Real Estate Glossary

A la carte real estate services

Professional real estate services that are rendered one transaction at a time.

A-frame design

An interior style featuring a steeply peaked roofline and a ceiling open to the top rafters.

Abatement

Often referred to as free rent or early occupancy and may occur outside or in addition to the primary term of the lease

Absentee Owner

Landlord who lives elsewhere

Absorption rate

The rate at which rentable space is filled.

Abstract of judgment

The summary of a court judgment that creates a property lien when filed with the appropriate government recording office.

Abstract or title search

The process of reviewing all publicly recorded transactions to determine whether any title defects exist that could interfere with a clear transfer of property ownership.

Accelerated cost recovery system

A tax calculation that provides greater depreciation in the early years of ownership.

Accelerated depreciation

A bookkeeping method that provides faster property depreciation in the early years of ownership.

Acceleration clause

A clause that provides the mortgagee (lender) the right to demand immediate repayment of the loan balance upon default of the mortgagor (borrower). "Acceleration" is also triggered by the due on sale clause (demands immediate repayment if the home is sold).

Acceptance

The seller's written approval of a buyer's offer.

Access

Any means by which a person can enter property.

Accessibility

The degree to which a building or site allows access for people with disabilities.

Accretion

The gradual addition to the shore or bank of a waterway by deposits of sand or silt.

Acre

A measurement of land equal to 43,560 square feet.

Acre-foot

The volume of material needed to cover an acre of land one foot deep.

Act of God

Action occurring without the intervention of man which could include but not be limited to hurricanes, earthquakes, floods, lightning storms etc.

Active solar system

A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.

Actual age

The number of years a structure has been standing.

Ad valorem tax

Tax based on assessed property value.

Addendum

An addition or change to an existing contract between two (2) or more parties.

Additional principal payment

Additional funds outside of the scheduled loan payment to reduce the principal balance and shorten the term of the loan.

Adjustable rate mortgage (ARM)

A home loan with an interest rate that periodically adjusts to reflect changes in a specified financial index.

Adjusted cost basis

The addition of any improvement costs a seller makes to a property. Deducting this cost figure from the original sales price will provide the realized profit or loss upon sale.

Adjustment period

The amount of time between interest rate adjustments in an adjustable-rate mortgage.

Administrator

A person given authority to administer and distribute the effects of an estate left who dies without a will.

Administrator's deed

A legal document that an estate administrator uses to transfer property

Adverse possession

The acquisition of property title through possession without the owner's consent for a certain period of time.

Adverse use

The access and use of property without the owner's consent.

Aeolian soil

Soil composed of materials deposited by the wind.

Affiant

A person who makes a sworn statement.

Affirmation

A substitution for an oath granted to people based on religious reasons.

Affordability Analysis

An analysis of a consumers ability to afford the purchase of a home. This analysis usually includes the review of a potential borrower's income, liabilities and available funds.

Agency

The relationship of trust that exists between sellers, buyers and their agents.

Agency closing

When a lender uses a title company or other firm as an agent to complete a loan.

Agency disclosure

Most states require agents who act for both buyers or sellers to disclose who they are working for in the transaction.

Agreed boundary

A boundary property owners agree on in order to resolve a dispute.

Agreement of sale

A legal document the buyer and seller approve detailing the price & terms of the transaction.

Air handler

The blower equipment in a furnace, heat pump, or similar appliance designed for circulating heated or cooled air through a central heating system.

Air lot

A designated airspace over a piece of property.

Alcove

A recessed section of a room.

Alienation clause

A loan provision requiring the borrower to pay the balance of the loan in a lump sum if the property is sold or transferred.

Alkali

Mineral salt found in soil.

Alkaline soil

Soil containing a higher concentration of mineral salt than natural acid.

Alley

A lane behind a row of buildings or between two rows of buildings.

Allowance

A dollar amount offered by builders of new homes for the purchase of carpeting and fixtures.

Alternative mortgage

A home loan program that does not conform to standard fixed-rate mortgage terms.

Amenities

Enticements offered by builders of planned developments. Common amenities include swimming pools, health clubs and business centers.

American Society of Home Inspectors (ASHI)

Professional association of independent home inspectors. Members must meet defined education and performance requirements.

Americans with Disabilities Act (ADA)

A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.

Amortization

The process of paying the principal and interest on a loan through regularly scheduled payments.

Amortization schedule

A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.

Amortization tables

Mathematical tables used to calculate a borrower's monthly payment.

Amortization term

The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed-rate mortgage.

Amperage

The strength of an electrical current.

Ampere

The basic unit used to measure electric current.

Anchor bolt

A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.

Annual assessments

The process of placing a value on property for the sole purpose of taxation. Also refers to a levy against property for a special purpose, such as street lighting or sewer assessment.

Annual mortgagor statement

An annual statement to borrowers detailing the remaining principal balance and amounts paid for taxes and interest throughout the year.

Annuity

The payment of a fixed sum at regular intervals.

Antioxidant compound

A substance applied to aluminum wiring connections to seal and promote conduction.

Application fee

An application fee is charged by some lenders and may include charges for items such as property appraisal and/or a credit report unless those fees are reported separately.

Appraisal

A professional opinion of the value of a property by a licensed real estate appraiser.

Appraisal fee

The fee that a professional real estate appraiser charges to appraise, or estimate the market value of, a property

Appraisal report

A written report on the value of a property based on recent sales of comparable property in the area.

Appraised value

A professional opinion of the current market value of a property.

Appreciation

An increase in the value of a home or other property.

APR (annual percentage rate)

A measure of interest that expresses the cost of a mortgage as a yearly rate on the loan balance. The APR assumes the loan is held for its full term. For adjustable-rate loans, the APR assumes the loan's index doesn't change from its initial value.

Arbitration

A method of resolving a dispute in which a third party renders a decision.

Architect

A licensed professional who designs residential and commercial property structures.

Architectural fees

The fee charged by an architect for services. A common way of billing by architects is to charge for their services by the hour, by the square foot or by a percentage of the project budget.

ARM (adjustable rate mortgage)

A home loan with an interest rate that periodically adjusts to reflect changes in a specified financial index.

ARM index

A publicly published number used as the basis for adjusting the interest rates of adjustable rate loans (ARM).

Array

A term used by tax assessors to describe a list of properties in a certain category sold within a defined period of time.

As-is condition

The purchase or sale of a property in its existing condition.

ASHI (American Society of Home Inspectors)

A professional association of independent home inspectors whose members must meet and maintain defined education and performance requirements.

Asking price

A seller's initial sales price.

Assemblage

The combining of two or more adjoining lots into one larger tract.

Assessed value

A tax assessor's determination of the value of a home in order to calculate a tax base.

Assessment

The estimated value of a piece of real estate or a special levy placed in addition to taxes.

Assessment rolls

A list of taxable property compiled by the assessor.

Assessor

An official who determines the assessed value of a property.

Assets

Items of value which include cash, real estate, securities, and investments.

Assignment

The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.

Assignor

A person who transfers rights and interests of a property.

Assumable mortgage

A mortgage that can be transferred to another borrower.

Assumption clause

A provision that allows a buyer to take responsibility for the mortgage from a seller.

Assumption fee

A fee the lender charges to process new records for a buyer who assumes an existing loan.

Automatic extension

A clause in a listing contract stating that the agreement will automatically continue for a certain period of time after the expiration date (very rare)

Automatic flue damper

A device in the flue of a heating unit that closes to prevent heat loss when the unit is not in operation.

Avigation easement

An easement over private property near an airport that limits the height of structures and trees.

Awning windows

Single-sash windows that tilt outward and up.

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