Purgula Homeowner Glossary Wordcloud Narrow

Purgula’s Homeowner Glossary helps homeowners become familiar with a wide range of new and important topics pertaining to all aspects of Homeownership. Subjects range from: iBuyers; virtual staging; ADUs; Aging In Place; homeowners insurance; renovation contracts; project managementinterior design; real estateproptech; home financing; safety & security; and property taxes.

Do you know of any additionally helpful terms for us to include? If so, please submit a suggestion here – thanks!

Homeowner Glossary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z



203k FHA Loan

Unlike conventional mortgage loans, a 203k Loan includes the renovation funds combined with the mortgage loan, so you only pay back one loan. Once the sale or refinance is closed, renovation funds are held in escrow and paid out at approved intervals based on improvement completions.
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Accessible Design

Interior and exterior design that addresses the needs of people with disabilities. Laws and guidelines pertaining to accessible design include standard dimensions and features for items including: door & hall widths; exterior ramps; zero threshold showers; countertop heights; switch and outlet heights, and more.
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ADU: Accessory Dwelling Unit

A secondary residential unit that can be added to an existing single family home or lot, either attached or detached. Local municipalities typically have specific requirements and standards for the construction of an ADU. Also known as “in-law apartment” or “granny flat“. Some states, such as California, are encouraging the construction of ADUs in order to address a shortage of affordable housing.
Also see:

ADA: Americans with Disabilities Act

A civil rights law that prohibits discrimination based on disability. Title III prohibits private places of public accommodation, such as hotels, restaurants, retail merchants, doctor’s offices, day care centers, and so forth, from discriminating against individuals with disabilities. The ADA does not cover strictly residential private apartments and homes. If, however, a place of public accommodation, such as a hair salon or day care center, is located in a private residence, the portions of the residence used for that purpose are subject to the ADA’s requirements.
Also see: Aging In Place Technology for Today and Tomorrow

Adaptive Performance

The ability of an environment (inside or outdoors) to dynamically adjust to the needs of its inhabitants. This capability leverages smart technology & automation solutions to provide the following benefits: reduced energy consumption; enhanced occupant comfort; and better optimized space usage.
Also see: How to Apply Transformable Interior Design to Your Home


A representative of an insurance company who determines the extent of the insurer’s liability for loss when an insurance claim is submitted. Also referred to as Insurance Claims Adjuster.
See also:

AIP: Aging In Place

A lifestyle choice that refers to people who desire to remain in their own homes as they grow older. Being in familiar surroundings through the aging process can provide substantial health & wellness benefits. Aging In Place is made possible by making available necessary social supports, wellness activities, and home maintenance services that aging homeowners require to live happy, productive lives in their communities.
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A max dollar amount defined by contractors in a renovation contract for materials that are to be chosen by the homeowner. An allowance usually reflects “builder or contractor grade” quality and is capped at a certain amount per unit or measurement, such as square foot or yard. Homeowner would be obligated to pay for any costs beyond an agreed to allowance amount. Allowances are used in contracts when the exact amount for items are unknown.
Also see: Home Renovation Budgets: 5 Easy Steps

Appraisal Contingency

A purchase clause that protects the buyer in the case that the appraised value of the home to be purchased is lower than the agreed upon sale price. If the buyer is unable to work out the difference between the sale price and the approved loan amount (e.g. increasing the down payment or getting the price reduced), the contract can be canceled without being in breach of contract.

AR: Augmented Reality

Technology that delivers an interactive experience that combines the representation of real-world objects with computer-generated enhancements, such as audio and visual overlays and integration to provide helpful information and context. An example of AR in the home improvement space is the delivery of home repair services through the use of streaming video through smartphone apps. Two vendors providing solutions of this kind include Neli and Streem.
Also see: What Homeowners Should Know About Proptech


A process where disputing parties (e.g. homeowner and contractor) submit their differences to an impartial neutral person who makes a final award or decision. Arbitration differs from mediation because the neutral arbitrator has the authority to make a decision about the dispute. Arbitration is considered to be a more cost-effective and efficient process for resolving disputes between homeowners and contractors, as compared to full litigation.

ARV: After Repair Value

The estimated value of a property when incorporating the completion of planned repairs and renovations. This type of appraisal is necessary when applying for a 203K FHA Loan, which includes funds necessary to complete the defined improvements to the home.

As-Built Drawings

A set of 2D floor plan drawings, including exterior views, that accurately reflect the current layout of a residence. Can be created and used if original blueprints are unavailable.  These drawings show the dimensions, geometry, and location of all components of a residence or construction project. Floor plans commonly include details such as walls, doors, windows, and plumbing fixtures. As-Builts can also be created after the completion of a construction project to show any variance from the original design.

Assessed Value

Typically the value assigned to a property for the purpose of property taxes.


A public official who sets the value of a property for taxation purposes.

