REAL ESTATE DICTIONARY - A
Abstract
A summary; an abridgment. Before the use of photo static
copying public records were kept by abstracts of recorded
documents.
Abstract of Title
A summary of the public records relating to the title
to a particular piece of land. An attorney or title
insurance company reviews an abstract of title to determine
whether there are any title defects which must be cleared
before a buyer can purchase clear, marketable, and insurance
title.
Acceleration Clause
Provision in a mortgage document stating that if a payment
is missed or any other provision is violated the whole
debt becomes immediately due and payable.
Acknowledgment
Formal declaration before a public official that one
has signed a document. Prior to recording real estate
legal documents, such as grant deeds and deeds of trust,
a Notary Public acknowledges the person's signature
on the document.
Acre
A measure of land equal to 43,560 square feet.
Action to Quiet Title
A court action to establish ownership of real property.
Although technically not an action to remove a cloud
on title, the two actions are usually referred to as
"Quiet Title" actions.
Adjustable Rate Mortgage (ARM)
A mortgage where the interest rate is not fixed for
the life of the loan. These mortgages adjust periodically
based on an index that changes with market conditions.
The rate of interest is the sum of the index plus a
margin ( the margin remains fixed for the life of the
loan). Most ARMs have periodic interest rate and payment
caps, as well as a life cap. ARM's may also be referred
to as AML's or VRM's.
Ad Valorem
Designates an assessment of taxes against property.
Literally, according to value; based on the "ability
to pay" theory.
Adverse Possession
The actual, exclusive, open notorious, hostile and continuous
possession and occupation of real property under an
evident claim of right or title. The time required legally
to obtain title by adverse possession varies from state
to state.
Agency
A contract by which the agent undertakes to represent
the principal in business transactions, using some degree
of discretion.
Agent
Person authorized to act on behalf of another in dealings
with third parties.
Agreement of Sale
An agreement between parties for the sale of real estate.
In some states it is synonymous with a Purchase Agreement,
Sales Agreement, or Land Contract. In Texas it is known
as an Earnest Money Contract.
Alienation Clause
Provision in a mortgage document stating that the loan
must be paid in full if ownership is transferred.
Amenities
The qualities and state of being pleasant and agreeable.
In appraising, those qualities that attach to property
in the benefits derived from other than monetary. Satisfactions
of possession and use arising from architectural excellence,
scenic beauty and social environment.
American Land Title Association
Title policy that assures a lender that it has the proper
rights as the beneficiary on a mortgage loan.
Amortization
Gradual payment of a debt through regular installments
that cover both interest and principal.
Annual Percentage Rate (APR)
A measure of the total cost of credit (interest as well
as other recurring charges) expressed as a yearly percentage
rate. Because all lenders apply the same rules in calculating
the annual percentage rate, it provides consumers with
a good basis for comparing the cost of loans.
Appraisal and Credit Report Fees
These fees are generally collected by the lender and
paid to outside companies performing the services.
Appraised Value
An expert option of the value of a property at a given
time, based on facts regarding the location, improvements,
etc., of the property and surroundings.
Appraisal Report
Estimate of real estate value, presumably by an expert.
An appraisal evaluates the property at a given time
based on facts regarding the location, improvements,
neighborhood and comparable sales. Generally, the value
is based on three approaches: cost, market and income.
Appreciation
Increase in value or worth of property.
Arrears
Payment made after it is due is in arrears. Interest
is said to be paid in arrears since it is paid to the
date of payment rather than in advance.
"as is"
A clause that is sometimes used in the transfer of property.
It means that the present property is being transferred
with no guarantee or warranty provided by the seller.
Assessment Base
The total assessed value of all property in a given
assessment district.
Assessed Valuation
Value placed on real estate by governmental assessors
as a basis for levying property taxes; not identical
with appraised or market value.
Assignment
Transfer of a contract from one party to another.
Assumption
New owner assumes the responsibility for repaying an
existing mortgage. Both FHA and VA loans are fully assumable.
Some adjustable rate mortgages may be partially assumable,
but the new owners may be required to re-qualify for
the loan.
Attached Homes
A home that has one or more common walls adjoining another
home. Condominiums and row houses are attached homes.
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