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.
method of estimating the value of property uses similar properties
available in the same market to extract the value of a parcel of land.
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.
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
43,560 square feet. A measurement of area.
The amount of time that has passed since a building or other structure
was built. See also: EFFECTIVE AGE
The date the interest rate changes on an adjustable rate mortgage.
VAL OREM TAX
Taxes assessed based on the value of the land and improvements
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
A type of mortgage where the interest rate varies based on a particular
index, normally the prime lending rate.
value of an asset (property or otherwise) that includes the original
price plus the value of any improvement, and less any applicable
opinion of a property's sales price, after adjustments have been made
to account for differences between it and another comparable property.
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.
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
A person who has been appointed to act on behalf of another for a
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
SOCIETY OF APPRAISERS
An organization of appraisal professionals and others interested in the
The repayment of a loan through regular periodic payment.
breakdown of individual payments throughout the life of an amortized
loan, showing both principal contribution and debt service (interest)
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.
The rate of annual interest charged on a loan.
A sum of money paid at regular intervals, often annually.
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.
''defensible'' and carefully documented opinion of value. Most commonly
derived using recent sales of comparable properties by a licensed,
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.
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
STANDARDS BOARD (ASB)
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.
opinion of the fair market value of a property as developed by a
licensed, certified appraiser following accepted appraisal principals.
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.
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 value of a property according to jurisdictional tax assessment.
The function of assigning a value to a property for the purpose of
The comparative relationship of a property's assessed value to its
The jurisdictional official who performs the assessment and assigns the
value of a property.
Any item of value which a person owns.
Transfer of ownership of a mortgage usually when the loan is sold to
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.
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.
The slope of the ground around a house.
The valve inside a toilet tank that controls the filling of the tank.
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.
The final large payment at the end of a balloon mortgage term.
a person or business is unable to pay their debts and seeks protection
of the state against creditors. Bankruptcies remain on credit records
for up to ten years and can prevent a person from being able to get a
A structural supporting member.
A physical receipt indicating the sale of property.
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.
Any region of a city or town that has fallen into disrepair or
otherwise has become undesirable.
Any genuine offer, made without intent to defraud or deceive.
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
Structural members used between beams to strengthen the structure.
An individual who facilitates the purchase of property by bringing
together a buyer and a seller.
British Thermal Unit. A unit of measurement used to describe heating or
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.
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.
LINE OR SETBACK
statutory distance between buildings and the property line, imposed by
municipalities, home associations, or other agreements.
items of personal property which are installed in a real estate
improvement such that they become part of the building. Built-in
microwave ovens and dishwashers are common examples.
A one-story, home-style dating from the early twentieth century. Often
characterized by a low-pitched roof.
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.
Electrical cable shrouded in a galvanized steel outer cover.
A clause in a mortgage which allows the lender to demand payment of the
outstanding balance at a specific time.
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.
A single-story house style made popular in New England. Often
characterized by a steep roof with gables.
Accumulated goods and money which is most often used to generate
An outlay of funds designed to improve the income-producing
capabilities of an asset or to extend its economic life.
Refinancing a mortgage at a higher amount than the current balance in
order to transform a portion of the equity into cash.
A pliable material used to seal cracks or openings such as around
translated: ''Let the buyer beware.'' A common business tenet whereby
the buyer is responsible for verifying any and all claims by the seller
document showing that the bearer has a certain amount of money, at a
particular amount interest, on deposit with a financial institution.
An index based on the interest rate of six month CD's. Used to set
interest rates on some Adjustable Rate Mortgages.
A document issued by the Veterans Administration that certifies
eligibility for a VA loan.
by an appropriate jurisdictional entity, this document certifies that a
building complies with all building codes and is safe for use or
OF REASONABLE VALUE
based on an independent appraisal, a CRV for a particular property
establishes the maximum amount which can be secured by a VA mortgage.
A document designating the legal owner of a parcel of real estate.
