Real Estate Glossary

The words of a deal, in plain English.

Plain-English definitions of the words that run a real-estate deal — mortgages, insurance, taxes, closings and everything around them — organized by subject and alphabet, from a broker with 818 MLS transactions across Chelsea and Greater Boston.
Plain-English definitions — not legal or tax advice.

Contents — browse by subject

Twelve sections, matching the Ask Jeffrey question library. Terms are alphabetical inside each section — or jump straight to a word in the A–Z index.

Mortgages & Financing

Adjustable-Rate Mortgage (ARM)

A mortgage whose interest rate is fixed for an introductory period, then adjusts periodically based on a market index plus a margin. Payments can rise or fall at each adjustment, subject to caps in the loan terms.

Amortization

The schedule by which a loan is paid off over time through regular payments. Early payments are mostly interest; later payments are mostly principal, until the balance reaches zero at the end of the term.

Annual Percentage Rate (APR)

The yearly cost of a loan expressed as a percentage, including the interest rate plus certain lender fees and mortgage insurance. APR lets you compare loans with different fees on one yardstick, though it assumes you keep the loan for its full term.

Assumable Mortgage

A loan that lets a buyer take over the seller’s existing mortgage, including its interest rate, with lender approval. Most FHA and VA loans are assumable; most conventional loans are not.

Balloon Payment

A large lump-sum payment due at the end of a loan whose regular payments did not fully pay it off. Balloon loans are common in commercial and some investor lending, and the borrower typically refinances or sells before the balloon comes due.

Bridge Loan

Short-term financing that lets you buy a new home before your current home sells, secured by the equity in one or both properties. It bridges the gap between two transactions and is usually repaid when the old home closes.

Buydown

Paying money up front — by the buyer, seller or builder — to reduce the mortgage interest rate. A permanent buydown lowers the rate for the life of the loan; a temporary buydown, like a 2-1, lowers it for the first years only.

Debt-to-Income Ratio (DTI)

The share of your gross monthly income that goes to debt payments. Lenders look at a front-end ratio (housing costs) and a back-end ratio (all debts); lower ratios make approval easier.

Asked & answered: What are front-end and back-end debt-to-income ratios?

Down Payment

The portion of the purchase price you pay in cash up front, rather than borrowing. The rest comes from your mortgage; a larger down payment means a smaller loan and, at 20% or more, usually no mortgage insurance on a conventional loan.

Escrow Account

An account your lender holds to pay your property taxes and homeowners insurance as they come due. You fund it a little with each monthly payment, and the lender pays those bills from it.

Asked & answered: What is an escrow account?

Fixed-Rate Mortgage

A mortgage whose interest rate — and therefore whose principal-and-interest payment — stays the same for the entire loan term, most commonly 30 or 15 years.

Home Equity Line of Credit (HELOC)

A revolving line of credit secured by your home’s equity, drawn and repaid like a credit card during a draw period, usually at a variable rate. After the draw period, you repay what you borrowed over a set term.

Home Equity Loan

A loan secured by your home’s equity, paid out as one lump sum and repaid in fixed installments, usually at a fixed rate. It sits behind your first mortgage, which is why it is often called a second mortgage.

Interest Rate

The percentage a lender charges on the money you borrow, before fees. It is the starting point of your monthly payment; your APR is the broader cost measure that adds fees in.

Loan Estimate

The standard three-page form a lender must give you within three business days of a mortgage application, laying out the estimated interest rate, monthly payment and closing costs. It replaced the old Good Faith Estimate for most loans.

Loan-to-Value (LTV)

The loan amount divided by the property’s value, shown as a percentage. A $400,000 loan on a $500,000 home is 80% LTV; lower LTV generally means less risk to the lender and better pricing.

Asked & answered: What is loan-to-value, or LTV?

Mortgage

A loan secured by real estate — and, strictly, the legal document that gives the lender a lien on the property until the loan is repaid. In everyday use it means the home loan itself.

Mortgage Commitment

The lender’s written promise to make your loan, issued after underwriting approves you and the property, usually with a list of any final conditions to satisfy before closing.

Asked & answered: What is a mortgage commitment?

PITI

Principal, interest, taxes and insurance — the four parts of a typical monthly mortgage payment. When people quote “the payment,” PITI is the honest full number.

Asked & answered: What is PITI?

Points

Prepaid interest charged at closing, where one point equals 1% of the loan amount. Discount points buy a lower rate; origination points are a lender fee. Paying points only pays off if you keep the loan long enough.

Asked & answered: What are discount points versus origination points?

Pre-Approval

A lender’s written statement that you are approved for a loan up to a set amount, based on verified income, assets and credit. It is stronger than pre-qualification and is what sellers expect to see with an offer.

