Glossary
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Abstract of Title
A summary of al1 of the recorded instruments and proceedings which affect the title to property, arranged in the order in which they were recorded.
Accretion
The addition of land through processes of nature, as by water or wind.
Accrued Interest
Accrue; to grow; to be added to. Accrued interest is interest that has been earned but not due and payable.
Acknowledgment
A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is the person’s act and deed.
Acquisition
An act or process by which a person procures property.
Acre
A measure of land equaling 43,560 square feet.
Action for Specific Performance
A court action to compel a defaulting principal to comply with the provisions of a contract.
Adjacent
Lying near to but not necessarily in actual contact with.
Adjoining
Contiguous; attaching, in actual contact with.
Adjustable Rate Loan / Adjustable Rate Mortgage (ARM)
An adjustable-rate loan (also called an adjustable-rate mortgage (ARM) for home loans) is a type of loan where the interest rate can change periodically based on a specified benchmark or index. Unlike a fixed-rate loan, which has a constant interest rate for the life of the loan, an ARM typically starts with a lower fixed rate for an initial period (e.g., 5, 7, or 10 years) and then adjusts at regular intervals (e.g., annually).
Key features of an adjustable-rate loan:
- Initial Fixed Period: The interest rate remains the same for a set number of years (e.g., a “5/1 ARM” has a fixed rate for five years).
- Adjustment Period: After the initial period, the rate adjusts periodically based on an index (such as the LIBOR, SOFR, or Treasury rate) plus a margin.
- Rate Caps: Limits on how much the interest rate can increase per adjustment period and over the life of the loan.
- Potential Savings & Risk: Borrowers may benefit from lower initial rates but face uncertainty if rates increase after the fixed period.
Administrator
A person appointed by court to administer the estate of a deceased person who left no will; i.e., who died intestate.
Ad Valorem
According to valuation
Adverse Possession
A means of acquiring title where an occupant has been in actual, open, notorious, exclusive, and continuous occupancy of property under a claim of right for the required statutory period.
Affidavit
A statement or declaration reduced to writing, and sworn to or affirmed before some officer who is authorized to administer an oath or Affirmation.
Affirm
To confirm, to ratify, to verify.
Agency
That relationship between principal and agent which arises out of a contract either expressed or implied, written or oral, wherein an agent is Employed by a person to do certain acts on the person’s behalf in dealing with a third party.
Agent
One who undertakes to transact some business or to manage some affair for another by authority of the latter.
Agreement of Sale
A written agreement between seller and purchaser in which the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms and conditions set forth therein.
Air Rights
Rights in real property to use the space above the surface of the land.
Alienation
A transferring of property to another; the transfer of property and possession of lands, or other things, from one person to another.
Alienation Clause
Allows lender to require the balance of a loan to be paid in full if the collateral is sold (also known as a “due on sale” clause).
Amortization
A gradual paying off of a debt by periodic installments.
Apportionment
Adjustment of the income, expenses or carrying charges of real estate usually computed to the date of closing of title so that the seller pays all expenses to that date. The buyer assumes all expenses commencing the date the deed is conveyed to the buyer.
Appraisal
An estimate of a property’s value by a licensed appraiser who is usually presumed to be expert in his work. This is different than a Comparative Market Analysis (CMA) that is just an opinion of value by a knowledgeable person.
Appraisal by Income Capitalization Approach
An estimate of value by capitalization of productivity and income.
Appraisal by Sale Comparison Approach
Comparability with the sale prices of other similar properties.
Appraisal by Cost Approach
Adding together all parts of a property separately appraised to form a whole: e.g., value of the land considered as vacant added to the cost of reproduction of the building, less depreciation.
Appurtenance
Something which is outside the property itself but belongs to the land and adds to its greater enjoyment such as a right-of-way or a barn or a dwelling.
APR
Annual Percentage Rate (APR) is the interest rate charged for a loan. for one year.
Assessed Valuation
A valuation placed upon property by a public officer or a board, as a basis for taxation.
Assessment
A charge against real estate made by a unit of government to cover a proportionate cost of an improvement such as a street or sewer.
Assessor
An official who has the responsibility of determining assessed values of property for taxation purposes.
Assignee
The person to whom an agreement or contract is assigned.
Assignment
The method or manner by which a right or contract is transferred from one person to another.
Assignor
A party who assigns or transfers an agreement or contract to another.
Assumption of Mortgage
The taking of title to property by a grantee, wherein the grantee assumes liability for payment of an existing note or bond secured by a mortgage against a property and becomes personally liable for the payment of such mortgage debt.
Avulsion
A sudden and perceptible loss or addition to land by the action of water, or a sudden change in the bed or course of a stream.
