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This alphabetical guide contains all the terms you'd likely to encounter in your transactions—real estate, mortgages, financing, brokerage law, contract law, federal institutions, appraisal, planning, architecture and structure.
Click on the letter to go to that alphabet section.
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| A-frame Design |
| An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters. |
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| Abstract Of Judgment |
| The summary of a court judgment that creates a lien against a property when filed with the county recorder. |
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| Abstract Of Title |
| A condensed, chronological history of the title to a particular piece of real estate consisting of a summary of the various documents that have been recorded in the office of Register of Deeds and certain other public offices constituting the various links in the chain of statement of all liens, judgments, taxes, or encumbrances that title. |
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| Accelerated Cost Recovery System |
| A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property. |
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| Accelerated Depreciation |
| A bookkeeping method that depreciates property faster in the early years of ownership. |
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| Acceleration Clause |
| A clause in a mortgage note or contract stating that upon default of a payment due, the balance of the debt or obligation should at once become due and payable. Basically, a provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment. |
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| Acceptance |
| The seller's written approval of a buyer's offer. In contract law, a promise by the offeree to be bound by the terms of an offer. An acceptance must be absolutely identical with the terms of the offer and must be communicated to the offeror in the manner indicated or implied in the offer. |
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| Access |
| Any means by which a person can enter property. |
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| Accessibility |
| The degree to which a building or site allows access to people with disabilities. |
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| Accord And Satisfaction |
| A settlement or compromise of a dispute between parties to a contract with the rendering of some different performance by one of the parties which is accepted by the other. |
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| Accretion |
| The gradual and imperceptible deposit of additional soil to land by natural causes, usually the flow of water. The gradual addition to the shore or bank of a waterway by deposits of sand or silt. See Alluvion. |
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| Accrued Interest |
| The amount of interest due for the period of time that has passed since interest was last paid. |
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| Acknowledgment |
| A written declaration affirming that a person acted voluntarily. The act of one who has executed a deed or other written instrument when he/she goes before a notary public or other competent officer and declares the instrument that he/she has executed to be his/her voluntary act and deed. An acknowledgment is sometimes referred to as the written certification of the officer itself. |
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| Acre |
| A measure of land equaling 4,840 square yards, or 43,560 square feet, or a tract about 208.71 feet square. |
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| Acre Foot |
| The volume of material needed to cover an acre of land one foot deep. |
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| Active Solar System |
| A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use. |
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| Actual Age |
| The number of years a structure has been standing. |
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| Ad Valorem |
| Designates an assessment of taxes against property; literally, according to value. |
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| Add-on Interest |
| The interest a borrower pays on the principal for the duration of the loan. |
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| Addendum |
| An addition or change to a contract. |
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| Additional Principal Payment |
| Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan. |
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| Adjustable Rate Mortgage (ARM) |
| A mortgage loan involving a payment plan that allows the lender to periodically (e.g. annually) adjust the interest rate (and usually the monthly principal and interest payment as well) in accordance with certain indices which normally reflect trends in general market interest rates. You may also see ARMs referred to as AMLs (adjustable mortgage loans) or VRMs (variable-rate mortgages). See also Variable Rate Mortgage (VRM). |
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| Adjusted Cost Basis |
| For income tax purposes, the original cost (adjusted purchase price) of a property, referred to as its basis, less the amount of allowable depreciation taken, plus the cost of capital improvements. (Note: A depreciation deduction is not allowed for a personal residence.) |
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| Adjustment Period |
| The amount of time between interest rate adjustments in an adjustable-rate mortgage. |
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| Administrator |
| A person appointed by the court to manage and settle the estate of a deceased person who died intestate, that is, died without leaving a will. (Technically, the term administrator is now obsolete and the term personal representative is the proper statutory title. The old terminology remains in popular use, however.) |
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| Administrator's Deed |
| A legal document that an administrator of an estate uses to transfer property. |
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| Adverse Possession |