Assignment of Responsibility

A person responsible for completing a listed action item in a renovation contract or scope of work. Example assigned persons within a typical home renovation project would include: homeowner, general contractor, electrician, plumber, tiler, etc. Example responsibilities for a homeowner would include: material selection; color choice; fixture purchase; etc.
Also see: What to Include in a Renovation Contract

Augusta Exemption

A popular nickname for a tax exemption in IRS Code Section 280A(g). ‘Augusta’ refers to the famous golf course in Augusta, Georgia where the Masters Tournament is held. Many nearby homeowners take advantage of the event’s large attendance by renting their homes to golfers, fans and members of the media. This exemption provides a homeowner with a short period of tax-free rental income per year: “if a dwelling unit is used during the taxable year by the taxpayer as a residence and such dwelling unit is actually rented for less than 15 days during the taxable year, then … the income derived from such use for the taxable year shall not be included in the gross income”. This exemption can be applied to other forms of short-term rentals, such as offering weekend rentals for no more than 7 weekends.
Also see: Tax Deductions for Homeowners

AVM: Automated Valuation Model

A mathematical model that leverages data to quickly and accurately estimate the current value of a home. These models are typically used by businesses, such as iBuyers, to be able to make automated purchase decisions. Pre-sale renovation firms, like Curbio, also use models of this kind to determine maximum project budgets for to-be-listed homes. Recent sale prices of similar properties represent the most important variables within these calculations.



Balneotherapy is the treatment of disease through bathing, usually in mineral-rich waters like hot springs, that can provide the following health benefits: improved circulation; reduction of toxins; and increased relaxation. Some practitioners use it to address arthritis, respiratory disorders, and high blood pressure, and skin disorders. Balneology is the study of therapeutic bathing and medicinal springs.

Biophilic Design

The practice of connecting people and nature within built environments and communities. Think plants, natural light, glass, accessible windows, natural materials, opening door systems, and easy access to outdoors.

BIPV: Building-Integrated Photovoltaics

Building-Integrated Photovoltaics (BIPV) are solar power generating materials, products or systems that seamlessly integrate into the envelope of a building or home, such as the roof, façade or windows. Solar Energy Shingles are an example of a BIPV product in the residential construction space.

Bond Company

A firm that provides a line of credit to be used if a contractor does not meet its obligation to a customer and the customer suffers financial lost. Under these circumstances the bond company can provide reimbursement to the customer for costs incurred. The three parties of a Contractor License Bond include: the Obligee (a licensing board that requires a contractor to be bonded); the Principal (a contractor that must pay for the bond); and the Surety (a bond company, that backs the bond obligation). The bond amount that a contractor holds is a pooled resource, meaning other claimants may have claimed portions of the total amount for a given period. A bond company is also referred to as a Surety Company.

BRRRR: Buy, Rehab, Rent, Refinance, Repeat

A real estate investment strategy, used by investors who have experience renovating or rehabbing properties, who invest in rental properties with the goal of generating consistent cash flow. The approach involves buying devalued assets that need repairs and upgrades. Timely and cost-effective renovations enable the investor to generate competitive rental income, while also qualifying the property for a cash-out refinancing. The cash-out funds are used to recoup the previous downpayment and renovation costs, and to invest in a new property.

Buffer Zone

A strip of land that separates one parcel from another.

Building Code

A set of local rules that specify the standards for designing, constructing and modifying buildings, including residential homes. Primary focus is safety and adhering to defined standards of workmanship and materials. Pertains to the Permitting Process, where certain modifications to a home are inspected to confirm pertinetn standards are met, before being allowed to proceed with the project. Also referred to as Local Building Code Laws and Ordinances.
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811 is the national Call-Before-You-Dig phone number. Anyone who plans to dig on their property should call 811 or visit their state’s 811 website beforehand to request that any nearby buried utilities be marked with paint or flags, to prevent an unintentional dig into an underground utility line.

Cash-Out Refinance

When a mortgage is recapitalized and the homeowner receives additional funds over the amount needed to repay the existing mortgage, closing costs, points, and any subordinate liens. In general, the maximum amount of cash that a homeowner can receive is capped at between 80% to 90% of the home’s equity. The most common scenario of this type of refinance is when a homeowner holds significant equity while being “cash poor”. Though the cash can be used for virtually anything, it is typically used to pay-off high-interest debt or to finance major home improvement projects. Interest paid on the cash-out portion of the new mortgage can be tax deductible if used for IRS specified capital home improvements.

CFA: Consumer Federation of America

Publishes an annual Consumer Complaint Report that consists of survey findings from state and local consumer protection agencies (35 agencies from 21 states across the U.S.), to better understand areas in which consumers filed complaints. Though the survey includes home improvement related complaints, the survey does not include agencies that focus solely on one industry, such as state licensing boards for construction and home improvement. The reason for this approach is to be able to compare relative complaint volumes and trends across multiple consumer interest areas.
Also see: Home Improvement Findings in the Consumer Complaint Survey

CFPB: Consumer Financial Protection Bureau

An agency of the US government that is responsible for providing consumer protection in the financial sector, including Mortgages, Home Equity Loans, Personal Loans and Credit Reporting.

Change Order

The process of documenting and mutually approving (between homeowner and contractor) a new or changed project item that was not explictily defined in the most current signed renovation contract. Part of the Change Order process will be to confirm any adjustments to the budget and schedule, either more or less.
Also see: What to Include in a Renovation Contract

Circadian Lighting

The concept that electric light can be used to enhance human health by minimizing the effect of electric light on the human circadian rhythm (the natural, internal process that regulates the sleep-wake cycle on a 24 hour cycle). There are currently three approaches to implementing a circadian lighting system: intensity tuning; color tuning; and stimulus tuning.