Usually provided by a title or abstract company.
any professional who has met the local or state requirements, and
passed the appropriate certification exam, and is capable of appraising
any type of property.
A sub-classification of appraiser who is only licensed to appraise
residential property, usually up to four units.
The complete history of ownership of a piece of property.
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.
Electrical devices which automatically open electrical circuits if they
Ownership of property that is not encumbered by any counter-claim or
torturous process designed to induce cramping in a home buyer's hands
by requiring signature on countless pieces of documentation that nobody
has ever read. Or, 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).
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 document detailing the final financial arrangement between a buyer
and seller and the costs paid by each.
A second person sharing obligation on the loan and title on the
An asset which is placed at risk to secure the repayment of a loan.
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.
A second party who signs a loan, along with the borrower, and becomes
liable for the debt should the borrower default.
As opposed to statute law. Laws that have been established by custom,
usage and courts over many years.
percentage of the sales price or a fixed fee negotiated by an agent to
compensate for the effort expended to sell or purchase property.
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.
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.
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.
abbreviated term used by appraisers to describe properties which are
similar in size, condition, location and amenities to a subject
property whose value is being determined. The Uniform
Professional Appraisal Practice (USPAP) establish clear guidelines for
determining a comparable property.
Interest paid on the principal amount, as well as any accumulated
Additional value granted by a buyer or seller to entice another party
to complete a deal.
official process by which a property is deemed to be uninhabitable or
unusable due to internal damage or other external conditions.
The transition of water vapor to liquid. Typically forms in areas of
A development where individual units are owned, but common areas and
amenities are shared equally by all owners.
the conversion of a rental property such as an apartment complex into a
CONDOMINIUM-style complex where each unit is owned rather than leased.
The pipe through which electric wiring is run.
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.
Connected to or touching along an unbroken boundary.
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 that requires a complete home
inspection before it becomes official.
A legally binding agreement, oral or written, between two parties.
A traditional, real estate financing mechanism that is not backed by
any government or other agency (FHA, VA, etc.).
mortgage that begins as and adjustable, that allows the borrower to
convert the loan to a fixed rate within a specific timeframe.
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.
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.
OF FUNDS INDEX
An index of financial institutions costs used to set interest rates for
some Adjustable Rate Mortgages.
A stipulation in any mortgage that, if not met, can be cause for the
lender to foreclose.
loan of money for the purchase of property, real or personal. Credit is
either secured by an asset, such as a home, or unsecured.
A record of debt payments, past and present. Used by mortgage lenders
in determining credit worthiness of individuals.
A person to whom money is owed.
detailed report of an individuals credit, employment and residence
history prepared by a credit bureau. Used by lenders to determine
credit worthiness of individuals.
Large companies that gather and store financial and credit information
about individuals who apply for credit.
A dead-end street. One with only one entrance/exit.
The specific point in time as of which an appraiser designates the
value of a home. Often stipulated as the date of inspection.
An obligation to repay some amount owed. This may or may not be
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.
A document indicating the ownership of a property.
document given by a borrower to a lender, transferring title of the
property. Often used to avoid credit-damaging foreclosure procedures.
document which transfers title in a property to a
obligations and powers are stipulated. Often used in mortgage
document which transfers ownership of a property from a Trustee back to
a borrower who has fulfilled the obligations of a mortgage.
A document which dismisses a lien or other claim on a property.
A document used to surrender any claim a person has to a property.
The condition in which a borrower has failed to meet the obligations of
a loan or mortgage.
The state in which a borrow has failed to meet payment obligations on
Cash given along with an offer to purchase property, Also called
The natural decline in property value due to market forces or depletion
A single building improvement intended to serve as a home for one
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.
A mortgaged property which has been foreclosed on.
The pipe that water moves through to reach the ground from the rain
A clause in a mortgage giving the lender the right to demand payment of
the full balance when the borrower sells the property.
A single-building improvement which is divided and provides two units
which serve as homes to two families.
A house or other building which serves as a home.
