mortgage loans and refinances, and they follow the Uniform Standards of Professional Appraisal Practice (USPAP).
- A low appraisal can force the buyer and seller to renegotiate, or the buyer to bring more cash to closing.
- An appraisal values a property, while a home inspection assesses its condition.
A real estate appraisal is a licensed or certified appraiser’s written opinion of what a property would likely sell for under normal market conditions.
- The Real Estate Beginners Guide to Application Fees in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An application fee is a charge paid by a rental applicant or mortgage borrower to cover screening and processing costs.
- Rental application fees typically range from $25 to $100, and a mortgage lender generally may not charge a fee until the borrower has received the Loan Estimate and indicated intent to proceed, other than a bona fide credit report fee.
- Application fees are usually non-refundable, though some jurisdictions require a refund if the application is not processed.
- Some states cap rental application fees; California limits the amount and adjusts it annually for inflation.
A real estate application fee is a one-time charge to a rental applicant or loan borrower that covers credit checks, background checks and administrative processing of the application.
- The Real Estate Beginners Guide to Antitrust Laws in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Antitrust laws are federal and state laws that prohibit agreements and practices that restrain competition, including price fixing, market allocation, group boycotts and tying arrangements.
- The Sherman Act (1890), the Clayton Act (1914) and the Federal Trade Commission Act (1914) are the core federal antitrust statutes.
- The Department of Justice, the Federal Trade Commission and state regulators enforce antitrust laws.
- Real estate agents and brokerages must set commission rates and client terms independently, without agreeing with competitors.
Antitrust laws are federal and state laws that protect competition by banning agreements among competitors, and monopolistic conduct, that restrain trade or inflate prices.
- The Real Estate Beginners Guide to Annuity in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An annuity in real estate is a structured series of payments made over time instead of a single lump sum.
- Seller-financed sales, long-term leases and private annuity arrangements in estate planning are the main real estate deals that work like annuities.
- A seller who accepts installment payments can keep a lien or mortgage interest in the property until the last payment is made.
- Tax treatment depends on whether each payment is interest, principal or gain, so a tax professional should review the structure before signing.
An annuity in real estate is an agreement that pays one party a set amount at regular intervals over a fixed period, or for life, in place of one lump-sum payment.
- The Real Estate Beginners Guide to Annual Percentage Rate (APR) in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Annual Percentage Rate (APR) is the annual cost of borrowing, expressed as a percentage, that includes the interest rate plus certain charges such as origination fees, discount points, and some closing costs.
- Federal law requires lenders to disclose APR under the Truth in Lending Act (TILA), and both the interest rate and APR appear on the Loan Estimate and Closing Disclosure.
- APR does not include every fee, and costs like appraisal or title insurance may not be reflected in it.
- A lower APR is usually better, but borrowers should consider how long they plan to keep the loan, since upfront fees may or may not pay off over time.
- Some APR components, such as origination fees or discount points, may be negotiable with the lender.
APR is a standardized yearly percentage that combines a mortgage's interest rate with certain lender fees so borrowers can compare loan offers side by side.
- The Real Estate Beginners Guide to Amortization Schedule in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An amortization schedule is a table that shows how each mortgage payment is split between principal and interest and how the loan balance falls over time.
- Each row shows the payment date, the amount applied to interest, the amount applied to principal, and the remaining balance.
- On a fixed-rate mortgage, early payments go mostly toward interest and principal repayment increases over time.
- Extra principal payments or refinancing create a new schedule with a faster payoff or different terms.
- Federal disclosures such as the Loan Estimate and Closing Disclosure include projections of how payments will be applied.
- The schedule covers principal and interest only, unless noted, and does not include taxes and insurance.
An amortization schedule is the payment-by-payment table of a loan that shows the interest, the principal, and the remaining balance after every payment.
- The Real Estate Beginners Guide to Amortization in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Amortization is the process of paying off a loan through scheduled installments that include both interest and principal.
