A Real Estate Glossary
Real Estate uses many different terms and can often
be confusing.
We have provided the glossary below to help you understand
the terminology. Use the menu below to find a term. Click
on the letter that corresponds to the first letter of the
term you are looking up.
ABATEMENT OF NUISANCE
Extinction or termination of a nuisance.
ABSOLUTE OWNERSHIP
See FEE SIMPLE ESTATE.
ABSTRACT OF JUDGMENT
A condensation of the essential provisions of a court judgment.
ABSTRACT OF TITLE
A summary or digest of all transfers, conveyances, legal proceedings,
and any other facts relied on as evidence of title, showing continuity
of ownership, together with any other elements of record which may
impair title.
ABSTRACTION
A method of valuing land. The indicated value of the improvement is
deducted from the sale price.
ACCELERATED COST RECOVERY SYSTEM
The system for figuring depreciation (cost recovery) for depreciable
real property acquired and placed into service after January 1, 1981.
(ACRS)
ACCELERATED DEPRECIATION
A method of cost write-off in which depreciation allowances are greater
in the first few years of ownership than in subsequent years. This
permits an earlier recovery of capital and a faster tax write-off of an
asset.
ACCELERATION CLAUSE
A condition in a real estate financing instrument giving the lender the
power to declare all sums owing lender immediately due and payable upon
the happening of an event, such as sale of the property, or a
delinquency in the repayment of the note.
ACCEPTANCE
The act of agreeing or consenting to the terms of an offer thereby
establishing the ?meeting of the minds? that is an essential element of
a contract.
ACCESS RIGHT
The right of an owner to have ingress and egress to and from owner?s
property over adjoining property.
ACCESSION
An addition to property through the efforts of man or by natural forces.
ACCRETION
Accession by natural forces, e.g., alluvium.
ACCRUED DEPRECIATION
The difference between the cost of replacement new as of the date of the
appraisal and the present appraised value.
ACCRUED ITEMS OF EXPENSE
Those incurred expenses which are not yet payable. The seller?s accrued
expenses are credited to the purchaser in a closing statement.
ACKNOWLEDGMENT
A formal declaration made before an authorized person, e.g., a notary
public, by a person who has executed an instrument stating that the
execution was his or her free act. In this state an acknowledgment is
the statement by an officer such as a notary that the signatory to the
instrument is the person represented to be.
ACOUSTICAL TILE
Blocks of fiber, mineral or metal, with small holes or roughtextured
surface to absorb sound, used as covering for interior walls and
ceilings.
ACQUISITION
The act or process by which a person procures property.
ACRE
A measure of land equaling 160 square rods, or 4,840 square yards, or
43,560 square feet, or a tract about 208.71 feet square.
ACTUAL AUTHORITY
Authority expressly given by the principal or given by the law and not
denied by the principal.
ACTUAL FRAUD
An act intended to deceive another, e.g., making a false statement,
making a promise without intending to perform it, suppressing the truth.
ADJUSTABLE RATE MORTGAGE (ARM)
A mortgage loan which bears interest at a rate subject to change during
the term of the loan, predetermined or otherwise.
ADJUSTMENTS
In appraising, a means by which characteristics of a residential
property are regulated by dollar amount or percentage to conform to
similar characteristics of another residential property.
ADMINISTRATOR
A person appointed by the probate court to administer the estate of a
deceased person who died intestate. (Administratrix, the feminine form.)
AD VALOREM
A Latin phrase meaning ?according to value.? Usually used in connection
with real estate taxation.
ADVANCE
Transfer of funds from a lender to a borrower in advance on a loan.
ADVANCE COMMITMENT
The institutional investor?s prior agreement to provide long-term
financing upon completion of construction; also known as a ?takeout?
loan commitment.
ADVANCE FEES
A fee paid in advance of any services rendered. Sometimes unlawfully
charged in connection with that illegal practice of obtaining a fee in
advance for the advertising of property or businesses for sale, with no
intent to obtain a buyer, by persons representing themselves as real
estate licensees, or representatives of licensed real estate firms.
ADVERSE POSSESSION
A method of acquiring title to real property through possession of the
property for a statutory period under certain conditions by a person
other than the owner of record.
AFFIANT
One who makes an affidavit or gives evidence.
AFFIDAVIT
A statement or declaration reduced to writing sworn to or affirmed
before some officer who has authority to administer an oath or
affirmation.
AFFIDAVIT OF TITLE
A statement, in writing, made under oath by seller or grantor,
acknowledged before a Notary Public in which the affiant identifies
himself or herself and affiant?s marital status certifying that since
the examination of title on the contract date there are no judgments,
bankruptcies or divorces, no unrecorded deeds, contracts, unpaid repairs
or improvements or defects of title known to affiant and that affiant is
in possession of the property.
AFFIRM
To confirm, to aver, to ratify, to verify. To make a declaration.
AGENCY
The relationship between principal and the principal?s agent which
arises out of a contract, either expressed or implied, written or oral,
wherein the agent is employed by the principal to do certain acts
dealing with a third party.
AGENT
One who acts for and with authority from another called the principal.
AGREEMENT
An exchange of promises, a mutual understanding or arrangement; a
contract.
AGREEMENT OF SALE
A written agreement or contract between seller and purchaser in which
they reach a ?meeting of minds? on the terms and conditions of the sale.
The parties concur; are in harmonious opinion.
AIR RIGHTS
The rights in real property to the reasonable use of the air space above
the surface of the land.
