Hazard Insurance

Definition

Insurance protecting the property structure against fire, wind, theft, and other physical damage. Lenders require it; it's paid via escrow every month.

Example Usage

Our annual hazard insurance was $1,200, divided into $100/month escrow payments handled by the mortgage servicer.

Origin

From 'hazard' (risk of loss); insurance term dating to early 20th century

Fun Fact

In high-risk areas (flood, wildfire, hurricane zones), hazard insurance can cost more than property taxes—sometimes disqualifying purchases entirely.

Source: Mortgage lending standards; insurance industry

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tax abatement

A reduction or elimination of property taxes for a specified period, typically offered as an incentive for development or renovation in targeted areas. It's the government's way of bribing you to improve neighborhoods they've neglected.

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warranty

A seller's promise that their product won't immediately explode or fall apart, though the fine print will explain in excruciating detail all the ways you can void this promise. This legal guarantee assures buyers that goods or property meet certain standards and provides recourse if things go wrong—assuming you kept the receipt, didn't use it wrong, and performed ritual maintenance every third Tuesday. Extended warranties are the profitable cousin that exists solely to make you second-guess your purchase.

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duplex

A single building cleverly divided into two separate dwelling units, allowing property owners to live in one half while collecting rent from neighbors who share their walls. It's the real estate equivalent of having your cake and eating it too, assuming you don't mind hearing your tenant's TV through the drywall. In postal circles, it's also a fancy stamp cancellation, but nobody cares about that definition anymore.

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Good Bones

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break-even ratio

The percentage of gross income needed to cover operating expenses and debt service, revealing how close a property teeters to financial disaster. It's the fiscal tightrope number—anything approaching 100% means you're one vacancy from trouble.

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