- On a fully amortizing mortgage, early payments are interest-heavy and later payments are principal-heavy, and the balance reaches zero if payments are made as scheduled.
- Fixed-rate mortgages are commonly 15 or 30 years, and the payment stays the same for the whole term.
- Negative amortization occurs when the required payment is less than the interest due, so the unpaid interest is added to the balance and the loan grows.
- Extra principal payments shorten the term and cut total interest, even though the required payment does not change.
- Escrow amounts for property taxes and insurance are separate from amortization and do not reduce principal.
Amortization is the gradual repayment of a loan through equal scheduled payments, each of which covers the interest due and pays down part of the principal.
- The Beginners Guide to Americans with Disabilities Act (ADA) Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Americans with Disabilities Act (ADA) is a federal civil rights law, signed on July 26, 1990, that prohibits discrimination based on disability.
- For real estate, the ADA's property rules sit mainly in Title III, which covers public accommodations (stores, restaurants, hotels, theaters, doctors' and dentists' offices) and commercial facilities (office buildings, factories, warehouses), according to ADA.gov.
- Commercial facilities are subject only to the ADA's requirements for new construction and alterations, while public accommodations also have barrier-removal obligations.
- Private housing is generally governed by the Fair Housing Act, which prohibits housing discrimination based on disability, rather than by the ADA's public-accommodation rules.
- Practical steps for owners are an accessibility audit, a compliance plan with a timeline, qualified contractors and staff training.
The ADA is a federal civil rights law, enacted in 1990, that bans disability discrimination in employment, state and local government services, businesses open to the public and commercial buildings, and sets accessibility standards for how those places are built and altered.
- The Real Estate Beginners Guide to Amendments in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Amendments in real estate are changes or additions made to the original terms of a contract, and all parties to the contract must agree to them.
- An amendment changes a contract that is already signed, while an addendum adds terms to the original contract before it is finalized.
- Common amendments change the purchase price, extend the closing date, add repair requests, or adjust financing terms.
- Amendments are legally binding once signed by all parties, so they should be in writing and specific.
- Notarization is not typically required for an amendment, and a real estate lawyer can review it for compliance with local laws.
A real estate contract amendment is a written, signed document in which the buyer and seller change one or more terms of a purchase contract they have already made.
- The Beginners Guide to Alternative Dispute Resolution (ADR) Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Alternative Dispute Resolution (ADR) is a set of processes, including mediation, arbitration, negotiation and conciliation, that resolve disputes without going to court.
- In mediation, a neutral mediator helps the parties reach their own agreement but does not decide the outcome.
- In arbitration, a neutral arbitrator hears both sides and makes a decision that is usually binding and final.
- ADR is generally faster, cheaper and more private than litigation, and it can preserve business relationships.
- Most real estate disputes can go through ADR, but a contract's arbitration clause or state law may decide which method applies, so check your documents.
ADR definition: Alternative Dispute Resolution is any method of settling a dispute outside a courtroom, such as mediation or arbitration, with the help of a neutral third party or direct negotiation.
- The Real Estate Beginners Guide to Alienation in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Alienation in real estate is the legal process by which ownership of a property is transferred from one party to another.
- Voluntary alienation happens through sales, gifts, or inheritance, and involves a deed that is signed, notarized, and recorded with the local government.
- Involuntary alienation happens without the owner's consent, through foreclosure, eminent domain, or adverse possession.
- An alienation clause in a mortgage requires the borrower to pay off the loan in full if the property is sold or transferred.
- A foreclosure sale or other distressed alienation can sell for less than market value.
Alienation is the transfer of title to real property from one owner to another, whether the owner agrees to it (voluntary) or not (involuntary).
- The Real Estate Beginners Guide to Air Rights in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Air rights are the rights to control, use, or occupy the space above a property, and they can be sold or leased separately from the land.