An amount paid in cash for a property, with the intent to mortgage the
remaining amount due.
cash deposit made to a home seller to secure an offer to buy the
property. This amount is often forfeited if the buyer decides to
withdraw his offer.
right of a non-owner of property to exert control over a portion or all
of the property. For example, power companies often own an easement
over residential properties for access to their power lines.
The part of the roof that extends beyond the exterior wall.
The decline in property value caused by external forces, such as
neighborhood blight or adverse development.
The amount of time which any income-producing property is able to
provide benefits to its owner.
subjective, estimated age of a property based on its condition, rather
than the actual time since it was built. Excessive wear and tear can
cause a property's effective age to be greater than its actual age.
legal process whereby a government can take ownership of a piece of
property in order to convert it to public use. Often, the property
owner is paid fair-market value for the property.
A building or other improvement on one property which invades another
property or restricts its usage.
A claim against a property. Examples are mortgages, liens and easements.
efficiency rating system for air conditioning units that corresponds to
the number of BTU's output per watt of electricity used.
CREDIT OPPORTUNITY ACT
federal law requiring that lenders afford people equal chance of
getting credit without discrimination based on race, religion, age, sex
difference between the fair market value of a property and that amount
an owner owes on any mortgages or loans secured by the property.
natural increase in the amount of equity an owner has in a property,
accumulated through market appreciation and debt repayment.
An insurance policy taken out by appraisers to cover their liability
for any mistakes made during the appraisal process.
amount retained by a third party in a trust to meet a future
obligation. Often used in the payment of annual taxes or insurance for
account setup by a mortgage servicing company to hold funds with which
to pay expenses such as homeowners insurance and property taxes. An
extra amount is paid with regular principal and interest payments that
go into the escrow account each month.
analysis performed by the lender usually once each year to see that the
amount of money going into the escrow account each month is correct for
the forecasted expenses.
The payout of funds from an escrow account to pay property expenses
such as taxes and insurance.
The total of all property and assets owned by an individual.
The report on the title of a property from the public records or an
abstract of the title.
An agreement between the owner of a property and a real estate agent
giving the agent exclusive right to sell the property.
The person named in a will to administer the estate.
front exposure of any building. Often used to describe an artificial or
false front which is not consistent with the construction of the rest
of the building.
CREDIT REPORTING ACT
federal law regulating the way credit agencies disclose consumer credit
reports and the remedies available to consumers for disputing and
correcting mistakes on their credit history.
The price at which two unrelated parties, under no duress, are willing
to transact business.
private, shareholder-owned company that works to make sure mortgage
money is available for people to purchase homes. Created by Congress in
1938, Fannie Mae is the nation's largest source of financing for home
The boards that enclose the eaves.
U.S. Government agency created in 1933 which maintains the stability of
and public confidence in the nation's financial system by insuring
deposits and promoting safe and sound banking practices.
sub-agency of the U.S. Department of Housing and Urban Development
created in the 1930's to facilitate the purchase of homes by
low-income, first-time home buyers. It currently provides
federally-subsidized mortgage insurance for private lenders.
certified, professional appraiser who forms an opinion of the fair
market value of property and receives a set fee in exchange.
A complete, unencumbered ownership right in a piece of property.
form or ownership, or holding title to real estate. It is the most
complete form of title, having an unconditional and unlimited interest
of perpetual duration.
A mortgage that is insured by the Federal Housing Administration (FHA).
The opinion of value of a piece of property resulting from an appraisal
following the USPAP guidelines.
The primary loan or mortgage secured by a piece of property.
A mortgage which has a fixed rate of interest over the life of the loan.
Any piece of personal property which becomes permanently affixed to a
piece of real property.
The metal used around the base of roof mounted equipment, or at the
junction of angles used to prevent leaking.
insurance which covers a home owner for any loss due to water damage
from a flood. Often required by lenders for homes located in
FEMA-designated flood zones.
representation of a building which shows the basic outline of the
structure, as well as detailed information about the positioning of
rooms, hallways, doors, stairs and other features. Often includes
detailed information about other fixtures and amenities.
