Dictionary of Terms - A

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As-Is Condition: A clause in a sales contract that states that the buyer agrees to accept the property in the exact condition that it is in and that the seller makes no representation as to the condition of the property.
As-Is Value: The value of the property in its present condition with no provision for repairs.
Abatement: Pursuant to the taxing authority, a reduction, of the assessed value of a property (and hence property tax) following the assessor's first assessment.
Absentee Landlord: An owner of an who does not reside on the premises.
Absolute Fee Simple Title: A title that is unqualified; the best title that can be obtained. (also called fee simple title.)
Absorption Analysis: A study of the number of units of property that can be sold or leased over a given period of time in a defined location. (See also feasibility study.)
Absorption Field: The area where the leach lines for a septic system is located.
Absorption Rate: The rate, anticipated or actual, at which the market will absorb an existing supply of rentals or offered properties of a specific type. Usually identified in a feasibility study or absorption analysis.
Abstract Of Title: The condensed history of a title to a particular parcel of real estate consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.
Abstract Or Title Search: The process of reviewing all publicly recorded transactions to determine whether any title defects exist that could interfere with a clear transfer of property ownership.
Abstraction: (i) The procedure of extracting information directly from the market. (ii) The development of a ratio between land and building by examining sales and then using that ratio to estimate the value of other sites. Sometimes called the "allocation" method. (iii) Method of finding land value in which all improvement costs (less depreciation) are deducted from sales price. Also called ext raction.
Abutting: The joining, reaching or touching of adjoining land, creating a common boundary.
Accelerated Cost Recovery System: A tax calculation that provides greater depreciation in the early years of ownership.
Accelerated Depreciation: A bookkeeping method that provides faster property depreciation in the early years of ownership.
Acceleration Clause: The clause in a mortgage or deed of trust that provides the mortgagee (lender) the right to demand immediate repayment of the loan balance upon default of the mortgagor (borrower). "Acceleration" is also triggered by the due on sale clause (demands immediate repayment if the home is sold).
Acceptance: The seller's written approval of a buyer's offer.
Access: A route to enter and leave a tract of land, sometimes by easement over land owned by another. (See also egress and ingress.)
Accessibility: The relative ease of entrance to a property by various means,.
Accession: Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
Accessory Buildings: Structures on a property, such as sheds and garages, that are secondary to the main building.
Accretion: (i) the increase or addition of land by the deposit of sand or soil washed up naturally from a river lake or sea. (ii) An addition to land through natural causes. (iii) Land buildup resulting from the deposit by natural action of sand or soil washed up from a river, lake or sea.
Accrual Basis: A system of allocating revenue and expense items based on when the revenue is earned or the expense incurred, not on when the cash is received or paid out.
Accrued Depreciation: (i) The difference between reproduction cost new or replacement cost new of the improvements and the present worth of those improvements, both measured as of the date of appraisal. cometimes called diminished utility. (ii) The total of all existing depreciation regardless of type. (iii) the difference between an improvement's reproduction or replacement cost and its market value (present value) as of a given date. (iv) total depreciation taken on an asset from the time of its acquisition. (v) The difference between reproduction or replacement cost and the appraised value as of the date of appraisal.
Accrued Expenses: Expenses incurred that are not yet payable. In a closing statement, the accrued expenses of the seller typically are credited to the purchaser (taxes, wages, interest, etc.).
Accrued Items: Closing statement items of expense that are incurred but not yet payable, such as interest or taxes.
Acknowledgment: A formal declaration made usually before a notary public by a person who has signed a document.
Acquisition Appraisal: A market value appraisal of property condemned or otherwise acquired for public use, to establish the compensation to be paid to the owner.
Acre: A surface area measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods or 0.4047 hectares.
Actual Age: The number of years that have elapsed since the construction of property up to valuation date.
Actual Eviction: the legal process that results in the tenant's being physically removed from the leased premises.
