VA loan

A government-sponsored mortgage assistance program administered by the Department of Veterans Affairs. Under the Servicemen's Readjustment Act of 1944, eligible veterans and unremarried widows or widowers of veterans who died in service or from service-connected causes may obtain partially guaranteed loans for the purchase or construction of a house or to refinance existing mortgage debt.

vacancy and credit loss factor

A deduction from gross potential annual rent used to account for less than 100% occupancy and potential rent defaults over time. Part of the operating statement used in the income capitalization approach to value by the direct capitalization method.

vacancy rate

The percentage of total space ("market square footage") that is unoccupied at a given time. The total amount of available space compared to the total inventory, or market square footage, of space.

vacant inventory

The total vacant space, expressed as square footage, in an office, industrial, or retail market or submarket. The total number of vacant apartment units in a multifamily market or submarket.

vacant land

Land not currently being used. May have "utilities" and "off-site improvements." Contrast with "raw land." Example: "Vacant land" was cleared and graded for future use as a "shopping center."

vacant space

This is the amount of square feet that is physically empty, regardless whether it is being marketed. This statistic does not include space, which is being marketed and not yet available. It does, however, include space, which has been leased but not yet occupied. These definitions prevent double counting of vacancy and absorption. This space is not currently being used by workers or being used to store anything. Tenants seeking new space may be concerned about whether a particular space on the market is vacant or not, because it tells them how soon they can move into that space. In contrast, landlords are often less concerned about the vacancy of a particular space than they are about whether they are collecting rent on it. For example, a tenant may have moved out but the lease is not due to expire for some time. If the landlord is still receiving rent for that space, the landlord may not care whether it is occupied or vacant. An empty space does, however, affect how the building is perceived by the public, and, to retail landlords, that can be very important. The total amount of vacant space in the market is an important analytical concept because it is used to calculate "net absorption." Net absorption, or occupancy growth, is a measure of market health. Net absorption is also thought of as "demand."


To move out. Example: A tenant "vacates" an apartment by terminating occupancy and removing all possessions. The tenant is responsible for "rent" to the end of the "lease" term.

valid contract

A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it. (See contract)


The power of a good or service to command other goods in exchange for the present worth to typical users and investors of future benefits arising out of ownership of a property; the amount of money deemed to be the equivalent in worth of the subject property. The four essential elements of value are utility, scarcity, demand and transferability. Cost does not equal value, nor does equity. There are various types of value, such as market value, tax assessed value, book value, insurance value, use value, par value, rental value and replacement value. By far, the type of value used for the largest number of real estate transactions is market value.

value-add opportunity

In some markets, a marketing term utilized to describe a “fixer-upper” property.

value in use

The value of a property as used for a specific purpose.

vanilla shell

See retail shell.

variable expenses

Property operating expenses that vary with a building’s occupancy level. See also fixed expenses.

variable interest rate

An amount of compensation to a lender that is allowed to vary over the "maturity" of a loan. The amount of variation is generally governed by an appropriate index. See "variable rate mortgage," "renegotiated rate mortgage." Example: A 20-year loan is made with a "variable interest rate." The initial rate is 14%, but may be changed each year in relation to changes in a published index of average loan rates. If, at the end of the first year, the index has risen one percentage "point," the rate on the loan may be raised to 15%. Similarly, a fall in the index at one point would allow a decrease in the loan rate to 13%.

variable lease

Allows for increases in the rental charges during the lease period. One of the more common is the graduated lease. A graduated lease provides for specified rent increases at set future dates. Another is the index lease, which allows rent to be increase or decreased periodically based on changes in the consumer price index or some other indicator.

variable-maturity mortgage

A long-term "mortgage" loan, under which the "interest rate" may be adjusted periodically. Payment levels remain the same but the loan "maturity" is lengthened or shortened to achieve the adjustment. Example: Abel obtains a "variable-maturity mortgage" originated at 12% with a "term" of 25 years. At the end of the year, the interest rate is increased to 12%. Abel's monthly payment of $527 remains the same after the adjustment; however, the remaining term is no longer 24 years, but is increased to 27 years.