The furnace exhaust pipe, usually going through the roof.
The valve between the toilet bowl and the tank.
The partially buried support for a vertical structural member such as a
process whereby a lender can claim the property used by a borrower to
secure a mortgage and sell the property to meet the obligations of the
The loss of property or money due to the failure to meet the
obligations of a mortgage or loan secured by that property.
The solid structural element upon which a structure is built.
The segment of a property that runs along a point of access, such as a
street or water front.
decrease in the value of property due to a feature or lack thereof
which renders the property undesirable. Functional obsolescence can
also occur when the surrounding area changes, rendering the property
unusable for its originally intended purpose.
A steeply angled, triangular roof.
Iron pipe with a galvanized (zinc) coating.
A ''barn-like'' roof, where the upper portion of the roof is
less-steeply angled than the lower part.
A broad-based claim against several properties owned by a defaulting
A classic, English-style house characterized by simple rectangular
shape and multiple stories.
Ground Fault Interrupter. A type of circuit breaker required in areas
where water is present.
wholly owned corporation created in 1968 within the U.S. Department of
Housing and Urban Development to serve low-to moderate-income
A main supporting beam.
Any mortgage insured by a government agency, such as the FHA or VA.
The slope of land around a building. Also ground level.
Any person who is given ownership of a piece of property.
Any person who gives away ownership of a piece of property.
sum total of all floor space, including areas such as stairways and
closet space. Often measured based on external wall lengths.
Material used around ceramic tile.
The trough around the edge of the roof that catches and diverts rain.
Insurance covering damage to a property caused by hazards such as fire,
wind and accident.
The framing elements above an opening such as a window or door.
The floor of a fireplace or the area immediately in front of it.
A municipal restriction on the maximum height of any building or other
of a property which contribute to its value, but are not readily
apparent. Examples might include upgraded or premium building
AND BEST USE
most profitable and likely use of a property. Selected from reasonably
probable and legal alternative uses, which are found to be physically
possible, appropriately supported and financially feasible to result in
the highest possible land value.
EQUITY CONVERSION MORTGAGE
known as a reverse annuity mortgage. It allows home owners (usually
older) to convert equity in the home into cash. Normally paid by the
lender in monthly payments. HECM's typically do not have to be
until the borrower is no longer occupying the home.
EQUITY LINE OF
A type of mortgage loan that allows the borrower to draw cash against
the equity in his home.
complete examination of a building to determine its structural
integrity and uncover any defects in materials or workmanship which may
adversely affect the property or decrease its value.
person who performs professional home inspections. Usually, with an
extensive knowledge of house construction methods, common house
problems, how to identify those problems and how to correct them.
organization of home owners in a particular neighborhood or development
formed to facilitate the maintenance of common areas and to enforce any
building restrictions or covenants.
A policy which covers a home owner for any loss of property due to
accident, intrusion or hazard.
An insurance policy covering the repair of systems and appliances
within the home for the coverage period.
family income for a particular county or metropolitan statistical area
(MSA), as estimated by the Department of Housing and Urban Development
standardized, itemized list, published by the U.S. Department of
Housing and Urban Development (HUD), of all anticipated CLOSING COSTS
connected with a particular property purchase.
Any parcel of land which has been changed from its natural state
through the creation of roads, buildings or other structures.
Any item added to vacant land with the intent of increasing its value
The comparative value of an improved piece of land to its natural,
process of estimating the value of property by considering the present
value of a stream of income generated by the property.
A piece of property whose highest and best use is the generation of
income through rents or other sources.
An estimation of value created by a professional, certified appraiser
with no vested interest in the value of the property.
The examination of a piece of property, its buildings or other
title to property which has been sufficiently reviewed by a title
insurance company, such that they are willing to insure it as free and
A percentage of a loan or mortgage value that is paid to the lender as
compensation for loaning funds.
piece of property that is expected to generate a financial return. This
may come as the result of periodic rents or through appreciation of the
property value over time.
