Absorption rate - The ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market.
Abstract of judgment law - The summary of a court judgment that creates a lien against a property when filed with the county recorder.
Abstraction method - This method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.
Accelerated cost recovery system - A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
Acceleration clause - A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.
Accelerated depreciation - A bookkeeping method that depreciates property faster in the early years of ownership.
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 to people with disabilities.
Accessory building - A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.
Accretion - The gradual addition to the shore or bank of a waterway by deposits of sand or silt.
Acknowledgment - A written declaration affirming that a person acted voluntarily.
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.
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 - Taxes assessed based on the value of the land and improvements.
Addendum - An addition or change to a contract.
Additional principal payment - Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.
Add-on interest - The interest a borrower pays on the principal for the duration of the loan.
Adjustable-rate mortgage (ARM) - A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.
Adjusted basis - Adjustments (increases or decreases) made to the basis of a home. (The basis is the amount paid if the home was bought or built.)
Adjusted cost basis - The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
Adjustment date - The date the interest rate changes on an adjustable rate mortgage.
Adjustment period - The amount of time between interest rate adjustments in an adjustable-rate mortgage.
Adjustable Rate Mortgage (ARM) - A loan for which the interest rate is subject to change on a periodic basis (i.e. every 1, 3, or 5 years).
Administrator - A person given authority to manage and distribute the estate of someone who died without leaving a will.
Administrator's deed - A legal document that an administrator of an estate uses to transfer property.
Adverse possession - The acquisition of title to property 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 that is composed of materials deposited by the wind.
Aesthetic value - The additional value a property enjoys based on subjective criteria such as look or appeal.
Affiant - A person who makes a sworn statement.
Affirmation - A declaration that a certain set of facts are truthful.
Affordability analysis - A calculation used to determine an individual's likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs and on-going mortgage payments.
A-frame design - An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters.
Agency - The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.
Agency closing - The process by which a lender uses a title company or other firm as an agent to complete a loan.
Agent - A person licensed by the state to conduct real estate transactions on behalf of another.
Agreed boundary - A compromise boundary to which property owners agree in order to resolve a dispute.
Agreement of sale - A document the buyer initiates and the seller approves that details the price and terms of the transaction.
Alcove - A recessed section of a room, such as a breakfast nook.
Alienation clause - A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.
Alkali - Mineral salt found in soil.
Alkaline soil - Soil that contains a higher concentration of mineral salt than natural acid.
Alley - A lane behind a row of buildings or between two rows of buildings.
Allowances - Budgets offered by builders of new homes for the purchase of carpeting and fixtures.
Alternative mortgage - Any home loan that does not conform to a standard fixed-rate mortgage.
Aluminum-clad windows - Wooden windows with aluminum covering the exterior.
Aluminum siding - A metal covering that provides an alternative to paint for owners of wood homes.
Amenities - Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments.
American society of appraisers - An organization of appraisal professionals and others interested in the appraisal profession.
American society of home inspectors - The American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744.
Americans with disabilities act - 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 installments.
Amortization tables - Mathematical tables that lenders use to calculate a borrower's monthly payment.
Amperage - The strength of an electrical current.
Anchor bolt - A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.
Annual - Any kind of plant that must be planted every year.
Annual mortgagor statement - A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.
Annual percentage rate (APR) - The annual cost of credit over the life of a loan including interest, service charges, points, loan fees, mortgage insurance and other items.
Annuity - The payment of a fixed sum to an investor at regular intervals.
Anticipatory breach - A communication that informs a party that the obligations of the original contract will not be fulfilled.
Application - A document that details a potential borrower's income, debt and other obligations to determine credit worthiness.
Application fee - The fee that a lender charges to process a loan application.
Appraisal - An opinion to determine the price for which a property would sell in the current marketplace.
Appraisal fee - The fee that an appraiser charges to estimate the market value of the property.
Appraisal foundation - A not-for-profit educational organization established by the appraisal profession in the United States in 1987. It is dedicated to the advancement of professional valuation and responsible for establishing, improving, and promoting the Uniform Standards of Professional Appraisal Practice (USPAP).
Appraisal institute - A world-wide organization dedicated to real estate appraisal education, publication and advocacy.
Appraisal principles - The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
Appraisal report - A detailed written report on the value of a property based on recent sales of comparable sites in the area.
Appraisal standards board (ASB) - An independent board of the Appraisal Foundation, which writes, amends, and interprets USPAP. The ASB is composed of up to seven appraisers appointed by the Foundation's Board of Trustees. The ASB holds public meetings throughout the year to interpret and amend USPAP.
Appraised value - An opinion of the current market value of a property.
Appraiser - An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.
Appreciation - An increase in the value of a home or other property.
Arbitration - A method of resolving a dispute in which a third party renders a decision.
Arbor - An area shaded by trees, shrubs or vines on a latticework structure.
Arch - A curved structure that supports weight over an area, such as a doorway.
Architect - A licensed professional who designs homes, buildings and other structures.
Architectural fees - The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget.
Arpent - A French measurement of land equal to .84625 acres.
Arms-length transaction - Any transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property.
Asbestos - A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.
As-is condition - The purchase or sale of a property in its existing condition.
Asking price - A seller's initial price for a property.
Assessed value - A tax assessor's determination of the value of a home in order to calculate a tax base.
Assessment - A tax levied on a property or a value placed on the worth of a property by a taxing authority.
Assessment rolls or ratio - A list of taxable property compiled by the assessor.
Assessor - The jurisdictional official who performs the assessment and assigns the value of a property.
Assets - Items of value which include cash, real estate, securities and investments.
Assignor - A person who transfers rights and interests of a property.
Assumable mortgage - When a home is sold, a mortgage than can be taken over by the buyer at the same interest rate.
Assumption - A transaction allowing the buyer to assume responsibility for an existing loan instead of originating a new loan.
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.
Attached housing - Any number of houses or other dwellings which are physically attached to one another, but are occupied by a number of different people. The individual houses may or may not be owned by separate people as well.
Average price - The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.
Aviation 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.
