M1, M2, M3

Three measurements of the United States money supply. M1, or the basic money supply, consists of cash in public hands, private checking accounts, credit union share accounts and demand deposits at thrifts. M2 includes all of M1 plus money market mutual fund shares, and savings deposits of less than $100,000 at all depository institutions. M3 includes M2 plus large time deposits at all depository institutions.


Member Appraisal Institute. An appraiser holding the MAI designation


The maker of a check is known as the drawer. (See payee)


Malls typically are enclosed, with a climate-controlled walkway between two facing strips of stores. The term represents the most common design mode for regional and super regional centers and has become an informal term for these types of centers.


Refers to the amount of personal, or hired time, it takes to run the investment.

management agreement

A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority.

management fee

The cost of professional "property management." The fee is typically set at a fixed percentage of total rental income generated by the property managed. Example: Acme Management Company is employed by several property owners to oversee and collect rent for their properties. Acme's standard "management fee" is 5% of gross rental income.

manufactured home

A structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width, or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein.


Buildings with 10 to 16 foot ceilings or sufficient height for overhead cranes. Provides floor height and dock-height loading.


In an adjustable-rate loan, the amount added to the index rate that represents the lender's cost of doing business (including costs, profits and risk of loss of the loan). Generally the margin stays constant during the life of the loan. (See adjustable-rate loan, index rate)


In commercial real estate, a market is typically a geographic area that includes a certain type of properties with similar functions or characteristics competing for tenants or buyers. These markets can be as large as a city or metropolitan area, or small, such as a downtown district.

market analysis

A study of the supply and demand conditions in a specific area for a specific type of property or service. A "market analysis" report is generally prepared by someone with experience in real estate, economics, or marketing. It serves to help decide what type of project to develop and is also helpful in arranging permanent and construction financing for a proposed development. Example: The developer commissioned a "market analysis" to evaluate the need for luxury apartments in the St. Louis suburban market. Copies of the report were supplied to prospective lenders for this type of development.

market approach

A method of pricing using comparable market data. When pricing rental properties, the income approach is probably better. (See comparative market analysis, net income approach)

market area

A geographic region from which one can expect the primary demand for a specific product or service provided at a fixed location. Example: (1) A regional shopping center has a larger "market area" than a neighborhood shopping center. (2) A developer estimates that the "market area" for a "subdivision" covers the northeast section of the metropolitan area.

market comparison approach

One of 3 appraisal approaches. Value is estimated by analyzing sales prices of similar properties ("comparables") recently sold.

market cycle

The recurring real estate cycle that can be described as having six phases: the bottom, recovery, growth, the peak, downturn, and recession.

market data

Information on market inventory vacancies, absorption, asking rents and prices, and comparable rents and sales. Commercial real estate market data is available from a variety of public, private, proprietary, and commercial sources.

market delineation

The process of defining the geographic extent of the demand for a specific property. Example: The "market delineation" for a new regional shopping center showed that shoppers are likely to be drawn from a 2-county area.

market price

The actual price paid in a market transaction. Contrast with "market value." Example: A home was offered for sale at $100,000. It was appraised for $93,000, and actually sold for $95,000. The "market price" is $95,000.

market rent

The rental income that a property would most probably command on the open market, as indicated by current rents paid for comparable space.

market rental rates

The rental income that a property would most probably command in the open market; indicated by the current rents paid and asked for comparable space. [Appraisal Institute]

market square footage

The total amount of space of a particular property type in a market/submarket. Market square footage can also refer more specifically to a particular property use type and/or property of a particular class. Also called "inventory."

market value

The most probable price that a property should bring in the open market under all conditions requisite to a fair sale, including the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

market value reassessment

The updating by a municipality of the total municipal assessment base (total value of all properties) to a more recent calculation of value.

market-data approach

Estimating a property's value based on a comparison of the property with similar properties in the same locale that have sold recently. Also known as the direct sales comparison approach. (See appraisal)

marketable title

Good or clear title, reasonably free from the risk of litigation over possible defects.

master deed

The principal conveyance document used by the owners of land on which condominiums are located. (See fictitious deeds of trust)

master lease

A controlling "lease." Contrast with "sublease." Note that one cannot grant a greater interest in real estate than one has; so if "master lease" is for a 5-year term, a "sublease" cannot legally exceed 5 years. Example: Abel leases 10,000 square feet of retail space to Baker. Baker then subleases the space to 5 different "tenants." The lease between Abel and Baker is the "master lease."

