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ABSORPTION
RATE Back
to top
The ratio of the number of
properties in an area that
have been sold against the
number available. Used to
show the volatility of a
market.
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.
ACCELERATION
CLAUSE Back
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A provision in a mortgage
that gives the lender the
right to demand immediate
payment of the outstanding
loan balance under certain
circumstances. Usually
when the borrower defaults
on the loan.
ACCESSORY
BUILDING Back
to top
A building separate from
the main structure on a
property. Often used for a
specific purpose, such as
a workshop, storage shed
or garage.
ACCRETION Back
to top
The natural growth of a
piece of land resulting
from forces of nature
ACRE Back
to top
43,560 square feet. A
measurement of area.
ACTUAL
AGE Back
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The amount of time that
has passed since a
building or other
structure was built. See
also: EFFECTIVE AGE
ADJUSTMENT
DATE Back
to top
The date the interest rate
changes on an adjustable
rate mortgage.
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.
ADJUSTED
BASIS Back
to top
The value of an asset
(property or otherwise)
that includes the original
price plus the value of
any improvement, and less
any applicable
depreciation.
ADJUSTED
SALES PRICE Back
to top
An opinion of a property's
sales price, after
adjustments have been made
to account for differences
between it and another
comparable property.
AESTHETIC
VALUE Back
to top
The additional value a
property enjoys based on
subjective criteria such
as look or appeal.
AFFIRMATION Back
to top
A declaration that a
certain set of facts are
truthful.
AFFORDABILITY
ANALYSIS Back
to top
A calculation used to
determine an individual's
likelihood of being able
to meet the obligations of
a mortgage for a
particular property. Takes
into account the down
payment, closing costs and
on-going mortgage
payments.
AGENT Back
to top
A person who has been
appointed to act on behalf
of another for a
particular transaction.
AMENITY Back
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Any feature of a property
that increases its value
or desirability. These
might include natural
amenities such as location
or proximity to mountains,
or man-made amenities like
swimming pools, parks or
other recreation.
AMERICAN
SOCIETY OF APPRAISERS Back
to top
An organization of
appraisal professionals
and others interested in
the appraisal profession.
AMORTIZATION Back
to top
The repayment of a loan
through regular periodic
payment.
AMORTIZATION
SCHEDULE Back
to top
The breakdown of
individual payments
throughout the life of an
amortized loan, showing
both principal
contribution and debt
service (interest) fees.
AMORTIZATION
TERM Back
to top
The length of time over
which an amortized loan is
repaid. Mortgages are
commonly amortized over 15
or 30 years.
AMPERAGE Back
to top
A measure of electric
current describing the
magnitude.
ANNUAL
PERCENTAGE RATE (APR) Back
to top
The rate of annual
interest charged on a
loan.
ANNUITY Back
to top
A sum of money paid at
regular intervals, often
annually.
APPLICATION Back
to top
A form used to apply for a
mortgage loan that details
a potential borrower's
income, debt, savings and
other information used to
determine credit
worthiness.
APPRAISAL Back
to top
A ''defensible'' and
carefully documented
opinion of value. Most
commonly derived using
recent sales of comparable
properties by a licensed,
professional appraiser.
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
PRINCIPLES Back
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The basic building blocks
of the property valuation
process, including
property inspection,
market analysis and basic
economics.
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 opinion of value of
the subject property and
support that opinion with
corroborating information.
APPRAISAL
STANDARDS BOARD (ASB) Back
to top
An independent board of
the APPRAISAL FOUNDATION,
which writes, amends, and
interprets USPAP. The ASB
is composed of up to seven
appraisers appointed by
the Foundation's Board of
Trustees. The ASB holds
public meetings throughout
the year to interpret and
amend USPAP.
APPRAISED
VALUE Back
to top
An opinion of the fair
market value of a property
as developed by a
licensed, certified
appraiser following
accepted appraisal
principals.
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.
APPRECIATION Back
to top
The natural rise in
property value due to
market forces.
ARMS
LENGTH TRANSACTION Back
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Any transaction in which
the two parties are
unconnected and have no
overt common interests.
Such a transaction most
often reflects the true
market value of a
property.
ASSESSED
VALUE Back
to top
The value of a property
according to
jurisdictional tax
assessment.
ASSESSMENT Back
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The function of assigning
a value to a property for
the purpose of levying
taxes.
ASSESSMENT
RATIO Back
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The comparative
relationship of a
property's assessed value
to its market value.
ASSESSOR Back
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The jurisdictional
official who performs the
assessment and assigns the
value of a property.
ASSET Back
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Any item of value which a
person owns.
ASSIGNMENT Back
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Transfer of ownership of a
mortgage usually when the
loan is sold to another
company.
ASSUMABLE
MORTGAGE Back
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A mortgage that can be
taken over by the buyer
when a home is sold.
ASSUMPTION Back
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When a buyer takes over,
or "assumes" the
sellers mortgage.
ATTACHED
HOUSING Back
to top
Any number of houses or
other dwellings which are
physically attached to one
another, but are occupied
by a number of different
people. The individual
houses may or may not be
owned by separate people
as well.
BACKFILL Back
to top
The slope of the ground
around a house.
BALL
COCK VALVE Back
to top
The valve inside a toilet
tank that controls the
filling of the tank.
BALLOON
MORTGAGE Back
to top
A mortgage loan in which
the monthly payments are
not large enough to repay
the loan by the end of the
term. So at the end of the
term, the remaining
balance comes due in a
single large payment.
BALLOON
PAYMENT Back
to top
The final large payment at
the end of a balloon
mortgage term.
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.
BEAM Back
to top
A structural supporting
member.
BILL
OF SALE Back
to top
A physical receipt
indicating the sale of
property.
BIWEEKLY
MORTGAGE Back
to top
A mortgage where you make
"half payments"
every two weeks, rather
than one payment per
month. This results in
making the equivalent of
13 monthly payments per
year, rather than 12,
significantly reducing the
time it takes to pay off a
thirty year mortgage.
