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   - Glossary

 

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Abandonment   a situation in which a homeowner completely leaves the house with no intention to return.

Abatement - a reduction in the level of taxation faced by an individual or company. Examples of an abatement include a tax decrease, a reduction in penalties or a rebate.  A common type of tax abatement is a property tax abatement.  A homeowner who has received a property tax bill that they feel is too high and also believe that the assessed value of their property is too high, can appeal to their local tax assessor for a tax abatement.

Abode     means “fixed” place of residence. Fixed place of residence can be a house, your home, your shelter, a building, a structure or a dwelling place with enclosing walls, with a floor and roof.

Absorption rate  the total number of vacant square feet of office space divided by the square footage leased per year historically. Used to analyze demand of office space in a given market area

Abstract of judgment, law   the summary of a court judgment that creates a lien against a property when filed with the county recorder.

Abstract of Title   a condensed history or summary of all transactions affecting a particular tract of land

Acceleration clause   condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made or for breach of other conditions of the mortgage.

Acceptance  The seller's written approval of a buyer's offer. Or the buyer’s approval of the seller’s counter offer.

Access   The right to enter and leave a tract of land from a public way. Can include the right to enter and leave over the lands of another.

Accretion   The slow build-up of lands by natural forces such as wind or water

Accrued Weeks   (Relating to Time-Shares) Weeks that have accumulated from the prior year and are available for use in the current calendar year.

Acknowledgment  a written declaration affirming that a person acted voluntarily. Also a signature and/or initials of recipient .

Acquiesce : To accept something reluctantly but without protest.

Acre   a measurement of land equal to 43,560 square feet.

Addendum    an addition or change to a contract. Additional material  attached to and made part of a document. If there is space insufficient to write all the details of a transaction on the sales contract form, the parties will attach an addendum or supplement to the document. The sales contract should incorporate the addendum by referring to it as part of the agreement. The addendum should refer to the sales contract and be dated and signed or initialed by all the parties.

Adjusted basis  The original cost basis of a property reduced by certain deductions and increased by certain improvement costs. The original basis determined at the time of acquisition is reduced by the amount of allowable depreciation or depletion allowances taken by the taxpayer, and by the amount of any uncompensated property losses suffered by the taxpayer. It then increases by the cost of capital improvements plus certain carrying costs and assessments. The amount of gain or loss recognized by the taxpayer upon sale of the property is determined by subtracting the adjusted basis on the date of sale from the adjusted sales price.

Adjustable-rate mortgage (ARM)   a loan with an interest rate that is periodically adjusted to reflect changes in a pre-selected financial index and margin. With an adjustable rate mortgage, the rate of the loan can change throughout the term of the loan. The rate of the loan is based on adding points to a fixed base.

Administrator  an  individual appointed by the court to settle the estate of a person who has died intestate (leaving no will). Sometimes referred to as the personal representative of the Estate.

Adverse Possession   a claim made against the lands of another by virtue of open and notorious possession of said lands by the claimant.

Ad valorem  the Latin word for "according to value."

Ad valorem tax  a tax levied according to value, generally used to refer to real estate tax.

Affidavit - a voluntary oath, or declaration on oath, in writing sworn to before a person who had authority to administer oaths.

Affordable Housing     developed through some combination of zoning incentives, cost-effective construction techniques, and governmental subsidies that can be rented or purchased by households who cannot afford market rate housing in the community. Low cost housing for sale or rent, often from a housing association, to meet the needs of local people who cannot afford accommodation through the open or low cost market, or subsidised housing….  A comprehensive term applied to the efforts of the public and private sector to help low and moderate-income people purchase homes through programs that offer lower down payments easier loan-qualifying rules and/or below-market interest rates.

Agency    The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.

Agency Disclosure  (AD)  a state mandated form that describes representation options available to the buyer and must be presented to all buyers at the first "meaningful meeting. "

Agent   a person or company that has the power to act on behalf of another or to transact business for another (Real Estate agent via agency)

Agreement of Sale   known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties.

Air rights   ownership of land includes the right to all air above the property.  

Alienation Clause   a clause within a loan instrument calling for a debt in its entirety upon the transfer of ownership of the secured property. Also called a "due on sale" clause.

ALTA   American Land Title Association, a national association of title insurance companies, abstractors and attorneys specializing in real property law.

Amendment  an amendment is a change to the existing content of a contract. Any time words or provisions are added to or deleted from the body of the contract, the contract has been amended.

Amendment –(to the escrow instructions)   a change to escrow instructions requiring the agreement of both buyer and seller.

American Dream - Home ownership is frequently cited as an example of attaining the American dream. It is a symbol of financial success and independence, and it means having the ability to control one’s own piece of property. Owning one’s own business and being one’s own boss is also viewed as a representation of the American Dream fulfillment.

American Institute of Real Estate Appraisers  (AIREA)  a professional organization formerly affiliated with the National Association of REALTORS. AIREA promotes professional practice and ethics in the real estate appraisal industry with identified experienced, competent, ethical appraisers

Amortization  means of loan payment by equal monthly installments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Amortization Schedule   a table that lists what percentage of each payments consist of interest and principal.

