Allotment
In order to define allotment, we have to take into consideration what it refers to. While generally, it refers to a certain amount of something that is allocated to a particular person, the most common use of the term can be seen in the corporate world regarding shares distributed across different entities. The term also has an application in the real estate world, but the idea is relatively similar. In both instances, a party makes an initial public offering (IPO), and interested parties express their desire to have amounts of something allocated to them.
If there’s a higher demand, the amount of something allocated might be smaller than the amount desired. In the opposite case, with lower demand, the amount of something allocated might be larger or cheaper than the original amount desired. Let’s take a closer look at what happens when this concept is applied in the real estate industry.
What is Allotment in Real Estate?
The residential allotment meaning describes a piece of land that is one part of a developmental land for a proposed development (i.e., residential) that will only be used for a single-family home, prohibiting further subdivision of the piece of land. This is a scenario where a real estate developer has 30 lots available within their residential development, and each lot is an allotment for a particular individual.
The allotment process is an equitable distribution of lots, and the individual who gets the lot allotted to them proceeds to make the purchase. The downside of this process can be seen when the supply is lower than the demand. If there are 30 lots available for allotment and 50 families interested in them, the distribution will leave 20 families without an allotted lot. In that scenario, the 20 families will be unhappy, disgruntled potential buyers that would have to look elsewhere for a developed lot.
Popular Real Estate Terms
The Exclusive Agency Listing is regularly confused with the Exclusive Right to Sell Listing, but they are not the same. True: on both Listings, only 1 Broker or Agent has the right to sell ...
Imagine someone asking you about the definition of the real estate market. At first sight, it may seem like an easy answer. But wait! Could the real estate market meaning be more complex ...
In real estate terms, many consider having corner influence an extra financial advantage when it comes to transactions in most cases. Usually, enjoying a corner influence brings an ...
A portion of a real estate company's assets financed with debt instead of equity. It involves interest an principal obligations. Financial leverage is beneficial to real estate investors ...
Kind of siding for wood frame houses where the joints in the usually vertical siding are covered by narrow strips of wood called battens. The battens are nailed over the joints. ...
Situation in which very few prospective buyers of real estate are rejected by lenders. This may be due to ample money supply, lower interest rates, and/or relaxed credit standards. See also ...
Special tax incentive for the continued use and rehabilitation of historical buildings and old structures in an effort to arrest urban decay. Developers receive a credit based on a ...
Scale drawing or diagram illustrating the proposed use of a land plat property. ...
A report required by the Interstate Land Sale Act for the sale of subdivisions having 50 or more lots. It is filed with the Federal Department of Housing and urban Development's Office of ...
Have a question or comment?
We're here to help.