Asked & answered: Why get preapproved instead of just prequalified?

Pre-Qualification

A lender’s informal estimate of what you might borrow, based on information you provide without full verification. It is a starting point, not a commitment — pre-approval is the verified step.

Private Mortgage Insurance (PMI)

Insurance that protects the lender, not you, when a conventional loan is made with less than 20% down. You pay the premium as part of your monthly payment, and it can usually be removed once you reach about 20% equity.

Asked & answered: What are PMI, MI and FHA mortgage insurance?

Rate Lock

A lender’s written guarantee of a specific interest rate and points for a set period, often 30 to 60 days, while your loan is processed. If the lock expires before closing, the rate can change.

Asked & answered: When should I lock my rate, and how long does it last?

Refinance

Replacing an existing mortgage with a new one — to lower the rate, change the term, switch loan type or take cash out against equity. The new loan pays off the old one at a fresh closing.

Second Mortgage

Any loan secured by a property that already has a first mortgage, such as a home equity loan or HELOC. In a foreclosure, the first mortgage is paid before the second.

Underwriting

The lender’s verification process: reviewing your income, assets, credit and debts, plus the property’s appraisal, to decide whether the loan meets the guidelines it must satisfy.

Asked & answered: What happens during mortgage underwriting?

Questions & answers in Mortgages & Financing

Insurance

Condo Master Policy

The insurance policy carried by a condominium association covering the building’s exterior, structure and common areas. What it covers — and what your own HO-6 policy must cover — depends on the condo documents.

Flood Insurance

Insurance for flood damage, which standard homeowners policies do not cover. Lenders require it for homes in high-risk flood zones; in Greater Boston’s coastal communities many owners carry it whether required or not.

Asked & answered: Is flood insurance required in Winthrop?

Forced-Place Insurance

Insurance a lender buys on your property — at your expense — when your own policy lapses or is too small. It costs more and protects less than a policy you choose yourself, so it is a gap to fix, not a solution.

Hazard Insurance

The part of a homeowners policy that covers physical damage to the home itself — fire, storm, vandalism and similar perils. Lenders require it for at least the loan amount.

HO-6 Policy

A condominium unit owner’s policy — sometimes called condo insurance or “walls-in” coverage — covering your unit’s interior, your belongings and your liability, complementing the association’s master policy.

Asked & answered: What is HO-6 insurance?

Homeowners Insurance (HO-3)

The standard policy for single-family homes (HO-3 is the common form), covering the structure, your belongings, liability and loss of use. Your lender will require it, with coverage at least equal to the loan amount.

Asked & answered: What insurance does a homeowner need?

Insurance Binder

A temporary written proof of insurance coverage, issued when a policy is bought, that stands in for the policy itself until the full policy arrives. Buyers typically need a binder — and a paid receipt — for closing.

Liability Insurance

Coverage for claims that you are legally responsible for someone else’s injury or property damage. It is built into homeowners and landlord policies, and umbrella policies extend it.

National Flood Insurance Program (NFIP)

The federal program that makes flood insurance available in participating communities, including most Greater Boston cities and towns. Private flood policies also exist, but NFIP is the standard route.

Renter’s Insurance

A tenant’s policy covering their belongings and personal liability — not the building, which is the landlord’s coverage. It is inexpensive, and landlords may require it in the lease.

Asked & answered: Do I need renter’s insurance?

Title Insurance

Insurance protecting against losses from defects in a property’s title — old liens, errors in records, undisclosed heirs and similar problems from before you owned it. The lender’s policy protects the lender; an owner’s policy protects you, for a one-time premium at closing.

Asked & answered: What are owner’s and lender’s title insurance? Why buy them?

Umbrella Policy

Extra liability coverage that sits on top of your homeowners, landlord or auto policies and pays when those limits run out. Common for landlords and higher-asset owners.

Questions & answers in Insurance

Taxes & Assessments

1031 Exchange

A tax-deferred swap of investment or business real estate for like-kind property under Section 1031 of the tax code. Strict identification and closing deadlines apply, the gain is deferred rather than forgiven, and it does not apply to a primary residence. (See also Investing & Development.)

Abatement

A formal request to your city or town to reduce your property tax because the assessment is higher than the property’s fair value or otherwise incorrect. In Massachusetts, abatement applications are due by the deadline printed on the tax bill — missing it usually ends the claim for that year.

Appraised Value

A licensed appraiser’s opinion of a property’s market value, usually prepared for a lender during a sale or refinance. It is an opinion at a point in time — related to, but not the same as, the tax assessor’s number.