- Air rights are regulated mainly by zoning laws and city planning ordinances, and they are typically measured in square feet.
- Transferable Development Rights (TDRs) move the right to develop one property to another property, and are typically used to preserve historic or agricultural land.
- New York City has one of the most active air rights markets in the world, with deals such as the air rights above Grand Central Terminal and St. Patrick's Cathedral.
- Location, zoning laws, and market demand are the key factors that set the value of air rights.
Air rights are the legal rights to use the space above a piece of land, and an owner can often sell or lease the unused part separately from the land itself.
- The Real Estate Beginners Guide to Agency in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Agency in real estate is the legal relationship in which a principal (the client) authorizes a real estate agent to act on their behalf in a transaction.
- The four common types are buyer's agent, seller's (listing) agent, dual agency, and designated agency.
- Agents owe their clients fiduciary duties of loyalty, confidentiality, disclosure, and care.
- Dual agency is one agent representing both sides, which creates conflicts of interest, and some states regulate it strictly.
- Agency agreements must be signed by both parties to be legally binding.
- Commissions are a percentage of the sale price, have typically been around 5-6%, and can be negotiated.
Agency is the fiduciary relationship in which a licensed real estate agent, working under a broker, represents a client's interests in buying, selling, or leasing property.
- The Beginners Guide to Maximizing After Repair Value (ARV) Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- After Repair Value (ARV) is the estimated market value of a property once all planned repairs and renovations are finished.
- ARV is set by the recent sale prices of comparable renovated properties (comps) in the same area, not by adding the rehab budget to today's value.
- Investors use ARV to cap what they pay: a common rule of thumb is a maximum offer of 70% of ARV minus repair costs.
- Lenders often base loan amounts on ARV, so an inflated ARV can mean losses, while an accurate one supports financing and profit planning.
- ARV is different from market value, which is the property's worth as it stands today.
ARV, or After Repair Value, is the price a property is expected to sell for after it has been fully renovated, based on what similar renovated homes have recently sold for nearby.
- The Beginners Guide to Affidavit And Memorandum Agreements Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An affidavit is a written statement of fact confirmed by oath or affirmation, usually signed before a notary public, and it can be used as evidence in court.
- Lying on an affidavit can lead to perjury charges.
- A memorandum agreement (or memorandum of understanding) is a written summary of agreed terms, such as price and closing date, written before a final contract is signed.
- An affidavit swears to facts, such as ownership or no liens; a memorandum agreement records terms both sides have agreed to.
- A memorandum agreement is not always legally enforceable as a contract, so have an attorney review both documents.
Definitions: an affidavit is a sworn written statement of fact, and a memorandum agreement is a written outline of agreed terms made before the final agreement.
- The Real Estate Beginners Guide to Adverse Possession Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Adverse possession is a legal doctrine that lets a person who occupies land without the owner's permission gain legal title after a statutory period.
- The statutory period varies by state, typically ranging from 5 to 30 years.
- The claimant's possession must be continuous, open and notorious, exclusive, and hostile to the owner's rights for the whole period.
- In some states, paying property taxes on the land is also required for a successful claim.
- Easement by prescription gives only a right to use land, while adverse possession transfers ownership.
- Owners reduce risk through regular inspections, written permission or lease agreements, clear boundaries, and prompt legal action against unauthorized use.
Adverse possession is the legal route by which a person who openly occupies someone else's land, without permission and for long enough, can become its legal owner.
- The Real Estate Beginners Guide to Adjustable Rate Loans Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An adjustable rate loan (ARL), also called an adjustable-rate mortgage (ARM), has an interest rate that changes periodically based on market conditions.
- Most ARMs start with a lower initial rate than fixed-rate loans, then adjust after an initial period based on an index plus a lender margin.
- The CFPB says an ARM's rate is tied to an index and that the margin is the number of percentage points the lender adds to the index.