BLIGHTED
AREA Back
to top
Any region of a city or
town that has fallen into
disrepair or otherwise has
become undesirable.
BONA
FIDE Back
to top
Any genuine offer, made
without intent to defraud
or deceive.
BRIDGE
FINANCING Back
to top
An interim loan made to
facilitate the purchase of
a new home before the
buyer's current residence
sells and its equity is
available to fund the new
purchase.
BRIDGING Back
to top
Structural members used
between beams to
strengthen the structure.
BROKER Back
to top
An individual who
facilitates the purchase
of property by bringing
together a buyer and a
seller.
BTU Back
to top
British Thermal Unit. A
unit of measurement used
to describe heating or
cooling capacity.
BUFFER
ZONE Back
to top
A segment of land between
two disparate municipal
zones which acts as a
shield to keep one zone
from encroaching upon the
other. Often used to
separate residential
districts from commercial
areas.
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.
BUILDING
LINE OR SETBACK Back
to top
The statutory distance
between buildings and the
property line, imposed by
municipalities, home
associations, or other
agreements.
BUILT-INS Back
to top
Specific items of personal
property which are
installed in a real estate
improvement such that they
become part of the
building. Built-in
microwave ovens and
dishwashers are common
examples.
BUNGALOW Back
to top
A one-story, home-style
dating from the early
twentieth century. Often
characterized by a
low-pitched roof.
BUY
DOWN Back
to top
Extra money paid in a lump
sum to reduce the interest
rate of a fixed rate
mortgage for a period of
time. The extra money may
be paid by the borrower,
in order to have a lower
payment at the beginning
of the mortgage. Or paid
by the seller, or lender,
as incentive to buy the
property or take on the
mortgage.
BX
CABLE Back
to top
Electrical cable shrouded
in a galvanized steel
outer cover.
CALL
OPTION Back
to top
A clause in a mortgage
which allows the lender to
demand payment of the
outstanding balance at a
specific time.
CAP Back
to top
Associated with Adjustable
Rate Mortgages. A limit on
how high monthly payments
or how much interest rates
may change within a
certain time period or the
life of the mortgage.
CAPE
COD COLONIAL Back
to top
A single-story house style
made popular in New
England. Often
characterized by a steep
roof with gables.
CAPITAL Back
to top
Accumulated goods and
money which is most often
used to generate
additional income.
CAPITAL
EXPENDITURE Back
to top
An outlay of funds
designed to improve the
income-producing
capabilities of an asset
or to extend its economic
life.
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.
CAULKING Back
to top
A pliable material used to
seal cracks or openings
such as around windows.
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.
CERTIFICATE
OF DEPOSIT INDEX Back
to top
An index based on the
interest rate of six month
CD's. Used to set interest
rates on some Adjustable
Rate Mortgages.
CERTIFICATE
OF ELIGIBILITY Back
to top
A document issued by the
Veterans Administration
that certifies eligibility
for a VA loan.
CERTIFICATE
OF OCCUPANCY Back
to top
Issued by an appropriate
jurisdictional entity,
this document certifies
that a building complies
with all building codes
and is safe for use or
habitation.
CERTIFICATE
OF REASONABLE VALUE (CRV) Back
to top
Usually based on an
independent appraisal, a
CRV for a particular
property establishes the
maximum amount which can
be secured by a VA
mortgage.
CERTIFICATE
OF TITLE Back
to top
A document designating the
legal owner of a parcel of
real estate. Usually
provided by a title or
abstract company.
CERTIFIED
GENERAL APPRAISER Back
to top
Generally, any
professional who has met
the local or state
requirements, and passed
the appropriate
certification exam, and is
capable of appraising any
type of property.
CERTIFIED
RESIDENTIAL APPRAISER Back
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A sub-classification of
appraiser who is only
licensed to appraise
residential property,
usually up to four units.
CHAIN
OF TITLE Back
to top
The complete history of
ownership of a piece of
property.
CHATTEL Back
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Any personal property
which is not attached to
or an integral part of a
property. Chattel is not
commonly taken into
consideration when
appraising the value of
real property.
CIRCUIT
BREAKERS Back
to top
Electrical devices which
automatically open
electrical circuits if
they are overloaded.
CLEAR
TITLE Back
to top
Ownership of property that
is not encumbered by any
counter-claim or lien.
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.
CO-BORROWER Back
to top
A second person sharing
obligation on the loan and
title on the property.
COLLATERAL Back
to top
An asset which is placed
at risk to secure the
repayment of a loan.
COLLECTION Back
to top
The process a lender takes
to pursue a borrower who
is delinquent on his
payments in order to bring
the mortgage current
again. Includes
documentation that may be
used in foreclosure.
CO-MAKER Back
to top
A second party who signs a
loan, along with the
borrower, and becomes
liable for the debt should
the borrower default.
COMMON
LAW Back
to top
As opposed to statute law.
Laws that have been
established by custom,
usage and courts over many
years.
COMMISSION Back
to top
A percentage of the sales
price or a fixed fee
negotiated by an agent to
compensate for the effort
expended to sell or
purchase property.
COMMON
AREA ASSESSMENTS Back
to top
Fees which are charged to
the tenets or owners of
properties to cover the
costs of maintaining areas
shared with other tenets
or owners. Commonly found
in condominium, PUD or
office spaces.
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 whose value
is being determined. The
Uniform Standards of
Professional Appraisal
Practice (USPAP) establish
clear guidelines for
determining a comparable
property.
COMPOUND
INTEREST Back
to top
Interest paid on the
principal amount, as well
as any accumulated
interest.
CONCESSIONS Back
to top
Additional value granted
by a buyer or seller to
entice another party to
complete a deal.
