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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
ABSTRACTION METHOD Back to top
This method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.
ACRE Back to top
43,560 square feet. A measurement of area.
ACTUAL AGE Back to top
The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE
AD VAL OREM TAX Back to top
Taxes assessed based on the value of the land and improvements.
ADDENDUM Back to top
A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.
ADJUSTABLE-RATE MORTGAGE (ARM) Back to top
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.
AGENT Back to top
A person who has been appointed to act on behalf of another for a particular transaction.
ANNUAL PERCENTAGE RATE (APR) Back to top
The rate of annual interest charged on a loan.
APPRAISAL FOUNDATION Back to top
A not-for-profit educational organization established by the appraisal profession in the United States in 1987. It is dedicated to the advancement of professional valuation and responsible for establishing, improving, and promoting the Uniform Standards of Professional Appraisal Practice (USPAP).
APPRAISAL INSTITUTE Back to top
A world-wide organization dedicated to real estate appraisal education, publication and advocacy.
APPRAISAL REPORT Back to top
The end result of the appraisal process, usually consists of one major, standardized form such as the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the estimated value of the subject property and support that estimate with corroborating information.
APPRAISER Back to top
An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.
ASSIGNMENT Back to top
Transfer of ownership of a mortgage usually when the loan is sold to another company.
BANKRUPTCY Back to top
When a person or business is unable to pay their debts and seeks protection of the state against creditors. Bankruptcies remain on credit records for up to ten years and can prevent a person from being able to get a loan.
BILL OF SALE Back to top
A physical receipt indicating the sale of property.
BROKER Back to top
An individual who facilitates the purchase of property by bringing together a buyer and a seller.
BUILDING CODE Back to top
Regulations that ensure the safety and material compliance of new construction within a municipality. Building codes are localized to ensure they are adequate to meet the risk of common hazards.
CASH-OUT REFINANCE Back to top
Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.
CAVEAT EMPTOR Back to top
Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.
CERTIFICATE OF DEPOSIT Back to top
A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.
CERTIFIED RESIDENTIAL APPRAISER Back to top
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.
CLOSING Back to top
A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).
CLOSING COSTS Back to top
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.
CLOSING STATEMENT Back to top
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
COMMON AREAS Back to top
Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property near by. Commonly found in condominium, PUD or office spaces.
COMMUNITY PROPERTY Back to top
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.
COMPARABLES Back to top
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property who's value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.
CONDOMINIUM CONVERSION Back to top
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.
CREDIT REPORT Back to top
A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.
DATE OF APPRAISAL Back to top
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.
DEBT Back to top
An obligation to repay some amount owed. This may or may not be monetary. .
DEED OF TRUST Back to top
A document which transfers title in a property to a trustee, who's obligations and powers are stipulated. Often used in mortgage transactions.
DOWN PAYMENT Back to top
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.
EARNEST MONEY DEPOSIT Back to top
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
EASEMENT Back to top
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.
ECONOMIC LIFE Back to top
The amount of time which any income-producing property is able to provide benefits to its owner.
EFFECTIVE AGE Back to top
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.
EMINENT DOMAIN Back to top
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.
ERRORS AND OMISSIONS INSURANCE Back to top
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
FEDERAL HOUSING ADMINISTRATION (FHA) Back to top
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.
FEE APPRAISER Back to top
A certified, professional appraiser who estimates the fair market value of property and receives a set fee in exchange.
FEE SIMPLE Back to top
A complete, unencumbered ownership right in a piece of property.
FHA MORTGAGE Back to top
A mortgage that is insured by the Federal Housing Administration (FHA).
FINAL VALUE ESTIMATE Back to top
The estimated value of a piece of property resulting from an appraisal following the USPAP guidelines.
FIRST MORTGAGE Back to top
The primary loan or mortgage secured by a piece of property.
HOME EQUITY LINE OF CREDIT Back to top
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.
HOME INSPECTION Back to top
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
HOMEOWNER'S ASSOCIATION Back to top
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.
HOMEOWNER'S INSURANCE Back to top
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.
LEASE Back to top
A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.
LOAN OFFICER Back to top
A person that sells loans, representing the lender to the borrower, and the borrower to the lender.
LOAN ORIGINATION Back to top
How a lender refers to the process of writing new loans.
LOAN SERVICING Back to top
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.
MORTGAGE INSURANCE PREMIUM (MIP) Back to top
An fee that is often included in mortgage payments that pays for mortgage insurance coverage.
MORTGAGE LIFE INSURANCE Back to top
A policy that fulfills the obligations of a mortgage when the policy holder dies.
OWNER FINANCING Back to top
A transaction where the property owner provides all or part of the financing.
OWNER OCCUPIED Back to top
The state of property wherein the owner occupies at least some portion of the property.
PRIME RATE Back to top
The interest rate that banks and other lending institutions charge other banks or preferred customers.
PRINCIPAL Back to top
The amount owed on a mortgage which does not include interest or other fees.
PRINCIPAL BALANCE Back to top
The outstanding balance of principal on a mortgage. Does not included interest due.
PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI) Back to top
The most common constituents of a monthly mortgage payment.
PRIVATE MORTGAGE INSURANCE (PMI) Back to top
A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.
PROPERTY Back to top
Any item which is owned or possessed.
PURCHASE AGREEMENT Back to top
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
QUADRAPLEX Back to top
Any building designed to accommodate four families.
REAL ESTATE AGENT Back to top
A licensed professional who facilitates the buying and selling of real estate.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) Back to top
A federal law requiring lenders to give full disclosure of closing costs to borrowers.
REAL PROPERTY Back to top
Land, improvements and appurtenances, and the interest and benefits thereof.
REALTOR Back to top
A real estate agent or broker who is a member of the National Association of Realtors.
RECORDER Back to top
A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.
RECORDING Back to top
The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.
REFINANCE TRANSACTION Back to top
A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.
RELOCATION SERVICE Back to top
Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.
REPLACEMENT RESERVE FUND Back to top
An account, or fund, setup for the replacement of short life items , such as carpeting, in the common areas of a cooperative property.
RESIDENTIAL PROPERTY Back to top
A piece of property whose highest and best use is the maintenance of a residence.
REVOLVING DEBT Back to top
A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.
RIGHT OF FIRST REFUSAL Back to top
An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.
RURAL Back to top
An area outside of an established urban area or metropolitan district.
SALE PRICE Back to top
The actual price a property sells for, exclusive of any special financing concessions.
SALES COMPARISON APPROACH Back to top
An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.
SCARCITY Back to top
An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.
SECOND MORTGAGE Back to top
A loan secured by the equity in a home, when a primary mortgage already exists.
SECONDARY MORTGAGE MARKET Back to top
An economic marketplace where mortgage bankers buy and sell existing mortgages.
SECURED LOAN Back to top
A loan that is backed by collateral. In the case of a mortgage loan, the collateral is the house.
SECURITY Back to top
The property used as collateral for a loan.
SEMIDETACHED HOUSING Back to top
Two residences which share a common wall.
SERVICER Back to top
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.
SERVICING Back to top
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.
SINGLE-FAMILY PROPERTY Back to top
A property designed and built to support the habitation of one family.
SUBDIVISION Back to top
A residential development that is created from a piece of land which has been subdivided into individual lots.
SUBJECT PROPERTY Back to top
A term which indicates a property which is being appraised.
SURVEY Back to top
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.
SWEAT EQUITY Back to top
The method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.
TAX-EXEMPT PROPERTY Back to top
Any property which is not taxed.
TENANCY Back to top
The right to occupy a building or unit.
TENANCY IN COMMON Back to top
A form of holding title, whereby there are two or more people on title to a property, ownership does not pass on to the others upon the death of one individual.
THIRD PARTY ORIGINATION Back to top
When a lender uses a third party to originate and package loans for sale to the secondary market (Fannie Mae, Freddie Mac).
TITLE Back to top
A specific document which serves as proof of ownership.
TITLE COMPANY Back to top
An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.
TITLE INSURANCE Back to top
A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.
TITLE SEARCH Back to top
The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.
TRANSFER OF OWNERSHIP Back to top
Any means by which the ownership of a property changes hands.
TRANSFER OF TAX Back to top
Taxes payable when title passes from one owner to another.
TRUSTEE Back to top
A fiduciary who holds or controls property for the benefit of another.
TRUTH IN LENDING Back to top
A federal law requiring full disclosure by lenders to borrowers of all terms, conditions and costs of a mortgage.
TUDOR Back to top
A style of architecture typified by exposed stone, wood and brick construction. Similar in style to English manor homes.
UNDER IMPROVED LAND Back to top
A piece of land which has been improved, but not to the full extent of its potential.
UNENCUMBERED PROPERTY Back to top
Any property which has no outstanding claims or liens against it.
UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP) Back to top
Developed in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in 1987 by The Appraisal Foundation, USPAP forms the guidelines followed by every licensed and certified real estate appraiser in the United States. The purpose of these Standards is to establish requirements for professional appraisal practice, which includes appraisal, appraisal review, and appraisal consulting. The intent of these Standards is to promote and maintain a high level of public trust in professional appraisal practice.
USEFUL LIFE Back to top
The span of time over which a property can be used or can provide benefits to its owner.
VACANCY RATE Back to top
The current percentage of vacant properties in a given area, regardless of why they are vacant.
VA MORTGAGE Back to top
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).
VARIANCE Back to top
An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.
VESTED Back to top
Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.
VETERANS AFFAIRS, DEPARTMENT OF (VA) Back to top
The successor to the Veteran's Administration, this government agency is responsible for ensuring the rights and welfare of our nation's veterans and their dependents. Among other duties, the VA insures home loans made to veterans.
WALK-THROUGH INSPECTION Back to top
A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.
WARRANTY Back to top
An affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.
WEAR AND TEAR Back to top
A term used to indicate the normal damage inflicted on a property through every-day use.
ZERO LOT LINE Back to top
A municipal zoning category wherein a building or other fixture may abut the property line.
ZONE Back to top
A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.
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