Clear Title

Ownership of a home that is free of liens, defects or other legal hindrances.

Coconut Coir

Coconut Coir is the cellulose fiber of a coconut, also referred to as coconut waste, that has been used since ancient times for a variety of applications, such as mats, brushes, and gunny sacks. Coir is also used for landscaping and gardening purposes due to its ability to retain moisture and repel insects. Coir’s rot-resistant and termite-repellent characteristics are ideal for wood furniture, flooring and wall-cladding. The latest usage of coconut coir has been the production of a sustainable wood for flooring, furniture, interior décor and insulation.
Also see: Sustainable Uses & Benefits of Coconut Coir for Furniture & Home Décor

COLI: Certificate of Liability Insurance

A form issued by a contractor’s insurance company that confirms the following: types of coverage; issuing insurance company; policy number; name of the insured; policy’s effective dates; and types and dollar amounts of limits and deductibles. This certificate should always be requested and received prior to signing a contract with a contractor. Homeowner also needs to confirm that the coverage amount is greater than the value of one’s residence.
Also see: How to Choose a Qualified & Trustworthy Contractor in 4 Steps


Sale prices of recently sold properties, similar to a home that is being evaluated for sale or purchase. Used to estimate a reasonable fair market value for a given property. Also referred to as Comparative Market Analysis (CMA).


The practice of enlisting outside persons for specific services, in an as-needed basis, from a large pool of qualified candidates, via the Internet. Has become a popular service model within the design community, especially graphic design work involving logo design, website design and brand identity. This model has been adapted quickly by innovative and thrifty startups that need flexible and cost-effective access to competent outside resources.
Also see: Crowdsourcing Your Renovation Design with GoPillar

CSIA: Chimney Safety Institute of America

The CSIA is a nonprofit organization whose mission is to provide education, training, and certification of chimney and venting industry professionals. They also publish information for consumers on the dangers of chimney fires and problems related to the maintenance and performance of chimney and venting systems. Their website includes a directory of certified chimney professionals that can be used to hire a competent local professional.
Also see: How to Prevent Chimney Fires

Curb Appeal

The visual attractiveness of the exterior of a home and lot, as viewed from the street. Curb appeal is important when selling a home as it gives a strong initial impression to homebuyers that can either influence an in-depth tour or an immediate pass.
Also see: How to Make Homebuyers Want Your Home in the First 8 Seconds.



A legal document that transfers ownership of a property between two parties.

Deed-in-Lieu of Foreclosure

The transfer of a title from a borrower to the lender to satisfy the mortgage debt and avoid foreclosure. Also called a ‘voluntary conveyance‘.

DFMA: Design For Manufacturing and Assembly

Design and engineering methodology that focuses on the ease of manufacturing for a given product and the simplified assembly of related parts to create the final product. Within the broad home category, this approach can be applied to furniture and modular living structures.

Digital Twin

A highly accurate 3D digital model that is an exact digital copy of a real-world place, such as a building or house, or an object, like an appliance or a piece of furniture. Digital twins can be used to rebuild or replicate a physical item, such as a home destroyed by a natural disaster. Digital twins are also used to keep track of changes made to its physical counterpart.
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Dispute Resolution

A clause in a renovation contract that defines how project disagreements will be handled  and remedied.
Also see: How to Deal with a Bad Contractor and Reset Your Renovation


Eminent Domain

Refers to the ability of the government, under certain circumstances, to take private land from property owners to use for public purposes. The taking of land and houses for the expansion of mass transportation conduits has been the most common example of Eminent Domain. In these cases, homeowners are entitled to fair compensation for their losses.

ENERGY STAR® Certification

A government-backed symbol for energy efficiency, that is backed by unbiased information for consumers and businesses to make informed purchase decisions. Implies that a product is an energy-efficient top performer that saves money without sacrificing performance. Managed by the U.S. Environmental Protection Agency (EPA) and has been in existence since 1992.
Also see: The New American Remodel 2021: Sustainable & Energy Efficient Beauty

Extender Clause

A provision in an exclusive real estate listing agreement that specifies how long after a listing agreement expires that the agent is elgible for a full commission.


FEMA: Federal Emergency Management Agency

Federal agency whose mission is to help people and first responders before, during and after disasters. FEMA is primarily responsible for coordinating the federal government’s response to disasters. As of 2003, they are part of the Department of Homeland Security.

Feng Shui

Pronounced ‘fung shway’. A traditional practice from ancient China that strives to achieve balance and harmony within a space. Focus is on the free flow of good energy within the immediate environment. Literal translation is ‘wind-water’. Is practiced as a form of Interior Design.


The most recognized Indoor Air Quality (IAQ) certification standard for hard surface flooring materials, adhesives, and underlayments. Developed by SCS (Scientific Certification Systems) with the RFCI (Resilient Floor Covering Institute), a leading trade association for flooring manufacturers and suppliers. Qualifies for many green building schemes including LEED v4, WELL, BREEAM, and CHPS.

FMV: Fair Market Value

The calculated worth of a real estate asset based on its likely sales price to a third-party buyer, at a given point in time. The value can be derived by several methods and data inputs such as: an Automated Valuation Model (AVM); recent sales of nearby comparable properties listed in a Comparative Market Analysis (CMA); or a Broker’s Price Opinion (BPO).

