Real Estate Terms Flashcards
Abandonment
Failure to occupy and use property. May result in loss of rights.
Abatement of Nuisance
The act of ending or terminating a nuisance, legal action brought to end nuisance.
Absentee Owner
A property holder who does not reside on the property and who usually relies on a property manager to supervise the investment.
Abstract
A brief summary.
Abstractors
A person who, historically, searches out anything affecting the title to real property and
summarizes the information in the findings.
Abstract of Judgement
A summary of money
judgment. The summary is usually prepared so that it
may be recorded, thereby creating a (judgement) lien on
real estate owned by the judgment debtor.
Abstract of Title
A summary of the instruments
affecting title to a parcel of real property as shown by the
public records.
Abstraction
A method of valuing land. The indicated value of the improvement is deducted from the saleprice.
Abstraction Method/Allocation Method
Method of appraising
vacant land; allocation of the appraised total value or
sale price of the property between land and building
either on a ratio basis or by subtracting a figure
representing building value or price from the total
appraised value or price of the property.
Accelerate
To make a note all due and payable at one time.
Accredited Management Organization (AMO)
A professional designation awarded to qualified property management firms by the institute of Real Estate Management.
Accredited Resident Manager (ARM)
An individual who has completed IREMs educational program for resident
managers of residential property.
Accelerated Cost Recovery System (ACRS)
The system for figuring depreciation (cost recovery) for depreciable real property acquired and placed into service after January 1, 1981.
Accelerated Depreciation
A method of cost w rite-off in
which depreciation allowances are greater in the first few years
of ownership than in subsequent years. This permits an earlier recovery of capital and a faster tax write-o ff of an as set.
Acceleration Clause
A clause in a deed of trust or
mortgage giving the lender the right to call all sums owing him
or her to be immediately due and payable upon the occurrence of a certain event. It is also a clause that permits a debtor to pay off a loan before the due date.
Acceptance
- Agreeing to the terms of an offer to enter into a contract, thereby creating a binding contract.
- Taking delivery of a deed. The act of agreeing or consenting to an offer.
Acceptance of An Offer
After acceptance of an offer, a
broker may not return the buyer’s deposit without authorization
from the seller. An essential element of every contract, it is the consent to be bound by the offer. In deeds, it is the consent to accept a grant of real property.
Accession
The acquisition of title to additional property by
its annexation to real estate already owned. An addition to
property through the efforts of man or by natural forces.
Accommodation Party
A person who, without
receiving value, signs a promissory note to help another person borrow money or get credit.
Accommodator
An intermediary who holds funds in a delayed exchange.
Accord and Satisfaction
An agreement to accept
something different than (and usually less than) what the original contract called for. The discharge of an existing
contract by accepting the performance under a substitute
contract. Generally, consideration under the new
contract is different from and of lesser value than under
the original contract, and satisfaction is the performance
of that contract; the combination discharges the original contract.
Accretion
A gradual addition to land from natural causes; for example, from gradual action of ocean or river waters.
Accrue
To increase or accumulate. Interest on loans is said to accrue daily.
Accrued Depreciation
The difference between
the cost of replacement of a new building, as of the date
of the appraisal and the present appraised value. Depreciation that has accumulated over a period of time.
(1) The difference between the cost of replacement new
as of the date of the appraisal and the present appraised
value. (2) The accumulated losses in value that has
affected the improvements on real property.
Accrued Items of Expense
Those incurred expenses which are not yet payable. The seller’s accrued expenses are credited to the purchaser in a
closing statement.
Accusation
A written statement of rules violated, used in a property right hearing.
Acknowledgement
When a person who has signed a document formally declares to an authorized
public official (usually a notary public) that he or she signed voluntarily. The official attests that the signature is
voluntary and genuine. A formal declaration before a
notary public or qualified officer that the person signing
the document is doing so voluntarily and using his or her
legal name and signature; called notarizing .
Acoustic Tile
Blocks of fiber, mineral, or metal with small holes or a rough-textured surface to absorb sound, used as covering for interior walls and ceilings.
Acquisition Cost
Under FHA. A loan is based
on acquisition cost, which is sale price or FHA value,
whichever is lesser, plus nonrecurring closing costs the
buyer is paying per FHA rules.
Acre
A measure of land equaling 160 square rods, 4,840 square yards, 43,560 square feet, or a tract about 208.71
feet square.
Adjudication
A judicial or court decision.
Adjusted Cost Basis
The income tax cost basis of the
property with certain additions, such as acquisition costs and
the cost of improvements, and certain subtractions, such as
depreciation in value.
Adjustment Interval
The time between permitted
changes in the interest rate or monthly payments, typically six
months to one year, depending on the index used.
Adjustments
In appraising, a means by which characteristics of a residential property are regulated by dollar amount of percentage to conform to similar characteristics of another residential property.
Adjustable Rate Note
A note whose interest rate is tied to a flexible index.
Adjudicative Methods
The resolution of a dispute by mirroring the judicial process in that a third party decides the controversy much as a judge does in court.
Adjusted Basis
The adjusted basis is equal to the original cost reduced by depreciation deductions and increased by capital expenditures.
Adjustable Rate Mortgage (ARM)
A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise.
A mortgage or deed of trust with a variable interest rate (an interest rate that changes
periodically. This mortgage tends to attract more people into the mortgage market.
Administrator
A person appointed by the probate
court to manage and distribute the estate of a deceased person when no executor is named in the will or there is no will.
Ad Valorem
According to Value
Adverse Posessession
A method of acquiring property based on open and notorious possession, under a
claim of right, color of title, continuous use for five years, and the payment of taxes. A method of acquiring property through continuous use of that property while paying taxes on it.
Affiant
One who makes an affidavit or gives evidence.
Agency
A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal).
Agents of Production
Four factors combined to produce income: labor, coordination, capital, and land.
Ambulatory
Capable of being changed or
revoked. In wills, it refers to the concept that a will may be revoked or modified at any time up to the testator’s death.
Amortization
The liquidation of a financial obligation on an installment basis, which includes both principal and interest. (2) Recovery of cost or value over a period of time. The method or plan for the payment of a debt, bond, deed of trust, etc., by installments or sinking fund.
Amortize
Pay off a debt in installments.
Amortized Loan (Mortgage)
A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity. Also called a Level Payment Loan.
Annexation
Attaching personal property to land so that the law views it as part of the real property (a fixture). Annexation can be actual or constructive.
Annual Debt Service
The amount of money required each year for the payment of all mortgage interest and principal.
Annuity
A sum of money received or paid yearly or at other fixed periods.
