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

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.
Back to top

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.
Back to top

ACCELERATION CLAUSE
A provision in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances. Usually when the borrower defaults on the loan.
Back to top

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.
Back to top

ACCRETION
The natural growth of a piece of land resulting from forces of nature.
Back to top

ACRE
43,560 square feet. A measurement of area.
Back to top

ACTUAL AGE
The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE
Back to top

ADJUSTMENT DATE
The date the interest rate changes on an adjustable rate mortgage.
Back to top

AD VAL OREM TAX
Taxes assessed based on the value of the land and improvements.
Back to top

ADDENDUM
A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.
Back to top

ADJUSTABLE-RATE MORTGAGE (ARM)
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.
Back to top

ADJUSTED BASIS
The value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.
Back to top

ADJUSTED SALES PRICE
An estimate of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.
Back to top

AESTHETIC VALUE
The additional value a property enjoys based on subjective criteria such as look or appeal.
Back to top

AFFIRMATION
A declaration that a certain set of facts are truthful.
Back to top

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.
Back to top

AGENT
A person who has been appointed to act on behalf of another for a particular transaction.
Back to top

AMENITY
Any feature of a property that increases its value or desirability. These might include natural amenities such as location or proximity to mountains, or man-made amenities like swimming pools, parks or other recreation.
Back to top

AMERICAN SOCIETY OF APPRAISERS
An organization of appraisal professionals and others interested in the appraisal profession.
Back to top

AMORTIZATION
The repayment of a loan through regular periodic payment.
Back to top

AMORTIZATION SCHEDULE
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.
Back to top

AMORTIZATION TERM
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.
Back to top

ANNUAL PERCENTAGE RATE (APR)
The rate of annual interest charged on a loan.
Back to top

ANNUITY
A sum of money paid at regular intervals, often annually.
Back to top

APPLICATION
A form used to apply for a mortgage loan that details a potential borrowers income, debt, savings and other information used to determine credit worthiness.
Back to top

APPRAISAL
A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.
Back to top

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).
Back to top

APPRAISAL INSTITUTE
A world-wide organization dedicated to real estate appraisal education, publication and advocacy.
Back to top

APPRAISAL PRINCIPLES
The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
Back to top

APPRAISAL REPORT
The end result of the appraisal process, usually consists of one major, standardized form such as the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the estimated value of the subject property and support that estimate with corroborating information.
Back to top

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.
Back to top

APPRAISED VALUE
The estimated fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.
Back to top

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.
Back to top

APPRECIATION
The natural rise in property value due to market forces.
Back to top

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.
Back to top

ASSESSED VALUE
The value of a property according to jurisdictional tax assessment.
Back to top

ASSESSMENT
The function of assigning a value to a property for the purpose of levying taxes.
Back to top

ASSESSMENT RATIO
The comparative relationship of a property's assessed value to its market value.
Back to top

ASSESSOR
The jurisdictional official who performs the assessment and assigns the value of a property.
Back to top

ASSET
Any item of value which a person owns.
Back to top

ASSIGNMENT
Transfer of ownership of a mortgage usually when the loan is sold to another company.
Back to top

ASSUMABLE MORTGAGE
A mortgage that can be taken over by the buyer when a home is sold.
Back to top

ASSUMPTION
When a buyer takes over, or assumes the sellers mortgage.
Back to top

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.
Back to top

BALLOON MORTGAGE
A mortgage loan in which the monthly payments are not large enough to repay the loan by the end of the term. So at the end of the term, the remaining balance comes due in a single large payment.
Back to top

BALLOON PAYMENT
The final large payment at the end of a balloon mortgage term.
Back to top

BANKRUPTCY
When a person or business is unable to pay their debts and seeks protection of the state against creditors. Bankruptcies remain on credit records for up to ten years and can prevent a person from being able to get a loan.
Back to top

BASEBOARD
Usually wood or vinyl installed around the perimeter of a room to cover the space where the wall and floor meet.
Back to top

BASEBOARD HEAT
A heating system with the heating unit located along the perimeter of the wall where the baseboard would be. It can be either an electric or hot water system.
Back to top

BILL OF SALE
A physical receipt indicating the sale of property.
Back to top

BIWEEKLY MORTGAGE
A mortgage where you make half payments every two weeks, rather than one payment per month. This results in making the equivalent of 13 monthly payments per year, rather than 12, significantly reducing the time it takes to pay off a thirty year mortgage.
Back to top

BLIGHTED AREA
Any region of a city or town that has fallen into disrepair or otherwise has become undesirable.
Back to top

BONA FIDE
Any genuine offer, made without intent to defraud or deceive.
Back to top

BREAKER BOX
A metal box that contains circuit breakers or fuses that control the electrical current in the home.
Back to top

BRIDGE FINANCING
An interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase.
Back to top

BROKER
An individual who facilitates the purchase of property by bringing together a buyer and a seller.
Back to top

BUFFER ZONE
A segment of land between two disparate municipal zones which acts as a shield to keep one zone from encroaching upon the other. Often used to separate residential districts from commercial areas.
Back to top

