decrease or removal of a nuisance.
B, C, D paper
Mortgage loans are rated as A, B, C, or D paper. "A"
paper loans are the highest quality, lowest risk loans;
"B" quality are loans where the borrower has minor
credit problems; "C" quality are borrowers with marginal
or poor credit; "D" quality indicates very high risk
abstract of title
A full summary of all consecutive grants,
conveyances, wills, records and judicial proceedings
affecting title to a specific parcel of real estate,
together with a statement of all recorded liens and
encumbrances affecting the property and their present
status. The abstract of title does not guarantee or
ensure the validity of the title of the property.
Rather, it is a condensed history that merely discloses
those items about the property that are of public
record; thus, it does not reveal such things as
encroachments and forgeries.
abstract of judgment
A full summary by the court of a judgment. It becomes a
general lien on all of a debtor's property in the county
where it is recorded.
A provision in a mortgage, trust deed, promissory note
or contract for deed (agreement of sale) that, upon the
occurrence of a specified event, gives the lender
(payee, obligee or mortgagee) the right to call all sums
due and payable in advance of the fixed payment date.
written approval of a buyer's offer.
A measurement of land equal to 43,560 square feet.
A written addition or change to a contract. Any change
to the contract must be acknowledged with signatures
from both the seller and buyer.
adjustable rate mortgage (ARM)
A mortgage in which the interest rate is adjusted
periodically based on a pre-selected index. Also
sometimes known as variable rate mortgage.
An acceptance is a promise by the offeree to be
bound by the exact terms proposed by the offeror. The
acceptance must be communicated to the offeror.
The increase or addition of land by the deposit of sand
or soil washed up naturally from a river, lake or sea.
The gradual and imperceptible addition of land by
alluvial deposits of soil through natural causes, such
as shoreline movement caused by streams or rivers. This
added land upon a bank or stream, navigable or not,
becomes the property of the riparian or littoral owner,
and it also becomes subject to any existing mortgages.
1. In accounting, a bookkeeping account that shows
the total amount of depreciation taken on an asset since
it was acquired; also called accumulated depreciation.
2. For appraisal purposes, the difference between the
cost to reproduce the property (as of the appraisal
date) and the property's current value as judged by its
"competitive condition." In this context, accrued
depreciation is often called diminished utility.
A formal declaration made before a duly authorized
officer, usually a notary public, by a person who has
signed a document; also, the document itself. An
acknowledgment is designed to prevent forged and
fraudulently induced documents from taking effect.
The amount of money or other valuable consideration
expended to obtain title to a property. It includes the
purchase cost, plus such items as appraisal fees,
closing costs, finance charges, mortgage loan
origination fees and title insurance.
A measure of land equal to 43,560 square feet, 4,840
square yards, 4,047 square meters, 160 square rods or
Additional material attached to and made part of a
document. If there is space insufficient to write all
the details of a transaction on the sales contract form,
the parties will attach an addendum or supplement to the
document. The sales contract should incorporate the
addendum by referring to it as part of the agreement.
The addendum should refer to the sales contract and be
dated and signed or initialed by all the parties.
The original cost basis of a property reduced by
certain deductions and increased by certain improvement
costs. The original basis determined at the time of
acquisition is reduced by the amount of allowable
depreciation or depletion allowances taken by the
taxpayer, and by the amount of any uncompensated
property losses suffered by the taxpayer. It then
increases by the cost of capital improvements plus
certain carrying costs and assessments. The amount of
gain or loss recognized by the taxpayer upon sale of the
property is determined by subtracting the adjusted basis
on the date of sale from the adjusted sales price.
Decrease or increase in the sales price of a comparable
property to account for a feature that the property has
or does not have in comparison with the subject
The Latin word for "according to value."
The acquiring of title to real property owned by someone
else by means of open, notorious, hostile and continuous
possession for a statutory period of time. The burden to
prove title is on the possessor, who must show that four
conditions were met: 1. He or she has been in possession
under a claim of right. 2. He or she was in actual, open
and notorious possession of the premises so as to
constitute reasonable notice to the record owner. 3.
Possession was both exclusive and hostile to the title
of the owner (that is, without the owner's permission
and evidencing an intention to maintain the claim of
ownership against all who may contest it). 4. Possession
was uninterrupted and continuous for at least the
prescriptive period stipulated by state law.
A statement of declarations reduced to writing, signed
and sworn to before a notary public or other authorized
A relationship created when one person, the principal,
delegates to another, the agent, the right to act on his
or her behalf in business transactions and to exercise
some degree of discretion while so acting. An agency
gives rise to a fiduciary relationship and imposes on
the agent, as the fiduciary of the principal, certain
duties, obligations, and high standards of good faith
A person who
acts or has the power to act for another. A fiduciary
relationship is created under the law of agency when a
property owner executes a listing agreement authorizing
a licensed real estate broker to be his or her agent.