| The acquisition of title to property through possession without the owner's consent for a certain period of time. Adverse possession is the actual, open, notorious, exclusive, continuous, and hostile occupation and possession of the land of another under a claim of right or under color of title. If adverse possession is maintained for the period prescribed by statute, a new title is created in the adverse possessor and the title of the record owner is extinguished. |
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| Adverse Use |
| The access and use of property without the owner's consent. |
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| Aeolian Soil |
| Soil that is composed of materials deposited by the wind. |
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| Aesthetic Zoning |
| Zoning laws designed to regulate the physical appearance of property. Such zoning might require, for example, that junkyards be screened from public view by a fence or shrub-line. |
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| Affiant |
| A person who makes a sworn statement. |
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| Affidavit |
| A statement or declaration reduced to writing, and sworn or affirmed to before some officer who has authority to administer oaths or affirmations. |
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| Affidavit As To Mechanics' Liens |
| An affidavit provided by a seller to a buyer assuring the buyer that no work has been done on the subject property that might give rise to the filing of a mechanic's lien. |
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| Affirmation |
| A substitution for an oath granted to people who have religious scruples against taking oaths. |
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| Agency |
| The relationship that exists by contract between a principal and an agent, whereby the agent is authorized to represent and act on behalf of the principal in certain business transactions. See Agent and Principal. |
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| Agency Closing |
| The process by which a lender uses a title company or other firm as an agent to complete a loan. |
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| Agency Disclosure |
| Laws in most states requiring agents who act for buyers or sellers to disclose who represents whom in a real estate transaction. Laws vary widely by state. |
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| Agency Listing Contract |
| A contract in which a property owner appoints one real estate broker as the sole agent for the sale of a property for a designated period of time. Under such contract the owner, herself/himself, may sell the property without a obligation to pay the agent a commission. |
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| Agent |
| A person who represents and acts on behalf of another person, called the principal, in dealing with a third party or parties pursuant to a contract of agency. |
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| Agreed Boundary |
| A compromise boundary to which property owners agree in order to resolve a dispute. |
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| Agreement Of Sale |
| A document the buyer initiates and the seller approves that details the price and terms of the transaction. See Purchase Contract and Sales Contract. |
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| Air Rights |
| The right vested by a grant (deed, lease agreement, or other conveyance) on an estate in real property to build upon, occupy, or use, in the manner and degree permitted, all of any portion of space above the ground or any other stated elevation within vertical planes, the basis of which corresponds with the boundaries of the real estate described in the grant. |
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| Alcove |
| A recessed section of a room, such as a breakfast nook. |
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| Alienation Clause |
| A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred. See Due-on-Sale Clause. |
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| Alkali |
| Mineral salt found in soil. |
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| Alkaline Soil |
| Soil that contains a higher concentration of mineral salt than natural acid. |
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| Alley |
| A lane behind a row of buildings or between two rows of buildings. |
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| Allowances |
| Budgets offered by builders of new homes for the purchase of carpeting and fixtures. |
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| Alluvion |
| Soil deposited on existing land by accretion; increase in land on the shore or bank of a river due to change in flow of stream. See Accretion. |
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| Alternative Mortgage |
| Any home loan that does not conform to a standard fixed-rate mortgage. |
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| Aluminum Siding |
| A metal covering that provides an alternative to paint for owners of wood homes. |
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| Aluminum-clad Windows |
| Wooden windows with aluminum covering the exterior. |
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| Amenities |
| In appraising, those qualities that attach to property in the form of benefits derived from ownership other than monetary. Satisfactions of possession and use arising from architectural excellence, scenic beauty, and social environment. Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments. |
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| American Society Of Home Inspectors (ASHI) |
| Professional association of independent home inspectors whose members must meet the group's education and performance requirements. Call (800) 743-2744 for list of ASHI-certified inspectors in your area. |
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| Americans With Disabilities Act |
| A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications. |
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| Amortization |
| The process of paying the principal and interest on a loan through regularly scheduled installments. |
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| Amortization Tables |
| Mathematical tables that lenders use to calculate a borrower's monthly payment. |
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| Amperage |