variable-payment plan

Any "mortgage" repayment schedule that provides for periodic change in the amount of monthly payments. Changes may occur as a result of: the expiration of an interest-only period ("flexible payment mortgage"), a planned step-up in payments ("graduated payment mortgage"), or a change in the "interest rate" due to fluctuation in an index ("variable-rate mortgage"). Example: A loan is made with a "variable-payment plan. The interest rate on the loan may be adjusted once a year according to a published index. As the interest rate is changed, the monthly payment is adjusted to provide for full "amortization" of the outstanding "principal" over the remaining life of the loan.

variable-rate mortgage

Q long-term "mortgage" loan applied to residences, under which the "interest rate" may be adjusted on a 6-month basis over the term of the loan. Rate increases are restricted to no more than 1/2 "point" per year and 2 1/2 points over the term. Example: Abel obtains a "variable-rate mortgage" originated at a 12% interest rate. In 6 months, the index upon which the rate is based increases by one percentage point. Abel's rate is adjusted to 12 1/2% and cannot be further increased during the year because of the 1/2% annual cap.


A permit that allows a property owner to depart from the requirements of a zoning ordinance that, because of special circumstances or unique hardship, would deprive the owner of the reasonable use of the property.


The purchaser of realty; the buyer. The buyer under a land contract.

vendee's lien

A "lien" against property under a "contract of sale," to secure the "deposit" paid by the purchaser. Example: Moore, the vendee (buyer), gave a substantial deposit. Since Moore did not trust the seller, she secured a "vendee's lien" against the property. The lien provides the vendee with a claim against the property should the seller attempt to sell to another party prior to closing.


The seller of realty. The seller under a land contract. In some cases, the vendor may not be the owner-he or she might be the holder of an option.

vendor take-back mortgage

A mortgage taken back by the vendor from the purchaser to facilitate a sale, whereby the vendor becomes the mortgagee and the purchaser becomes the mortgagor.

vendor's statement of adjustment

Closing statement which shows the net amount of proceeds to be received by the vendor upon completion of the transaction. See also Statement of Adjustment.


Confirmation under oath of the truthfulness of a statement.

vertical support

The right of land to be supported by the land which lies under it.

Veteran's Administration (VA)

Federal agency providing assistance to veterans, including the guarantee of VA mortgage loans.

veteran's exemption

California war veterans may receive a $4,000 exemption on the full cash value of their homes.


One of the criteria used by retail tenants to qualify potential locations. Visibility of the building, storefront, and/or retailer's sign(s) from frequented traffic areas, such as highways, streets, sidewalks, and/or a mall, will be of importance to most retailers.


Having no legal force or binding effect; a nullity; not enforceable. A void agreement is no contract at all. A void contract need not be disaffirmed, nor can it be ratified. A contract for an illegal purpose (for example, gambling) is void. A voidable contract is one that is able to be voided. Voidable implies a valid act that may be rejected by an act of disaffirmance, rather than an invalid act that may be confirmed. For example, if a minor contracts to buy a diamond ring, the contract can be voided by the minor because of lack of sufficient age. If, however, the minor elects to enforce the contract, the contract is valid and the other party cannot assert the minor's lack of age as a defense.

void contract

A contract which never had any legal existence or effect and which is not capable of being enforced.


Capable of being voided, but not void unless action is taken to void it. A "contract" to "real estate" entered into by a "minor" is voidable only by the minor. Example: A "landlord" leases an apartment to a minor. The minor may honor the lease and rent the apartment. However, should the minor decide not to rent the apartment, he may "void" the lease without "liability" for performance. The lease is a "voidable" contract.

voidable contract

A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.

voluntary conveyance

Voluntarily signing over to a lender the property pledged as collateral on a defaulted loan. (See deed in lieu of foreclosure)

voluntary lien

A lien placed on property with the knowledge and consent of the property owner. (See lien)