Assessed Value

The value your city or town’s assessors place on your property for tax purposes. It drives your tax bill but is not a market appraisal — assessed and market values routinely differ.

Capital Gains Tax

Tax on the profit when you sell property for more than your basis (roughly, what you paid plus improvements, minus depreciation). Homeowners may exclude part of the gain on a main home if they meet the ownership and use tests; investors plan around it with tools like the 1031 exchange.

Deed Stamps

Massachusetts’ excise tax on real estate transfers, paid by the seller at closing when the deed is recorded. The rate in most counties is $4.56 per $1,000 of the sale price.

Depreciation

For tax purposes, the annual deduction spreading the cost of an income-producing building over its useful life — 27.5 years for residential rental property under current IRS rules. Land is not depreciated; the deduction reduces taxable rental income but is generally recaptured when you sell.

Mortgage Interest Deduction

The federal income-tax deduction for interest paid on a qualifying home mortgage, available if you itemize. How much it saves depends on your bracket and whether itemizing beats the standard deduction.

Property Tax

The yearly tax your city or town levies on real estate, based on the assessed value and the local tax rate. It funds municipal services and is usually the largest single carrying cost after the mortgage.

Asked & answered: Property taxes: who pays them?

Proposition 2½

The Massachusetts law limiting how much a city or town’s total property-tax levy can grow — the levy cannot exceed 2.5% of the community’s total value, and annual levy growth is capped at 2.5% plus new growth, unless voters approve an override.

Proration

Splitting ongoing costs — property taxes, condo fees, rents, oil in the tank — between buyer and seller as of the closing date, so each side pays only for the days they own the property.

Residential Exemption

A Massachusetts property-tax break some cities and towns offer owners who live in their home as their principal residence, reducing the taxable value. Boston is the best-known example locally; availability and amounts vary by community.

Questions & answers in Taxes & Assessments

Buying a Home

Appraisal

A licensed appraiser’s professional opinion of a property’s market value, ordered by the lender after an accepted offer. If the appraisal comes in below the price, the buyer and seller have to renegotiate, cover the gap in cash, or walk away if the contract allows.

Asked & answered: What is the appraisal and do I pay for it?

Buyer’s Agent

The broker who represents the buyer’s interests in a purchase — searching, advising on price and terms, writing offers and negotiating. In Massachusetts the relationship is documented with a buyer representation agreement that also sets compensation.

Comparable Sales (Comps)

Recent sales of similar properties nearby, used to judge what a home is worth. Appraisers, agents and buyers all lean on comps; the best ones match on location, size, condition and timing.

Contingency

A condition in an offer or contract that must be satisfied — or formally waived — for the deal to proceed, such as a satisfactory home inspection, mortgage financing or the sale of the buyer’s current home.

Earnest Money Deposit

The good-faith money a buyer puts down with an offer and at the Purchase and Sale, held in escrow and applied to the purchase at closing. In Massachusetts the combined deposits can be a meaningful share of the price, and the contract spells out when they can be kept or refunded.

Asked & answered: What happens to my deposit?

Final Walk-Through

The buyer’s last inspection of the property, usually within 48 hours before closing, to confirm it is in the agreed condition, agreed repairs are done and nothing has changed since the inspection.

Asked & answered: What happens at the final walkthrough?

Home Inspection

A licensed inspector’s examination of a home’s structure and systems — roof, heating, plumbing, electrical and more — usually done within days of an accepted offer. It informs the buyer; it is not a pass/fail test and does not cover everything.

Asked & answered: Why get a home inspection?

Offer to Purchase

The written offer a Massachusetts buyer signs to propose price and terms. Once accepted it is a binding contract — which is why buyers here review it with an attorney before signing, not after.

Asked & answered: What is an Offer to Purchase?

Open House

A scheduled time when a listed home is open for anyone to walk through, usually hosted by the listing agent. It is useful for seeing condition and competition; anything you say there can reach the seller, so go in with a strategy.

Showing

A private appointment to tour a home for sale, arranged through the listing side. Sellers expect pre-approval and an agent for most showings; your impressions there feed the offer decision.

Questions & answers in Buying a Home

Selling a Home

Asking Price

The price a seller lists a property for — a strategy decision, not a valuation. It is set from comparable sales, condition and the seller’s timeline, and the market answers it with offers or silence.

Asked & answered: How is the asking price determined?

Co-Broke

The practice of a listing broker offering part of the commission to the broker who brings the buyer. In Massachusetts the offer of compensation is made between brokers and disclosed to the parties.

Days on Market (DOM)

The count of days from a property’s listing date to an accepted offer or sale, as tracked by the MLS. Rising DOM changes negotiating leverage and is one of the first numbers buyers and their agents look at.

