Management Agreement


An agreement between the owner of property and the person or company who agrees to manage it.
Example: ABC Company has a management agreement with XYZ Management for the ACME Shopping Mall. The agreement outlines XYZ's responsibilities and obligations, and payment structure for handling the leasing, operational and management duties of the property.

Management Fee


The cost of property management.
Example: XYZ Management charges ABC Company 5% of gross rental income for managing the Acme Shopping Mall.

Marketable Title


A title which has no material encumbrances. A court will likely enforce a title's acceptance if it is a marketable title.
Example: Through a title search for the property ABC Company is purchasing, it's discovered that the previous owner had a partner in the property. In order to receive marketable title, ABC obtains a Quit Claim Deed from both partners clearing the property of any claim.

Market Analysis


Analysis of a particular geographic area, including its demographics, comparable rents and property value, related to supply and demand.
Example: Before opening Clean Mutts, its owner had a professional create a market analysis to evaluate the need for a dog grooming shop in the area.
Example: ABC Company obtained a market analysis to consider developing a shopping mall in a suburb of Pittsburgh. Prospective lenders received copies of the report.

Market Comparison Approach


One of three real estate appraisal methods used to estimate the value of real estate. This method compares a property's characteristics with those of comparable properties recently sold.

Mezzanine Financing


A loan, subordinate to the first mortgage, that is between equity and debt.
Example: ABC Company bought a property for $50 Million and received a first mortgage of $40 Million. The remaining $10 Million was obtained through a Mezzanine Mortgage.

Mortgage Commitment


An Agreement by the lender to lend money that lists the specific terms of a loan, such as the amount being borrowed and for how long.

Mortgage Constant


A ratio between the Annul Debt Service and the value of the loan. It can be used to calculate the maximum loan amount received for a property, given the income generated by that property.
Example: If the annual payment on a $10,000 loan is $2,000, the mortgage constant is 2,000 divided by 10,000 = .2 or 20%.

Mortgage Note


The document that lists the terms of a loan, such as the borrower, lender, amount borrowed, interest rate, repayment terms, and other loan provisions. While the mortgage itself pledges the property as collateral, the mortgage note states the loan amount and its terms and holds the signee responsible for repayment.

Mortgage Servicing


Mortgage administration which includes collecting payments, calculating interest and principal, acting as an Escrow Agent to cover taxes and insurance, and foreclosing in the event of a default.

Mortgagor


The individual or company (borrower) who borrows money, with a Note, in a Mortgage Agreement.