A sum of money set aside in the construction contract for items which have not been selected and specified in the construction contract. For example, selection of tile as a flooring may require an allowance for an underlayment material, or an electrical allowance which sets aside an amount of money to be spent on electrical fixtures.

An expert valuation of property.

A tax levied on a property, or a value placed on the worth of a property.

Billings for work performed or costs incurred by one party that, in accordance with the agreement, should have been performed or incurred by the party to whom billed. Owners bill back charges to general contractors, and general contractors bill back charges to subcontractors. Examples of back charges include charges for cleanup work or to repair something damaged by another subcontractor, such as a tub chip or broken window.

A subsurface layer of earth that is suitable to support a structure.

A formal offer by a contractor, in accordance with specifications for a project, to do all or a phase of the work at a certain price in accordance with the terms and conditions stated in the offer.

A bond issued by a surety on behalf of a contractor that provides assurance to the recipient of the contractor's bid that, if the bid is accepted, the contractor will execute a contract and provide a performance bond. Under the bond, the surety is obligated to pay the recipient of the bid the difference between the contractor's bid and the bid of the next lowest responsible bidder if the bid is accepted and the contractor fails to execute a contract or to provide a performance bond.

A unit of measure for lumber equal to 1 inch thick by 12 inches wide by 12 inches long. Examples: 1" x 12" x 16' = 16 board feet, 2" x 12" x 16' = 32 board feet

An amount of money (usually $5,000-$10,000) which must be on deposit with a governmental agency in order to secure a contractor's license. The bond may be used to pay for the unpaid bills or disputed work of the contractor. Not to be confused with a 'performance bond'. Such bonds are rarely used in residential construction, they are an insurance policy which guarantees proper completion of a project.

Community ordinances governing the manner in which a home may be constructed or modified.

A subsidy (usually paid by a builder or developer) to reduce monthly payments on a mortgage.

An abbreviation for "Certificate of Occupancy". This certificate is issued by the local municipality and is required before anyone can occupy and live within the home. It is issued only after the local municipality has made all inspections and all monies and fees have been paid.

The mortgage interest rate will not exceed a specified value during a certain period of time, but it will fluctuate up and down below that level.

A manufactured panel made out of gypsum plaster and encased in a thin cardboard. Usually 1/2" thick and 4' x 8' or 4' x 12' in size. The panels are nailed or screwed onto the framing and the joints are taped and covered with a 'joint compound'. 'Green board' type drywall has a greater resistance to moisture than regular (white) plasterboard and is used in bathrooms and other "wet areas".