Actual Notice: Express information or fact; that which is known; direct knowledge.
Ad Valorem Tax: (i) A tax based on the value of the property subject to taxation. (ii) A tax levied according to value generally used to refer to real estate tax. Also called the general tax. (iii) tax based upon value. (iv) generally used to refer to real estate taxes that are based on assessed property value.
Ad Valorem: Latin for according to the value.
Addendum: An addition or change to an existing.
Additional Principal Payment: Additional funds payed to reduce the principal balance and shorten the term of the loan.
Adjustable Rate Mortgage (ARM): A home loan with a fluctuating interest rate, in which the lender can raise or lower the interest rate according to a set index, usually a specified financial index tied to a bank or savings and loan association cost of funds index.
Adjusted Basis: See basis.
Adjustment Period: The amount of time between interest rate adjustments in an adjustable-rate mortgage.
Adjustment: Decrease or increase in the sales price of a property to account for a feature that the property has or does not have compared to similarly priced properties.
Administrative Appeal: The informal hearing and appraisal review board (ARB) hearing during the property tax appeal processand which must be exhausted before a property owner can file a judicial appeal lawsuit in state district court.
Adverse Land Use: A land use that has a detrimental effect on the market value of nearby properties.
Adverse Possession: The actual open, notorious, hostile and continuous possession of another's land under a claim of title. Possession for a statutory period may be a means of acquiring title.
Aesthetic Value: Relating to beauty, rather than to functional considerations.
Affidavit Of Title: A written statement made under oath and acknowledged by a notary public in which the grantor (1) identifies himself or herself and indicates marital status (2) certifies that since the examination of the title on the date of the contracts no defects have occurred in the title and (3) certifies that he or she is in possession of the property (if applicable).
Age-Life Method: A method of estimating accrued physical deterioration, calculated as a decimal by dividing the estimated effective age by the total economic life.
Agency Closing: When a lender uses a title company or other firm as an agent to complete a loan.
Agency Coupled With An Interest: An agency relationship in which the agent is given an estate or interest in the subject of the agency (the property).
Agency Disclosure: Identification by agents who act for both buyers or sellers of the principal for whom they are working in the transaction.
Agency: The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.
Agent: One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner as the principal executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent.
Aggregate: In statistics, the sum of all individuals, called variates.
Agreement Of Sale: A legal document approved by the buyer and seller detailing the price and terms of the transaction.
Agricultural Use Value: The value of the land based on the land's worth for producing agricultural products.
Air Lot: A designated airspace over a piece of land. An air lot like surface property may be transferred.
Air Rights: The right to use the open space above the physical surface of a property usually allowing the surface to be used for another purpose.
Alienation Clause: The clause in a mortgage or deed of trust requiring the borrower to pay the balance of the loan in a lump sum if the property is sold or transferred.. Prevents the borrower from assigning the debt without the lender's approval.
Alienation: The act of transferring property to another. Alienation may be voluntary such as by gift or sale or involuntary as through eminent domain or adverse possession.
Allocation Method: The determination of the appraised total value of a property between land and building, either as a ratio or by subtracting building value from the total appraised value of the property.
Allodial System: A system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. Land is held under the allodial system in the United States.
Allowance For Vacancy And Collection Losses: The percentage of potential gross income that will be lost due to vacant units, collection losses or both.
Alternate Use: If a special use building is vacated and no longer used for its primary function, the most likely secondary use at that time is called an "Alternate Use."
Alternative Mortgage: A home loan program that does not conform to standard fixed-rate mortgage terms.
Amenities: Those qualities that are attached to a property and from which the owner derives benefits other than monetary; satisfaction of possession and use arising from architectural excellence, scenic beauty and social environment.
American Land Title Association (ALTA): policy A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.
Americans With Disabilities Act: Law that protects rights of individuals with disabilities in employment and public accommodations.