The side of a door frame.
situation where two or more parties own a piece of property together.
Each of the owners has an equal share, and may not dispose of or alter
that share without the consent of the other owners.
Horizontal beams laid on edge to support flooring or a ceiling.
official court decision. If the judgment requires payment from one
party to another, the court may put a lien against the payee's property
A type of foreclosure conducted as a civil suit in a court of law.
A mortgage loan for an amount greater than the limits set by Fannie Mae
and Freddie Mac. Often called non-conforming loans.
A concrete filled steel pipe used to support beams.
extra charge, or penalty added to a regular mortgage payment when the
payment is made late by an amount of time specified in the original
defect in a piece of property which is not readily apparent, but which
has an impact of the value. Structural damage or termite infestation
would be examples of latent defects.
contract between a property owner and a tenant specifying the payment
amount, terms and conditions, as well as the length of time the
contract will be in force.
A type of property ''ownership'' where the buyer actually has a
long-term lease on the property.
lease agreement that gives the tenant an option to buy the property.
Usually, a portion of the regular monthly rent payment will be applied
towards the down payment.
description of a piece of property, identifying its specific location
in terms established by the municipality or other jurisdiction in which
the property resides. Often related in specific distances from a known
landmark or intersection.
person or entity who loans funds to a buyer. In return, the lender will
receive periodic payments, including principal and interest amounts.
A person's outstanding debt obligations.
that covers against potential lawsuit brought against a property owner
for alleged negligence resulting in damage to another party.
Any claim against a piece of property resulting from a debt or other
A limit on how far the interest rate can move for an Adjustable Rate
Any property which is substantially similar to another property.
An extension of credit for a certain amount for a specific amount of
time. To be used by the borrower at his discretion.
Any asset which can be quickly converted into cash at little or no
cost, or cash itself.
Money borrowed, to be repaid with interest, according to the specific
terms and conditions of the loan.
A person that "sells" loans, representing the lender to the borrower,
and the borrower to the lender.
How a lender refers to the process of writing new loans.
processing of payments, mailing of monthly statements, management and
disbursement of escrow funds etc Typically carried out by the company
you make payments to.
The comparison of the amount owed on a mortgaged property to its fair
agreement between a lender and a borrower, guaranteeing an interest
rate for a loan if the loan is closed within a certain amount of time.
The amount of time the lender has guaranteed an interest rate to a
deficiency that strongly impacts the usability and habitability of a
house. Or a deficiency that may be very expensive to repair.
known as ''mobile homes,'' manufactured housing is any building which
has been constructed off site, then moved onto a piece of real
The difference between the interest rate and the index on an adjustable
whose value has been diminished due to some internal defect or external
condition. In most cases, the cost to correct the flaw or condition is
as much or more than the expected return from the property.
umbrella organization that is made up of multiple, smaller home owner's
associations. Often found in very large developments or condominium
The date on which the principal balance of a financial instrument
becomes due and payable.
A credit report derived from data obtained from multiple credit
traditional way of describing property, generally expressed in terms of
distance from a known landmark or intersection, and then following the
boundaries of the property back to its origin.
accumulated land in and around a city or other municipality which falls
under the political and economic influence of that entity.
The legal right to exploit and enjoy the benefits of any minerals
located below the surface of a parcel of land.
statement by one party in a transaction that is incorrect or
misleading. Most misrepresentations are deemed to be intentional and
thus may constitute fraud. Others, however, some are rendered through
simple mistakes, oversights or negligence.
financial arrangement wherein an individual borrows money to purchase
real property and secures the loan with the property as collateral.
A financial institution that provides primary and secondary mortgages
to home buyers.
person or organization that serves as a middleman to facilitate the
mortgage process. Brokers often represent multiple mortgage bankers and
offer the most appropriate deal to each buyer.
The entity that lends money in a real estate transaction.
A policy that fulfills those obligations of a mortgage when
policy holder defaults or is no longer able to make payments.
