ABSORPTION RATE   
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   
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   
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   
A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.

ACRE   
43,560 square feet. A measurement of area.

ADJUSTMENT DATE   
The date the interest rate changes on an adjustable rate mortgage.

AD VALOREM TAX  
Taxes assessed based on the value of the land and improvements

ADDENDUM   
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)   
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.

ADJUSTED BASIS   
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   
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   
The additional value a property enjoys based on subjective criteria such as look or appeal.

AFFORDABILITY ANALYSIS  
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   
A person who has been appointed to act on behalf of another for a particular transaction.

AMENITY   
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.

AMORTIZATION   
The repayment of a loan through regular periodic payment.

AMORTIZATION SCHEDULE   
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.

AMORTIZATION TERM   
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.

ANNUAL PERCENTAGE RATE (APR)  
The rate of annual interest charged on a loan.

ANNUITY   
A sum of money paid at regular intervals, often annually.

APPLICATION  
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   
A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.

APPRAISAL FOUNDATION  
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 PRINCIPLES   
The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.

APPRAISAL REPORT   
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.

APPRAISED VALUE   
An opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.

APPRAISER   
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   
The natural rise in property value due to market forces.

ASSESSED VALUE   
The value of a property according to jurisdictional tax assessment.

ASSESSMENT   
The function of assigning a value to a property for the purpose of levying taxes.

ASSESSMENT RATIO   
The comparative relationship of a property's assessed value to its market value.

ASSESSOR   
The jurisdictional official who performs the assessment and assigns the value of a property.

ASSET   
Any item of value which a person owns.

ASSIGNMENT   
Transfer of ownership of a mortgage usually when the loan is sold to another company.

ASSUMABLE MORTGAGE   
A mortgage that can be taken over by the buyer when a home is sold.

ASSUMPTION   
When a buyer takes over, or "assumes" the sellers mortgage.

ATTACHED HOUSING   
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.

BALLOON MORTGAGE   
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  
The final large payment at the end of a balloon mortgage term.

BILL OF SALE   
A physical receipt indicating the sale of property.

BIWEEKLY MORTGAGE   
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.

BONA FIDE   
Any genuine offer, made without intent to defraud or deceive.

BRIDGE FINANCING   
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   
Structural members used between beams to strengthen the structure.

BROKER   
An individual who facilitates the purchase of property by bringing together a buyer and a seller.

BTU   
British Thermal Unit. A unit of measurement used to describe heating or cooling capacity.

BUFFER ZONE  
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   
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 
The statutory distance between buildings and the property line, imposed by municipalities, home associations, or other agreements.

BUNGALOW 
A one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.

BUY DOWN   
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.

CALL OPTION   
A clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.

CAP   
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   
A single-story house style made popular in New England. Often characterized by a steep roof with gables.

CASH-OUT REFINANCE   
Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.

CAULKING   
A pliable material used to seal cracks or openings such as around windows.

CAVEAT EMPTOR   
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 ELIGIBILITY   
A document issued by the Veterans Administration that certifies eligibility for a VA loan.

CERTIFICATE OF OCCUPANCY   
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)  
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  
A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.

CERTIFIED RESIDENTIAL APPRAISER   
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.

CHAIN OF TITLE   
The complete history of ownership of a piece of property.

CHATTEL   
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  
Electrical devices which automatically open electrical circuits if they are overloaded.

CLEAR TITLE   
Ownership of property that is not encumbered by any counter-claim or lien.

CLOSING   
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   
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   
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.

CO-BORROWER   
A second person sharing obligation on the loan and title on the property.

COLLATERAL   
An asset which is placed at risk to secure the repayment of a loan.

COLLECTION   
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   
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.

COMMON LAW   
As opposed to statute law. Laws that have been established by custom, usage and courts over many years.

COMMISSION   
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   
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   
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   
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   
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property who's value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.

COMPOUND INTEREST   
Interest paid on the principal amount, as well as any accumulated interest.

CONCESSIONS 
Additional value granted by a buyer or seller to entice another party to complete a deal.

CONDEMNATION   
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.

CONDENSATION   
The transition of water vapor to liquid. Typically forms in areas of high humidity.

CONDOMINIUM   
A development where individual units are owned, but common areas and amenities are shared equally by all owners.

CONDOMINIUM CONVERSION   
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   
The pipe through which electric wiring is run.

CONSTRUCTION LOAN  
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  
Connected to or touching along an unbroken boundary.

CONTINGENCY   
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 the requires a complete home inspection before it becomes official.

CONTRACT   
A legally binding agreement, oral or written, between two parties.

CONVENTIONAL MORTGAGE  
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).

CONVERTIBLE ARM 
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) 
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   
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) 
An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.

COVENANT 
A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.

CREDIT 
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   
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.

CREDITOR 
A person to whom money is owed.

CREDIT REPORT  
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 
Large companies that gather and store financial and credit information about individuals who apply for credit.

CUL-DE-SAC   
A dead-end street. One with only one entrance/exit.

DATE OF APPRAISAL   
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEBT   
An obligation to repay some amount owed. This may or may not be monetary.

DEBT EQUITY RATIO   
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   
A document indicating the ownership of a property.

DEED-IN-LIEU (OF FORECLOSURE)   
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   
A document which transfers title in a property to a trustee, who's obligations and powers are stipulated. Often used in mortgage transactions.

DEED OF RECONVEYANCE   
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   
A document which dismisses a lien or other claim on a property.

DEED OF SURRENDER   
A document used to surrender any claim a person has to a property.

DEFAULT   
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.

DELINQUENCY   
The state in which a borrow has failed to meet payment obligations on time.

DEPOSIT   
Cash given along with an offer to purchase property, Also called EARNEST MONEY.

DEPRECIATION   
The natural decline in property value due to market forces or depletion of resources.

DETACHED SINGLE-FAMILY HOME   
A single building improvement intended to serve as a home for one family.

DISCOUNT POINTS   
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   
A mortgaged property which has been foreclosed on.

DOWNSPOUT   
The pipe that water moves through to reach the ground from the rain gutter.

DUE-ON-SALE PROVISION   
A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.

DUPLEX   
A single-building improvement which is divided and provides two units which serve as homes to two families.

DWELLING   
A house or other building which serves as a home.

DOWN PAYMENT   
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.