| The strength of an electrical current. |
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| Anchor Bolt |
| A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving. |
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| Annexation |
| (a) The permanent attachment of an item of personal property to real property, thus creating a fixture; (b) The addition of real property to its corporate limits by a city or town. |
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| Annual |
| Any kind of plant that must be planted every year. |
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| Annual Mortgagor Statement |
| A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest. |
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| Annual Percentage Rate (APR) |
| A measure of the cost of credit, expressed as a yearly rate. It is the relationship, expressed as a percentage, of the total finance charges associated with a loan to the amount of the loan. It includes interest as well as other charges. This rate must be disclosed by lenders to borrowers under the Truth-in-Lending Act. Because all lenders follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing the cost of loans, including mortgage plans. |
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| Annuity |
| The payment of a fixed sum to an investor at regular intervals. |
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| Anticipatory Breach |
| A communication that informs a party that the obligations of the original contract will not be fulfilled. |
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| Application |
| A document that details a potential borrower's income, debt and other obligations to determine credit worthiness. |
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| Application Fee |
| The fee that a lender charges to process a loan application. |
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| Appraisal |
| As applied to real property, it is a documented opinion as to a property's value, marketability, usefulness, or suitability at a given point in time. Also, the process of deriving a conclusion as to value, and the report setting forth such conclusion. See Valuation. |
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| Appraisal Fee |
| The fee that an appraiser charges to estimate the market value of the property. |
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| Appraisal Report |
| A detailed written report on the value of a property based on recent sales of comparable sites in the area. |
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| Appraised Value |
| An opinion of the current market value of a property. |
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| Appreciation |
| Generally, an increase in the value of a home or other property. Specifically, an increased conversion value of property or mediums of exchange due to economic or related causes that may prove to be either temporary or permanent. |
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| Approval |
| When you get approved for a loan, the lender completes a thorough assessment of your ability to pay for a home, and confirms the amount you can borrow on a particular home. |
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| Appurtenance |
| That which belongs to something else. In real estate law an appurtenance is a right, privilege, or improvement that passes as an incident to the land, such as a right of way. |
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| Appurtenant Easement |
| An easement over one parcel, the servient estate, which benefits (is appurtenant to) another parcel, the dominant estate. According to property law, whoever owns the dominant estate has the right to use the easement over the servient estate. (See Easement for a full definition of that term.) |
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| APR (annual Percentage Rate) |
| The cost of the loan expressed as a yearly rate on the balance of the loan. |
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| Arbitration |
| A method of resolving a dispute in which a third party renders a decision. |
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| Arbor |
| An area shaded by trees, shrubs or vines on a latticework structure. |
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| Arch |
| A curved structure that supports weight over an area, such as a doorway. |
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| Architect |
| A licensed professional who designs homes, buildings and other structures. |
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| Architectural Fees |
| The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget. |
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| ARM (Adjustable-Rate Mortgage) |
| A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index. |
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| Arpent |
| A French measurement of land equal to .84625 acres. |
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| As-is Condition |
| The purchase or sale of a property in its existing condition. |
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| Asbestos |
| A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard. |
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| ASHI (American Society Of Home Inspectors) |
| Professional association of independent home inspectors whose members must meet the group's education and performance requirements. Call (800) 743-2744 for list of ASHI-certified inspectors in your area. |
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| Asking Price |
| A seller's initial price for a property. |
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| Assessed Value |
| The official appraised value of property for ad valorem property tax purposes. |
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| Assessment |
| The estimated value of a piece of real estate or a levy placed on property in addition to taxes. See Special Assessment. |
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| Assessment Rolls |
| A list of taxable property compiled by the assessor. |
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| Assets |
| Items of value which include cash, real estate, securities and investments. |
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| Assignee |