A fee that is often included in mortgage payments that pays for
mortgage insurance coverage.
A policy that fulfills the obligations of a mortgage when the policy
The entity that borrows money in a real estate transaction.
Any collection of buildings that are designed and built to support the
habitation of more than four families.
ASSOCIATION OF MASTER
non profit professional association organized in 1982, dedicated to the
advancement of professionalism in real estate appraisal.
SOCIETY OF REAL ESTATE
An organization founded in 1956 which promotes standards of
professionalism in its members.
The percentage of vacant properties in a given area that is the result
of natural turnover and market forces.
the balance of a loan increases instead of decreases. Usually due to a
borrower making a minimum payment on an Adjustable Rate Mortgage during
a period when the rate fluctuates to a high enough point that the
minimum payment does not cover all of the interest.
evolution of neighborhood use and demographics over time. Economic
fluctuations, municipal zoning changes and population shifts can effect
the life cycle.
A subsection of a municipality that has been designated by a developer,
economic forces or physical formations.
The space in a development, outside of the common areas, that can be
rented to tenants.
An architectural style dating from early American history typified by a
two-story building with clapboard siding.
lenders offer loans that you can obtain at "no cost." You should
inquire whether this means there are no "lender" costs associated with
the loan, or if it also covers the other costs you would normally have
in a purchase or refinance transactions, such as title insurance,
escrow fees, settlement fees, appraisal, recording fees, notary fees,
and others. These are fees and costs which may be associated with
buying a home or obtaining a loan, but not charged directly by the
lender. Keep in mind that, like a "no-point" loan, the interest rate
will be higher than if you obtain a loan that has costs associated with
loan with no "points". The interest rate on such a loan will be higher
than a loan with points paid. Also sometimes refers to a refinance loan
where closing costs are included in the loan.
use of land for purposes contrary to the applicable municipal zoning
specifications. Often occurs when zoning changes after a property is in
Any asset which can not be quickly converted into cash at little or no
A legal document that obligates a borrower to repay a mortgage loan at
a stated interest rate during a specified period of time.
The interest rate stated on a mortgage note.
Formal written notice from a lender to a borrower that default has
process of an assets value diminishing due to the development of more
desirable alternatives or because of the degradation of its
A physical presence within and control of a property.
The percentage of properties in a given area that are occupied.
An outlet with too many devices plugged into it, using a power strip or
other device to multiply the outlets.
structures or other amenities which are not located on a piece of
property, but are necessary to maximize the use of the property or in
some way contribute to the value of the property.
Designated parking spaces associated with a particular building or
other structure which are not located on public streets.
Where no termites are currently active, but indications of past
activity can be seen.
Buildings, structures or other amenities that are erected on a piece of
property and contribute to its value.
land which has not had any significant buildings or structures erected
on it. Most often used to describe desirable neighborhood features like
An uncovered electrical connection.
The amount of cash a home buyer initially invests in the home.
The total amount of principal owed on a mortgage loan at the time of
Refers to the total number of points paid by a borrower at closing.
A transaction where the property owner provides all or part of the
The state of property wherein the owner occupies at least some portion
of the property.
The cement coat applied to block foundations.
A shared ownership in a piece of property. May be divided among two or
A payment of less than the regular monthly amount. Usually, a lender
will not accept partial payments.
The limit on how much regular monthly payments on an Adjustable Rate
Mortgage can change during one adjustment period.
The limit on how much the interest rate on an Adjustable Rate Mortgage
can change during any one adjustment period.
Owned items which are not permanently affixed to the land.
The primary domicile of a person or family.
A coordinated, real estate development where common areas are shared
and maintained by an owner's association or other entity.
A plan or chart of a piece of land which lays out existing or planned
streets, lots or other improvements.
A percentage of a mortgage amount (one point = 1 percent).
process of applying for a mortgage loan and becoming approved for a
certain amount at a certain interest rate before a property has been
chosen. Pre-approval allows the borrower greater freedom in
negotiations with sellers.