CONDEMNATION Back
to top
The official process by
which a property is deemed
to be uninhabitable or
unusable due to internal
damage or other external
conditions.
CONDENSATION Back
to top
The transition of water
vapor to liquid. Typically
forms in areas of high
humidity.
CONDOMINIUM Back
to top
A development where
individual units are
owned, but common areas
and amenities are shared
equally by all owners.
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.
CONDUIT Back
to top
The pipe through which
electric wiring is run.
CONSTRUCTION
LOAN Back
to top
A loan made to a builder
or home owner that
finances the initial
construction of a
property, but is replaced
by a traditional mortgage
one the property is
completed.
CONTIGUOUS Back
to top
Connected to or touching
along an unbroken
boundary.
CONTINGENCY Back
to top
Something that must occur
before something else
happens. Often used in
real estate sales when a
buyer must sell a current
home before purchasing a
new one. Or, when a buyer
makes an offer that
requires a complete home
inspection before it
becomes official.
CONTRACT Back
to top
A legally binding
agreement, oral or
written, between two
parties.
CONVENTIONAL
MORTGAGE Back
to top
A traditional, real estate
financing mechanism that
is not backed by any
government or other agency
(FHA, VA, etc.).
CONVERTIBLE
ARM Back
to top
A mortgage that begins as
and adjustable, that
allows the borrower to
convert the loan to a
fixed rate within a
specific timeframe.
COOPERATIVE
(CO-OP) Back
to top
A form of ownership where
each resident of a
multiunit property owns a
share in a cooperative
corporation that owns the
building. With each
resident having rights to
a specific unit within the
building.
CORPORATE
RELOCATION Back
to top
A situation where a
person's employer pays all
or some of the expenses
associated with moving
from one location to
another, usually over a
substantial distance.
Relocation expenses often
include the amounts, such
as brokerage fees,
incurred in the selling
and buying of the
employee's primary
residence.
COST
OF FUNDS INDEX (COFI) Back
to top
An index of financial
institutions costs used to
set interest rates for
some Adjustable Rate
Mortgages.
COVENANT Back
to top
A stipulation in any
mortgage that, if not met,
can be cause for the
lender to foreclose.
CREDIT Back
to top
A loan of money for the
purchase of property, real
or personal. Credit is
either secured by an
asset, such as a home, or
unsecured.
CREDIT
HISTORY Back
to top
A record of debt payments,
past and present. Used by
mortgage lenders in
determining credit
worthiness of individuals.
CREDITOR Back
to top
A person to whom money is
owed.
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.
CREDIT
REPOSITORY Back
to top
Large companies that
gather and store financial
and credit information
about individuals who
apply for credit.
CUL-DE-SAC Back
to top
A dead-end street. One
with only one
entrance/exit.
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.
DEBT
EQUITY RATIO Back
to top
The ratio of the amount a
mortgagor still owes on a
property to the amount of
equity they have in the
home. Equity is calculated
at the fair-market value
of the home, less any
outstanding mortgage debt.
DEED Back
to top
A document indicating the
ownership of a property.
DEED-IN-LIEU
(OF FORECLOSURE) Back
to top
A document given by a
borrower to a lender,
transferring title of the
property. Often used to
avoid credit-damaging
foreclosure procedures.
DEED
OF TRUST Back
to top
A document which transfers
title in a property to a
trustee, whose
obligations and powers are
stipulated. Often used in
mortgage transactions.
DEED
OF RECONVEYANCE Back
to top
A document which transfers
ownership of a property
from a Trustee back to a
borrower who has fulfilled
the obligations of a
mortgage.
DEED
OF RELEASE Back
to top
A document which dismisses
a lien or other claim on a
property.
DEED
OF SURRENDER Back
to top
A document used to
surrender any claim a
person has to a property.
DEFAULT Back
to top
The condition in which a
borrower has failed to
meet the obligations of a
loan or mortgage.
DELINQUENCY Back
to top
The state in which a
borrow has failed to meet
payment obligations on
time.
DEPOSIT Back
to top
Cash given along with an
offer to purchase
property, Also called
EARNEST MONEY.
DEPRECIATION Back
to top
The natural decline in
property value due to
market forces or depletion
of resources.
DETACHED
SINGLE-FAMILY HOME Back
to top
A single building
improvement intended to
serve as a home for one
family.
DISCOUNT
POINTS Back
to top
Points paid in addition to
the loan origination fee
to get a lower interest
rate. One point is equal
to one percent of the loan
amount.
DISTRESSED
PROPERTY Back
to top
A mortgaged property which
has been foreclosed on.
DOWNSPOUT Back
to top
The pipe that water moves
through to reach the
ground from the rain
gutter.
DUE-ON-SALE
PROVISION Back
to top
A clause in a mortgage
giving the lender the
right to demand payment of
the full balance when the
borrower sells the
property.
DUPLEX Back
to top
A single-building
improvement which is
divided and provides two
units which serve as homes
to two families.
DWELLING Back
to top
A house or other building
which serves as a home.
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.
EAVE Back
to top
The part of the roof that
extends beyond the
exterior wall.
ECONOMIC
DEPRECIATION Back
to top
The decline in property
value caused by external
forces, such as
neighborhood blight or
adverse development.
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.
ENCROACHMENT Back
to top
A building or other
improvement on one
property which invades
another property or
restricts its usage.
ENCUMBRANCE Back
to top
A claim against a
property. Examples are
mortgages, liens and
easements.
ENERGY
EFFICIENCY RATIO Back
to top
An efficiency rating
system for air
conditioning units that
corresponds to the number
of BTU's output per watt
of electricity used.
EQUAL
CREDIT OPPORTUNITY ACT (ECOA) Back
to top
U.S. federal law requiring
that lenders afford people
equal chance of getting
credit without
discrimination based on
race, religion, age, sex
etc
EQUITY Back
to top
The difference between the
fair market value of a
property and that amount
an owner owes on any
mortgages or loans secured
by the property.
