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Debt Coverage Ratio

The ratio between the net income of an investment and the amount of debt service of the investment: expressed as (NOI / DS = DCR).

Debt Service

The periodic payments of interest and/or principal on a property's indebtedness.

Deed

The legal document that transfers ownership of a piece of property.

Deed of trust

A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan.

Default

The failure to fulfill a duty or promise or discharge an obligation, such as making monthly mortgage payments.

Deferred maintenance

Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value.

Delinquent mortgage

A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings.

Density test

An analysis of soil to determine if the surface can support the foundation of a property.

Deposit

Money given by the buyer with an offer to purchase property. Also known as earnest money.

Depreciation

The decline in value of a piece of property.

Discount points

Fees that a borrower pays at the time the lender makes the loan. One point equals 1 percent of the total loan amount.

Discount rate

The percentage rate at which money or cash flows are discounted. The discount rate reflects both the market risk-free rate of interest and a risk premium. See opportunity cost.

Discounting

The process of reducing the value of money received in the future to reflect the opportunity cost of waiting to receive the money.

Distressed property

Property that is in poor physical or financial condition.

Down spouts

A vertical gutter that empties water from the roof to the ground.

Dry rot

A fungal decay that causes wood to become brittle and crumble.

Dual agency

A relationship in which a real estate agent or broker represents both parties in a transaction.

Due-on-sale clause

Standard language in a mortgage which states that the loan must be paid when the property is sold.

Duplex

A structure that consists of two separate family units.

Some definitions come from the Certified Commercial Investment Member Institute (CCIM).