master plan

A document that describes, in narrative and with maps, an overall development concept. The "master plan" is used to coordinate the preparation of more detailed plans or may be a collection of detailed plans. The plan may be prepared by a local government to guide private and public development or by a "developer" on a specific project. Example: (1) The city planners checked to see if the "zoning" request complied with the city's "master plan." (2) The "master plan" for further development of the resort "condominium" is displayed in the sales office.]

material fact

Any fact that is relevant to a person making a decision. Agents must disclose all material facts to their clients. Agents must also disclose to buyers material facts about the condition of the property, such as known structural defects, building code violations and hidden dangerous conditions. Brokers are often placed in a no-win situation of trying to evaluate whether a certain fact is material enough that it needs to be disclosed to a prospective buyer, such as the fact that a murder occurred on the property 10 years ago or the fact that the neighbors throw loud parties. It is sometimes difficult to distinguish between "fact" and "opinion." The statement "real property taxes are low" is different from "real property taxes are $500 per year." Even though brokers act in good faith, they may still be liable for failure to exercise reasonable care or competence in ascertaining and communicating pertinent facts that the broker knew or "should have known." Many state laws provide that the fact that an occupant of property has AIDS is not deemed to be a material fact. A broker who fails to disclose this fact is not liable for concealment of a material fact.

measure line

Used in calculating industrial space areas. The area is calculated to the outside surface of exterior walls (or to the most exterior drip line around the perimeter of the building for wall-less buildings and walled buildings in some markets areas).

mechanics' lien

A statutory lien in favor of a building contractor (architects and designers in some states) to secure payment for materials supplied and services rendered in the improvement, repair or maintenance of real property. (See lien)


A process where a neutral third party works with the other parties to a dispute to reach a satisfactory solution.

meeting space

In hospitality properties, space made available for rent to the public for meeting, conference, or banquet uses, e.g., ballrooms, conference rooms, meeting rooms.

Mello-Roos Bonds

Based on passage of the Mello-Roos Community Facilities Act of 1982, certain housing tracts may be within what are called "community facilities districts" where special taxes are assessed to finance designated public facilities and/or services. Mello-Roos liens are usually municipal bonds issued to fund streets, sewers and other infrastructure needs before a housing development is built. These special assessments are paid by the seller and will be assumed by the buyer.

mentor program

A training program in a real estate office wherein newly-hired agents assist successful, knowledgeable salespersons for a period of time.


The joining of a lesser right with a greater right so that the lesser right is lost.


One of a set of imaginary lines running north and south used by surveyors for reference in locating and describing land under the government survey method of property description.

metes and bounds

A legal description of a parcel of land that begins at a well marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning. Example: "Metes and bounds" description: Beginning at a point on the northeasterly corner of the intersection of South St. and West Rd., running thence northerly along West Rd. 200 feet, thence easterly parallel to South St. 150 feet; thence southerly parallel to West Rd. 200 feet; thence westerly along South St. 150 feet to the point of the beginning.]

mezzanine loans

A property loan that allows the lender to convert its debt position to an equity interest in the property if the borrower fails to meet its loan obligations.

mid-rise office building

Between seven and twenty-five stories above ground level.

mid-sized properties

Those investment properties in the $5 million to $30 million range customarily bought and sold by wealthy private investors.

military ordinance location

Certain military bases in California contain live ammunition for various reasons. A seller of residential property located within one mile of such a hazard must give the buyer written notice as soon as practicable before transfer of title.


Equal to one tenth of a cent. Used in expressing a tax rate. Ten mills would be the same as ten dollars per thousand.

mineral rights

Rights to subsurface land and profits. Normally, when real property is conveyed, it includes everything above and below the surface of the land, except where specified by the grantor.


Someone who has not reached the age of majority and therefore does not have legal capacity to transfer title to real property.


Offenses lower than felonies and generally those punishable by fine or imprisonment otherwise than in a penitentiary.


A false statement or concealment of a material fact made with the intention of inducing some action by another party.