EQUITY
BUILDUP Back
to top
The natural increase in
the amount of equity an
owner has in a property,
accumulated through market
appreciation and debt
repayment.
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.
ESCROW Back
to top
An amount retained by a
third party in a trust to
meet a future obligation.
Often used in the payment
of annual taxes or
insurance for real
property.
ESCROW
ACCOUNT Back
to top
An account setup by a
mortgage servicing company
to hold funds with which
to pay expenses such as
homeowners insurance and
property taxes. An extra
amount is paid with
regular principal and
interest payments that go
into the escrow account
each month.
ESCROW
ANALYSIS Back
to top
An analysis performed by
the lender usually once
each year to see that the
amount of money going into
the escrow account each
month is correct for the
forecasted expenses.
ESCROW
DISBURSEMENTS Back
to top
The payout of funds from
an escrow account to pay
property expenses such as
taxes and insurance.
ESTATE Back
to top
The total of all property
and assets owned by an
individual.
EXAMINATION
OF TITLE Back
to top
The report on the title of
a property from the public
records or an abstract of
the title.
EXCLUSIVE
LISTING Back
to top
An agreement between the
owner of a property and a
real estate agent giving
the agent exclusive right
to sell the property.
EXECUTOR Back
to top
The person named in a will
to administer the estate.
FACADE Back
to top
The front exposure of any
building. Often used to
describe an artificial or
false front which is not
consistent with the
construction of the rest
of the building.
FAIR
CREDIT REPORTING ACT Back
to top
A federal law regulating
the way credit agencies
disclose consumer credit
reports and the remedies
available to consumers for
disputing and correcting
mistakes on their credit
history.
FAIR
MARKET VALUE Back
to top
The price at which two
unrelated parties, under
no duress, are willing to
transact business.
FANNIE
MAE Back
to top
A private,
shareholder-owned company
that works to make sure
mortgage money is
available for people to
purchase homes. Created by
Congress in 1938, Fannie
Mae is the nation's
largest source of
financing for home
mortgages.
FASCIA Back
to top
The boards that enclose
the eaves.
FEDERAL
DEPOSIT INSURANCE
CORPORATION (FDIC) Back
to top
The U.S. Government agency
created in 1933 which
maintains the stability of
and public confidence in
the nation's financial
system by insuring
deposits and promoting
safe and sound banking
practices.
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 forms an
opinion of 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.
FEE
SIMPLE ESTATE Back
to top
A form or ownership, or
holding title to real
estate. It is the most
complete form of title,
having an unconditional
and unlimited interest of
perpetual duration.
FHA
MORTGAGE Back
to top
A mortgage that is insured
by the Federal Housing
Administration (FHA).
FINAL
VALUE ESTIMATE Back
to top
The opinion of 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.
FIXED-RATE
MORTGAGE (FRM) Back
to top
A mortgage which has a
fixed rate of interest
over the life of the loan.
FIXTURE Back
to top
Any piece of personal
property which becomes
permanently affixed to a
piece of real property.
FLASHING Back
to top
The metal used around the
base of roof mounted
equipment, or at the
junction of angles used to
prevent leaking.
FLOOD
INSURANCE Back
to top
Supplemental insurance
which covers a home owner
for any loss due to water
damage from a flood. Often
required by lenders for
homes located in FEMA-designated
flood zones.
FLOOR
PLAN Back
to top
The representation of a
building which shows the
basic outline of the
structure, as well as
detailed information about
the positioning of rooms,
hallways, doors, stairs
and other features. Often
includes detailed
information about other
fixtures and amenities.
FLUE Back
to top
The furnace exhaust pipe,
usually going through the
roof.
FLUSH
VALVE Back
to top
The valve between the
toilet bowl and the tank.
FOOTING Back
to top
The partially buried
support for a vertical
structural member such as
a post.
FORECLOSURE Back
to top
The process whereby a
lender can claim the
property used by a
borrower to secure a
mortgage and sell the
property to meet the
obligations of the loan.
FORFEITURE Back
to top
The loss of property or
money due to the failure
to meet the obligations of
a mortgage or loan secured
by that property.
FOUNDATION Back
to top
The solid structural
element upon which a
structure is built.
FRONTAGE Back
to top
The segment of a property
that runs along a point of
access, such as a street
or water front.
FUNCTIONAL
OBSOLESCENCE Back
to top
A decrease in the value of
property due to a feature
or lack thereof which
renders the property
undesirable. Functional
obsolescence can also
occur when the surrounding
area changes, rendering
the property unusable for
its originally intended
purpose.
GABLE
ROOF Back
to top
A steeply angled,
triangular roof.
GALVANIZED
PIPE Back
to top
Iron pipe with a
galvanized (zinc) coating.
GAMBREL
ROOF Back
to top
A ''barn-like'' roof,
where the upper portion of
the roof is less-steeply
angled than the lower
part.
GENERAL
LIEN Back
to top
A broad-based claim
against several properties
owned by a defaulting
party.
GEORGIAN Back
to top
A classic, English-style
hose characterized by
simple rectangular shape
and multiple stories.
GFI Back
to top
Ground Fault Interrupter.
A type of circuit breaker
required in areas where
water is present.
GINNIE
MAE Back
to top
A wholly owned corporation
created in 1968 within the
U.S. Department of Housing
and Urban Development to
serve low-to
moderate-income
homebuyers.
GIRDER Back
to top
A main supporting beam.
GOVERNMENT
MORTGAGE Back
to top
Any mortgage insured by a
government agency, such as
the FHA or VA.
GRADE Back
to top
The slope of land around a
building. Also ground
level.
GRANTEE Back
to top
Any person who is given
ownership of a piece of
property.
GRANTOR Back
to top
Any person who gives away
ownership of a piece of
property.
