A GLOSSARY OF REAL ESTATE TERMS
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.
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.
A measure of land equal to 43,560 square feet, 4,840 square yards or 160 square rods. A square parcel of land measuring 208.71 feet on each side contains one acre. There are 640 acres in a "section" of land.
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.
Rent as specified in a rental or lease agreement, as opposed to actual market or economic rent. (See Market Rent)
Adequate - Ease of Ingress/Egress
Refers to a good degree of capacity to enter and exit a property.
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.
Designates an assessment of taxes against property. Literally, according to value; based on the "ability to pay" theory.
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.
Advertising & Marketing
An expense line item that includes expenses for advertising, promotion, sales, and publicity managers, secretaries and clerks and all related printing, stationary, artwork, magazine space, broadcasting, and postage related to marketing.
A contract by which the agent undertakes to represent the principal in business transactions, using some degree of discretion.
Person authorized to act on behalf of another in dealings with third parties.
An Agent in Commercial Law is a person who is authorized to act on behalf of another.
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.
Provision in a mortgage document stating that the loan must be paid in full if ownership is transferred. See (Anti-alienation Clause.)
Identifies the loan amortization that is being quoted (in years); the period of time over which principal and interest payments are scheduled. For example, a loan with a 10-year term and a 25-year amortization will have a balloon payment at the end of 10 years. Also, the maximum number of periodic installments (expressed in years) over which repayment of a mortgage debt is calculated; a portion of each payment consists of a blend of interest and amortization of principal.
Identifies whether the tenant is an anchor tenant. An anchor tenant is a well-known commercial business such as a national chain store, regional department store or Fortune 500 company strategically placed in a shopping center or other commercial building.
Identifies the total annual rent, or base rent, paid by the tenant to the lessor.
Annual Debt Service
The dollar amount required to satisfy periodic or annual loan payments on real property. Refers only to the actual loan payments, not to total expenses or other carrying charges.
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.
Annual Percentage Yield (APY) expresses an annual rate of interest taking into account the effect of compounding.
Anticipated Closing Date
If the Loan Purpose is Purchase, identifies the anticipated or desired closing date of the sale transaction.
Anticipated Completion Date
If the Loan Purpose is Construction, identifies the anticipated completion date of construction.
Used to describe the overall appearance and marketability of the property as it relates to other comparable properties in the market or submarket; factors include actual and effective age, structural and aesthetic appeal, physical condition, functional utility, etc.
A fee or schedule of fees charged by a lender at the time of loan application. This fee may include the cost of an appraisal, credit report, processing fee or other closing costs which are incurred during the process or the fee may be in addition to other charges.
An estimate of the value of a property, made by a qualified professional called an appraiser; results in the estimated market value of the property.
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.
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.
Increase in value or worth of property.
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.
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.
The total assessed value of all property in a given assessment district.
Value placed on real estate by governmental assessors as a basis for levying property taxes; not identical with appraised or market value.
Transfer of a contract from one party to another.
A Healthcare subtype; provides apartment-style accommodations where services focus on providing assistance with daily living activities. These facilities are designed to bridge the gap between independent living and nursing home care, and provide a higher level of services for their residents including meals, housekeeping, medication assistance, laundry, and regular checks-ins.
A fee, paid a borrower or lender, for the paperwork and processing of records necessary to approve and document a new debtor.
Identifies the height or elevation of the primary loading docks on the building; at grade refers to a door level with the ground at the foundation of a building.
All funds available or collected, including prepayments, servicer advances , etc.
Available Funds Cap
Limited amount of interest payable to certificate holders to the extent of interest accrued on a group/pool of mortgage loans.
Refers to an average or similar overall appearance and marketability of the property as it relates to other comparable properties in the market or submarket; factors include actual and effective age, structural and aesthetic appeal, physical condition, functional utility, etc.