Real Estate Glossary

blueprint

A building plan with an architect's or engineer's stamp that includes the layout of the rooms and their measurements, and indicates location of windows, doors, fixtures, and major appliances

assumption

A buyer agrees, in writing, to take over the sellers' loan payments

amendment

A change to an existing contract

asbestosis

A chronic lung disease caused by breathing asbestos fibers

call option

A clause in a financial contract that enables the buyer to pay the remainder of the loan balance at a specific price within a specific time period.

adjustment (loan)

A debit or credit at closing to coincide with appropriate closing costs

bargain and sale deed

A deed where there is at most one warranty: that the current owner has not encumbered it

agency disclosure form

A disclosure form that describes the possible agency relationships to a consumer

bill of sale

A document transferring title to personal property.

adverse material fact

A fact that might cause the buyer to change his mind about purchasing the property

Americans with Disabilities Act of 1990

A federal anti-discrimination law to protect persons with disabilities from discrimination in public accommodations and commercial facilities; also mandates easy access in new multi-family housing with four or more units

asbestos

A fibrous mineral found in rocks and soil, previously used in construction materials for its insulating and fire-retardant strength

buydown

A financing technique in which the buyer obtains a lower interest rate by buying down the interest rate at the time the loan is made

anchor store/anchor tenant

A large commercial tenant that draws in traffic to a mall or shopping center

associate broker

A licensed real estate broker who may perform the acts of a broker but who chooses to work under the name and supervision of a licensed broker; the licensed broker may be an individual, a corporation, a partnership, or a trade-name organization. An associate broker may not work independently.

avulsion

A loss of existing land by the sudden change in a watercourse, washing it away

BTU (British Thermal Unit)

A measure of heat energy (the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

British Thermal Unit (BTU)

A measure of heat energy (the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

budget mortgage

A mortgage in which taxes and insurance are added to the payment for principal and interest.

biweekly mortgage

A mortgage in which the borrower makes payments every two weeks, resulting in 13 payments a year instead of 12. Some borrowers use this strategy to pay off their loan earlier.

assumable mortgage

A mortgage that can be assumed when property transfers ownership (requires borrower to qualify for the loan).

balloon mortgage

A mortgage that has lower initial payments that do not amortize and provide for a "catch up" lump sum to be paid at a specific time

adjustable rate mortgage (ARM)

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

Balloon payment

A one-time payment, usually occurring at or near the end of a loan term, that is larger than all the other payment amounts

benchmark

A permanent affixed brass plaque that is numbered and is used as a point of reference by surveyors when measuring elevation

builder-owner salesperson

A person who is employed by a builder-owner and licensed to perform real estate activities on behalf of the builder-owner.

campground membership

A person's right to use a specified unit of real estate to locate an RV, trailer, tent, or other on a periodic basis according to the terms of a membership contract.

agreement of sale

A proposed contract between a buyer and seller of real estate that describes the terms of the transaction

annual percentage rate (APR)

A rate derived according to a government formula that's intended to reflect the true cost of financing that allows consumers to compare loan products; includes financing fees, so it will always be higher than the actual interest rate on a loan

acknowledgment

A requirement for deed transfer; a public official must acknowledge the grantor's signature

affiliated business arrangement (AfBA)

A shared ownership among settlement service providers (such as a real estate firm and a mortgage brokerage) that must be disclosed to clients whenever more than 1% is owned by the other company, if both service providers are used by the same client in the same transaction.

agency coupled with interest

A situation in which the agent has a financial stake in the transaction beyond the anticipated commission

air lot

A specific section of the open space above a property.

buffer zone

A strip of land used to separate land dedicated to one use from land of another use (for instance, residential from commercial). Often a green space or other dedicated land such as a park.

amortization schedule/chart

A table that shows how much of each payment will apply toward principal and how much toward interest for the loan term; also shows decrease in loan balance until paid off

bridge loan

A temporary loan used to cover the interval between two transactions.

acre

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

act of waste

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

acceleration clause

Allows a lender to demand immediate and full payment of all debt owed if a buyer defaults

amperage

Amount of current or electricity flowing through electrical wires

brownfield

An abandoned commercial or industrial site that is believed to contain toxic waste

attorney's opinion of title

An abstract of title that an attorney has reviewed and approved as accurate

addendum

An addition to a real estate contract that's added before contract acceptance

buyer's agency agreement

An agreement between a buyer and an agent to provide representation; it explains the duties of the agent to the buyer and the duties of the buyer to the agent.