GROSS
AREA Back
to top
The sum total of all floor
space, including areas
such as stairways and
closet space. Often
measured based on external
wall lengths.
GROUTING Back
to top
Material used around
ceramic tile.
GUTTER Back
to top
The trough around the edge
of the roof that catches
and diverts rain.
HALF-SECTION Back
to top
320 acres.
HAZARD
INSURANCE Back
to top
Insurance covering damage
to a property caused by
hazards such as fire, wind
and accident.
HEADER Back
to top
The framing elements above
an opening such as a
window or door.
HEARTH Back
to top
The floor of a fireplace
or the area immediately in
front of it.
HEIGHT
ZONING Back
to top
A municipal restriction on
the maximum height of any
building or other
structure.
HIDDEN
AMENITIES Back
to top
Assets of a property which
contribute to its value,
but are not readily
apparent. Examples might
include upgraded or
premium building
materials.
HIGHEST
AND BEST USE Back
to top
The most profitable and
likely use of a property.
Selected from reasonably
probable and legal
alternative uses, which
are found to be physically
possible, appropriately
supported and financially
feasible to result in the
highest possible land
value.
HOME
EQUITY CONVERSION MORTGAGE
(HECM) Back
to top
Also known as a reverse
annuity mortgage. It
allows home owners
(usually older) to convert
equity in the home into
cash. Normally paid by the
lender in monthly
payments. HECM's typically
do not have to be
repaid until the borrower
is no longer occupying the
home.
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.
HOME
INSPECTOR Back
to top
A person who performs
professional home
inspections. Usually, with
an extensive knowledge of
house construction
methods, common house
problems, how to identify
those problems and how to
correct them.
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.
HOMEOWNER'S
WARRANTY Back
to top
An insurance policy
covering the repair of
systems and appliances
within the home for the
coverage period.
HUD
MEDIAN INCOME Back
to top
Median family income for a
particular county or
metropolitan statistical
area (MSA), as estimated
by the Department of
Housing and Urban
Development (HUD).
HUD-1
STATEMENT Back
to top
A standardized, itemized
list, published by the
U.S. Department of Housing
and Urban Development
(HUD), of all anticipated
CLOSING COSTS connected
with a particular property
purchase.
IMPROVED
LAND Back
to top
Any parcel of land which
has been changed from its
natural state through the
creation of roads,
buildings or other
structures.
IMPROVEMENTS Back
to top
Any item added to vacant
land with the intent of
increasing its value or
usability.
IMPROVEMENT
RATIO Back
to top
The comparative value of
an improved piece of land
to its natural, unaltered
state.
INCOME
APPROACH Back
to top
The process of estimating
the value of property by
considering the present
value of a stream of
income generated by the
property.
INCOME
PROPERTY Back
to top
A piece of property whose
highest and best use is
the generation of income
through rents or other
sources.
INDEPENDENT
APPRAISAL Back
to top
An estimation of value
created by a professional,
certified appraiser with
no vested interest in the
value of the property.
INSPECTION Back
to top
The examination of a piece
of property, its buildings
or other amenities.
INSURABLE
TITLE Back
to top
The title to property
which has been
sufficiently reviewed by a
title insurance company,
such that they are willing
to insure it as free and
clear.
INTEREST
RATE Back
to top
A percentage of a loan or
mortgage value that is
paid to the lender as
compensation for loaning
funds.
INVESTMENT
PROPERTY Back
to top
Any piece of property that
is expected to generate a
financial return. This may
come as the result of
periodic rents or through
appreciation of the
property value over time.
JAMB Back
to top
The side of a door frame.
JOINT
TENANCY Back
to top
A situation where two or
more parties own a piece
of property together. Each
of the owners has an equal
share, and may not dispose
of or alter that share
without the consent of the
other owners.
JOISTS Back
to top
Horizontal beams laid on
edge to support flooring
or a ceiling.
JUDGMENT Back
to top
An official court
decision. If the judgment
requires payment from one
party to another, the
court may put a lien
against the payee's
property as collateral.
JUDICIAL
FORECLOSURE Back
to top
A type of foreclosure
conducted as a civil suit
in a court of law.
JUMBO
LOAN Back
to top
A mortgage loan for an
amount greater than the
limits set by Fannie Mae
and Freddie Mac. Often
called non-conforming
loans.
LALLY
COLUMN Back
to top
A concrete filled steel
pipe used to support
beams.
LATE
CHARGE Back
to top
An extra charge, or
penalty added to a regular
mortgage payment when the
payment is made late by an
amount of time specified
in the original loan
document.
LATENT
DEFECTS Back
to top
Any defect in a piece of
property which is not
readily apparent, but
which has an impact of the
value. Structural damage
or termite infestation
would be examples of
latent defects.
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.
LEASEHOLD
ESTATE Back
to top
A type of property
''ownership'' where the
buyer actually has a
long-term lease on the
property.
LEASE
OPTION Back
to top
A lease agreement that
gives the tenant an option
to buy the property.
Usually, a portion of the
regular monthly rent
payment will be applied
towards the down payment.
LEGAL
DESCRIPTION Back
to top
The description of a piece
of property, identifying
its specific location in
terms established by the
municipality or other
jurisdiction in which the
property resides. Often
related in specific
distances from a known
landmark or intersection.
LENDER Back
to top
The person or entity who
loans funds to a buyer. In
return, the lender will
receive periodic payments,
including principal and
interest amounts.
LIABILITIES
Back
to top
A person's outstanding
debt obligations.
LIABILITY
INSURANCE Back
to top
Insurance that covers
against potential lawsuit
brought against a property
owner for alleged
negligence resulting in
damage to another party.
LIEN Back
to top
Any claim against a piece
of property resulting from
a debt or other
obligation.
LIFE
CAP Back
to top
A limit on how far the
interest rate can move for
an Adjustable Rate
Mortgage.
LIKE-KIND
PROPERTY Back
to top
Any property which is
substantially similar to
another property.