- Rate caps limit how much the rate can rise at each adjustment and over the life of the loan, with three types: initial adjustment cap, periodic adjustment cap and lifetime cap.
- The main risk is payment shock, when a rate reset sharply raises the monthly payment.
An adjustable rate loan is a mortgage whose interest rate starts at a set level for an introductory period and then resets at regular intervals to the current index plus a fixed margin.
- The Real Estate Beginners Guide to Addendums in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An addendum is a supplementary document added to an existing real estate contract to modify, add or clarify its terms.
- An addendum becomes a legally binding part of the contract once both parties sign it.
- Common addendums cover financing, inspection and contingencies, and others document price changes, closing date extensions and included personal property.
- A good addendum references the original contract by date, parties and the specific sections being changed.
- Keep signed addendums with the contract and consult a real estate professional or attorney for complex changes.
An addendum is a signed document attached to a contract that changes or adds terms without replacing the whole agreement.
- The Real Estate Beginners Guide to Ad Valorem Taxes in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Ad valorem is Latin for "according to value," and ad valorem taxes are based on the assessed value of an item such as real estate or personal property.
- Property tax is calculated as assessed value multiplied by the tax rate, which is set by local authorities.
- The tax rate is also called the millage rate, expressed as the amount of tax per thousand dollars of assessed value.
- Local governments levy ad valorem taxes to fund public services such as schools, infrastructure and emergency services.
- Owners who believe a property is over-assessed can appeal, usually with evidence such as recent sales data or an independent appraisal.
An ad valorem tax is a tax whose amount rises and falls with the value of what is taxed, so a more valuable property pays more tax at the same rate.
- The Beginners Guide to Actual Cash Value (ACV) in Insurance Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Actual Cash Value (ACV) is the replacement cost of damaged property minus depreciation, and it is what an ACV policy pays on a covered claim.
- Replacement Cost Value (RCV) pays the cost to replace the property with a new item of similar kind and quality, without deducting depreciation.
- ACV policies generally have lower premiums than RCV policies but pay less on a claim, especially for older roofs, appliances and belongings.
- A deductible is subtracted from the claim payment: a $1,000 ACV payout with a $200 deductible pays $800.
- How ACV is defined can vary by state and by policy, so the policy language controls.
Actual Cash Value definition: Actual Cash Value is the amount an insurer pays for a covered loss, calculated as what it would cost to replace the item today minus depreciation for age and wear.
- The Real Estate Beginners Guide to Valuing Acreage Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Acreage is the size of a piece of land measured in acres, and one acre equals 43,560 square feet.
- Land is typically valued per acre using recent sales of comparable parcels, adjusted for location, access, zoning, utilities, terrain and use.
- Larger parcels usually sell for more in total, but the price per acre can be lower than on a smaller parcel in the same area.
- Acreage is measured by a licensed surveyor, GIS software or drone-based aerial imagery; the length times width formula works only for rectangular parcels.
- Acreage affects zoning options, assessed value and property tax, so buyers should confirm the acreage before agreeing on a price.
Valuing acreage means estimating what a parcel of land is worth, usually by finding the price per acre of comparable recently sold parcels and adjusting for the parcel's location, access, zoning, utilities and condition.
- The Real Estate Beginners Guide to Accessory Dwelling Units Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An accessory dwelling unit (ADU) is a small, self-contained secondary housing unit on the same lot as a single-family home, with its own kitchen, bathroom and sleeping area.
- The main ADU types are detached units, attached units with a separate entrance, garage conversions and basement conversions.
- The guide puts construction costs at roughly $100,000 to $300,000 and the timeline at 6 to 12 months, depending on size, design and location.
- Zoning, permits and inspections vary by location, so owners should check with the local planning or building department before building.
- ADUs can provide rental income, housing for family members and added property value.
An ADU is a second, complete home built on the same property as a primary single-family house, either attached to it, detached from it or created by converting space such as a garage or basement.