Dual Agency

When one brokerage represents both buyer and seller in the same transaction. Massachusetts allows it only with informed written consent from both parties, and it limits the advice the agent can give either side.

Listing Agent

The broker who represents the seller: pricing strategy, marketing, showings, offer negotiation and shepherding the sale to closing, under a written listing agreement with the owner.

Listing Agreement

The written contract between a seller and a brokerage authorizing the property’s marketing and sale, setting the term, the asking price and the compensation. In Massachusetts it is the document that makes the broker your agent.

Multiple Listing Service (MLS)

The database cooperating brokers use to share listings, terms and offers of compensation — in Greater Boston, MLS Property Information Network (MLSPIN). Most public listing sites ultimately draw from it.

Net Proceeds

What a seller actually walks away with: the sale price minus the mortgage payoff, closing costs, deed stamps, commissions and any other amounts owed at closing. It is the only number that matters — plan from it, not from the price.

Asked & answered: What will I actually net from the sale?

Seller’s Disclosure Statement

The seller’s written statement about the property’s known condition. Massachusetts is largely a “buyer beware” state with narrow mandatory disclosures — lead paint is the big exception — so the statement and the inspection carry real weight.

Selling Agent

In MLS terms, the broker who brings the buyer to a listing — the buyer’s broker in that transaction. The name confuses everyone; “selling” here means the one who produced the sale, not the one who represented the seller.

Staging

Preparing a home for market — cleaning, decluttering, repairing and arranging — so buyers can see its rooms and light rather than its stuff. It ranges from a deep clean and edit to full furniture rental.

Questions & answers in Selling a Home

6D Certificate

In Massachusetts, the condominium association’s certificate stating whether a unit owner owes unpaid condo fees or assessments. A clean 6D — named for M.G.L. c. 183A, §6(d) — is required to pass clear title at a condo closing.

ALTA Settlement Statement

The standard closing statement itemizing every charge and credit for buyer and seller — price, deposits, loan, taxes, fees — and the final amounts each side pays or receives. ALTA is the American Land Title Association, whose form most closings use alongside the federal Closing Disclosure.

Chain of Title

The linked record of a property’s ownership transfers, deed by deed, back through time. A title search reads the chain to make sure each transfer was valid and nothing is missing.

Closing

The final step of a sale: documents are signed, money is disbursed, the deed is recorded, and ownership passes to the buyer. In Massachusetts, closings are conducted by an attorney.

Closing Costs

The fees and prepaid amounts due at closing beyond the down payment — lender charges, title and recording fees, escrow deposits, deed stamps and similar items. Who pays which cost is set by the contract and local custom.

Asked & answered: How much are closing costs for buyers and sellers?

Closing Disclosure

The federal five-page form itemizing your loan’s final terms and closing costs, which the lender must deliver at least three business days before closing on most mortgages. Compare it line by line with your Loan Estimate.

Deed

The legal document that transfers ownership of real estate. It names the grantor (seller) and grantee (buyer), describes the property, and becomes official when recorded at the Registry of Deeds.

Asked & answered: What is a deed?

Easement

A legal right to use part of someone else’s land for a specific purpose — a utility line, a shared driveway, a right of way. Easements run with the land and show up in a title search.

Encumbrance

Any claim or restriction on a property that affects its title or use — liens, easements, deed restrictions and the like. Some are routine; others must be cleared before a closing.

Escrow Agent

The neutral third party — often the closing attorney or a broker — who holds deposits and documents in escrow until the contract’s conditions are met, then releases them as instructed.

Homestead Protection

In Massachusetts, a protection shielding a portion of a homeowner’s equity from certain creditors. An automatic amount applies to every homeowner here, and filing a written declaration of homestead increases the protection substantially.

Lien

A legal claim against a property securing a debt — a mortgage, a tax bill, a court judgment, or a mechanic’s lien for unpaid work. Liens must generally be paid or released for clear title to pass.

Power of Attorney

A written document authorizing one person to act for another — for example, signing closing documents. For a real estate closing it must be specific, properly executed and accepted by the closing attorney and lender.

Purchase and Sale Agreement (P&S)

The full contract that governs a Massachusetts sale after the Offer to Purchase: price, deposits, dates, contingencies, and everything the closing must satisfy. Once signed, it supersedes the offer — read it like it matters, because it does.

Asked & answered: What is the Purchase and Sale Agreement?

Smoke & Carbon Monoxide Certificate

In Massachusetts, the local fire department’s certificate that a home’s smoke and carbon monoxide alarms comply with state law. The seller must obtain it for closing; no certificate, no closing.