LINE
OF CREDIT Back
to top
An extension of credit for
a certain amount for a
specific amount of time.
To be used by the borrower
at his discretion.
LIQUID
ASSET Back
to top
Any asset which can be
quickly converted into
cash at little or no cost,
or cash itself.
LOAN
Back
to top
Money borrowed, to be
repaid with interest,
according to the specific
terms and conditions of
the loan.
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.
LOAN-TO-VALUE
RATIO (LTV) Back
to top
The comparison of the
amount owed on a mortgaged
property to its fair
market value.
LOCK-IN
Back
to top
An agreement between a
lender and a borrower,
guaranteeing an interest
rate for a loan if the
loan is closed within a
certain amount of time.
LOCK-IN
PERIOD Back
to top
The amount of time the
lender has guaranteed an
interest rate to a
borrower.
MAJOR
DEFICIENCY Back
to top
A deficiency that strongly
impacts the usability and
habitability of a house.
Or a deficiency that may
be very expensive to
repair.
MANUFACTURED
HOUSING Back
to top
Once known as ''mobile
homes,'' manufactured
housing is any building
which has been constructed
off site, then moved onto
a piece of real property.
MARGIN Back
to top
The difference between the
interest rate and the
index on an adjustable
rate mortgage.
MARGINAL
LAND Back
to top
Land whose value has been
diminished due to some
internal defect or
external condition. In
most cases, the cost to
correct the flaw or
condition is as much or
more than the expected
return from the property.
MASTER
ASSOCIATION Back
to top
An umbrella organization
that is made up of
multiple, smaller home
owner's associations.
Often found in very large
developments or
condominium projects.
MATURITY Back
to top
The date on which the
principal balance of a
financial instrument
becomes due and payable.
MERGED
CREDIT REPORT Back
to top
A credit report derived
from data obtained from
multiple credit agencies.
METES
AND BOUNDS Back
to top
A traditional way of
describing property,
generally expressed in
terms of distance from a
known landmark or
intersection, and then
following the boundaries
of the property back to
its origin.
METROPOLITAN
AREA Back
to top
The accumulated land in
and around a city or other
municipality which falls
under the political and
economic influence of that
entity.
MINERAL
RIGHTS Back
to top
The legal right to exploit
and enjoy the benefits of
any minerals located below
the surface of a parcel of
land.
MISREPRESENTATION Back
to top
A statement by one party
in a transaction that is
incorrect or misleading.
Most misrepresentations
are deemed to be
intentional and thus may
constitute fraud. Others,
however, some are rendered
through simple mistakes,
oversights or negligence.
MORTGAGE Back
to top
A financial arrangement
wherein an individual
borrows money to purchase
real property and secures
the loan with the property
as collateral.
MORTGAGE
BANKER Back
to top
A financial institution
that provides primary and
secondary mortgages to
home buyers.
MORTGAGE
BROKER Back
to top
A person or organization
that serves as a middleman
to facilitate the mortgage
process. Brokers often
represent multiple
mortgage bankers and offer
the most appropriate deal
to each buyer.
MORTGAGEE Back
to top
The entity that lends
money in a real estate
transaction.
MORTGAGE
INSURANCE Back
to top
A policy that fulfills those
obligations of a mortgage
when the policy holder
defaults or is no longer
able to make payments.
MORTGAGE
INSURANCE PREMIUM (MIP) Back
to top
A 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.
MORTGAGOR Back
to top
The entity that borrows
money in a real estate
transaction.
MULTI-FAMILY
PROPERTIES Back
to top
Any collection of
buildings that are
designed and built to
support the habitation of
more than four families.
NATIONAL
ASSOCIATION OF MASTER
APPRAISERS (NAMA) Back
to top
A non profit professional
association organized in
1982, dedicated to the
advancement of
professionalism in real
estate appraisal.
NATIONAL
SOCIETY OF REAL ESTATE
APPRAISERS Back
to top
An organization founded in
1956 which promotes
standards of
professionalism in its
members.
NATURAL
VACANCY RATE Back
to top
The percentage of vacant
properties in a given area
that is the result of
natural turnover and
market forces.
NEGATIVE
AMORTIZATION Back
to top
When the balance of a loan
increases instead of
decreases. Usually due to
a borrower making a
minimum payment on an
Adjustable Rate Mortgage
during a period when the
rate fluctuates to a high
enough point that the
minimum payment does not
cover all of the interest.
NEIGHBORHOOD
LIFE-CYCLE Back
to top
The evolution of
neighborhood use and
demographics over time.
Economic fluctuations,
municipal zoning changes
and population shifts can
effect the life cycle.
NEIGHBORHOOD Back
to top
A subsection of a
municipality that has been
designated by a developer,
economic forces or
physical formations.
NET
LEASABLE AREA Back
to top
The space in a
development, outside of
the common areas, that can
be rented to tenants.
NEW
ENGLAND COLONIAL Back
to top
An architectural style
dating from early American
history typified by a
two-story building with
clapboard siding.
NO-COST
LOAN Back
to top
Many lenders offer loans
that you can obtain at
"no cost." You
should inquire whether
this means there are no
"lender" costs
associated with the loan,
or if it also covers the
other costs you would
normally have in a
purchase or refinance
transactions, such as
title insurance, escrow
fees, settlement fees,
appraisal, recording fees,
notary fees, and others.
These are fees and costs
which may be associated
with buying a home or
obtaining a loan, but not
charged directly by the
lender. Keep in mind that,
like a
"no-point" loan,
the interest rate will be
higher than if you obtain
a loan that has costs
associated with it.
NO-POINT
LOAN Back
to top
A loan with no
"points". The
interest rate on such a
loan will be higher than a
loan with points paid.
Also sometimes refers to a
refinance loan where
closing costs are included
in the loan.
