Real Estate Glossary

Question 1

Abutting

Answer 1

Land parcels that share a common border.

Question 2

Acceleration Clause

Answer 2

Allows a lender to demand immediate and full payment of all debt owed if a buyer defaults or fails to meet
certain conditions that apply to the loan.

Question 3

Accession

Answer 3

The addition of value to property through labor or the addition of new materials, including an increase in land
through natural processes.

Question 4

Accessory Use

Answer 4

An incidental or subordinate use to the primary use of the property.

Question 5

Accounting

Answer 5

One of the fiduciary duties, accounting means an agent is accountable for any funds or properties entrusted to
the agent. This is a duty that survives termination of an agency agreement.

Question 6

Accredited Investor

Answer 6

An investor that meets one of the following: An individual with net worth of $1 million; An individual with
annual income of $200k for the past 2 years (or a couple with joint income of $300k) with income expected to
remain level; Individual holding S7, S65, or S82 license; Any bank, investment company, insurance company;
Officer or director of issuer, or non-profit institution, trust, partnership, ERISA plan, or corporation with assets
over $5 million; Employee of private fund if deemed knowledgeable; Investment advisers, RBICs.

Question 7

Accretion

Answer 7

The gradual growth in the size of a land parcel due to water-deposited sand, silt, or gravel.

Question 8

Accrued Items

Answer 8

Expenses that have been incurred but aren’t due yet, e.g. property taxes.

Question 9

Acknowledgment

Answer 9

A requirement for deed transfer; a public official must acknowledge, usually by a notary public, the grantor’s
signature.

Question 10

Acre

Answer 10

A unit of land that is equal to 43,560 square feet.

Question 11

Active Fraud

Answer 11

Intentional misstatement of a material fact; action taken by one party to deceive a second party in an attempt to
consummate a contract or transaction.

Question 12

Act of waste

Answer 12

Abuse of a property by a person who holds possession through a life estate.

Question 13

Actual Notice

Answer 13

Express notice given directly to a person or actual knowledge that is known.

Question 14

Added Assessment

Answer 14

The difference between the property assessment before the property improvement and the property’s value after
the improvement.

Question 15

ARM

Answer 15

Adjustable-Rate Mortgage

Question 16

Adjustable-Rate Mortgage (ARM)

Answer 16

A mortgage with a rate that adjusts based on changes in a market index.

Question 17

Adjusted Basis

Answer 17

The final basis for taxing purposes, computed by taking acquisition costs plus capital improvements and less
certain deductions such as depreciation.

Question 18

Adjustment

Answer 18

In appraisals or CMAs, the dollar value or percentage added to or subtracted from the sales price of a
comparable to arrive at an indicated value for the subject; in closings, the credits and debits made to a
settlement statement for accrued or prepaid expenses.

Question 19

Adjustment Date

Answer 19

The date on which the interest rate changes on an adjustable rate mortgage.