Title

The legal concept of ownership of a property — your right to own, use and sell it, evidenced by the deed and the public record. “Clear title” means no unresolved claims stand against it.

Title 5

Massachusetts’ environmental code (310 CMR 15.000) governing septic systems. Most properties with septic systems must pass a Title 5 inspection within two years before a sale, and failed systems must be repaired or the price negotiated around the fix.

The examination of public records — deeds, mortgages, liens, court filings — to confirm who owns a property and what claims stand against it. It precedes every closing and every title insurance policy.

Questions & answers in Closing & Legal

Renting, Landlords & Tenants

Broker Fee (Rental)

A fee charged by a broker for placing a tenant in a rental, commonly one month’s rent in Greater Boston. Who pays — tenant or landlord — must be disclosed up front; only licensed brokers may charge it.

Landlord

The owner of rental property, or the person legally authorized to lease it. Massachusetts law gives landlords specific duties — habitable conditions, proper handling of deposits — alongside the right to collect rent.

Last Month’s Rent

Rent for the final month of a tenancy, collected in advance at move-in. In Massachusetts it is regulated much like the security deposit: it must be held properly and it earns interest for the tenant.

Lease

The written contract between landlord and tenant setting rent, term, and each side’s obligations. It governs the tenancy day to day and is the first document read when any dispute starts.

Rent Proration

Dividing a month’s rent by days when a tenancy starts or ends mid-month, so the tenant pays only for the days they occupy the unit.

Security Deposit

Money a tenant gives a landlord at move-in against unpaid rent or damage beyond ordinary wear. Massachusetts caps it at one month’s rent and requires it be held in a separate interest-bearing account, with receipts and a written statement of condition — the rules are strict and the penalties for breaking them are real.

Asked & answered: How much can the security deposit be?

Statement of Condition

In Massachusetts, the written description of a rental’s condition the landlord must provide when taking a security deposit or last month’s rent, which the tenant may amend within 15 days. It is the baseline for any later claim of damage.

Sublet

When a tenant rents the unit — or part of it — to someone else for part of the remaining lease. Most Massachusetts leases require the landlord’s written consent first.

Summary Process

The Massachusetts court procedure for eviction — the formal name for the legal process a landlord must use to regain possession of a unit. Only a court can evict; landlord lockouts and utility shutoffs are illegal.

Tenancy at Will

A rental arrangement with no fixed lease term — usually month to month — that either side can end with proper written notice. In Massachusetts that notice is generally a full rental period or 30 days, whichever is longer.

Tenant

The person who occupies rental property under a lease or tenancy at will, in exchange for rent. Massachusetts tenants hold strong statutory rights, including the right to habitable conditions and the return of deposits under strict timelines.

Questions & answers in Renting, Landlords & Tenants

Investing & Development

After Repair Value (ARV)

An investor’s estimate of what a property will be worth after planned renovations are complete. Purchase and rehab budgets are often set as a percentage of ARV.

Buy and Hold

An investment strategy of purchasing property to keep for rental income and long-term appreciation, rather than to resell quickly.

Capitalization Rate (Cap Rate)

A cap rate relates a property’s NOI to value or price. It can help compare income-producing properties, but it is not a complete investment decision: financing, capital expenses, rent growth, vacancy, location, condition and exit assumptions also matter.

Asked & answered: What is a capitalization rate?

Cash Flow

The money an investment property leaves after all operating expenses and debt service are paid. Positive cash flow is income; negative cash flow means feeding the property every month.

Cash-on-Cash Return

The yearly pre-tax cash flow divided by the total cash you invested — down payment, closing costs and upfront repairs. It measures the return on your actual dollars in, ignoring loan principal paydown and appreciation.

Debt Service Coverage Ratio (DSCR)

Debt Service Coverage Ratio compares qualifying property cash flow or income with required debt service under the lender’s methodology. DSCR can matter both as an investment metric and in certain investor-loan programs. Definitions and thresholds vary by lender and loan.

Asked & answered: What is DSCR?

Exit Strategy

Every acquisition should consider the eventual exit before closing. The plan may be long-term ownership, refinance, resale, condominium conversion, redevelopment or another strategy.

Asked & answered: What is the exit strategy?

Gross Rent Multiplier (GRM)

A quick comparison metric: the property’s price divided by its gross annual rent. Lower can suggest better value, but GRM ignores expenses entirely — a screening tool, not an underwriting.

Leverage

Using borrowed money to control a larger asset than your cash alone could buy. Leverage magnifies both returns and losses, and its cost and terms shape whether an investment actually works.

Asked & answered: How much leverage should an investor use?

Net Operating Income (NOI)

NOI is a property-level measure of operating income after applicable operating expenses and before financing costs and certain other items. The exact analysis depends on the asset, so investors should normalize income and expenses rather than accept a marketing pro forma without verification.

