REAL ESTATE GLOSSARY # -  A -  B -  C -  D -  E -  F -  G -  H -  I -  J -  K -  L -  M -  N -  O -  P -  Q -  R -  S -  T -  U -  V -  W -  X -  Y -  Z Abstract of title: A condensed version of the history of title to a piece of land that lists any transfers in ownership, as well as any liabilities attached to it, such as mortgages. Abutting: The joining, reaching, or touching of adjoining land. Abutting pieces of land have a common boundary. Acceleration Clause: A provision in a written mortgage, note, bond or conditional sales contract that, in the event of default, providing the holder with the right to demand the whole amount of principal and interest may be declared to be due and payable at once. Acceptance: An offeree’s consent to enter into a contract and be bound by the terms of the offer. Accretion: An addition to land through natural causes. Accrued Interest: Interest earned but not yet paid. Acknowledgment: A declaration made by a person to a notary public, or other public official authorized to take acknowledgments, that the instrument was executed by him and that it was his free and voluntary act. Acre: A measure of land equal to 43,560 square feet. Ad valorem: Designates an assessment of taxes against property. Literally, according to value. Additional Principal Payment: A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan. Adjustable Rate Mortgage: Also known as an ARM Loan.  It is a  mortgage loan whose interest rate fluctuates according to the movements of an assigned index or a designated market indicator--such as the weekly average of one-year U.S. Treasury Bills--over the life of the loan. The loans monthly payment will rise and fall with the increases and decreases of the interest rate. To avoid constant and drastic fluctuations, ARMs typically limit how often and by how much the interest rate can vary. An interest rate cap limits the amount by which the interest rate can change; look for this feature when you consider an ARM loan. Adjusted basis: The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken. Adjustment Date: The date on which the interest rate and/or monthly payment changes for an adjustable-rate mortgage (ARM).  Adjustment Period/Interval: The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM). Adjustments: Money that the buyer and sellers credit each other at the time of closing. Often includes taxes and down payment. Administrator/administratrix: A man/woman appointed by a court to settle the estate of a deceased person when there is no will. Contrast with executor/executrix. Adverse possession: The right of an occupant of land to acquire title against the real owner, where possession has been actual, continuous, hostile, visible, and distinct for the statutory period.  The requirements for adversely possessing property vary between states, but usually include continuous and open use for a period of five or more years and paying taxes on the property in question. After Repair Value: Also known as ARV.  This is the value of a property after the renovations have been completed.  Typically used to obtaining a reconstruction loan. Affidavit: Written statement signed and sworn to before some person authorized to take an oath. Agency: The legal relationship between a principal and an agent. In real estate transactions, usually the seller is the principal, and the broker is the agent: however, a buyer represented by a broker (i.e., buyer as principal is a growing trend. In an agency relationship, the principal delegates to the agent the right to act on his or her behalf in business transactions and to exercise some discretion while so acting. The agent has a fiduciary relationship with the principal and owes to that principal the duties of accounting, care, loyalty, and obedience. Also see buyer's broker. Agent: A person authorized to act for and under the direction of another person when dealing with third parties. The person who appoints an agent is called the principal. An agent can enter into binding agreements on the principal's behalf and may even create liability for the principal if the agent causes harm while carrying out his or her duties. Laws governing real estate--especially relating to agents--vary considerably from state to state. See also attorney-in-fact. Agent - Buyer: An agent who represents the buyer in a real estate transaction. A buyer agent may be paid by the buyer, seller, or listing agent at closing, provided all parties consent. Agent - Dual: An agent representing both parties in a transaction. In almost every state, dual agency is illegal and unethical without the written consent of both the buyer and the seller. Agent - Listing: The agent who represents the seller. Agent - Selling: The agent who obtains a buyer. A selling agent may represent the buyer, or may be a subagent of the seller. Agent - Sub: A salesperson who works for an agent. Agreement of Sale: Contract signed by buyer and seller stating the terms and conditions under which a property will be sold. Alienation Clause: A clause in a mortgage, which gives the lender the right to call the entire loan balance due if the property is sold; due-on-sale clause. Alternative Documentation: A method of documenting a loan file that relies on information the borrower is likely to be able to provide instead of waiting on verification sent to third parties for confirmation of statements made in the application. Amenities: Features that enhance the value or desirability of a property such as a pleasant view, pride in home ownership, etc. Amendment: A modification to an existing contract, mutually agreed to by all parties. Examples might include a change in the purchase price due to a low appraisal, or a change in the closing date. Amortization: A schedule of payments (principal and interest) for a  loan over a set period of time where at the end of the period of time the full principal plus interest has been completely paid. Amortized Mortgage: A mortgage requiring periodic payments that include both interest and principal.  Also see amortization. Annual Membership: The amount that is charged annually for having a line of credit available. Often charged regardless of whether or not you use the line. Annual Percentage Rate: Also thought of as an APR.  This is the cost of credit expressed as a yearly rate. The annual percentage rate is often not the same as the interest rate. It is a percentage that results from an equation considering the amount financed, the finance charges, and the term of the loan. Antitrust Laws: Federal and state laws prohibiting, among other things, monopolies, monopolistic practices, restraint of trade, and price fixing. Application: An initial statement of personal and financial information required to apply for a loan. Application Fee: Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges. Appraisal: A written document explaining the estimate of a property's current market value completed by an impartial qualified party with knowledge of real estate markets. In real estate appraisals are typically used to ascertain the worth of real estate for lending purposes. Appraisal Fee: A fee charged by a licensed, certified appraiser to render an opinion of market value as of a specific date. Appraised Value: An estimate of a property's current market value Appraiser: A qualified, disinterested expert who makes an estimate by examining the property, and looking at the initial purchase price and comparing it with recent sales of similar property. Appreciation: An increase in value or worth of property. APR: See Annual Percentage Rate. ARM: See Adjustable Rate Mortgage Loans. ARV: See After Repaired Value. Asking (list) Price: The price placed on property for sale. Assessment: An official valuation of property for tax purposes. Payments made by condominium or cooperative owners for their share of building maintenance expenses. Assessor: A local government official who determines the value of the property for taxation purposes. Assignee: A person to whom a property right is transferred. For example, an assignee may take over a lease from a tenant who wants to permanently move out before the lease expires. The assignee takes control of the property and assumes all the legal rights and responsibilities of the tenant, including payment of rent. However, the original tenant remains legally responsible if the assignee fails to pay the rent. Assignment: The transfer of ownership, rights, or interests in property by one person, the assignor, to another, the assignee. Assumable Mortgage: An existing mortgage that can be taken over by the buyer on the same terms given to the original borrower. Assumption: A method of selling real estate where the buyer of the property agrees to become responsible for the repayment of an existing loan on the property. Attachment: Method by which a debtor's property is placed in the custody of the law and held as security pending outcome of a creditor's suit. Attorney's Opinion of Title: An instrument written and signed by the attorney who examines the abstracts of title, stating his opinion as to whether a seller may convey good title. Attractive Nuisance: Something on a piece of property that attracts children but also endangers their safety. For example, unfenced swimming pools, open pits, farm equipment and abandoned refrigerators have all qualified as attractive nuisances. Auction: A public sale of property to the highest bidder. # -  A -  B -  C -  D -  E -  F -  G -  H -  I -  J -  K -  L -  M -  N -  O -  P -  Q -  R -  S -  T -  U -  V -  W -  X -  Y -  Z