Any building or portion thereof which is manufactured and assembled off
site, then erected on a property.
Payment made that reduces the principal balance of a loan before the
due date and before the loan has become fully amortized.
A fee that may be charged to a borrower who pays off a loan before it
formal that pre-approval, pre-qualification usually means a written
statement from a loan officer indicating his or her opinion that the
borrower will be able to become approved for a mortgage loan.
The interest rate that banks and other lending institutions charge
other banks or preferred customers.
The amount owed on a mortgage which does not include interest or other
The outstanding balance of principal on a mortgage. Does not included
INTEREST, TAXES, AND
The most common constituents of a monthly mortgage payment.
form of mortgage insurance provided by private, non-government
entities. Normally required when the LOAN TO VALUE RATIO is less that
Any item which is owned or possessed.
A written contract signed by the buyer and seller stating the terms and
conditions under which a property will be sold.
Any building designed to accommodate four families.
ratios used in determining credit worthiness for a mortgage loan. One
is the ratio of a borrower's monthly housing costs to monthly income.
The other is a ratio of all monthly debt to monthly income.
legal document which transfers any ownership an individual has in a
piece of property. Often used when the amount of ownership is not known
or is unclear.
A structural element of the roof, sloping from the peak to the outer
An architectural style typified by a single-story, low-roof
construction. Popular in the western U.S.
A guarantee from a lender of a specific interest rate for a period of
Any land which has not been developed.
A piece of land and any improvements or fixtures located on that land.
A licensed professional who facilitates the buying and selling of real
ESTATE SETTLEMENT PROCEDURES
A federal law requiring lenders to give full disclosure of closing
costs to borrowers.
Land, improvements and appurtenances, and the interest and benefits
A real estate agent or broker who is a member of the NATIONAL
ASSOCIATION of REALTORS®.
An electrical outlet to plug into.
A local government employee whose role it is to keep records of all
real estate transactions within the jurisdiction.
filing of a real estate transaction with the appropriate government
agent (normally the RECORDER). A real estate transaction is considered
final when it is recorded.
A new loan to pay off an existing loan. Typically to gain a lower
interest rate or convert equity into cash.
Where air from a furnace or air conditioning system enters the room.
company or agency that assists corporate employees in relocating from
one place to another. Services may include hiring and coordinating real
estate agents, moving companies, utilizes and the like.
The amount of principal, interest and other costs that has not yet been
The amount of time remaining on the original amortization schedule.
activity designed to improve the value or desirability of a property
through rebuilding, refurbishing, redecorating or adding on to it.
A plan to repay delinquent payments, agreed upon between a lender and
borrower, in an effort to avoid foreclosure.
account, or fund, setup for the replacement of short life items, such
as carpeting, in the common areas of a cooperative property.
A piece of property whose highest and best use is the maintenance of a
type of credit that allows the borrower/customer to make charges
against a predetermined line of credit. The customer then pays monthly
installments on the amount borrowed, plus interest.
The structural member of a roof where the rafters join at the top.
OF FIRST REFUSAL
An agreement giving a person the first opportunity to buy or lease a
property before the owner offers it for sale to others.
The degree of slope in a roof.
An area outside of an established urban area or metropolitan district.
The actual price a property sells for, exclusive of any special
appraisal practice which estimates the value of a property by comparing
it to comparable properties which have sold recently.
economic principal that dictates the price of a good or service through
the interaction of supply and demand. When an item is scarce, its price
tends to rise, given a constant demand. Real Estate is a classic
example of scarcity.
A loan secured by the equity in a home, when a primary mortgage already
An economic marketplace where mortgage bankers buy and sell existing
A loan that is backed by collateral. In the case of a mortgage loan,
the collateral is the house.
The property used as collateral for a loan.
Two residences which share a common wall.
financial institution which collects mortgage payments from borrowers
and applies the appropriate portions to principal, interest and any
processing of payments, mailing of monthly statements, management and
disbursement of escrow funds etc Typically carried out by the company
you make payments to.