Asked & answered: What is net operating income (NOI)?

Portfolio Loan

A loan a lender keeps on its own books rather than selling to investors, which lets it lend on properties or borrowers that do not fit standard guidelines — often used by local banks lending to investors.

Pro Forma

A projected financial statement for a property — rents, expenses and resulting income as the presenter expects them to be. A pro forma is an argument, not a record; verify every line against actuals.

Rehab

Short for rehabilitation: the renovation work done to a property, from cosmetic updates to a full gut renovation. Investors budget rehabs in tiers — light, medium, heavy — and carry contingency for surprises.

Rent Roll

The landlord’s schedule of a property’s units, tenants, rents, lease dates and deposits. Buyers of income property verify the rent roll against the actual leases before closing.

Asked & answered: What is a rent roll—and what should it show?

Reserves

Cash set aside for future capital needs — roofs, heating systems, vacancies and surprises. Lenders may also require reserve accounts for taxes and insurance; disciplined investors fund both kinds.

Asked & answered: How much should I keep in reserves?

Turnkey

A property sold ready to own as an investment — renovated, tenanted and often managed — requiring little immediate work from the buyer. The convenience is priced in; verify the numbers anyway.

Value-Add

An investment strategy of buying a property with fixable problems — deferred maintenance, below-market rents, poor management — and creating value by fixing them.

Questions & answers in Investing & Development

Property Types & Construction

Accessory Unit (ADU)

A secondary dwelling on the same lot as a main home — an attached apartment, a basement or garage unit, or a small detached cottage. Massachusetts law now requires most communities to allow ADUs in single-family districts, subject to reasonable local rules.

Condo Conversion

The legal process of turning a rental or single-owner building into condominiums — separate units with their own deeds, plus a condominium association to run the common property. Chelsea and East Boston triple-deckers are classic candidates.

Condominium (Condo)

A form of ownership where you hold title to your individual unit plus an undivided share of the common areas, run by an association funded by monthly condo fees. You own real estate, not shares — the building is divided by a master deed.

Deed-Restricted Unit

A home whose resale price or buyer eligibility is limited by a legal restriction, usually to keep it affordable to income-qualifying buyers. The restriction runs with the deed and survives resale.

Gross Living Area (GLA)

The finished, above-grade living space of a home as measured by appraisers — the number behind most price-per-square-foot comparisons. Basements and garages count only in specific circumstances.

Loft

A home created from open industrial or commercial space — high ceilings, large windows, exposed structure and few interior walls. Chelsea and East Boston mill and warehouse conversions are the local textbook examples.

Asked & answered: What makes a loft different?

Lot

A defined parcel of land, identified by map and lot number in municipal records. Its size, frontage, shape and zoning determine what can be built on it.

Mixed-Use Property

A property combining commercial and residential uses — a storefront with apartments above is the Chelsea classic. Financing, insurance and zoning all treat it differently from purely residential property.

Multifamily Home

A residential building with two to four units under one ownership — two-family, three-family (the triple-decker) and four-family. Five or more units is generally treated as commercial property.

Septic System

An on-site system that treats a property’s wastewater where no municipal sewer is available, governed in Massachusetts by Title 5. Its condition is a major sale issue — see Title 5 under Closing & Legal.

Single-Family Home

A detached (or sometimes attached) house designed for one household, on its own lot, with no shared ownership structure. The classic first purchase in most Greater Boston suburbs.

Triple-Decker

The three-family, one-unit-per-floor, wood-frame house that defines whole streets in Chelsea, East Boston and other Greater Boston neighborhoods. Built mostly between 1870 and 1930, it is the region’s original workforce housing and a staple investment property.

Two-Family Home

A house containing two dwelling units — side by side or one over the other — under single ownership. Owner-occupying one unit while renting the other is a classic first step into landlording.

Zoning

The municipal rules dividing a city into districts and controlling what can be built and used in each — housing type, height, density, parking and business uses. Zoning decides what a lot is worth as much as the lot itself.

Questions & answers in Property Types & Construction

Towns & Neighborhoods

Admiral’s Hill

A waterfront Chelsea neighborhood on the Mystic River, built around the former Chelsea Naval Hospital grounds. It is known for its commandant-era houses, marina and yacht club, and some of the best skyline views in the city.

Asked & answered: What is Admiral’s Hill?

Blue Line

The MBTA subway line running from downtown Boston through East Boston to Revere (Wonderland), with stations serving Chelsea-area commuters via connections at Airport and Maverick. Proximity to it is a real value factor in East Boston and Revere.

