Taunya Fagan Real Estate Glossary and Dictionary of Real Estate Terms Beginning With "A" - Mortgage Glossary and Real Estate Terminology - Building and Construction Terms

Terms You May Need to Know When Preparing Your Bozeman Real Estate Transaction

Abstract of Judgment (law):  
The summary of a court judgment that creates a lien against a property when filed with the county recorder.

Abstract of Title:
A public records summary that relates to the title of a specific piece of land. A title insurance company representative or attorney reviews this records summary to determine if there are any title defects that must be cleared before a buyer can purchase clear, marketable and insurable title.

Accelerated Cost Recovery System:  
A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.

Acceleration Clause:
Stipulation or clause in a mortgage document that may require the loan balance to become due immediately. This condition usually applies if regularly scheduled mortgage payments are not made or if there's a breach of other mortgage conditions.

Accelerated Depreciation:  
A bookkeeping method that depreciates property faster in the early years of ownership.

Acceptance:  
The seller's written approval of a buyer's offer.

Access:  
Any means by which a person can enter property.

Accessibility:  
The degree to which a building or site allows access to people with disabilities.

Accretion:  
The gradual addition to the shore or bank of a waterway by deposits of sand or silt.

Acknowledgment:  
A written declaration affirming that a person acted voluntarily.

Acre:  
A measurement of land equal to 43,560 square feet.

Acre foot:  
The volume of material needed to cover an acre of land one foot deep.

Acreage:
Residential structure with more than one dwelling.

Active Solar System:  
A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.

Actual Age:  
The number of years a structure has been standing.

Addendum:  
An addition or change to a contract. Additional principal payment   Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.

Add-on Interest:  
The interest a borrower pays on the principal for the duration of the loan.

Adjustable-Rate Mortgage (ARM):
A mortgage with an interest rate that is periodically adjusted by the lender based on a specified index. Also known as a variable rate mortgage. These types of mortgage products typically start with a lower interest rate, then the interest rate may move up or down as market conditions and the index change.

Adjusted Cost Basis:  
The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.

Adjustment Period:  
The amount of time between interest rate adjustments in an adjustable-rate mortgage.

Administrator:  
A person given authority to manage and distribute the estate of someone who died without leaving a will.

Administrator's Deed:  
A legal document that an administrator of an estate uses to transfer property.

Adverse Possession:  
The acquisition of title to property through possession without the owner's consent for a certain period of time.

Adverse Use:  
The access and use of property without the owner's consent.

Advocate:
Someone who works for the benefit of another person.

Aeolian Soil:  
Soil that is composed of materials deposited by the wind.

Affiant:  
A person who makes a sworn statement.

Affirmation:  
A substitution for an oath granted to people based on religious reasons.

A-frame Design:  
An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters.

Agency:  
The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.

Agency Closing:  
The process by which a lender uses a title company or other firm as an agent to complete a loan.

Agent:  
A person licensed by the state to conduct real estate transactions.

Agreed Boundary:  
A compromise boundary to which property owners agree in order to resolve a dispute.

Agreement of Sale:
A contract in which a seller agrees to sell and a buyer agrees to buy, under specific terms and conditions specified in writing and signed by both parties. Also known as a Contract of Purchase, Purchase Agreement or Sales Agreement according to location or jurisdiction.

Alcove:  
A recessed section of a room, such as a breakfast nook.

Alienation Clause:  
A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.

Alkali:  
Mineral salt found in soil.

Alkaline Soil:  
Soil that contains a higher concentration of mineral salt than natural acid.

Alley:  
A lane behind a row of buildings or between two rows of buildings.

Allowances:  
Budgets offered by builders of new homes for the purchase of carpeting and fixtures.

Alternative Mortgage:  
Any home loan that does not conform to a standard fixed-rate mortgage.

Aluminum-clad Windows:  
Wooden windows with aluminum covering the exterior.

Aluminum Siding:  
A metal covering that provides an alternative to paint for owners of wood homes.

Amenities:  
Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments. An attractive or desirable feature in a property.

American Society of Home Inspectors:  
The American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744.

Americans with Disabilities Act (ADA):
A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.

Amortization:
The gradual repayment of a mortgage loan by periodic installments.

Amortization Schedule:
A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.

Amortization Tables:  
Mathematical tables that lenders use to calculate a borrower's monthly payment.

Amperage:  
The strength of an electrical current.

Anchor Bolt:  
A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.

Annual:  
Any kind of plant that must be planted every year.

Annual Mortgagor Statement:  
A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.

Annual Percentage Rate (APR):
This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. It works sort of like this, but not exactly, so only use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. You will come up with a number close to the APR. Because you are using the same payment on a smaller amount, the APR is always higher than the actual note rate on your loan.

Annuity:  
The payment of a fixed sum to an investor at regular intervals.

Anticipatory Breach:  
A communication that informs a party that the obligations of the original contract will not be fulfilled.

Application:
The form used to apply for a mortgage loan, containing information about a borrower's income, savings, assets, debts, and more.

Application Fee:  
The fee that a lender charges to process a loan application.

Appraisal:
Estimate of value established by a licensed appraiser, which compares a subject property to recently sold comparable properties.

Appraisal Fee:  
The fee that an appraiser charges to estimate the market value of the property.

Appraisal Report:  
A detailed written report on the value of a property based on recent sales of comparable sites in the area.

Appraised Value:
An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price

Appraiser:
Licensed person who prepares an appraisal, which is a report of the value of a property.

Appreciation:  
An increase in the value of a home or other property over time.

Arbitration:  
A method of resolving a dispute in which a third party renders a decision.

Arbor:  
An area shaded by trees, shrubs or vines on a latticework structure.

Arch:  
A curved structure that supports weight over an area, such as a doorway.

Architect:  
A licensed professional who designs homes, buildings and other structures.

Architectural Fees:  
The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget.

Area Inventory:
A feature that enables customers or users to poll certain geographic zones such as a specific ZIP code, school district or Multiple Listing Service (MLS) area to determine a variety of information, including the number of available properties that are for sale, prices and current reported sale status.

ARM:
Acronym for "adjustable-rate mortgage."

Arpent:  
A French measurement of land equal to .84625 acres.

Asbestos:  
A group of natural fibrous impure silicate materials. Asbestos is best know as a fire-resistant mineral used for insulation and home products. Asbestos has been found to pose significant health hazards.

As-is Condition:  
The purchase or sale of a property in its existing condition.

Asking Price:  
A seller's initial price for a property.

Asphalt:
Derived from natural oil or the petroleum component, bitumen, which liquefies when heated and is genearlly impervious to moisture. Asphalt is used as a waterproofing agent and is applied to roofing materials during their manufacture.

Assessed Value:
The valuation placed on property by a public tax assessor for purposes of taxation.

Assessment:  
The estimated value placed on a piece of real estate for the purpose of taxation or a levy placed on property in addition to taxes.

Assessment Rolls:  
A list of taxable property compiled by the assessor.

Assessor:
A public official who establishes the value of a property for taxation purposes.

Asset:
Items of value owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets." These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.

Assignment:
When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.

Assignor:  
A person who transfers rights and interests of a property.

Assumable Mortgage:
A mortgage that can be assumed by the buyer when a home is sold. Usually, the borrower must "qualify" in order to assume the loan.

Assumption Clause:  
A provision that allows a buyer to take responsibility for the mortgage from a seller.

Assumption Fee:  
A fee the lender charges to process new records for a buyer who assumes an existing loan.

Average Price:  
The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.

Avigation Easement:  
An easement over private property near an airport that limits the height of structures and trees.

Awning Windows:  
Single-sash windows that tilt outward and up.

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