ALIENATION
The transferring of property to another; the transfer of property and
possession of lands, or other things, from one person to another.
ALIENATION CLAUSE
A clause in a contract giving the lender certain rights in the event of
a sale or other transfer of mortgaged property.
ALLODIAL TENURE
A real property ownership system where ownership may be complete except
for those rights held by government. Allodial is in contrast to feudal
tenure.
ALLUVIUM
The gradual increase of the earth on a shore of an ocean or bank of a
stream resulting from the action of the water.
ALTA OWNER?S POLICY
An owner?s extended coverage policy that provides buyers and owners the
same protection the ALTA policy gives to lenders.
ALTA TITLE POLICY
(American Land Title Association) A type of title insurance policy
issued by title insurance companies which expands the risks normally
insured against under the standard type policy to include unrecorded
mechanic?s liens; unrecorded physical easements; facts a physical survey
would show; water and mineral rights; and rights of parties in
possession, such as tenants and buyers under unrecorded instruments.
AMENITIES
Satisfaction of enjoyable living to be derived from a home; conditions
of agreeable living or a beneficial influence from the location of
improvements, not measured in monetary considerations but rather as
tangible and intangible benefits attributable to the property, often
causing greater pride in ownership.
AMORTIZATION
The liquidation of a financial obligation on an installment basis;also,
recovery over a period of cost or value.
AMORTIZED LOAN
A loan to be repaid, interest and principal, by a series of regular
payments that are equal or nearly equal, without any special balloon
payment prior to maturity. Also called a Level Payments Loan.
ANNUAL PERCENTAGE RATE
The relative cost of credit as determined in accordance with Regulation
Z of the Board of Governors of the Federal Reserve System for
implementing the Federal Truth in Lending Act.
ANNUITY
A sum of money received at fixed intervals, such as a series of assured
equal or nearly equal payments to be made over a period of time, or it
may be a lump sum payment to be made in the future. The installment
payments due to the landlord under a lease is an annuity. So are the
installment payments due to a lender.
ANTICIPATION, PRINCIPLE OF
Affirms that value is created by anticipated benefits to be derived in
the future.
APPELLANT
A party appealing a court decision or ruling.
APPRAISAL
An estimate of the value of property resulting from an analysis of facts
about the property. An opinion of value.
APPRAISER
One qualified by education, training and experience who is hired to
estimate the value of real and personal property based on experience,
judgment, facts, and use of formal appraisal processes.
APPR0PRIATION OF WATER
The taking, impounding or diversion of water flowing on the public
domain from its natural course and the application of the water to some
beneficial use personal and exclusive to the appropriator.
APPURTENANCE
That which belongs to something, but not immemorially; all those rights,
privileges, and improvements which belong to and pass with the transfer
of the property, but which are not necessarily a part of the actual
property. Appurtenances to real property pass with the real property to
which they are appurtenant, unless a contrary intention is manifested.
Typical appurtenances are rights-of-way, easements, water rights, and
any property improvements.
APPURTENANT
Belonging to; adjunct; appended or annexed to. For example, the garage
is appurtenant to the house, and the common interest in the common
elements of a condominium is appurtenant to each apartment. Appurtenant
items pass with the land when the property is transferred.
APR
See ANNUAL PERCENTAGE RATE.
ARCHITECTURAL STYLE
Generally the appearance and character of a building?s design and
construction.
ARTICLES OF INCORPORATION
An instrument setting forth the basic rules and purposes under which a
private corporation is formed.
ASSESSED VALUATION
A valuation placed upon a piece of property by a public authority as a
basis for levying taxes on the property.
ASSESSMENT
The valuation of property for the purpose of levying a tax or the amount
of the tax levied. Also, payments made to a common interest subdivision
homeowners- association for maintenance and reserves.
ASSESSOR
The official who has the responsibility of determining assessed values.
ASSIGNMENT
A transfer to another of any property in possession or in action, or of
any estate or right therein. A transfer by a person of that person?s
rights under a contract.
ASSIGNMENT OF RENTS
A provision in a deed of trust (or mortgage) under which the beneficiary
may, upon default by the trustor, take possession of the property,
collect income from the property and apply it to the loan balance and
the costs incurred by the beneficiary.
ASSIGNOR
One who assigns or transfers property.
ASSIGNS, ASSIGNEES
Those to whom property or interests therein shall have been transferred.
ASSUMPTION AGREEMENT
An undertaking or adoption of a debt or obligation primarily resting
upon another person.
ASSUMPTION FEE
A lender?s charge for changing over and processing new records for a new
owner who is assuming an existing loan.
ASSUMPTION OF MORTGAGE
The taking of a title to property by a grantee wherein grantee assumes
liability for payment of an existing note secured by a mortgage or deed
of trust against the property, becoming a co-guarantor for the payment
of a mortgage or deed of trust note.
ATTACHMENT
The process by which real or personal property of a party to a lawsuit
is seized and retained in the custody of the court for the purpose of
acquiring jurisdiction over the property, to compel an appearance before
the court, or to furnish security for a debt or costs arising out of the
litigation.
ATTEST
To affirm to be true or genuine; an official act establishing
authenticity.
ATTORNEY IN FACT
One who is authorized by another to perform certain acts for another
under a power of attorney; power of attorney may be limited to a
specific act or acts or be general.
AVULSION
A sudden and perceptible loss of land by the action of water as by a
sudden change in the course of a river.
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