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 


Abatement Derived from Latin battere, “abatement” a common legal term meaning “the beating down, removal, or diminishment” of something.  For example, lead abatement refers to finding and removing lead paint.  Abatement usually refers to “Rent Abatement”, the incentive offered by a landlord, including free rent, early occupancy, or reduction of fees.

Absorption Rate The rate at which rentable space is filled, divided into gross absorption and net absorption. Gross absorption is a measure of the total square feet leased over a specified period, with no consideration given to space vacated in the same geographic area during the same time period. Net absorption is equal to the amount occupied at the end of a period, minus the amount occupied at the beginning of a period. Net absorption does take into consideration the space vacated during the period

abstract of title  A summary of all legal instruments affecting title to a property from the original source of the title to the present. If the buyer’s lawyer examines the abstract and writes a report of the title’s condition, it is called an abstract and lawyer’s opinion.

Abstract of Title Abstract of title is a historical summary of the recorded instruments and proceedings on the title of a property.

acceleration clause A clause in the mortgage that allows the lender to demand immediate payment of the loan balance if the borrower breaks the terms of the note or mortgage. 

acceleration clause A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.

acre  A measure of land equal to 43,560 square feet.

adjustable rate mortgage (ARM)  A mortgage in which the interest rate changes at predetermined intervals according to a predetermined financial market index. There are usually caps that limit the amount the rate can change every year and over the life of the loan. 

adjustable-rate mortgage (ARM) A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.

Adjustable-Rate Mortgage or ARM
An ARM is a loan that has a varying interest rate and payment based on an adjustment period.  The adjustment is dependent on the variation in a benchmark index, usually the LIBOR or prime rate.  This loan is also known as a variable rate mortgage.

Adjusted Sales Price Adjusted sales price is the price on the contract less all credit concessions by the seller.

adjustment date The date the interest rate changes on an adjustable-rate mortgage.

adverse possession  A method of acquiring title to real property by using the property without the owner’s consent and following statutory requirements. 

Air Rights Air rights are the legal ability to use or control the space above a property.  Air rights can be sold, rented or leased to another party.

agency  The relationship between and agent and a principal.

agent  The party who acts on behalf of the principal.

alienation clause  The clause in a mortgage that allows the lender to make the entire loan balance due if title to the property is transferred. Also referred to as due-on-sale clause.  

Amenities Amenities are the enhancements that buildings offer their owners or tenants.  These usually include a doorman, health club, garage, children’s playroom, common lounge, etc.

Americans with Disabilities ACT (ADA)  A law that requires property that is open to the public include features that faciliatate access to the building. 

amortization  Systematic repayment of a debt through periodic installments.

Amortization Amortization is the periodic payment of principal and interest on a liability (including a mortgage), or the write-off of a non-depreciable asset over a scheduled term.

Amortization Schedule An amortization schedule is the designation of periodic payments of principal and interest toward the principal to eventually pay off a debt.

amortization The loan payment consists of a portion which will be applied to pay the accruing interest on a loan, with the remainder being applied to the principal. Over time, the interest portion decreases as the loan balance decreases, and the amount applied to principal increases so that the loan is paid off (amortized) in the specified time.

amortization schedule A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.

annual percentage rate  A term used in the Truth and Lending Act to represent the true yearly cost of a loan. The APR is a yearly rate and includes the loan’s interest rate plus other loan fees.

 annual percentage rate (APR) This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. It works sort of like this, but not exactly, so only use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. You will come up with a number close to the APR. Because you are using the same payment on a smaller amount, the APR is always higher than the actual note rate on your loan.

Annual Percentage Rate or APR The APR is the actual effective rate of interest charged on a loan expressed on a yearly basis and represents the full cost of all elements associated with obtaining a full mortgage into a single formula.  The APR is a useful device for making comparisons between mortgage products.

application The form used to apply for a mortgage loan, containing information about a borrower’s income, savings, assets, debts, and more.

appraisal  The process of estimating and supporting an opinion of value. 

appraisal A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.

Appraisal An appraisal is the evaluation of a property by a licensed appraiser on its price based on previous sales of similar properties.  The appraised value is used by a bank to determine the lending limit on a given property.  A seller may also have a property appraised to determine the offering price during a sale. 

appraised value An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.

appraiser An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.

appreciation  The increase in a property’s value over a period of time, which can be caused by inflation or by the characteristics of the property.

 appreciation The increase in the value of a property due to changes in market conditions, inflation, or other causes.

appurtenant easements  Easement rights belonging to properties that are adjacent to one another and pass with the property to new owners. It includes water rights and rights-of-way. 

as is  A contract clause indicating the seller will not fix any problems with the property. 

assessed value  A value put on real and personal property by a taxing authority as a basis to calculate the amount of real estate tax. 

assessed value The valuation placed on property by a public tax assessor for purposes of taxation.

assessment The placing of a value on property for the purpose of taxation.

Assessment An assessment is a levy against property and can be an extraordinary payment called for by the board of directors of a cooperative or condominium for the purpose of making a capital improvement or to provide some other essential service for which funds in the reserve account are inadequate.

assessor A public official who establishes the value of a property for taxation purposes.

asset Items of value owned by an individual. Assets that can be quickly converted into cash are considered “liquid assets.” These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.

Asset An asset is something that is owned that has value.

assignment When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.

Assignment Assignment is the process by which a right or contract is transferred from one party to another.  Examples of typical assigned contracts are mortgages, leases and deeds of trust.

associate broker  A license category. A person holding this type of license has passed the requirements for a broker’s license but is employed by another broker. 

assumable mortgage A mortgage that can be assumed by the buyer when a home is sold. Usually, the borrower must “qualify” in order to assume the loan.

assumption The term applied when a buyer assumes the seller’s mortgage

attachment  The process of changing personal property to real property. 

Attorney-in-Fact An attorney-in-fact is a person appointed to perform legal acts for another under a power-of-attorney.

attorney-at-law  A person licensed by the state to practice law.