gap financing syn bridge financing The short-term financing needed to "bridge the gap" between a loan presently committed or in place and the total financing required to complete a project.
garbage fees Loan fees allocated to the seller in escrow, as closing costs, in sales where buyers are not permitted to pay them. Seller accept these fees in order to make the sale. Garbage fees are miscellaneous charges associated with any real estate transaction. Examples of garbage fees that may be hidden away in the loan documents or settlement papers are: application fees, credit fees, underwriting fees, document preparation fees, and evaluation fees. Lenders may waive some or all garbage fees as inducements to attract borrowers. All lenders charge standard fees for title insurance, appraisals, and points.
garden home See condominium.
gazebo A small structure situated in a garden.
general contractor syn builder A person or business organization licensed by the state to represent an owner in supervising the construction of improvements and structures. A general contractor may work for the developer/owner of a project, or may own the project himself. States grant various types of contractor licenses for special purposes, such as a subcontractor's licenses limited to electrical or plumbing. A general contractor causes a structure to be built but does not promise to do anything personally other than manage the project.
general partner A partner, or joint venturer, who manages and who is held personally liable for all the debts of the partnership if it is unable to meet its obligations. Also, a general partner is fully liable for all the liabilities of his co-partner which are created while acting in the scope of the partnership’s business. For example, of partner A, while on company business, negligently injures X in an auto accident, co-partner B is liable. General partners are equal managers of their partnership unless they have agreed otherwise in the partnership contract. Most states have adopted some version of the Uniform Partnership Act, which governs the rights and obligations of partners.
general partnership Two or more persons, or entities, contractually bound to carry on a business activity for a profit. Any partner may declare a dissolution (termination) of the partnership at any time. Partnerships do not pay federal or state income taxes; tax consequences are “passed through” to the partners. Each partner is personally liable for all debts of the partnership. Profits and losses are divided in accordance with the partners’ profit and loss ratios.
general plan A long-range plan for a community’s growth. A general plan ultimately is implemented through the adoption of zoning ordinances.
gentrification The change in a neighborhood brought about by renovation and upgrading, the result of which is to displace lower income residents with middle income residents. See also filtering down.
gerrymandering The intentional drawing of a political district
by a political party that is in power so as to give itself, or the racial
minority, a majority of voters in as many districts as possible while concentrating
the voting power of the other party into as few districts as possible.
With this technique an incumbent party may control a legislature, although
it generates only the same number (or even fewer) votes as the other
party in each election.
get-rich-quick schemes Investment tactics in real estate popularized
by seminars promoting such "fail-safe" techniques as no-down payment acquisitions.
The realities of management, negative cash flow, and other problems make
these get-rich-quick schemes improbable for most people.
GIM syn gross income multiplier See gross income multiplier.
gingerbread Fancy or ornamental fixtures added to a model home as a sales inducement, such as specially designed light fixtures, door handles, drawer pulls, decorative mirrors and bathroom appointments.
Ginnie Mae syn Government National Mortgage Association, which is a federal corporation that purchases mortgages in the secondary mortgage market.
going rate The market rate. For example, the going rate for residential real estate commissions is six percent to seven percent of the sales price. The going rate is considered to be negotiable. The expression is also used with reference to interest rates. For example, the going rate for a single family fixed rate mortgage has been between eight percent and six percent in the 90s. Or, the going rate for real estate attorneys is $300 per hour.
