Southwest Florida Real Estate
Real Estate and Mortgage Terms Glossary
Real Estate and Mortgage transactions have languages all their own. Since most people don't use these terms on any type of a regular basis, we are providing this real estate and mortgage term glossary as a quick and easy reference for you to use. Rather than being unsure about a terms meaning, you can check here first. Of course, if you need a more in-depth understanding, please contact us directly and we'll be happy to assist you.
Terms - Letter A
ABSOLUTE FEE SIMPLE TITLE
A Title that is unqualified; the best title one can obtain; conveys the highest bundle of rights. See Title Insurance.
ABSTRACT OF TITLE
A condensed history of the title to a property.
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.
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.
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.
A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.
The natural growth of a piece of land resulting from forces of nature.
A measurement of area. 43,560 square feet.
Home is currently being marketed and does not have a purchase agreement.
The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE.
A supplement to any document that contains additional information pertinent to the subject.
The value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.
The date the interest rate changes on an adjustable rate mortgage.
ADJUSTABLE RATE MORTGAGE (ARM)
A mortgage loan program that allows the lender to change the interest rate based on a published index that is beyond the lenders control. See Interest Rates.
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.
AD VALOREM TAX
Taxes assessed based on the value of the land and improvements. See Florida State Information.
The additional value a property enjoys based on subjective criteria such as look or appeal.
A declaration that a certain set of facts are truthful.
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.
Fannie Mae and Freddie Mac offer affordable housing products. For example, Fannie Neighbors is aimed at increasing homeownership in areas designated as underserved by HUD, in low-to moderate-income, or minority census tracts. It adds "underwriting flexibility" to Fannie Mae's My Community Mortgage offering and to the Community Homebuyer's Program products by removing the income limits if the property is located in one of these areas.
A relationship in which one person (the principal or client) delegates authority to another (the agent) to act on behalf of the principal in certain business transactions. This creates a fiduciary relationship, which imposes certain responsibilities on the agent who acts in this capacity.
A person who has been appointed to act on behalf of another for a particular transaction.
Loan products aimed at borrowers whose credit/other issues make them less suitable for a prime mortgage program.
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.
AMERICANS WITH DISABILITIES ACT (ADA)
A federal law enacted to eliminate discrimination against people with disabilities in employment, public accommodations (housing), government services, public transportation and communications.
AMERICAN SOCIETY OF APPRAISERS
An organization of appraisal professionals.
The repayment of a loan through regular periodic payment.
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.
A measure of electric current describing the magnitude.
ANNUAL PERCENTAGE RATE (APR)
The rate of annual interest charged on a loan.
A sum of money paid at regular intervals, often annually.
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.
A "defensible" and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.
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).
A world-wide organization dedicated to real estate appraisal education, publication and advocacy.
The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
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)
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.
An opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.
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.
The natural rise in property value due to market forces.
A non-judicial proceeding in which a third party determines the resolution of a dispute between opposing parties. The determinations of the arbitrator can be as enforceable as a decision rendered in court.
ARMS LENGTH TRANSACTION
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.
The state of being behind in the discharge of an obligation or debt.
The value of a property according to jurisdictional tax assessment.
The function of assigning a value to a property for the purpose of levying taxes.
The comparative relationship of a property's assessed value to its market value.
The jurisdictional official who performs the assessment and assigns the value of a property.
Any item of value which a person owns. Please see Loan Qualification.
Transfer of ownership of a mortgage usually when the loan is sold to another company.
An organization of persons having a common interest (i.e. condominium or homeowner associations - HOA's). Please visit our Condominium and Homeowner Associations page for more in-depth information.
A mortgage that can be taken over by the buyer when a home is sold.
When a buyer takes over, or "assumes" the sellers mortgage.
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.