| The person to whom an agreement or contract is assigned. |
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| Assignment |
| The method or manner by which a right, a specialty, or a contract is transferred from one person to another. |
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| Assignment Of Lease |
| Transfer by a lessee (tenant) of all his/her interest under a lease for the entire balance of the term of the lease. |
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| Assignor |
| One who makes an assignment. A person who transfers rights and interests of a property. |
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| Assumability |
| When a home is sold, the seller may be able to transfer the mortgage to the new buyer. This means the mortgage is assumable. Lenders generally require a credit review of the new borrower and may charge a fee for the assumption. Some mortgages contain a due-on-sale clause, which means that the mortgage may not be transferable to a new buyer. Instead, the lender may make you pay the entire balance that is due when you sell the home. Assumability can help you attract buyers if you sell your home. |
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| Assumable Mortgage |
| A mortgage that can be transferred to another borrower. |
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| Assumption Clause |
| A provision that allows a buyer to take responsibility for the mortgage from a seller. |
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| Assumption Fee |
| Fee charged by a mortgage lender when a new buyer of property assumes an existing mortgage. |
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| Assumption Of Mortgage |
| The taking of title to property by a grantee, wherein the grantee assumes liability for payment of an existing indebtedness secured by a mortgage or deed of trust against the property. He/she becomes a co-guarantor for the payment of said mortgage or deed of trust indebtedness along with the original obliger (maker of the note) unless the latter is released from the debt obligation by the mortgagee (lender). One who assumes a mortgage indebtedness becomes the primary obliger thereon, and is personally liable for its payment. |
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| Attachment Of Property |
| A writ issued at the institution or during the progress of an action that commands the sheriff or other proper officer to take possession of the property, right, credit, or effects of the defendant in order to secure it for the purpose of satisfying the demands of the plaintiff in the action. An attachment is used principally against absconding, concealed, or fraudulent debtors. |
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| Attorney At Law |
| A lawyer; a licensed attorney; an officer of the courts who is employed by a party in a case to manage the cause for him/her. |
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| Attorney In Fact |
| One who is authorized to perform certain legal acts for another under a power of attorney; the power of attorney may be a general power or it may be limited to authorize the performance of a specific act or acts. See also Power of Attorney. |
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| Average Price |
| The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes. |
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| Avigation Easement |
| An easement over private property near an airport that limits the height of structures and trees. |
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| Avulsion |
| The removal of a considerable quantity of soil from the land of one person, and its deposit upon or annexation to the land of another, suddenly and by the perceptible action of water. |
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| Awning Windows |
| Single-sash windows that tilt outward and up. |
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| Back Fill |
| Soil used to solidify the foundation of a structure. |
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| Back Title Letter |
| A letter that a title insurance company gives to an attorney who then examines the title for insurance purposes. |
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| Back-end Ratio |
| A back-end ratio is a lender calculation that compares a borrower's total debt (principal, interest, property taxes and insurance plus other monthly debt payments) to gross monthly income. |
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| Back-to-back Escrow |
| Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time. |
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| Backup Offer |
| An offer to purchase a parcel of real estate on which there already exists a valid sales contract. Acceptance of a backup offer by a seller must be made contingent upon failure by the purchaser under the first contract to honor that contract; otherwise, the seller may have serious legal problems. |
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| Backup Offer |
| A secondary bid for a property that the seller will accept if the first offer fails. |
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| Backwater Valve |
| A valve in a sewer line that prevents sewage from flowing back into a house. |
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| Balance Sheet |
| A statement that shows the assets, liabilities and net worth of an individual. |
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| Balloon Payment |
| The final lump sum payment due at the end of a balloon mortgage. |
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| Balloon Payment Loan |
| A loan payment plan in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal. |
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| Balloon-frame Construction |
| A type of framing used in two-story homes in which studs extend from the ground to the ceiling of the second floor. |
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| Balustrade |
| Railing held up by a set of posts on a porch or stairway. |
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| Banker's Year |
| A 360-day year utilized in one method of proration. |
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| Bankruptcy |
| A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. Bankruptcies remain on a credit record for seven to 10 years and can severely limit a person's ability to borrow. |