The covering on outside walls beneath the siding or exterior finish
such as stucco.
Also called drywall, the gypsum board commonly used on interior walls.
The lumber used around the foundation to support exterior wall framing.
Garden hose pipe connection.
A property designed and built to support the habitation of one family.
The underside of a cornice at the eaves.
A textured plaster exterior (and occasionally interior) wall finish.
A vertical framing piece in a wall, generally 2x4 lumber in interior
A residential development that is created from a piece of land which
has been subdivided into individual lots.
A term which indicates a property which is being appraised.
A basin into which water drains and from which the water is pumped out.
specific map of a piece of property which includes the legal boundaries
and any improvements or features of the land. Surveys also depict any
rights-of-way, encroachments or easements.
method whereby a home owner develops equity in a property, either
during the purchase or throughout its life, by personally constructing
improvements rather than paying to have them built.
Any property which is not taxed.
The right to occupy a building or unit.
form of holding title, whereby there are two or more people on title to
a property, ownership does not pass on to the others upon the death of
When a lender uses a third party to originate and package loans for
sale to the secondary market (Fannie Mae, Freddie Mac).
A specific document which serves as proof of ownership.
organization which researches and certifies ownership of real estate
before it is bought or sold. Title companies also act at the
facilitator ensures all parties are paid during the real estate
policy which insures a property owner should a prior claim arise
against the property after the purchase has been completed. This also
covers a lender should a question of ownership arise.
The process whereby the TITLE COMPANY researches a properties title
history and ensures that no outstanding claims exist.
Any means by which the ownership of a property changes hands.
Taxes payable when title passes from one owner to another.
A bend in water pipe.
A fiduciary that holds or controls property for the benefit of
A federal law requiring full disclosure by lenders to borrowers of all
terms, conditions and costs of a mortgage.
A style of architecture typified by exposed stone, wood and brick
construction. Similar in style to English manor homes.
A piece of land which has been improved, but not to the full extent of
Any property which has no outstanding claims or liens against it.
STANDARDS OF PROFESSIONAL
APPRAISAL PRACTICE (USPAP)
in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in
1987 by The Appraisal Foundation, USPAP forms the guidelines followed
by every licensed and certified real estate appraiser in the United
States. The purpose of these Standards is to establish requirements for
professional appraisal practice, which includes appraisal, appraisal
review, and appraisal consulting. The intent of these Standards is to
promote and maintain a high level of public trust in professional
The span of time over which a property can be used or can provide
benefits to its owner.
The current percentage of vacant properties in a given area, regardless
of why they are vacant.
A mortgage that is guaranteed by the Department of Veterans Affairs
An exception to municipal zoning regulations granted for a specific
time period to allow for non-conforming use of the land.
A pipe allowing gas to escape.
the right to use a portion of a fund such as an IRA. Typically vesting
occurs over time. If you are 100% vested, you have a right to 100% of
AFFAIRS, DEPARTMENT OF
successor to the Veteran's Administration, this government agency is
responsible for ensuring the rights and welfare of our nation's
veterans and their dependents. Among other duties, the VA insures home
loans made to veterans.
An expression of electric force, or pressure. One volt being the force
needed to move one amp against one ohm resistance.
process whereby an appraiser examines a property in preparation for
estimating its value. Also, the process of inspecting a property for
any damage prior to that property being bought or sold.
affidavit given to stipulate the condition of a property. The person
giving the warranty assumes liability if the condition turns out to be
An expression of amount of electrical power. Volt times amps equals
A term used to indicate the normal damage inflicted on a property
through every-day use.
Material used around windows and doors to prevent drafts.
Drainage hole that allows water to escape.
A municipal zoning category wherein a building or other fixture may
abut the property line.
specific area within a municipality or other jurisdiction which
conforms to certain guidelines regarding the use of property in the
zone. Typical zones include single-family, multi-family, industrial,
commercial and mixed-use.