An error or misunderstanding. A contract is voidable if there is a mistake that is mutual, material, unintentional and free from negligence, such as both parties honestly contracting for a different lot in a subdivision (mistake of fact). Innocent mistakes seldom serve to void a contract. A party cannot claim "mistake" to get out of a contract on the basis that he or she did not read the contract he or she signed and was therefore mistaken as to its material terms; neither ignorance nor poor judgment is a mistake of fact. Nor can a party claim mistake in not knowing the legal consequences upon signing the contract (mistake of law). When there is an ambiguity known by one party who fails to explain the mistake to the innocent party, the innocent party's interpretation generally will prevail.


To make less severe, as in the "mitigation" of environmental hazards.

mixed-use developments (MUDs)

MUDs combine office space, stores, theaters and apartment units in a single community. MUDs usually contain and offer laundry facilities, restaurants, food stores, valet shops, beauty parlors, barbershops, swimming pools and other attractive and convenient features. (See high-rise developments)


Prefabricated trailer-type housing units that are semi permanently attached to land, either the owner's fee land or leasehold, such as in a mobile-home park. Mobile homes are usually affixed to a concrete foundation and connected to utilities. Although they may not be as mobile as the word implies, they may be removed from such attachments and hauled to a new location. In this respect mobile homes possess the features of both real and personal property. They are like real property when the units are attached to the earth's surface, and like personal property when they are detached and moved. The courts, however, generally consider a mobile home as a fixture and thus treat it as real property.

mobile-home loan

A mortgage loan on a large mobile-home, usually drawn for a shorter term than conventional mortgages.

mobile-home park

An area zoned and set up to accommodate mobile homes and provide water hookups and sewage disposal for each home. The mobile-home park contains all utilities, streets, parking and amenities. Mobile-home parks are also called trailer parks.

modified gross lease

See industrial gross lease.

modified gross rent (net lease)

A rental rate that includes only certain services provided by landlord. The tenant is usually responsible for cost of utilities and janitorial services.

modular housing

A relatively recent concept in home construction aimed at producing housing more economically and faster through prefabricating processes; also called prefabricated housing. Modular methods expedite construction because the house itself can be built in the factory while the building site is being prepared, thus potentially eliminating costly delays. Some courts have held that the sale of an unattached modular home is the sale of personal property, and thus no written listing or real estate license is required to earn a commission.


A potentially hazardous substance, which is not generally regulated at this time.

monetary policy

Governmental regulation of the amount of money in circulation through such institutions as the Federal Reserve Board. (See Federal Reserve)

month-to-month tenancy

A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written) a tenancy is generally considered to be month to month.


A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description.


  1. A temporary suspension of payments due under a financial obligation in order to help a distressed borrower recover from financial difficulties and avoid default and foreclosure.
  2. A temporary suspension of issuing building permits. (See workout)


A legal document used to secure the performance of an obligation. The term mortgage, which is derived from the French words mort meaning "dead" and gage meaning "pledge," is appropriate in that the pledge is extinguished only after the debt is paid. In the usual real estate transaction, the buyer seeks to borrow money to pay the seller the difference between the down payment and the purchase price. When the lender (mortgagee) lends the money, the buyer/borrower (mortgagor) is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The purpose of the mortgage note is to create a personal liability for payment on the part of the mortgagor; the purpose of the mortgage is to create a lien on the mortgaged property as security for the debt.

mortgage banker

A person, corporation or firm not otherwise in banking and finance that normally provides its own funds for mortgage financing as opposed to savings and loan associations or commercial banks that use other people's money; namely that of their depositors—to originate mortgage loans. Although some mortgage bankers do supply permanent long-term financing, the majority specialize in supplying short-term and interim financing, either through their own resources or by borrowing from commercial sources.

mortgage broker/company

A person or firm that acts as an intermediary between borrower and lender; one who, for compensation or gain, negotiates, sells or arranges loans and sometimes continues to service the loans; also called a loan broker. Loans originated by the mortgage broker are closed in the lender's name and are usually serviced by the lender. This is in contrast to mortgage bankers, who not only close loans in their own names but continue to service them as well. Many mortgage brokers are also licensed as real estate brokers and provide these financing services as supplements to their realty services.

mortgage discount

Amount of "principal" that lenders deduct at the beginning of the loan. See "discount points." Example: Abel obtains a mortgage loan in the amount of $50,000. The loan is discounted by 2 "points," each point equaling 1% of the "principal." At "closing," Abel will receive $49,000, yet will owe $50,000. The $1,000 difference is the "mortgage discount."

mortgage insurance

A kind of insurance policy that will pay off the mortgage balance in the event of death, and in some policies, disability. Premiums are paid with the regular monthly mortgage payment.