FSC: Forest Stewardship Council Certification

Ensures that products come from responsibly managed forests that provide environmental, social and economic benefits. The FSC Principles and Criteria provide a foundation for all forest management standards globally, including the FSC US National Standard.

FTC: Federal Trade Commission

Federal agency whose mission is to protect consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education. Industry issues covered that are of interest to homeowners include: Home Loans; Home Improvement; Energy Saving; Renting & Timeshares; Credit Monitoring & Lending; and Identity Theft.
Also see: consumer.ftc.gov


GC: General Contractor

For most major home renovation projects, the main point of contact for the project. This person is responsible for the success of the entire project and managing the day-to-day oversight of the project site, subcontractors, employees, vendors and local inspectors. Though the GC may hire a foreman to oversee the workers and job site, homeowners should run all critical communication solely through the GC for legal purposes.
Also see: How to Choose a Qualified & Trustworthy Contractor in 4 Steps

General Conditions

A section in a renovation contract to include miscellaneous items not defined or mentioned elsewhere. Any items that are unique to your property should be captured in this section, such as permitted working hours and days, as defined by your HOA.
Also see: What to Include in a Renovation Contract

GFCI: Ground-Fault Circuit Interrupter

A fast-acting circuit breaker designed to shut off electric power in the event of a ground-fault within as little as 1/40 of a second. The GFCI is rated to trip quickly enough to prevent an electrical incident. If it is properly installed and maintained, this will happen as soon as the faulty tool is plugged in. GFCIs are typically installed where electrical circuits may accidentally come into contact with water. They are most often used in kitchens, bathrooms, laundry rooms, garages, and outdoors.


Derivative usage of the slang term used to describe the practice of suddenly ceasing all communication and contact with another person. Homeowners can be ghosted by contractors during the proposal phase or during the project. To be ghosted prior to signing a contract should be viewed as good fortune. To be ghosted during a project has traditionally been referred to as Job Abandonment. Construction companies can also be ghosted by newer employees and recruits. When hiring a general contractor, inquire about the associated team and how long they have been working together. Stability and longevity in a team is highly desirable.

Green Seal Certification

An indicator that products or services have met or exceeded sustainability criteria based on Green Seal standards.

GREENGUARD Certification

Gives assurance that products designed for use within indoor spaces meet strict chemical emissions limits, which contribute to healthier indoor environments. Gives credence to manufacturers’ sustainability claims, backing them with empirical scientific data from an unbiased, third-party organization. Program helps to reduce indoor air pollution and the risk of chemical exposure. Formerly known as GREENGUARD Indoor Air Quality Certification.


HELOC: Home Equity Line of Credit

A revolving line of credit, much like a credit card, that is secured by your home. HELOCs often have lower interest rates than other common types of loans, and the interest may be tax deductible. Consult your tax advisor regarding interest deductibility, as tax rules are subject to change. You may borrow as much as you need, up to, but not exceeding your credit limit. Funds can be accessed at any time by writing a check or using a credit card connected to the account. Because a HELOC is a line of credit, you make payments only on the amount you actually borrow, not the full amount available.

HOA: Homeowners Association

A private governing organization that oversees a homeowner community, including condominium developments. The HOA defines and enforces rules that apply to residents, their properties and common areas. In turn, the HOA must abide by a set of bylaws, which defines how the organization is managed, run and audited. Membership is typically mandatory, with requisite monthly fees. Homeowners should always confirm rules when undertaking major renovations or changing outdoor aesthetics and features. An HOA’s policies and reputation should be diligently considered as part of a purchase decision, as well.
Also see: Homeowners Protection Bureau

Home Equity Loan

A loan for a fixed amount of money that is secured by your home. The loan is repaid with equal monthly payments over a fixed term. If you do not repay the loan as agreed, the lender can foreclose on  your home.

Home Inspection

A thorough inspection of a home, conducted prior to purchase, on behalf of the buyer to insure property is in compliance with city building codes and requirements. Involves using a detailed checklist of features throughout the house the may require repair or replacement. The findings of the inspection can be used by the buyer to negotiate a lower price, require remediation, or withdraw the offer altogether. The cost of an inspection is paid by the buyer, as it serves to protect the buyer’s financal interest. Inspections are especially important when buying an existing home due to associated risks of wear-and-tear. Though newly constructed homes normally come with a builder’s warranty, an inspection will aid in getting imperfections remedied prior to taking possession.

Home Warranty

A service contract for home repairs with very specific limitations. Home warranties provide immediate service and repair on existing or “used” home appliances and systems. Home Warranty contracts are not insurance policies, as they only cover what no insurance policy ever does – normal wear and tear. Home warranties DO NOT provide protection from sudden events or unpredictable perils, such as fire, rain, contractor malfeasance or damage caused by people, pests or pets.
Also see: Home Warranties: Do You Need One? Options & Alternatives.