Annual Budget  Any budget that is prepared for a 12-month period. An annual budget outlines both the income and expenditures that are expected to be received and paid over the coming year. Annual budgets are used by individuals, corporations, governments and various other types of organizations.  Annual budgets can apply to either a fiscal or calendar year....  Annual budgets help both individuals and organizations to accurately project their future cash flows and effectively manage their money.

Annual percentage rate (APR)  the interest rate that reflects the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on a mortgage, because it takes into account points and other credit costs. The APR allows buyers to compare different costs of mortgages based on annual cost for each loan.  Lenders need to be transparent about total costs. This is required under the federal Truth-in-Lending Act.

Annuity  a sum of money received by an annuitant in a series of fixed periodic payments.

APN - Assessor's Parcel Number:  is a number assigned to parcels of Real property by the Tax Assessor's Office for property identification purposes. Its numbers format is XXX-XXX-XX-XX   The 1st group is the "Book Number", the 2nd group is the "Page number", the 3rd group is the "Parcel number" and the 4th group is the "unit number".   (unit numbers are most commonly found in Condo's where a Condo building has one address, thus the identifier is most often the unit number)

Appraisal  a valuation report completed by a licensed, certified, and independent third party that estimates a property’s fair market value (Appraised Value)   An appraiser, who visits the home, evaluates its exterior and interior condition, and compares the property to other recently sold homes in the area with comparable features.

Appraisal contribution   the appraisal principle that states that the value of any component (improvement) of a property is what adds to the value of the whole.  Any absence of improvements is subtracted from the value when compared to identical and/or similar comparable properties..

Appraiser  an independent person trained to provide an unbiased estimate of value, such as a professional service performed for a fee.

Appreciation   an increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation.

Approval Letter  the physical letter issued after the investor (bank/lender) agrees to the terms that will permit the Short Sale of a property

Appurtenance   anything so annexed to land or used with it that it will pass with the conveyance of the land.

Arbitration  a nonjudicial method of resolving disputes by selecting a neutral party to make a final determination. This method was either previously agreed to by the disputing parties or stipulated by law.

ARM   acronym for Adjustable Rate Mortgage

Arm's-Length Transaction  the sale of a property in which the buyer and the seller have no existing relationship (they’re not family members, friends, business associates, etc.), are acting in their own self-interest and are under no undue influence or pressure from other parties. As a result, the property is sold in the open market under the sale terms and conditions that typically prevail in the marketplace (Fair Market Value).

Arrears - money “unpaid”  after it is due.

Asbestos   a mineral once used in insulation and other materials that can cause respiratory diseases. Asbestos has been classified as carcinogenic.

"as-is"   words in a contract intended to signify that no guarantees, whatsoever, are given regarding the subject property and that it is being purchased exactly as it is found. An "as-is" indicator is intended to be a disclaimer of warranties or representations. The recent trend in the courts to favor consumers tends to prevent sellers from using "as-is" wording in a contract to shield themselves from possible fraud charges brought on by neglecting to disclose material defects in the property.

Assessed Value   the valuation placed on property by a public tax assessor for purposes calculating of the homeowner's annual property tax.   The tax calculation starts with a percentage of the property's FMV at time of purchase,  but the actual percentage can vary from community-to-community.  Incorporated into the taxation is is "voter approved" bonds (which vary in different parts of the county) as well as any other community maintenance fees.

Assessment   the imposition of a tax, charge or levy, usually according to established rates.

Assessor   a public official who evaluates property for the purpose of taxation.

Assessor's Parcel Number (APN):  is a number assigned to parcels of Real property by the Tax Assessor's Office for property identification purposes. Its numbers format is XXX-XXX-XX-XX   The 1st group is the "Book Number", the 2nd group is the "Page number", the 3rd group is the "Parcel number" and the 4th group is the "unit number".   (unit numbers are most commonly found in Condo's where a Condo building has one address, thus the identifier is most often the unit number)

Assignee   one to whom a transfer of interest is made. For example, the assignee of a mortgage or contract.

Assignment   a transfer or making over to another the whole of any property, real or personal, or of any Estate or right therein. To assign is to transfer.

Assignor   one who makes an assignment. For example, the assignor of a mortgage or contract.

Assumable Mortgage   a mortgage which, by its terms, allows a new owner to take over its obligations.

Assumption of mortgage   the acts of acquiring title to property that has an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.

Attachment    a writ authorizing the legal seizure of property that may be needed to force the payment of a debt via judgment in a judicial proceeding

Attorney In Fact - one who serves/represents another person as an agent in the doing of a particular act or thing,  usually detailed and specified in an instrument called a  “letter or Power of Attorney”

Auction  the foreclosure auction is the formal sale of the property. This is done either at the county court house where the property resides or in front of the property itself.   The selling of property to the highest bidder. If a suitable bidder is not found, the lender will retain the property as an REO (Real Estate Owned-by the bank) and in the near future it will be put it up for resale on the open market.

Avulsion    the sudden tearing away of land, as by earthquake, flood, volcanic action or the sudden change in the course of a stream.  

 

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