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| Bargain Sale |
| The sale of a piece of property for less than market value. |
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| Baseboard |
| Any board or molding found at the bottom of an interior wall. |
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| Baseboard Electric Heat |
| Heating units installed in the floor that can be controlled by a central thermostat. |
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| Basement |
| The area of a home below ground level. |
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| Basis |
| For income tax purposes, the original cost (purchase price) of a property. |
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| Basis Point |
| A basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points. |
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| Bay |
| The opening between two columns or walls that forms a space. |
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| Bay Window |
| A window that projects outward in a curve. |
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| Bearing Wall |
| A wall that supports its own weight in addition to other parts of a structure. |
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| Before-tax Income |
| Total income before taxes are deducted. |
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| Bench Marks |
| Identification symbols on stone, metal, or other durable matter permanently fixed in the ground from which differences of elevation are measured. |
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| Beneficiary |
| A person for whose benefit property or funds are placed in trust or the recipient of funds from an insurance fund or annuity contract. The lender under a deed of trust, also called a mortgagee. The person borrowing money is the mortgagor. See Mortgagee. |
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| Bequest |
| Personal property given to a person through a will. |
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| Betterment |
| An improvement that increases a property's value as opposed to repairs that maintain the value. |
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| Bidding War |
| Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale. |
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| Bilateral Contract |
| A contract under which each party promises to perform a specified act in exchange for the other party's promise to perform a specified act. The exchange of promises forms the basis for the contract and binds both parties. Most contracts, including most real estate contracts, are bilateral contracts. Also called reciprocal contracts. |
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| Bill Of Sale |
| A written instrument that evidences the transfer of right, title, and interest in personal property from one person to another. binder |
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| Biweekly Mortgage |
| A mortgage that requires payments every two weeks and helps repay the loan over a shorter term. |
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| Blanket Insurance Policy |
| A policy that covers more than one person or piece of property. |
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| Blanket Mortgage |
| A single mortgage that covers more than one piece of real estate owned by the same borrower. |
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| Blighted Area |
| A declining area in which real property values are seriously affected by destructive economic forces, such as encroaching inharmonious property usages and/or rapidly deteriorating buildings. |
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| Blind Nailing |
| Nails driven into a wall and concealed with putty. |
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| Blockbusting |
| Persuading or trying to persuade persons to sell or move out by creating or exploiting fears of racial change in a neighborhood. An illegal practice under the Federal Fair Housing Act of 1968 and the State Fair Housing Act. Also known as panic peddling. |
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| Blue Sky Laws |
| Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks. |
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| Blue-ribbon Condition |
| A house maintained close to its original condition. Also called mint condition. |
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| Blueprint |
| The plan for a home or other structure. |
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| Board Foot |
| Measurement of lumber that is the equivalent of 144 cubic inches. |
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| Board Of Equalization |
| A state board charged with ensuring that local property taxes are assessed in a uniform manner. |
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| Board-and-batten Siding |
| Siding is composed of 8- to 12-inch wide wooden boards nailed vertically to create a barn-like exterior. |
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| Boilerplate |
| Form language used in deeds, mortgages and other documents. Details can be added by individual parties. |
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| Bona Fide |
| A legal term that refers to actions without fraud. or persons that are honest and in good faith. |
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| Bond |
| Any obligation under seal. A real estate bond is a written obligation, usually issued on security of a mortgage or deed of trust. An agreement that insures one party against loss by acts or defaults of another party. |
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| Bonus Room |
| Bonus room is typically used as a marketing term for a room with no specifically designated function, unlike a living room, bedroom or kitchen. |
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| Book Value |
| The value of a property as a capital asset based on its cost plus any additions, minus depreciation. |
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| Boring Test |
| An analysis of soil in which holes are bored into the ground and samples are removed. |
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| Borough |
| A section of a city that has authority over local matters. |
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