Homeowners Insurance

Provides a homeowner with financial protection in the event of an accident, theft or disaster involving your home. Most standard policies include four important types of coverage: the structure of your home; personal belongings; liability protection; and additional living expenses. Homeowners insurance policies do not cover all disaster-related damage, such as fires, earthquakes and floods, which require separate policies. Accidents and damages caused by poor home maintenance are the homeowner’s responsibility. There are emerging insurance offerings that can provide coverage for appliance wear and tear.
Also see:

Homestead Exemption

A property tax exemption or reduction that lowers the taxes that homeowners must pay on their primary residence. A homestead exemption reduces part of your home’s value from taxation. For example, if your home is valued at $500,000 and your state allows a homestead exemption of $50,000, you would only pay taxes on the remaining $450,000.

House Hacking

A real estate ownership strategy where the buyer partially or fully covers the mortgage payment by renting out a portion of the primary residence. For example, one might purchase and live in one half of a duplex, while renting out the other side.

HVAC: Heating, Ventilation & Air Conditioning

The system that maintains indoor air quality and temperature (heating and cooling). Involves recurring maintenance task of replacing the air filter anywhere from 3 to 12 months, depending on usage and how many people and pets live in a  given home.


An interior design style inferring all things cozy and comfortable. Danish and Norwegian origin.



A real estate company that leverages data, analysis and technology to make an “instant” offer on a home, with the intention of quickly reselling at a profit.  iBuyers assume the risk of performing any additional modifications necessary for a final sale. The benefits to homeowners include convenience, time savings, and being able to make a cash offer for a new home. The risks to homeowners is not maximizing the final sale price, if they were to take on strategic upgrades themselves. Examples of popular iBuyers include: KnockOfferpadOpendoorRedfinNow; and Zillow Offers.
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A contractual clause that protects a homeowner from liability should someone become injured on the property during a construction project.
Also see: What to Include in a Renovation Contract

Indoor airPLUS Certification

A government-backed symbol indicating that a home has healthier air quality and comfort. The house has features that reduce contaminants, including: mold, moisture, radon, carbon monoxide, and toxic chemicals. Home also provides protection against combustion pollutants, like gas, and has a manual on how to maintain air quality. In order to receive this certification, the home must first be Energy Star certified.
Also see: The New American Remodel 2021: Sustainable & Energy Efficient Beauty

Insurance Score

A rating calculated and used by insurance companies that represents the probability of a person filing a claim while under coverage. Low scores reflect higher risk and higher premiums. Conversely, high scores reflect lower risk and lower premiums. There are nine major factors that ultimately determine the cost of a homeowners insurance policy: the roof’s shape, condition & age; the home’s age; your location; the construction material; your credit score; frequency of claims; the deductible; home security system; and preventative maintenance. Also known as an Insurance Credit Score.
Also see: 4 Reasons to use Young Alfred to Purchase Homeowners Insurance.

ISBU: Intermodal Steel Building Unit

A type of ISO certified shipping container (also referred to as a module) that can be used for residential or commercial storage or construction. There are two types of ISBU modules: Maritime and Domestic. A Maritime ISBU is engineered to stack a maximum nine containers high, whereas a domestic ISBU can only stack a maximum of three containers. Domestic ISBUs have grown in popularity for modular construction projects due to their lower cost, local & quick fabrication, sufficient structural strength and flexibility.


Job Abandonment

Refers to one of the following situations when a hired contractor is under contract: does not start a project in a reasonable timeframe; does not resume work after a reasonable timeframe; or is unable or unwilling to complete the agreed upon scope of work. Some job abandonment accusations can be counter-argued by contractors, claiming they were terminated due to non-payment.
Also see: What to Include in a Renovation Contract


KISS: “Keep It Simple, Stupid”

A design principle often cited to ward against making plans overly complicated and to prevent scope creep. Origin of the term is attributed to the U.S. Navy in 1960.
Also see: 8 Steps for Starting Your Renovation


Liability Protection

Refers to an insurance product that provides an insured party (e.g. homeowner) with protection against claims resulting from injuries and damage to other people or property. Liability insurance policies cover any legal costs and payouts an insured party is responsible for if they are found legally liable.
Also see: 4 Reasons to use Young Alfred to Purchase Homeowners Insurance.

Licensed Contractor

A trades professional (e.g. general contractor, roofer, tiler, electrician, plumber, etc.) who possesses an active license from a local jurisdiction licensing board (e.g. state, county or city) for their area of practice. An active license implies that the contractor meets a minimum amount of experience and knowledge for a given trade. Additionally, licensing may also have business requirements, such as sufficient liability insurance and workmens comp. Applicants also may be subjected to a criminal background check, taking a trade examination, and not having any unresolved contracting complaints. An important reason to only hire licensed contractors is for maximum legal protection, as local licensing boards will not provide advocacy for homeowners who knowingly hired non-licensed contractors.
Also see:

Lien Waiver

A document that releases all financial claims that a General Contractor, subcontractor, materials or equipment supplier (Lienholder) may have against a homeowner for work performed as defined in a contract. In brief, the document states that the lienholder has waived his financial claims against the property. Once paid, the contractor or lienholder does not have lien rights.
Also see: Lien Waivers: Everything Homeowners Need to Know


A person or business entity, such as a bank, that holds a lien on a property. A lien grants legal interest in the property to the lienholder, until a financial obligation, such as a mortgage or renovation contract, is paid in full. A property with liens cannot be sold. A lien is removed with a Lien Waiver.
Also see: Lien Waivers: Everything Homeowners Need to Know

LVP: Luxury Vinyl Plank

Luxury Vinyl Plank, commonly known as LVP, is a thick flooring material that is sold in long, narrow planks, with a tongue-and-groove, click-lock system that can be snapped together. The flooring product is typically constructed with four layers: Wear Layer (Top); Decorative Layer; Flexibility Layer; and Backing Layer. This material is quite popular with investor flipped homes.
Also see: Luxury Vinyl Plank Flooring: Friend or Faux?