Amortization Tables: Mathematical tables used to calculate a borrower's monthly payment.
Amortization Term: The length of time required to pay off the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed-rate mortgage.
Amortization: The process of paying the principal and interest on a loan through regularly scheduled payments.
Amortized Loan: A loan in which the principal and interest are payable in monthly or other periodic installments over the term of the loan.
Amortized Mortgage: A mortgage loan in which the principal and interest are payable in periodic installments during the term of the loan so that at the completion of all payments nothing is owed the lender.
Annexation: Process of converting personal property into real property.
Annual Assessment Date: The date from which all comparable properties must precede - ideally by no more than 6 months.
Annual Mortgagor Statement: An annual statement to borrowers detailing the principal , interest and taxes paid throughout the year.
Annual Percentage Rate (APR): The relationship of the total finance charges associated with a loan. For adjustable-rate loans, the APR assumes the loan's index doesn't change from its initial value.
Annuity Method: A method of capitalization that treats income from real property as a fixed, regular return on an investment. For the annuity method to be applied, the lessee must be reliable and the lease must be long term.
Annuity: The payment at regular intervals of a fixed return on an investment.
ANSI Z765-1 996: A standard established by the American National Standard Institute, Inc. for calculating the amount of finished square footage in a single-family dwelling.
Anticipation: (i) The appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property. (ii) The principle that the purchase price of property is affected by the expectation of its future value.
Antitrust Laws: Most violations of antitrust laws in the real estate business involve either price fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their areas of trade or dealing to certain areas or properties).
Appeal: The act of protesting an assessment. See Protest
Appellant: The taxpayer who appeals to a higher governmental authority for review of an assessment.
Application Fee: Charges for items such as property appraisal and/or a credit report unless those fees are reported separately.
Appraisal Date: The date on which appraisal is applicable and valid.
Appraisal Fee: The fee charged to provide a professional estimate of the market value of a property.
Appraisal Foundation : A non-profit foundation created by appraisal trade groups for setting minimum standards and qualifications for appraisers.
Appraisal Methods: The approaches used in the appraisal of real property. (See cost approach, income capitalization approach, sales comparison approach.)
Appraisal Report: An appraiser's written opinion to a client of the value sought for the subject property as of the date of appraisal, giving all details of the appraisal process.
Appraisal Review Board (ARB): Conducts property tax protest hearings for appeals not resolved at the informal hearing. The appraisal review board is technically independent of the appraisal district. However, the board of directors of the appraisal district hires appraisal review board members, the appraisal district pays and supervises ARB members, and an attorney controlled by the appraisal district guides the appraisal review board on legal matters, The appraisal review board, therefore, is not completely independent of the appraisal district.
Appraisal Standards Board (ASB): The ASB develops, interprets and amends the Uniform Standards of Professional Appraisal Practice (USPAP). The ASB is composed of appraisers who are appointed by The Appraisal Foundation.
Appraisal Subcommittee (FFIEC): of the Federal Financial Institutions Examination Council (FFIEC). Designees of the heads of the Federal financial institutions regulatory agencies. This entity has the authority to ensure that the states and the Appraisal Foundation meet the requirements to certify appraisers.)
Appraisal: The process through which a professional opinion of property value is determined by a licensed appraiser.
Appraisal Complete: The act or process of developing an opinion of value or an opinion of value developed without invoking the DEPARTURE RULE.
Appraisal Limited: The act or process of developing an opinion of value or an opinion of value developed under and resulting from invoking the DEPARTURE RULE.
Appraised Value: (i) A professional opinion of the current market value of a property. (ii) The value upon which property taxes are calculated. (iii) An estimate by an appraiser of the amount of a particular value, such as assessed value, insurable value or market value, based on the particular assignment.
Appraiser Qualification Board: Created by the Appraisal Foundation and responsible for establishing minimum requirements for licensed and certified appraisers and licensing and certifying examinations.