NON-CONFORMING
USE Back
to top
The use of land for
purposes contrary to the
applicable municipal
zoning specifications.
Often occurs when zoning
changes after a property
is in use.
NONLIQUID
ASSET Back
to top
Any asset which can not be
quickly converted into
cash at little or no cost.
NOTE Back
to top
A legal document that
obligates a borrower to
repay a mortgage loan at a
stated interest rate
during a specified period
of time.
NOTE
RATE Back
to top
The interest rate stated
on a mortgage note.
NOTICE
OF DEFAULT Back
to top
Formal written notice from
a lender to a borrower
that default has occurred.
OBSOLESCENCE Back
to top
The process of an assets
value diminishing due to
the development of more
desirable alternatives or
because of the degradation
of its capabilities.
OCCUPANCY Back
to top
A physical presence within
and control of a property.
OCCUPANCY
RATE Back
to top
The percentage of
properties in a given area
that are occupied.
OCTOPUS
RECEPTACLE Back
to top
An outlet with too many
devices plugged into it,
using a power strip or
other device to multiply
the outlets.
OFF-SITE
IMPROVEMENTS Back
to top
Buildings, structures or
other amenities which are
not located on a piece of
property, but are
necessary to maximize the
use of the property or in
some way contribute to the
value of the property.
OFF-STREET
PARKING Back
to top
Designated parking spaces
associated with a
particular building or
other structure which are
not located on public
streets.
OLD
TERMITE ACTIVITY Back
to top
Where no termites are
currently active, but
indications of past
activity can be seen.
ON-SITE
IMPROVEMENTS Back
to top
Buildings, structures or
other amenities that are
erected on a piece of
property and contribute to
its value.
OPEN
SPACE Back
to top
Any land which has not had
any significant buildings
or structures erected on
it. Most often used to
describe desirable
neighborhood features like
parks.
OPEN
SPLICE Back
to top
An uncovered electrical
connection.
ORIGINAL
EQUITY Back
to top
The amount of cash a home
buyer initially invests in
the home.
ORIGINAL
PRINCIPAL BALANCE Back
to top
The total amount of
principal owed on a
mortgage loan at the time
of closing.
ORIGINATION
FEE Back
to top
Refers to the total number
of points paid by a
borrower at closing.
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.
PARGING Back
to top
The cement coat applied to
block foundations.
PARTIAL
INTEREST Back
to top
A shared ownership in a
piece of property. May be
divided among two or more
parties.
PARTIAL
PAYMENT Back
to top
A payment of less than the
regular monthly amount.
Usually, a lender will not
accept partial payments.
PERIODIC
PAYMENT CAP Back
to top
The limit on how much
regular monthly payments
on an Adjustable Rate
Mortgage can change during
one adjustment period.
PERIODIC
RATE CAP Back
to top
The limit on how much the
interest rate on an
Adjustable Rate Mortgage
can change during any one
adjustment period.
PERSONAL
PROPERTY Back
to top
Owned items which are not
permanently affixed to the
land.
PERSONAL
RESIDENCE Back
to top
The primary domicile of a
person or family.
PLANNED
UNIT DEVELOPMENT (PUD) Back
to top
A coordinated, real estate
development where common
areas are shared and
maintained by an owner's
association or other
entity.
PLAT Back
to top
A plan or chart of a piece
of land which lays out
existing or planned
streets, lots or other
improvements.
POINT Back
to top
A percentage of a mortgage
amount (one point = 1
percent).
PRE-APPROVAL Back
to top
The process of applying
for a mortgage loan and
becoming approved for a
certain amount at a
certain interest rate
before a property has been
chosen. Pre-approval
allows the borrower
greater freedom in
negotiations with sellers.
PREFABRICATED Back
to top
Any building or portion
thereof which is
manufactured and assembled
off site, then erected on
a property.
PREPAYMENT Back
to top
Payment made that reduces
the principal balance of a
loan before the due date
and before the loan has
become fully amortized.
PREPAYMENT
PENALTY Back
to top
A fee that may be charged
to a borrower who pays off
a loan before it is due.
PRE-QUALIFICATION Back
to top
Less formal that
pre-approval,
pre-qualification usually
means a written statement
from a loan officer
indicating his or her
opinion that the borrower
will be able to become
approved for a mortgage
loan.
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
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The most common
constituents of a monthly
mortgage payment.
PRIVATE
MORTGAGE INSURANCE (PMI) Back
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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
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Any item which is owned or
possessed.
PURCHASE
AGREEMENT Back
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A written contract signed
by the buyer and seller
stating the terms and
conditions under which a
property will be sold.
QUADRAPLEX Back
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Any building designed to
accommodate four families.
QUALIFYING
RATIOS Back
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Two ratios used in
determining credit
worthiness for a mortgage
loan. One is the ratio of
a borrower's monthly
housing costs to monthly
income. The other is a
ratio of all monthly debt
to monthly income.
QUITCLAIM
DEED Back
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A legal document which
transfers any ownership an
individual has in a piece
of property. Often used
when the amount of
ownership is not known or
is unclear.
RAFTER Back
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A structural element of
the roof, sloping from the
peak to the outer walls.
RANCH
HOUSE Back
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An architectural style
typified by a
single-story, low-roof
construction. Popular in
the western U.S.
RATE
LOCK Back
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A guarantee from a lender
of a specific interest
rate for a period of time.
RAW
LAND Back
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Any land which has not
been developed.
REAL
ESTATE Back
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A piece of land and any
improvements or fixtures
located on that land.
REAL
ESTATE AGENT Back
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A licensed professional
who facilitates the buying
and selling of real
estate.
REAL
ESTATE SETTLEMENT
PROCEDURES ACT (RESPA) Back
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A federal law requiring
lenders to give full
disclosure of closing
costs to borrowers.
REAL
PROPERTY Back
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Land, improvements and
appurtenances, and the
interest and benefits
thereof.