- The Real Estate Beginners Guide to Accession Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Accession in real estate refers to an increase in a property's value or size from external additions or improvements, whether natural or human-made.
- Natural accession includes gradual soil deposits from a river (alluvion); human accession includes building extensions and landscaping.
- Accretion is a subset of accession that applies only to the gradual increase of land from natural deposits such as soil or sand carried by water.
- Acquisition means obtaining ownership by purchase or transfer, while accession adds value or size to property already owned.
- Accession rules differ by jurisdiction, so property owners should seek legal advice for disputes.
Accession is the legal principle that additions to land, whether deposited by nature or built by people, generally become part of the property they attach to and belong to its owner.
- How to Get Your Offer Accepted in a Competitive Market Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A strong offer in a competitive market combines a mortgage pre-approval, a fair initial price, a flexible closing date and meaningful earnest money.
- Lowball offers usually backfire in competitive markets because they can offend the seller and lose to better terms.
- Earnest money typically ranges from 1-3% of the purchase price, though the amount varies by market and contract.
- Waiving contingencies makes an offer more attractive but raises the buyer's risk; protect yourself with an inspection contingency or a pre-offer inspection.
- In a bidding war, set a maximum price before you start and stick to it; an escalation clause raises your bid automatically up to that limit.
Offer definition: an offer is a buyer's formal written proposal to purchase a property at a stated price and on stated terms, such as contingencies and a closing date, which the seller can accept, reject or counter.
- The RE Beginners Guide to Acceleration Clauses in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An acceleration clause is a provision in a mortgage or loan agreement that lets the lender demand the entire loan balance immediately under certain conditions.
- Typical triggers are missed payments, violating loan terms such as not maintaining property insurance, and bankruptcy.
- A due-on-sale clause is triggered by selling or transferring the property, while an acceleration clause is triggered by default or other violations of the loan terms.
- If a borrower cannot pay the accelerated balance, the lender may proceed with foreclosure.
- The acceleration clause itself does not affect a credit score, but the missed payments and foreclosure that lead to it can.
An acceleration clause is the part of a loan contract that makes the whole unpaid balance due at once if the borrower defaults.
- The RE Beginners Guide to Abutting Properties in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Abutting properties are parcels of land that share a common boundary.
- Abutting properties are identified from the deed's legal description, a land survey and county assessor maps.
- Boundary disputes, encroachments and easement conflicts are the most common issues between abutting neighbors.
- Licensed surveyors establish property boundaries, and a land survey is often required for sales, development and title insurance.
- Before buying, review the deed, order a land survey and check for easements to avoid surprises with abutting neighbors.
Abutting means touching: two properties abut when they share a boundary line, such as a fence line between neighboring backyards.
- A Guide to Absentee Owners in Real Estate + How to Find Them Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An absentee owner is a property owner who does not live at or near the property; in property data, the usual test is that the owner's tax-bill mailing address differs from the property's address.
- Absentee owners include out-of-town landlords, heirs who inherit a home in another state, and vacation-home owners.
- County tax records and deeds show an owner's mailing address, which is the most direct way to identify absentee owners.
- Absentee owners often face maintenance, security and tenant-communication problems, which is why some are open to a hassle-free sale.
- Absentee owners are not the same as absentee landlords: every absentee landlord is an absentee owner, but an absentee owner may also hold a vacant or unrented property.
Absentee owner definition: an absentee owner is a person or entity that owns real estate but does not live in it, usually because the owner's mailing address is somewhere other than the property address.
- The Ultimate Guide to A-Frame Homes: Design, Cost and Living Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- An A-frame home has a steep triangular roof that reaches from the foundation to the peak, forming the letter A.
- A-frames became popular in the mid-20th century as vacation homes and have seen a resurgence.
- Cost estimates commonly range from $100,000 to $300,000 depending on size, materials and location, so get local bids.
- Build time ranges from a few months to over a year, and professionals are recommended for code compliance.