Golden Retirement Annuity Program syn Grannie Mae mortgage and reverse annuity mortgage This is a program under which senior citizens are able to turn their equity into cash payments while continuing to live in their family home. The essence of the program is a sale-leaseback. The sale proceeds are converted into an annuity, the monthly receipts of which are used for rent payments and spendable cash. The market rent usually leads to a negative cash flow to the investor who is more interested in a tax shelter and long term appreciation. Often the investor is related to the senior citizen.
good faith money syn earnest money, deposit and binder See earnest money.
good title See marketable title.
grace period A period of time during which a tardy payment on a home-purchase mortgage, or of rent, will be accepted without penalty. The grace period is the time between the due date of a payment and the delinquent date, following which later time a penalty will be assessed.
graduated lease A lease calling for increasing amounts of rent at specified time periods.
graduated-payment mortgage, (GYP-EM) A mortgage with payments tailored to meet the qualifications of first-time home buyers. The interest rate is fixed over the life of the loan, but in the early years the monthly payments are lower than is required to service the loan. The monthly payments gradually rise above the level at which a standard fixed-rate mortgage would then be written, but by that time the homeowner is expected to be able to meet the increased payment with increased salary or income. Some graduated-payment mortgages (GYP-EMS) are written with an adjustable interest rate, and become graduated payment adjustable rate mortgages (GPARMs).
grandfather clause A clause contained in many new laws that exempts current professionals and businesses from any new statutory requirements. However, these people and businesses normally remain subject to the old provisions and laws.
Grannie Mae mortgage syn golden retirement annuity program and reverse annuity mortgage A reverse annuity mortgage for seniors. "Grannie Mae" is a play on the term Ginnie Mae which describes the Government National Mortgage Association. See reverse annuity mortgage.
granny flat syn echo house A separate, small living unit located in close proximity to a main single family dwelling, made to provide housing for an aged parent or elderly person. It differs from an accessory apartment, which is contained within a single family dwelling. It is smaller than a tandem home, which is a second small home behind a larger home.
grant deed A standard variety of deed used to transfer ownership in real property sales. The word grant has historical significance in that its use implies a certain warranty as a matter of law, that the grantor previously has not conveyed the subject real property.
greater fool theory The belief that a property can be purchased
today, regardless of its inherent economic potential, and sold in a relatively
short time at a substantially greater price to another speculator.
The greater fool theory is related to inflationary periods.
greenbelt An open space or parklike area, usually bordering a
development, the effect of which achieves a desirable buffer. Private
development is prohibited in a greenbelt, though local government may construct
maintenance buildings, and the like. Greenbelt areas may be required
by government as an exaction, that is, as a condition for permission to
develop in the area.
GRI syn Graduate Realtors Institute The designation GRI is awarded by the Graduate Realtors Institute, an affiliate of the National Association of Realtors.
gross income multiplier, (GIM) A factor by which the gross income of a property is multiplied thereby arriving at its market value. For example, assuming a multiplier of twelve, the fair market value of an apartment producing an annual gross income of $100,000 would be $1,200,000. The GIM is determined by referring to the gross income and sales prices of other comparable properties in the area. The GIM is used as a quick method to estimate market value. (It sometimes is called the gross rent multiplier.)
gross lease A lease where all expenses of occupancy are paid by the landlord, e.g., real estate taxes, insurance and maintenance. It is opposite of a net lease.
gross profit ratio A ratio used to determine the portion of payments received on a carryback promissory note that are includible in taxable income each year. The ratio is computed by dividing taxable gain on the sale by the price of the property. That factor is applied to the installment payments received during the year to determine the amount includible in taxable income. Non-includible portions of installments are tax-free returns of principal. See also installment sale.
ground lease A lease of land upon which the tenant constructs some type of building. The tenant pays ground lease rent to the lessor. A ground lease avoids the substantial cash outlay that otherwise would be required if the land was purchased. The owner of the land defers payment of capital gains tax. The construction lender sometimes will require subordination of the leasehold to its deed of trust, or mortgage, which shifts some of the risk to the landowner.
guaranteed purchase syn guaranteed trade-in plan A commitment by a real estate broker to purchase his client's home within a stated period, and to make an immediate advance of funds on its price, thereby enabling the client to immediately purchase another property. These transactions are especially problematic because the agent is a fiduciary and thus in a conflict of interest.
guaranteed trade-in plan syn guaranteed purchase See guaranteed purchase.
GYP EM syn graduated-payment mortgage See graduated-payment mortgage.