ABSORPTION RATE Back to topThe 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.
ABSTRACTION METHOD Back to topThis method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.
ACCELERATION CLAUSE Back to topA 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.
ACCESSORY BUILDING Back to topA building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.
ACCRETION Back to topThe natural growth of a piece of land resulting from forces of nature
ACRE Back to top43,560 square feet. A measurement of area.
ACTUAL AGE Back to topThe amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE
ADJUSTMENT DATE Back to topThe date the interest rate changes on an adjustable rate mortgage.
AD VAL OREM TAX Back to topTaxes assessed based on the value of the land and improvements
ADDENDUM Back to topA 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.
ADJUSTABLE-RATE MORTGAGE (ARM) Back to topA type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.
ADJUSTED BASIS Back to topThe value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.
ADJUSTED SALES PRICE Back to topAn opinion of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.
AESTHETIC VALUE Back to topThe additional value a property enjoys based on subjective criteria such as look or appeal.
AFFIRMATION Back to topA declaration that a certain set of facts are truthful.
AFFORDABILITY ANALYSIS Back to topA 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.
AGENT Back to topA person who has been appointed to act on behalf of another for a particular transaction.
AMENITY Back to topAny 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.
AMERICAN SOCIETY OF APPRAISERS Back to topAn organization of appraisal professionals and others interested in the appraisal profession.
AMORTIZATION Back to topThe repayment of a loan through regular periodic payment.
AMORTIZATION SCHEDULE Back to topThe breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.
AMORTIZATION TERM Back to topThe length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.
AMPERAGE Back to topA measure of electric current describing the magnitude.
ANNUAL PERCENTAGE RATE (APR) Back to topThe rate of annual interest charged on a loan.
ANNUITY Back to topA sum of money paid at regular intervals, often annually.
APPLICATION Back to topA form used to apply for a mortgage loan that details a potential borrower's income, debt, savings and other information used to determine credit worthiness.
APPRAISAL Back to topA ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.
APPRAISAL FOUNDATION Back to topA 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 Back to topA world-wide organization dedicated to real estate appraisal education, publication and advocacy.
APPRAISAL PRINCIPLES Back to topThe basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
APPRAISAL REPORT Back to topThe 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 opinion of value of the subject property and support that opinion with corroborating information.
APPRAISAL STANDARDS BOARD (ASB) Back to topAn 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 Back to topAn opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.
APPRAISER Back to topAn 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 Back to topThe natural rise in property value due to market forces.
ARMS LENGTH TRANSACTION Back to topAny 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.
ASSESSED VALUE Back to topThe value of a property according to jurisdictional tax assessment.
ASSESSMENT Back to topThe function of assigning a value to a property for the purpose of levying taxes.
ASSESSMENT RATIO Back to topThe comparative relationship of a property's assessed value to its market value.
ASSESSOR Back to topThe jurisdictional official who performs the assessment and assigns the value of a property.
ASSET Back to topAny item of value which a person owns.
ASSIGNMENT Back to topTransfer of ownership of a mortgage usually when the loan is sold to another company.
ASSUMABLE MORTGAGE Back to topA mortgage that can be taken over by the buyer when a home is sold.
ASSUMPTION Back to topWhen a buyer takes over, or "assumes" the sellers mortgage.
ATTACHED HOUSING Back to topAny 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.
BACKFILL Back to topThe slope of the ground around a house.
BALL COCK VALVE Back to topThe valve inside a toilet tank that controls the filling of the tank.
BALLOON MORTGAGE Back to topA 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.
BALLOON PAYMENT Back to topThe final large payment at the end of a balloon mortgage term.
BANKRUPTCY Back to topWhen 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.
BEAM Back to topA structural supporting member.
BILL OF SALE Back to topA physical receipt indicating the sale of property.
BIWEEKLY MORTGAGE Back to topA 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.
BLIGHTED AREA Back to topAny region of a city or town that has fallen into disrepair or otherwise has become undesirable.
BONA FIDE Back to topAny genuine offer, made without intent to defraud or deceive.
BRIDGE FINANCING Back to topAn 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.
BRIDGING Back to topStructural members used between beams to strengthen the structure.
BROKER Back to topAn individual who facilitates the purchase of property by bringing together a buyer and a seller.
BTU Back to topBritish Thermal Unit. A unit of measurement used to describe heating or cooling capacity.
BUFFER ZONE Back to topA 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.
BUILDING CODE Back to topRegulations 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.
BUILDING LINE OR SETBACK Back to topThe statutory distance between buildings and the property line, imposed by municipalities, home associations, or other agreements.
BUILT-INS Back to topSpecific 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.
BUNGALOW Back to topA one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.
BUY DOWN Back to topExtra 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.
BX CABLE Back to topElectrical cable shrouded in a galvanized steel outer cover.
CALL OPTION Back to topA clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.
CAP Back to topAssociated 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.
CAPE COD COLONIAL Back to topA single-story house style made popular in New England. Often characterized by a steep roof with gables.
CAPITAL Back to topAccumulated goods and money which is most often used to generate additional income.
CAPITAL EXPENDITURE Back to topAn outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.
CASH-OUT REFINANCE Back to topRefinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.
CAULKING Back to topA pliable material used to seal cracks or openings such as around windows.
CAVEAT EMPTOR Back to topLiterally 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.
CERTIFICATE OF DEPOSIT Back to topA document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.
CERTIFICATE OF DEPOSIT INDEX Back to topAn index based on the interest rate of six month CD's. Used to set interest rates on some Adjustable Rate Mortgages.
CERTIFICATE OF ELIGIBILITY Back to topA document issued by the Veterans Administration that certifies eligibility for a VA loan.
CERTIFICATE OF OCCUPANCY Back to topIssued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
CERTIFICATE OF REASONABLE VALUE (CRV) Back to topUsually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.
CERTIFICATE OF TITLE Back to topA document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.
CERTIFIED GENERAL APPRAISER Back to topGenerally, 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.
CERTIFIED RESIDENTIAL APPRAISER Back to topA sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.
CHAIN OF TITLE Back to topThe complete history of ownership of a piece of property.
CHATTEL Back to topAny 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.
CIRCUIT BREAKERS Back to topElectrical devices which automatically open electrical circuits if they are overloaded.
CLEAR TITLE Back to topOwnership of property that is not encumbered by any counter-claim or lien.
CLOSING Back to topA 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).
CLOSING COSTS Back to topAll 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.
CLOSING STATEMENT Back to topThe document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
CO-BORROWER Back to topA second person sharing obligation on the loan and title on the property.
COLLATERAL Back to topAn asset which is placed at risk to secure the repayment of a loan.
COLLECTION Back to topThe 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.