Mechanics Lien

If a homeowner fails to pay a contractor the full amount contracted, the contractor may file a Mechanics Lien on the homeowner’s property. This gives the contractor “Lien Rights” to the property. A mechanics lien is used as security to guarantee payment for the contractor’s labor, materials, or value of the contract. A mechanics lien is removed with the signing of a Lien Waiver.
Also see: Lien Waivers: Everything Homeowners Need to Know

MRP: Military Relocation Professional

Certification program managed and awarded by NAR that focuses on educating real estate professionals who work with current and former military service members and families.


NAR: National Association of Realtors

See: NAR.realtor

NARPM: National Association of Property Managers

See: NARPM.org

NFIP: National Flood Insurance Program

A US federal insurance program, managed by FIMA (Federal Insurance and Mitigation Administration), that provides flood insurance to property owners, renters and businesses residing in one of the 24,000 participating NFIP communities. Homes in high-risk flood areas with mortgages from government-backed lenders are required to have flood insurance. NFIP partners with more than 60 private insurance companies to sell and service flood insurance policies. A local NFIP insurance provider can be found at floodsmart.gov/find.
Also see: fema.gov/flood-insurance

NIMBY: “Not In My Backyard”

Slogan that typically refers to opposition to new legislation or planning that will negatively impact one’s immediate neighborhood. Also a euphemism for ‘hypocrisy’, as what is usually contested is something that is largely consider necessary and beneficial for the greater community at large – a ‘greater good’.

NNN: Triple Net Lease

A lease agreement on a property where the tenant pays all expenses of the property including real estate taxes, building insurance, and maintenance.



In a Contractor License Bond situation, this is the party that requires and receives the protection of the bond, often a state licensing board. A bond requirement of a specific minimum amount is typically tied to acquiring and maintaining an active contractor license.


In a Contractor License Bond situation, this is the party that sells the bond to the principal (contractor), who must be bonded in order to do work as a licensed professional within the jurisdiction of the obligee (licensing board). The contractor or principal in the agreement buys the necessary bond at the required minimum amount set by the obligee. The obligor is also referred to as a Bond Company or Surety Company.


Payment Schedule

Payment amounts and dates that correspond to project milestones and tasks, included within a renovation contract. With the exception of the down payment, homeowners should only make payments for completed tasks, as detailed in the payment schedule within the signed contract or signed change orders. Homeowners should conduct thorough walkthroughs of the related work prior to making a payment. Payments should be withheld until the work satisfactorily meets the requirements as detailed in the contract. For materials that homeowners agree to purchase, they should adhere to making the purchases prior to any deadlines specified in the project timeline of the contact.
Also see: What to Include in a Renovation Contract


A local regulatory document and inspection process that protects homeowners, by validating the underlying methods of key work performed by contractors. Permits are an important step to insure that changes made to your property meet existing standards set by your local government. Most ethical contractors will not perform work on a property without required permits, as this will risk their professional standing within the construction industry. Licensed contractors will be fined heavily, or in some cases, lose their licenses should they perform work without pulling the necessary permits prior to construction. A permit is typically required for renovation projects that involve changes to a property’s current footprint, plumbing, electrical, HVAC, or adding new windows.
Also see:


The process of taking photos and visually documenting a project space prior to starting a renovation project. Photos and video should be used to ensure that out-of-scope ares and features are returned to their original condition and working state. Pre-photos and video also can be used to showcase new enhancements within sales materials.

Pre-Sale Renovation

An upgrade made to a home with the expressed intent of selling soon after the completion of the project. The main purpose of this type of project is to strategically address any features that may either hinder offers or significantly reduce bid prices. Unlike upgrades made for the long-term usage and enjoyment of the homeowner, pre-sale renovations are defined by what prospective buyers are currently seeking.
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Prefab ADU

Short for Prefabricated Accessory Dwelling Unit, a Prefab ADU is typically a detached ADU that is largely built off-site inside a climate-controlled manufacturing plant. Prefab ADUs provide the following construction benefits: Speed; Quality; Design; Cost; and ADU-Specialization. The most important benefit that Prefab ADUs provide is that they dramatically reduce the chances of setbacks that can cause delays or increase costs, such as: Weather Delays; Design Iterations; Lengthy Permit Processes; and Availability of Subcontractors.
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Prescriptive Maintenance

Prescriptive maintenance is the practice of autonomously collecting and analyzing data about an appliance’s status to receive recommendations and options to correct performance issues. This proactive approach reduces operational risks and downtime, and extends the lifespans of the enabled equipment.
Also see: Why Prescriptive Maintenance is the Cure for Homeowner Headaches