REALTORŪ Back
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A real estate agent or
broker who is a member of
the NATIONAL ASSOCIATION
of REALTORSŪ.
RECEPTACLE Back
to top
An electrical outlet to
plug into.
RECORDER Back
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A local government
employee whose role it is
to keep records of all
real estate transactions
within the jurisdiction.
RECORDING Back
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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
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A new loan to pay off an
existing loan. Typically
to gain a lower interest
rate or convert equity
into cash.
REGISTER Back
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Where air from a furnace
or air conditioning system
enters the room.
RELOCATION
SERVICE Back
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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.
REMAINING
BALANCE Back
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The amount of principal,
interest and other costs
that has not yet been
repaid.
REMAINING
TERM Back
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The amount of time
remaining on the original
amortization schedule.
REMODEL Back
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An activity designed to
improve the value or
desirability of a property
through rebuilding,
refurbishing, redecorating
or adding on to it.
REPAYMENT
PLAN Back
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A plan to repay delinquent
payments, agreed upon
between a lender and
borrower, in an effort to
avoid foreclosure.
REPLACEMENT
RESERVE FUND Back
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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
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A piece of property whose
highest and best use is
the maintenance of a
residence.
REVOLVING
DEBT Back
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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.
RIDGE
BOARD Back
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The structural member of a
roof where the rafters
join at the top.
RIGHT
OF FIRST REFUSAL Back
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An agreement giving a
person the first
opportunity to buy or
lease a property before
the owner offers it for
sale to others.
ROOF
PITCH Back
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The degree of slope in a
roof.
RURAL Back
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An area outside of an
established urban area or
metropolitan district.
SALE
PRICE Back
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The actual price a
property sells for,
exclusive of any special
financing concessions.
SALES
COMPARISON APPROACH Back
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An appraisal practice
which estimates the value
of a property by comparing
it to comparable
properties which have sold
recently.
SCARCITY Back
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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
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A loan secured by the
equity in a home, when a
primary mortgage already
exists.
SECONDARY
MORTGAGE MARKET Back
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An economic marketplace
where mortgage bankers buy
and sell existing
mortgages.
SECURED
LOAN Back
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A loan that is backed by
collateral. In the case of
a mortgage loan, the
collateral is the house.
SECURITY Back
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The property used as
collateral for a loan.
SEMIDETACHED
HOUSING Back
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Two residences which share
a common wall.
SERVICER Back
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A financial institution
which collects mortgage
payments from borrowers
and applies the
appropriate portions to
principal, interest and
any escrow accounts.
SERVICING Back
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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.
SHEATHING Back
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The covering on outside
walls beneath the siding
or exterior finish such as
stucco.
SHEETROCK Back
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Also called drywall, the
gypsum board commonly used
on interior walls.
SILL
PLATE Back
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The lumber used around the
foundation to support
exterior wall framing.
SILL
COCK Back
to top
Garden hose pipe
connection.
SINGLE-FAMILY
PROPERTY Back
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A property designed and
built to support the
habitation of one family.
SOFFIT Back
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The underside of a cornice
at the eaves.
STUCCO Back
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A textured plaster
exterior (and occasionally
interior) wall finish.
STUD Back
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A vertical framing piece
in a wall, generally 2x4
lumber in interior walls.
SUBDIVISION Back
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A residential development
that is created from a
piece of land which has
been subdivided into
individual lots.
SUBJECT
PROPERTY Back
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A term which indicates a
property which is being
appraised.
SUMP Back
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A basin into which water
drains and from which the
water is pumped out.
SURVEY Back
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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
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Any property which is not
taxed.
TENANCY Back
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The right to occupy a
building or unit.
TENANCY
IN COMMON Back
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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
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A specific document which
serves as proof of
ownership.
TITLE
COMPANY Back
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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
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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
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The process whereby the
TITLE COMPANY researches a
properties title history
and ensures that no
outstanding claims exist.
TRANSFER
OF OWNERSHIP Back
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Any means by which the
ownership of a property
changes hands.
TRANSFER
OF TAX Back
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Taxes payable when title
passes from one owner to
another.
TRAP Back
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A bend in water pipe.
TRUSTEE Back
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A fiduciary that
holds or controls property
for the benefit of
another.
TRUTH
IN LENDING Back
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A federal law requiring
full disclosure by lenders
to borrowers of all terms,
conditions and costs of a
mortgage.
TUDOR Back
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A style of architecture
typified by exposed stone,
wood and brick
construction. Similar in
style to English manor
homes.
UNDER
IMPROVED LAND Back
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A piece of land which has
been improved, but not to
the full extent of its
potential.
UNENCUMBERED
PROPERTY Back
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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
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The span of time over
which a property can be
used or can provide
benefits to its owner.
VACANCY
RATE Back
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The current percentage of
vacant properties in a
given area, regardless of
why they are vacant.
VA
MORTGAGE Back
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A mortgage that is
guaranteed by the
Department of Veterans
Affairs (VA).
VARIANCE Back
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An exception to municipal
zoning regulations granted
for a specific time period
to allow for
non-conforming use of the
land.
VENT
PIPE Back
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A pipe allowing gas to
escape.
VESTED Back
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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.
VOLTAGE Back
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An expression of electric
force, or pressure. One
volt being the force
needed to move one amp
against one ohm
resistance.
WALK-THROUGH
INSPECTION Back
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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
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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.
WATT Back
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An expression of amount of
electrical power. Volt
times amps equals watts.
WEAR
AND TEAR Back
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A term used to indicate
the normal damage
inflicted on a property
through every-day use.
WEATHER
STRIPPING Back
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Material used around
windows and doors to
prevent drafts.
WEEP
HOLE Back
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Drainage hole that allows
water to escape.
ZERO
LOT LINE Back
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A municipal zoning
category wherein a
building or other fixture
may abut the property
line.
ZONE Back
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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. |