BUILDING CODE
Regulations that ensure the safety and material compliance of new construction within a municipality. Building codes are localized to ensure they are adequate to meet the risk of common hazards.
Back to top

BUILDING LINE OR SETBACK
The statutory distance between buildings and the property line, imposed by municipalities, home associations, or other agreements.
Back to top

BUILT-INS
Specific items of personal property which are installed in a real estate improvement such that they become part of the building. Built-in microwave ovens and dishwashers are common examples.
Back to top

BUCKLING
The bending of a building material as a result of wear and tear or contact with a substance such as water.
Back to top

BUNGALOW
A one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.
Back to top

BUY DOWN
Extra money paid in a lump sum to reduce the interest rate of a fixed rate mortgage for a period of time. The extra money may be paid by the borrower, in order to have a lower payment at the beginning of the mortgage. Or paid by the seller, or lender, as incentive to buy the property or take on the mortgage.
Back to top

CALL OPTION
A clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.
Back to top

CAP
Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.
Back to top

CAPE COD COLONIAL
A single-story house style made popular in New England. Often characterized by a steep roof with gables.
Back to top

CAPITAL
Accumulated goods and money which is most often used to generate additional income.
Back to top

CAPITAL EXPENDITURE
An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.
Back to top

CARPENTER ANTS
Ants that bore through wood. Like termites, carpenter ants like warm, moist areas such as those found in wood structures in this part of the country. Carpenter ants differ from termites in several important ways. Carpenter ants do not ingest the wood; rather, they tunnel through the wood leaving a residue of sawdust. Also differing from termites, carpenter ants can nest anywhere; it is not uncommon to find a carpenter ant nest in an attic. Carpenter ants can do a great amount of structural damage. By the time the sawdust residue is visible, structural damage may already have occurred. Exterminating carpenter ants is difficult. To exterminate them, one must first find the nest. Finding the nest is the most difficult part of exterminating carpenter ants.
Back to top

CASH-OUT REFINANCE
Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.
Back to top

CAVEAT EMPTOR
Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.
Back to top

CERTIFICATE OF DEPOSIT
A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.
Back to top

CERTIFICATE OF DEPOSIT INDEX
An index based on the interest rate of six month CDs. Used to set interest rates on some Adjustable Rate Mortgages.
Back to top

CERTIFICATE OF ELIGIBILITY
A document issued by the Veterans Administration that certifies eligibility for a VA loan.
Back to top

CERTIFICATE OF OCCUPANCY
Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
Back to top

CERTIFICATE OF REASONABLE VALUE (CRV)
Usually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.
Back to top

CERTIFICATE OF TITLE
A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.
Back to top

CERTIFIED GENERAL APPRAISER
Generally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.
Back to top

CERTIFIED RESIDENTIAL APPRAISER
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.
Back to top

CHAIN OF TITLE
The complete history of ownership of a piece of property.
Back to top

CHATTEL
Any personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.
Back to top

CLEAR TITLE
Ownership of property that is not encumbered by any counter-claim or lien.
Back to top

CLOSING
A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).
Back to top

CLOSING COSTS
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.
Back to top

CLOSING STATEMENT
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
Back to top

COLLATERAL
An asset which is placed at risk to secure the repayment of a loan.
Back to top

CO-BORROWER
A second person sharing obligation on the loan and title on the property.
Back to top

COLLECTION
The process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.
Back to top

CO-MAKER
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.
Back to top

COMMON LAW
As opposed to statute law. Laws that have been established by custom, usage and courts over many years.
Back to top

COMMISSION
A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.
Back to top

COMMON AREA ASSESSMENTS
Fees which are charged to the tenets or owners of properties to cover the costs of maintaining areas shared with other tenets or owners. Commonly found in condominium, PUD or office spaces.
Back to top

COMMON AREAS
Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property near by. Commonly found in condominium, PUD or office spaces.
Back to top

COMMUNITY PROPERTY
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.
Back to top

COMPARABLES
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property who's value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.
Back to top

COMPOUND INTEREST
Interest paid on the principal amount, as well as any accumulated interest.
Back to top

CONCESSIONS
Additional value granted by a buyer or seller to entice another party to complete a deal.
Back to top

CONDEMNATION
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.
Back to top

CONDOMINIUM
A development where individual units are owned, but common areas and amenities are shared equally by all owners.
Back to top

CONDOMINIUM CONVERSION
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.
Back to top

CONSTRUCTION LOAN
A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.
Back to top

CONTIGUOUS
Connected to or touching along an unbroken boundary
Back to top

CONTINGENCY
Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer the requires a complete home inspection before it becomes official.
Back to top

CONTRACT
A legally binding agreement, oral or written, between two parties.
Back to top

CONVENTIONAL MORTGAGE
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).
Back to top

CONVERTIBLE ARM
A mortgage that begins as and adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.
Back to top

COOPERATIVE (CO-OP)
A form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.
Back to top

CORPORATE RELOCATION
A situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.
Back to top

COST OF FUNDS INDEX (COFI)
An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.
Back to top

COVENANT
A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.
Back to top

CREDIT
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.
Back to top

CREDIT HISTORY
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.
Back to top