mortgage insurance premiums (MIP)

Most FHA loans require the borrower to pay two mortgage insurance premiums one upfront paid at closing; the second is an annual premium based on the loan balance each year.

mortgage lien

An "encumbrance" on property used to secure a loan. The holder of the "lien" has a claim to the property in case of loan "default." The "priority" of the claim depends on the order of "recording" and any "subordination" agreements. Thus a "first mortgage" generally has prior claim to all other mortgage lien holders. See also "second mortgage." Example: Minton obtains a mortgage loan to purchase a house. Minton signs a "note" and mortgage contract. The lender obtains a "mortgage lien" on the house. Should Minton default on the loan, the lender may "foreclose" and exercise the lien to force a sale, the proceeds of which are used to satisfy Minton's debt.

mortgage revenue bonds

A type of tax-exempt industrial development bond offered by state and local governments through their housing financing agencies. (See industrial development bonds)

mortgage-backed security (MBS)

A security guaranteed by pools of mortgages and used to channel funds from securities markets to housing markets. Ginnie Mae has a popular MBS program recognized for its low risk and high yield. The Ginnie Mae MBS security is a pool of VA and FHA mortgages put together as a bond. Freddie Mac and Fannie Mae also have MBS programs. (See FHA, Fannie Mae, Freddie Mac, Ginnie Mae, VA loan)


In a mortgage transaction, the party who receives and holds a mortgage as security for a debt; the lender; a lender or creditor who holds a mortgage as security for payment of an obligation.

mortgagee's title insurance

An insurance policy protecting the lender for the amount of the loan in the event of a future title dispute. (See owner's title insurance, title insurance)


In a mortgage transaction, the buyer/borrower is the mortgagor. The mortgagor is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The mortgage note is creates a personal liability for payment on the part of the mortgagor. (See mortgage, promissory note)

moving allowance

An offer by a new landlord to pay all or part of tenant’s moving costs.

Mrs. Murphy's Exemption

The common description of the exemption that applies to an owner-occupied building with four or fewer units.


A nonstructural vertical strip between the casements or panes of a window (or the panels of a screen).

multiclass mortgage securities

Short- and long-term mortgage securities, with or without pass-through privileges. (See pass-through)

multifamily housing

A type of residential structure with more than one "dwelling" unit in the same building. Example: "Multifamily housing" is divided into 2 categories: 1) 2-4 dwelling units: "duplexes," "triplexes," and "quadruplexes" 2) 5 or more units: apartment buildings "Multifamily housing" may be tenant-occupied, owner-occupied (as in a "condominium" or "cooperative" project), or mixed (as in many duplexes, with the owner occupying one side).

multiperil policies

Many insurance companies offer multiperil policies for apartment and commercial buildings. Such a policy offers the property manager an insurance package that includes standard types of commercial coverage, such as fire, hazard, public liability and casualty. Special coverage for earthquakes and floods is also available.

multiple listing

An arranging among a group of real estate "brokers;" they agree in advance to provide information about some or all of their "listings" to the others and also agree that "commissions" on sales of such listings will be split between "listing" brokers and "selling" brokers. Example: A broker lists a home under an "exclusive right to sell." The broker belongs to a "multiple listing" association. After 5 days, the broker turns in a description of the home to the association. Any "cooperating" broker can sell the home and will receive half of the commission. The broker who obtained the "exclusive right to sell" is assured of earning half the commission upon the sale.

multiple-listing clause

A provision in an exclusive listing for the authority and obligation on the part of the listing broker to distribute the listing to other brokers in the multiple-listing organization.

multiple-listing service (MLS)

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on their own. Most multiple-listing services accept exclusive-right-to-sell or exclusive agency listings from their member brokers.


A factor, used as a guide, applied by multiplication to derive or estimate an important value. Example: A "gross rent multiplier" of 6 means that property renting for $12,000 per year can be sold for 6 times that amount, or $72,000. Example: A population "multiplier" of 2 means that, for each job added 2 people will be added to a city's population.

municipal bonds

Bonds issued to finance public improvements such as parks, schools and urban renewal projects.

must-buy buyers

Buyers looking for properties that meet specific needs.

must-sell sellers

A highly motivated or desperate seller.

mutual mortgage insurance

Insurance premiums and other specified FHA revenues are paid into one of four FHA funds. Losses due to foreclosure are met from these funds.