Project Completion Form

A signed document that legally indicates the conclusion of a construction contract. Homeowner should not be pressured or hurried into prematurely signing this document without conducting a thorough audit of the project’s status and all outstanding issues. Once this document is executed, the homeowner implicitly accepts that the contracted party (contractor) cannot be held liable for any uncompleted work as specified in the contract. Also known as a Notice of Completion.
Also see: When to Sign Your Construction Project Completion Form

Punch List

A list of tasks or issues that still need attention or are pending completion, created by either the homeowner or the contractor, near the end of a construction project. All items on the punch list should be resolved prior to signing a Project Completion Form.
Also see: Why a Punch List is so Important to Your Renovation Project


Qualifying Ratio

Calculations used by mortgage lenders to determine the loan amount for which a loan applicant qualifies. Formula typically compares the borrower’s total monthly income to total monthly debt payments and other recurring obligations.

Quitclaim Deed

A legal document that is used to transfer interest in real property, most often for transferring property between family members or correcting a mistake on the title, such as a misspelled name. The entity transferring its interest is called the grantor, while the recipient is called the grantee. Quitclaim deeds also may be used when a transferring property ownership without being sold.



A toxic gas found in the soil beneath a house that can contribute to cancer and other illnesses.


A widely referenced term that is synonymously, but incorrectly, used to refer to a licensed real estate agent. According to its registered trademark owner, the National Association of REALTORS® (NAR), this term should always be used with the registered trademark ® at the end. Also, it should only be used to refer to members of their association. All REALTORS® are licensed real estate agents, whereas not all licensed real estate agents are REALTORS®.
Also see: Top 5 Things You Need to Know About the REALTOR® Trademarks


A federally registered collective membership mark which identifies a real estate professional who is an active member in good standing of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict code of ethics. All REALTORS® are licensed real estate agents, but not all licensed real estate agents are REALTORS®. In technical terms, REALTOR® is classified as a collective mark which is a a trademark that identifies members of a union, cooperative, or organization.
Also see: Top 5 Things You Need to Know About the REALTOR® Trademarks

RTA: Ready-to-Assemble

RTA is industry shorthand that is used to refer to furniture that is purchased unassembled. The main benefit of purchasing ready-to-assemble furniture is lower cost when compared to fully-assembled furniture. The lower cost is largely due to less-costly shipping, as unassembled furniture takes up less shipping space than does assembled furniture. When purchasing RTA furniture be sure to confirm upfront that you have the necessary skills and tools to assemble the purchased item correctly.



A real estate transaction where the buyer leases the property back to the seller for a specified period of time. This type of sale can provide timing flexibility to the seller, if, for example, their next home is still undergoing construction. EasyKnock is an iBuyer that specializes in Sale-Leaseback transactions, where the seller can lease indefinitely, while having the option to buy their home back.

Scope Creep

Term widely used in project management that refers to gradual, organic growth of requested features and scope of work for a given project. Scope creep is subsceptible to occurring during poorly managed projects and is harmful, as it introduces uncertainty and risk. It should be guarded against by confirming any and all changes with written confirmation, ideally with written Change Orders.
Also see: 8 Steps for Starting Your Renovation

Scope of Work

A detailed description of work to be conducted for a given project included in a construction contract. The scope of work is the critical piece of any construction contract. The scope should be written carefully to eliminate any areas of ambiguity and be specific about: materials used; services which will be provided; and services that will not be provided. Brands, material types and product numbers should be listed when available and known. Any changes to the scope of work, after a contract has been signed, should be managed with Change Orders. Scope of Work is also called a Statement of Work.
Also see: What to Include in a Renovation Contract.


A derogatory slang term used within the interior design industry that refers to a client or prospect that appropriates a curated shopping list from an interior designer, without permission or compensation. “I think my client may have shopped me, as I have not heard back from her, after sharing too many details of my proposed design”. The opposite meaning can be used as a complement, too: “I have a long-term, trusted client – she does not shop me”.

SIP: Structural Insulated Panel

A sandwich composite structure used in the construction industry, consisting of a rigid insulating layer between two layers of board. SIPs are strong, energy efficient and cost-effective, due to reduced labor costs and long-term energy savings.

Sleep Hygiene

Health, environment and behavior issues that affect the quality of one’s sleep, including: daytime physical activity; nutrition; pre-bed electronic device use; consistent sleep schedule; room temperature; bed temperature; mattress comfort; pillow comfort; ambient noise; air quality of room; and darkness of the room.

Surety Company

See Bond Company.


Tax Deduction

A legal reduction of taxable income that typically involve expenses, including costs incurred to generate income. Tax deductions are also referred to as tax incentives, along with exemptions and credits. Though tax laws change over time, homeowers and owners of rental property have historically benefited from significant tax deductions, such as mortgage interest and property taxes.
Also see: Tax Deductions for Homeowners

Tax Lien

A legal claim against a property to secure the payment of taxes, imposed by law. A tax lien may be levied for unpaid taxes owed on real estate holdings, personal property, income, or other types of taxes.

