Real Estate Glossary
This glossary was created by a team of real estate professionals. It contains terms regarding real estate buying and selling, home finance, home improvement, as well as legal terms. For your convenience, the glossary is searchable alphabetically.
a la carte real estate services
Professional real estate services that are rendered one transaction at a time
instead of the conventional full-service, commission-based brokerage relationship.
An interior style that features a steeply peaked roofline and a ceiling that is
open to the top rafters.
abstract of judgment
The summary of a court judgment that creates a lien against a property when filed
with the county recorder.
abstract or title search
The process of reviewing all recorded transactions in the public record to determine
whether any title defects exist that could interfere with the clear transfer of
ownership of the property.
accelerated cost recovery system
A tax calculation that provides greater depreciation in the early years of ownership
of real estate or personal property.
A bookkeeping method that depreciates property faster in the early years of ownership.
A provision that gives a lender the right to collect the balance of a loan if
a borrower misses a payment.
The seller's written approval of a buyer's offer.
Any means by which a person can enter property.
The degree to which a building or site allows access to people with disabilities.
The gradual addition to the shore or bank of a waterway by deposits of sand or
A written declaration affirming that a person acted voluntarily.
A measurement of land equal to 43,560 square feet.
The volume of material needed to cover an acre of land one foot deep.
active solar system
A system that utilizes electric pumps or fans to transfer solar energy for storage
or direct use.
The number of years a structure has been standing.
ad valorem tax
Tax based on assessed property value.
additional principal payment
A payment by a borrower of more than the scheduled principal amount due in order
to reduce the remaining balance on the loan
adjustable rate mortgage (ARM)
A mortgage loan whose interest rate fluctuates according to the movements of an
assigned index or a designated market indicator--such as the weekly average of
one-year U.S. Treasury Bills--over the life of the loan. To avoid constant and
drastic fluctuations, ARMs typically limit how often and by how much the interest
rate can vary
The original cost of a property plus the value of any capital expenditures for
improvements to the property minus any depreciation taken
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
The period that elapses between the adjustment dates for an adjustable-rate mortgage
Money that the buyer and sellers credit each other at the time of closing. Often
includes taxes and down payment.
A man/woman appointed by a court to settle the estate of a deceased person when
there is no will. Contrast with executor/executrix.
The right of an occupant of land to acquire title against the real owner, where
possession has been actual, continuous, hostile, visible, and distinct for the
statutory period. The requirements for adversely possessing property vary between
states, but usually include continuous and open use for a period of five or more
years and paying taxes on the property in question
Written statement signed and sworn to before some person authorized to take an
The legal relationship between a principal and an agent. In real estate transactions,
usually the seller is the principal, and the broker is the agent: however, a buyer
represented by a broker (i.e., buyer as principal is a growing trend. In an agency
relationship, the principal delegates to the agent the right to act on his or
her behalf in business transactions and to exercise some discretion while so acting.
The agent has a fiduciary relationship with the principal and owes to that principal
the duties of accounting, care, loyalty, and obedience. Also see buyer's broker
A person authorized to act for and under the direction of another person when
dealing with third parties. The person who appoints an agent is called the principal.
An agent can enter into binding agreements on the principal's behalf and may even
create liability for the principal if the agent causes harm while carrying out
his or her duties. See also attorney-in-fact
A clause in a mortgage, which gives the lender the right to call the entire loan
balance due if the property is sold; due-on-sale clause
Non monetary benefits and satisfactions derived from property ownership, such
as a pleasant view, pride in home ownership, etc
A modification to an existing contract, mutually agreed to by all parties. Examples
might include a change in the pruchase price due to a low appraisal, or a change
in the closing date.
The operation of paying off indebtedness, such as a mortgage, by installments.
The conventional amortization periods are15 or 30 years.
A mortgage requiring periodic payments that include both interest and principal
The amount that is charged annually for having a line of credit available. Often
charged regardless of whether or not you use the line.
Federal and state laws prohibiting, among other things, monopolies, monopolistic
practices, restraint of trade, and price fixing.
An initial statement of personal and financial information, which is required
to approve your loan
Fees that are paid upon application. Charges for property appraisal and a credit
report are usually included in the application fee.
A determination of the value of something, such as a house, jewelry or stock.
A professional appraiser--a qualified, disinterested expert--makes an estimate
by examining the property, and looking at the initial purchase price and comparing
it with recent sales of similar property. Courts commonly order appraisals in
probate, condemnation, bankruptcy or foreclosure proceedings in order to determine
the fair market value of property. Banks and real estate companies use appraisals
to ascertain the worth of real estate for lending purposes. And insurance companies
require appraisals to determine the amount of damage done to covered property
before settling insurance claims
An estimate of the present worth
An increase in value or worth of property. Opposite of depreciation
asking (list) price
The price placed on property for sale
A local government official who determines the value of the property for taxation
A person to whom a property right is transferred. For example, an assignee may
take over a lease from a tenant who wants to permanently move out before the lease
expires. The assignee takes control of the property and assumes all the legal
rights and responsibilities of the tenant, including payment of rent. However,
the original tenant remains legally responsible if the assignee fails to pay the
A transfer of property rights from one person to another, called the assignee.
An existing mortgage that can be taken over by the buyer on the same terms given
to the original borrower
assumption of mortgage
The transfer of title to property to a grantee wherein he assumes liability for
payment of an existing note secured by a mortgage against the property; should
the mortgage be foreclosed and the property sold for a lesser amount than that
due, the grantee-purchaser who has assumed and agreed to pay the debt secured
by the mortgage is personally liable for the deficiency. Before a seller may be
relieved of liability under the existing mortgage, the lender must accept the
transfer of liability for payment of the note. Also known as simple assumption.
Contrast withsubject to mortgage
Method by which a debtor's property is placed in the custody of the law and held
as security pending outcome of a creditor's suit
attorney's opinion of title
An instrument written and signed by the attorney who examines the abstracts of
title, stating his opinion as to whether a seller may convey good title
Something on a piece of property that attracts children but also endangers their
safety. For example, unfenced swimming pools, open pits, farm equipment and abandoned
refrigerators have all qualified as attractive nuisances
A public sale of property to the highest bidder