anticipation

An economic principle that says that the value will increase or decrease depending on the anticipated future benefit of the property

appraisal

An estimate of value as of a specific date and for a specific use

appraised value

An estimate of value as of a specific date, and for a specific use

blockbusting

An illegal practice in which licensees or others encourage homeowners to sell because of an influx or expected influx of minorities into the area

base line

An imaginary line that runs east and west and crosses the principal meridian at a specified point; it is used by surveyors as a reference point to locate and describe land under the rectangular survey system.

accessory use

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

broker's price opinion (BPO)

An opinion of value prepared by a real estate licensee; similar to a comparative market analysis, but not as detailed; a lender or relocation company generally orders the BPO

building permit

Authority to construct a building or residential property by the local government

appurtenances

Automatic rights inherent in property ownership

assessment

Charge against a property; for instance, condominiums will have periodic assessments for maintenance and repairs of common areas

appraisal contingency

Contract clause that, if the property doesn't appraise at or above the sales price, the buyer is allowed to terminate

bracketing

Determines a probable range of property values by comparing a group of comparable sales to the subject

accrued items

Expenses that are accruing but are not yet payable (e.g., property taxes)

actual notice

Express notice given directly to a person

Administrative Procedure Act

Helps to ensure that no governmental entity acts without an opportunity for public input by requiring public disclosure and discourse before rulemaking

appreciation

Increase in property value

active fraud

Intentional misstatement of a material fact

asset

Items of value owned by an individual; often used when qualifying for financing

abutting

Land parcels that share a common border

agency law

Law related to the agency relationship

bond market

Market for buying and selling of (frequently) 30-year treasury bonds. Yield on bonds often rises and falls as fixed rate mortgages do.

alluvion

Newly formed land created by deposits from water action

accounting

One of the fiduciary duties, 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.

breach of contract

One or more parties fail to meet the terms of their agreement

agent

One who acts on behalf of another in a business transaction

appraiser

One who performs an appraisal

broker

One who provides brokerage services (buying and selling for another) for a commission

buyer presentation

Opportunity to build trust with a potential client, showcase your expertise, and learn more about the buyer's needs

air rights

Rights to use the airspace above the land may be sold or leased independently of the land itself

building code

Rules to ensure a safe, properly functioning environment for occupants of a building

auction

Sale in which highest bidder buys the property

1031 tax-deferred exchange

Section 1031 of the Internal Revenue Code allows the owner of real property to sell that property and then reinvest the proceeds in a "like-kind" property and defer paying any capital gains taxes.

aesthetic zoning

Specifies style or architecture of buildings in an area in order to preserve charm, feel, etc.

basement

Square footage below ground

accession

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

buyer's agent

The agent representing the buyer, and only the buyer in a real estate transaction.

annexation

The conversion of personal property into real property

adjustment date

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

area preference

The desirability of one location over another

assessed value

The dollar amount to which the local tax rate is multiplied to determine property tax owed

adjustment

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

adjusted basis

The final basis for taxing purposes computed by taking acquisition costs plus capital improvements and subtracting depreciation taken

accretion

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

bankruptcy

The legal process of discharging or restructuring a borrower's debts

business name

The name under which a business is licensed and conducts its activities in the public.

amortization

The paying off of a debt with regular installments over a fixed repayment schedule

beneficiary

The person entitled to the benefit of a trust arrangement

broker of record

The person responsible for the real estate activities of licensees in a corporation or other business entity.

assemblage

The process of combining separate adjacent parcels of land into one piece

agency

The relationship between the real estate professional and the person or persons being represented

bundle of rights

The rights of ownership that come with owning real property; includes both tangible and intangible rights; may be sold separately from the land itself

bylaws

The rules of an association, such as a homeowner's association or cooperative.

assignment (rentals)

The substitution of tenants, putting the responsibility for the lease contract in the new tenant's hands. Requires written permission of landlord.

assignment (mortgages)

The transfer of a mortgage from the original lender to another

assignment (contracts)

When a new party to a contract agrees to satisfy the former party's obligations. Unless there is a novation (a new contract) the original parties remain liable for the contract terms.

building specifications

Written narrative of the building plan; describes major systems, construction details, landscaping, and design features not captured in the building plan