Tear-Down Condition

A property that is purchased for the sole purpose of tearing it down to build a new house on the same lot. These types of properties are generally located in desirable neighborhoods that represent strong return on investment opportunities.
Also see: Tearer-Downer


Slang that refers to a property that is in such disrepair that it is a prime candidate for razing and having a total rebuild done on the lot.
Also see: Tear-Down Condition

TILA: Truth-In-Lending Act

US federal law that protects consumers against inaccurate and unfair credit billing and credit card practices. It also requires lenders to provide customers with loan cost information, to make it feasible for consumers to conduct accurate comparison shopping for certain types of loans.

Transformable Interior Design

A subset discipline of Transformable Design and the practice of creating dynamic interior spaces that conveniently provide multiple functions, layouts and uses on an everyday basis. This type of design often uses transforming furniture and adaptable built-ins within open spaces, to create multifunctional rooms.
Also see: How to Apply Transformable Interior Design to Your Home

Turnkey Home

A turnkey home is a residence that is ready for immediate occupancy, be it from a sale or rental agreement. The term “turnkey” implies that a property does not require any significant renovations or upgrades, and that all systems of the house are in good shape. It also infers that all of amenities and design elements are to current trends and standards of the local real estate market.
Also see: What is a Turnkey Home in Today’s Market?


Umbrella Liability Insurance

A type of personal liability insurance that provides protection in excess of existing limits and coverages of policies, such as homeowners insurance. Umbrella liability insurance coverage covers injury to others, damage to their possessions and certain lawsuits.
Also see: 4 Reasons to use Young Alfred to Purchase Homeowners Insurance.


The process of deciding whether or not a mortgage applicant can qualify for a home loan. The evaluation involves: the applicant’s credit history; the applicant’s income and assets; the applicant’s debt obligations; the applicant’s down payment; and the value of the home to be purchased. The end result is approval or denial of a home loan application.


The art of transforming discarded, unwanted materials and products into new designs and uses, which can improve upon the original item’s aesthetics, quality, cost or functionality. Can also be referred to as Sustainable Reuse. Different than recycling, which transforms waste into a reusable material or product. With upcycling, it is not necessary to break down the original item in order to create a new higher quality product.
Also see: Inspirational Upcycling Ideas for the Home


VDC: Virtual Design and Construction

Virtual Design and Construction (VDC) is a cost- and time-saving design service that uses digital tools to create 3-D virtual models of building structures, including residential homes. The models are evaluated prior to the commencement of construction to discover any conflicts and to visually confirm final design choices and treatments.

Virtual Staging

Staging of a home for sale that uses software tools to emulate the physical property with visual modifications, such as decor items and simulated before-and-after renovations. This service is helpful for potential buyers to envision the home in their preferred interior design style and the results of key upgrades.

VOC: Volatile Organic Compounds

Compounds that negatively impact indoor air quality. VOC can be found in paint and vinyl coverings. Low-VOC options in paints and adhesives are readily available in well-stocked hardware stores.

VR: Virtual Reality

Refers to a digitally immersive experience, typically using googles or a headset, of a 3D rendered world. An emerging use of VR in architecture is to provide clients immersive walkthroughs of design comps prior to the start of any building.



The process of walking through a worksite to review the project’s progress, workmanship and adherence to the Scope of Work. Preferably, homeowners should review the work on a daily basis after the workcrew has left for the day. Photos and video should be taken to note progress and to communicate any in-scope corrections or changes. A proactive approach by the homeowner will help detect issues early in the process, which in turn will reduce costs and time for proper remediation. Also refers to a common clause in a real estate sales contract that allows the buyer to examine the property being purchased at a specified time immediately before the closing, for example, within the 24 hours before closing.
Also see: Why a Punch List is so Important to Your Renovation Project

Window Film

A thin polyester material that is applied to the interior or exterior of glass windows of homes and buildings. It is most commonly used to reduce the amount of sunlight that passes through windows, but it has several other uses, as well, including: privacy; heat reduction; glare reduction; security; safety; energy efficiency; decorative treatment; and affordability.
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A clause in a construction contract to define and set minimum standards of construction quality, processes and materials. Necessary to ward against subjective difference of opinions over the quality of work done on a project.
Also see: What to Include in a Renovation Contract



Landscaping or gardening that is drough-tolerant or that requires little or no supplemental water from irrigation. Typically involves replacing grass lawns with soil, rocks, mulch, and drought-tolerant native plant species. Derived from the phrase ‘zero-scaping‘.
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XR: Extended Reality

An umbrella term that encompasses the family of existing and future technology that alters the experience of reality digitally, such as Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR).


Yield Rate

A percentage calculated for investment analysis by dividing the yearly net income from a property by its current market value. If a home has a market value of $100,000, and generates a yearly net income of $10,000, the yield rate would be 10% (dividing $10,000 by $100,000).

YIMBY: “Yes In My Backyard”

Slogan that typically refers to activists that are in favor of local community development, especially pertaining to initiatives that involve affordable housing. Often cited as the opposite of NIMBYism. However, some development issues, like the impact of ADUs on neighborhoods, can become divisive topics among neighboring homeowners.


A circular tent covered structure with a collapsible wood latticework framework as its walls. Origin of this structure is from several distinct nomadic groups in Mongolia, Siberia, and Turkey. Also referred to as a ger.


Zoning Variance

An exception to land use regulations, granted by a local governing body. To obtain a zoning variance, a property owner or developer must submit an application to the local governing body, which typically reviews the application at a public hearing.

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