CREDITOR
A person to whom money is owed.
Back to top

CREDIT REPORT
A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.
Back to top

CREDIT REPOSITORY
Large companies that gather and store financial and credit information about individuals who apply for credit.
Back to top

CUL-DE-SAC
A dead-end street. One with only one entrance/exit.
Back to top

DATE OF APPRAISAL
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.
Back to top

DEBT
An obligation to repay some amount owed. This may or may not be monetary.
Back to top

DEBT EQUITY RATIO
The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.
Back to top

DEED
A document indicating the ownership of a property.
Back to top

DEED-IN-LIEU (OF FORECLOSURE)
A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.
Back to top

DEED OF TRUST
A document which transfers title in a property to a trustee, who's obligations and powers are stipulated. Often used in mortgage transactions.
Back to top

DEED OF RECONVEYANCE
A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.
Back to top

DEED OF RELEASE
A document which dismisses a lien or other claim on a property.
Back to top

DEED OF SURRENDER
A document used to surrender any claim a person has to a property.
Back to top

DEFAULT
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.
Back to top

DELINQUENCY
The state in which a borrow has failed to meet payment obligations on time.

DEPOSIT
Cash given along with an offer to purchase property, Also called EARNEST MONEY.
Back to top

DEPRECIATION
The natural decline in property value due to market forces or depletion of resources.
Back to top

DETACHED SINGLE-FAMILY HOME
A single building improvement intended to serve as a home for one family.

DISCOUNT POINTS
Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.
Back to top

DISTRESSED PROPERTY
A mortgaged property which has been foreclosed on.
Back to top

DUE-ON-SALE PROVISION
A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.
Back to top

DUPLEX
A single-building improvement which is divided and provides two units which serve as homes to two families.
Back to top

DWELLING
A house or other building which serves as a home.
Back to top

DOWN PAYMENT
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.
Back to top

EARNEST MONEY DEPOSIT
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
Back to top

EASEMENT
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.
Back to top

ECONOMIC DEPRECIATION
The decline in property value caused by external forces, such as neighborhood blight or adverse development.
Back to top

ECONOMIC LIFE
The amount of time which any income-producing property is able to provide benefits to its owner.
Back to top

EFFECTIVE AGE
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.
Back to top

EMINENT DOMAIN
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.
Back to top

ENCROACHMENT
A building or other improvement on one property which invades another property or restricts its usage.
Back to top

ENCUMBRANCE
A claim against a property. Examples are mortgages, liens and easements.
Back to top

EQUAL CREDIT OPPORTUNITY ACT (ECOA)
U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc
Back to top

EQUITY
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.
Back to top

EQUITY BUILDUP
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.
Back to top

ERRORS AND OMISSIONS INSURANCE
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
Back to top

ESCROW
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.
Back to top

ESCROW ACCOUNT
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that goes into the escrow account each month.
Back to top

ESCROW ANALYSIS
An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.
Back to top

ESCROW DISBURSEMENTS
The payout of funds from an escrow account to pay property expenses such as taxes and insurance.
Back to top

ESTATE
The total of all property and assets owned by an individual.
Back to top

EXAMINATION OF TITLE
The report on the title of a property from the public records or an abstract of the title.
Back to top

EXCLUSIVE LISTING
An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.
Back to top

EXECUTOR
The person named in a will to administer the estate.
Back to top

FACADE
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.
Back to top

FAIR CREDIT REPORTING ACT
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.
Back to top

FAIR MARKET VALUE
The price at which two unrelated parties, under no duress, are willing to transact business.
Back to top

FANNIE MAE
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.
Back to top

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.
Back to top

FEDERAL HOUSING ADMINISTRATION (FHA)
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.
Back to top

FEE APPRAISER
A certified, professional appraiser who estimates the fair market value of property and receives a set fee in exchange.
Back to top

FEE SIMPLE
A complete, unencumbered ownership right in a piece of property.
Back to top

FEE SIMPLE ESTATE
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

Back to top
FHA MORTGAGE
A mortgage that is insured by the Federal Housing Administration (FHA).
Back to top

FINAL VALUE ESTIMATE
The estimated value of a piece of property resulting from an appraisal following the USPAP guidelines.
Back to top

FIRST MORTGAGE
The primary loan or mortgage secured by a piece of property.
Back to top

FIXED-RATE MORTGAGE (FRM)
A mortgage which has a fixed rate of interest over the life of the loan.
Back to top

FIXTURE
Any piece of personal property which becomes permanently affixed to a piece of real property.
Back to top

FLOOD INSURANCE
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
Back to top

FLOOR PLAN
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.
Back to top

FORECLOSURE
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.
Back to top

FORFEITURE
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.
Back to top

FRONTAGE
The segment of a property that runs along a point of access, such as a street or water front.
Back to top

FUNCTIONAL OBSOLESCENCE
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.
Back to top

GABLE ROOF
A steeply angled, triangular roof.
Back to top

GAMBREL ROOF
A ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.
Back to top

GENERAL LIEN
A broad-based claim against several properties owned by a defaulting party.
Back to top

GEORGIAN