Boston

The capital of Massachusetts and the commercial center of Greater Boston. Its neighborhoods each run their own housing market — the ones in this site’s working territory border Chelsea and East Boston across the harbor and the Mystic River.

Charlestown

Boston’s oldest neighborhood, sitting between the Charles and Mystic rivers, known for the Bunker Hill Monument, the Navy Yard and its brick rowhouses. It is one of the closest-in and priciest markets in Chelsea’s orbit.

Chelsea

A small, dense city of about 2.2 square miles across the Mystic River from Boston — and the home base of this brokerage. Working-class roots, triple-deckers, a revitalizing downtown and some of the fastest commutes into Boston in the region.

East Boston

The Boston neighborhood across the harbor — “Eastie” — home to Logan Airport, Jeffries Point and Orient Heights, with Blue Line service and a fast-growing waterfront. Jeffrey Bowen’s family roots and transaction history both run deep here.

Lynn

A North Shore city north of Boston — the largest city in Essex County — with commuter rail service, a long shoreline and relatively accessible multifamily housing stock, including many triple-deckers.

Neighborhood

The lived-in district within a city whose name buyers actually shop by — its streets, schools, transit and feel. In Greater Boston, value can change within a few blocks, which is why neighborhood knowledge is a broker’s core inventory.

Revere

A coastal city just north of East Boston, home to Revere Beach — America’s first public beach (1896) — and Blue Line stations at Wonderland, Revere Beach and Beachmont. Condos near the beach are a market of their own.

Winthrop

A small peninsula town surrounded by Boston Harbor, reached by land only through East Boston. It is known for its beaches, ferry service to Boston and a genuinely small-town scale minutes from downtown.

Questions & answers in Towns & Neighborhoods

Homeownership & Maintenance

Capital Improvement

A significant upgrade that adds value, extends a property’s life or adapts it to a new use — a new roof, a kitchen renovation, an added bathroom — as opposed to routine repairs. For tax purposes, improvements generally add to your cost basis.

Condominium Association

The organization of unit owners — in Massachusetts usually a trust or corporation — that runs a condominium: collecting fees, maintaining common areas, enforcing the documents and insuring the building.

Condominium Fee

The monthly amount each condo owner pays the association for its budget — master insurance, common-area maintenance, reserves, water and services. What it includes varies by building and matters to both value and financing.

Asked & answered: What does the condo fee include?

Condo Reserve Fund

The association’s savings for major future repairs — roofs, paving, boilers — built up from monthly fees. A healthy reserve protects owners from sudden special assessments; lenders and buyers review it.

Deferred Maintenance

Repairs and upkeep that were postponed and are now visibly due — the aging roof, the tired boiler. It lowers value, and it is where buyers and investors find both risk and opportunity.

Home Equity

The part of your home you actually own: its current market value minus what you still owe on mortgages and other liens. It builds through principal payments and, when markets cooperate, appreciation.

Asked & answered: How do I build equity?

Home Warranty

A service contract covering repair or replacement of major home systems and appliances for a yearly fee plus service charges. It is not insurance, and coverage is limited by the contract’s fine print.

Property Management

The business of operating a property for its owner — leasing, collecting rent, arranging maintenance and handling tenant issues — for a fee, typically a percentage of rent. It converts a hands-on investment into a mostly passive one.

Special Assessment

An extra charge levied on condo owners by their association for a major expense the regular fees and reserves do not cover — a roof, say, or structural work. It can be due as a lump sum or spread over months, and pending assessments must be disclosed in a sale.

Asked & answered: What is a special assessment?

Questions & answers in Homeownership & Maintenance

Housing Policy & Zoning

Affordable Housing

Housing priced to be affordable to households at specified income levels, usually created through subsidy, deed restrictions or both. In Massachusetts the term is often tied to the state’s Chapter 40B accounting of each community’s affordable stock.

Chapter 40B

Massachusetts’ comprehensive permit law (M.G.L. c. 40B, §§20–23), letting developers seek one consolidated local permit for housing with an affordable component — and to appeal denials when a community’s affordable housing stock is below 10%.

Density

How much housing a given area of land holds — usually expressed as units per acre or floor-area ratio. Density rules in zoning ordinances quietly decide what gets built in every Greater Boston community.

Fair Housing

The body of federal and Massachusetts law prohibiting discrimination in housing based on race, disability, family status, source of income and other protected classes. It governs advertising, screening, lending and brokerage practice.

Inclusionary Zoning

Local rules requiring developers of new housing to include a share of below-market units — or pay into an affordable-housing fund — as a condition of building market-rate projects.