Appraiser: A certified, licensed person trained to provide an unbiased estimate of value of
Appreciation: Any increase in the value of property resulting from causes other than additions or betterments to the property, such as greater demand, improved economic conditions, increasing price levels, and reversal of depreciating environmental trends.
Approaches To Value: The three traditional methods typically used by an appraiser in estimating the value of a property,including: (i) the cost approach, (ii) the income approach and (iii) the sales comparison approach.
Appurtenance: A right privilege used with land for its benefit, either affixed to land or used with it, that will pass with the conveyance of the land.
Appurtenant Easement: An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land.
APR: Annual percentage rate.
Arbitrary Assessment: Any assessment that has no factual or legal basis.
Area: (i) The surface of any unit measured in square units. (ii) A term meaning a geographic space. (iii) In design, area may indicate use such as work area or play area.
ARM (adjustable Rate Mortgage): A home loan with an interest rate that periodically adjusts to reflect changes in a specified financial index.
ARM Index: A publicly published number used as the basis for adjusting the interest rates of adjustable rate loans (ARM).
Arm's-length Transaction: A transaction in which both buyer and seller act willingly and with knowledge of the present and future potential of the property, and in which the property has been offered on the open market and there are no unusual circumstances.
Array: An arrangement of statistical data according to numerical size.
Asbestos: A mineral once used in insulation and other materials that can cause respiratory diseases, including cancer.
Assemblage: The combining of two or more adjoining lots into one larger tract to increase their total value.
Assessed Value: The portion of both real and personal property's full taxable value, determined by the assessor, against which taxes are multiplied by a tax rate to determine tax dollars owed.
Assessment: (i) The valuation level of property for ad valorem tax purposes. (ii) The act of determining the amount of tax base which includes discovery, listing and valuation of property by the tax assessor.
Assessment Comparables: Sometimes known as assessment comps, these are assessed values for properties which are comparable to the subject property. Factors that make a property comparable include property type, location, size, age and condition.
Assessment Date: Date on which taxes are levied or measured by the value of property on a given date. Also known as date of taxable status.
Assessment Ratio: The ratio expressed in terms of a percent of assessed value to full value. 1. Either defined by the statutes of the Jurisdiction; or 2. The relationship between the Assessor's opinion of market value and true market value.
Assessment Roll: The official listing of all property in a taxing jurisdiction, including the name and address of the taxable owner, the legal description, and the assessed value.
Assessment: The value of property to which the tax rate is applied. Assessment may also be called "taxable value" or "assessed value" or "tax base."
Assessor: An elected or appointed government official charged with determining property tax assessments in a certain jurisdiction.
Asset: Any property which is owned and has value.
Assignment: The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.
Assignor: A person who transfers rights and interests of a property.
Assumable Mortgage: A mortgage that can be transferred to another borrower.
Assumption (USPAP): That which is taken to be true
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.
Assumption Of Mortgage: Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage including payments.
Assumption Extraordinary: See Extraordinary Assumption
Atrium: Rectangular exterior area around which a house is built, or environmentally controlled interior area with natural light, sometimes for the growth of plants.
Attachment: The act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor.
Attic Ventilators: Openings in the roof or gables to allow for air circulation. Motorized thermostatically controlled exhaust fans mounted in the roof to remove super-heated air from the attic space.
Attorney's Opinion Of Title: An abstract of title that an attorney has examined and has certified to be in his or her opinion an accurate statement of the facts concerning the property ownership.
Automated Underwriting: Computer systems that permit lenders to expedite the loan approval process and reduce lending costs.
Automatic Extension: A clause in an agreement that states that the it will continue for a certain period of time after its expiration date. In many states use of this clause is discouraged or prohibited.
Average Deviation: In statistics, the measure of how far the average individual, or variate, differs from the mean of all variates.
Avulsion: The sudden tearing away of land as by earthquake flood volcanic action or the sudden change in the course of a stream.

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