- Steep roofs shed snow and rain well, but roof upkeep, heat loss through large glass walls and limited space are the main drawbacks.
An A-frame home is a house whose steep, triangular roof forms both the walls and the roof, creating a tall open interior with a loft.
- Everything You Need to Know About The 70% Rule in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The 70% Rule says an investor should pay no more than 70% of a property's After Repair Value (ARV) minus the estimated repair costs.
- The formula is Maximum Purchase Price = (ARV x 0.70) - Repair Costs; with a $200,000 ARV and $30,000 of repairs, the maximum price is $110,000.
- The remaining 30% of ARV is meant to cover the investor's profit plus holding, financing, closing and selling costs.
- The rule is a quick screen for house flips, not a substitute for a full deal analysis, and it needs adjusting in hot or cold markets.
- Inaccurate repair estimates and unrealistic ARVs are the most common reasons deals that pass the rule still lose money.
70% Rule definition: the 70% Rule is a house-flipping guideline that sets the maximum offer at 70% of a property's ARV, less the cost of repairs.
- Everything You Need to Know About 1031 Exchanges in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A 1031 exchange, named after Section 1031 of the Internal Revenue Code, lets an investor defer capital gains tax when selling an investment property and reinvesting in like-kind real property.
- You must identify replacement property in writing within 45 days of transferring the property you give up, and receive it within 180 days or by your tax return due date (including extensions), whichever comes first (IRS Form 8824 instructions).
- Since January 1, 2018, only real property qualifies; exchanges of personal property no longer do (IRS).
- Cash or other non-like-kind property you receive is called boot and is taxable up to the gain.
- A qualified intermediary holds the sale proceeds in a deferred exchange; you should not take possession of them.
- The IRS applies a two-year rule to related-party exchanges: disposing of the property early can end the deferral.
1031 exchange definition: a 1031 exchange is a swap of one investment or business real property for another like-kind real property that lets the owner defer, not eliminate, the capital gains tax on the sale.
- The Real Estate Beginners Guide to Zoning Ordinances in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Zoning ordinances are local laws that regulate land use within specific geographic zones.
- They dictate permitted uses, building heights, densities and the types of activities allowed.
- Typical classifications are residential, commercial, industrial, agricultural and mixed-use.
- Non-compliance can lead to fines, legal disputes and reduced property value.
- Variances, special use permits and rezoning allow changes, usually with a public hearing.
A zoning ordinance is the written local law, adopted by a city, town or county, that sets the rules for each zoning district and is paired with a zoning map.
- The Real Estate Beginners Guide to Zoning Board of Appeals (ZBA) in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Zoning Board of Appeals (ZBA) is a local appointed board that hears and decides appeals of zoning decisions.
- A ZBA can grant variances where strict enforcement would cause undue hardship and, in some places, special permits.
- Its process usually includes a formal application, evidence and a public hearing.
- Decisions can be appealed to court, so a ZBA ruling is not always the last word.
- Some states name the same body a board of adjustment or board of zoning appeals.
The Zoning Board of Appeals is the local panel that reviews disputes over how a zoning ordinance is applied to a specific property and can grant relief when strict enforcement would be unfair.
- The Real Estate Beginners Guide to Zoning in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Zoning is the regulation of land use by local governments, dividing areas into districts for residential, commercial, industrial and other uses.
- Zoning ordinances set what can be built, how it can be used and how dense development can be.
- Zoning can be changed through rezoning, which typically requires public hearings and local government approval.
- Variances and conditional use permits allow limited exceptions to zoning rules.
- Buyers and investors should confirm a property's zoning before purchase, because it determines the legal uses and development potential.
Zoning is the system of local laws that divides a city or county into districts and controls what may be built and how land may be used in each. The U.S. Supreme Court upheld zoning as a valid exercise of local police power in Village of Euclid v. Ambler Realty Co. (1926).