MBTA Communities Act

The Massachusetts law requiring cities and towns served by the MBTA to maintain at least one district where multifamily housing is allowed by right, near transit where feasible. It has reshaped zoning debates across Greater Boston since 2021.

Nonconforming Use

A use or structure that was legal when established but no longer matches current zoning — a triple-decker in a now single-family district, for example. It may generally continue, but expanding or rebuilding it is limited.

Question 7

A Massachusetts ballot proposal that would create statewide zoning protection for qualifying single-family homes on residentially zoned lots of at least 5,000 square feet, with 50 feet of frontage and public water and sewer. Jeffrey Bowen supports YES on Question 7 and has published his full analysis on this site.

Special Permit

A discretionary local approval letting a use or structure proceed when it is not allowed by right but may be acceptable under conditions — granted by a zoning or planning board after a public hearing.

Variance

Permission from a local zoning board to break a specific zoning rule — a setback, a height limit — granted only on proof of a genuine hardship tied to the land itself. Variances are deliberately hard to get.

Questions & answers in Housing Policy & Zoning

A–Z Index

Every term in the glossary, in one alphabetical list. Each link jumps back up to its definition.

1

1031 Exchange

6

6D Certificate

A

Abatement · Accessory Unit (ADU) · Adjustable-Rate Mortgage (ARM) · Admiral’s Hill · Affordable Housing · After Repair Value (ARV) · ALTA Settlement Statement · Amortization · Annual Percentage Rate (APR) · Appraisal · Appraised Value · Asking Price · Assessed Value · Assumable Mortgage

B

Balloon Payment · Blue Line · Boston · Bridge Loan · Broker Fee (Rental) · Buy and Hold · Buydown · Buyer’s Agent

C

Capital Gains Tax · Capital Improvement · Capitalization Rate (Cap Rate) · Cash Flow · Cash-on-Cash Return · Chain of Title · Chapter 40B · Charlestown · Chelsea · Closing · Closing Costs · Closing Disclosure · Co-Broke · Comparable Sales (Comps) · Condo Conversion · Condo Master Policy · Condo Reserve Fund · Condominium (Condo) · Condominium Association · Condominium Fee · Contingency

D

Days on Market (DOM) · Debt Service Coverage Ratio (DSCR) · Debt-to-Income Ratio (DTI) · Deed · Deed Stamps · Deed-Restricted Unit · Deferred Maintenance · Density · Depreciation · Down Payment · Dual Agency

E

Earnest Money Deposit · Easement · East Boston · Encumbrance · Escrow Account · Escrow Agent · Exit Strategy

F

Fair Housing · Final Walk-Through · Fixed-Rate Mortgage · Flood Insurance · Forced-Place Insurance

G

Gross Living Area (GLA) · Gross Rent Multiplier (GRM)

H

Hazard Insurance · HO-6 Policy · Home Equity · Home Equity Line of Credit (HELOC) · Home Equity Loan · Home Inspection · Home Warranty · Homeowners Insurance (HO-3) · Homestead Protection

I

Inclusionary Zoning · Insurance Binder · Interest Rate

L

Landlord · Last Month’s Rent · Lease · Leverage · Liability Insurance · Lien · Listing Agent · Listing Agreement · Loan Estimate · Loan-to-Value (LTV) · Loft · Lot · Lynn

M

MBTA Communities Act · Mixed-Use Property · Mortgage · Mortgage Commitment · Mortgage Interest Deduction · Multifamily Home · Multiple Listing Service (MLS)

N

National Flood Insurance Program (NFIP) · Neighborhood · Net Operating Income (NOI) · Net Proceeds · Nonconforming Use

O

Offer to Purchase · Open House

P

PITI · Points · Portfolio Loan · Power of Attorney · Pre-Approval · Pre-Qualification · Private Mortgage Insurance (PMI) · Pro Forma · Property Management · Property Tax · Proposition 2½ · Proration · Purchase and Sale Agreement (P&S)

Q

Question 7

R

Rate Lock · Refinance · Rehab · Rent Proration · Rent Roll · Renter’s Insurance · Reserves · Residential Exemption · Revere

S

Second Mortgage · Security Deposit · Seller’s Disclosure Statement · Selling Agent · Septic System · Showing · Single-Family Home · Smoke & Carbon Monoxide Certificate · Special Assessment · Special Permit · Staging · Statement of Condition · Sublet · Summary Process

T

Tenancy at Will · Tenant · Title · Title 5 · Title Insurance · Title Search · Triple-Decker · Turnkey · Two-Family Home

U

Umbrella Policy · Underwriting

V

Value-Add · Variance

W

Winthrop

Z

Zoning

Have a question behind a word? Ask Jeffrey — or see what the money actually buys in the What You Get for the Money series.

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