A designated space of air, such as a condominium unit on
the second floor. The title to this air space can be
transferred just like ownership of any other real
air quality standards
The level of selected pollutants set by law that may
not be exceeded in outside air. Used to determine the
amount of pollutants that may be emitted by industry.
Rights to the use of the open space or vertical plane
above a property. Ownership of land includes the right
to all air above the property. Until the advent of the
airplane, this right was unlimited, but now the courts
permit reasonable interference with one's air rights,
such as is necessary for aircraft, so long as the
owner's right to use and occupy the land is not
lessened. Thus, low-flying aircraft might be
unreasonably trespassing, and their owners would be
liable for any damages. Governments and airport
authorities often purchase air rights adjacent to an
airport, called an avigation easement, to provide glide
patterns for air traffic.
The act of transferring ownership, title, interest, or
estate in real property from one person to another.
Property is usually sold or conveyed by voluntary
alienation, as with a deed or assignment of lease.
Involuntary alienation takes place when property is sold
against the owner's will, as in a foreclosure sale or a
A provision sometimes found in a promissory note or
mortgage that provides that the balance of the secured
debt becomes immediately due and payable at the option
of the mortgagee upon the alienation of the property by
the mortgagor. Alienation is usually broadly defined to
include any transfer of ownership, title, interest, or
estate in real property, including a sale by way of a
contract for deed. Also called a due-on-sale clause.
An amendment is a change to the existing content of a
contract. Any time words or provisions are added to or
deleted from the body of the contract, the contract has
amenity or amenities
The qualities and state of being pleasant and agreeable.
In residential appraising, those peculiar and intangible
benefits of home ownership such as satisfaction of
possession and use arising from architectural
excellence, scenic beauty, and desirable social
The gradual repayment of a debt by means of systematic
payments of principal and/or interest over a set period,
so that at the end of the period there is a zero
balance. The principal is thus directly reduced or
amortized over the life of the loan. Some loans are not
fully amortized, and require a balloon payment at the
end of the term of the loan.
annual operating expenses
The actual costs it takes to run the property, such as
property tax, insurance, maintenance, repairs,
management fees, utilities, and supplies.
annual percentage rate (A.P.R.)
An expression of the relationship of the total finance
charge to the total amount to be financed as required
under the federal Truth-in-Lending Act. Tables available
from any Federal Reserve bank may be used to compute the
rate, which must be calculated to the nearest one-eighth
of 1 percent. Use of the APR permits a standard
expression of credit costs, which facilitates easy
comparison of lenders
An addition to property by the act of joining or uniting
one thing to another, as in attaching personal property
to real property, thereby creating a fixture. For
example, a sink becomes a fixture when it is annexed to
the plumbing outlet.
The appraisal principle which holds that value can
increase or decrease based on the expectation of some
future benefit or detriment produced by the property.
An opinion of the value of a property at a given point
in time. The evaluation is made by a licensed appraiser.
increase in the worth or value of a property due to
economic or related causes, which may prove to be either
temporary or permanent; opposite of depreciation.
Appropriation is the way a taxing body authorizes the
expenditure of funds and provides for the sources of
funding. Appropriation generally involves the adoption
of an ordinance or the passage of a law that states the
specific terms of the proposed taxation.
Belonging to; adjunctive; appended or annexed to. For
example, the garage is appurtenant to the house, and the
common interest in the common elements of a condominium
is appurtenant to each apartment. Appurtenant items run
with the land when the property is transferred.
An underground water-bearing layer of rock, including
gravel and sand, that will yield water in usable
quantity. Aquifers are sources of water for wells and
A mineral once used in insulation and other
materials that can cause respiratory diseases. Asbestos
has been classified as carcinogenic.
National Safety Council on Asbestos
Words in a contract intended to signify that no
guarantees, whatsoever, are given regarding the subject
property and that it is being purchased exactly as it is
found. An "as-is" indicator is intended to be a
disclaimer of warranties or representations. The recent
trend in the courts to favor consumers tends to prevent
sellers from using "as-is" wording in a contract to
shield themselves from possible fraud charges brought on
by neglecting to disclose material defects in the
The transfer of the right, title and interest in the
property of one person (the assignor) to another (the
assignee). There are assignments of, among other things,
mortgages, sales contracts, contracts for deeds, leases
The seller's initial price for a property.
The estimated value of a
piece of real estate. Also, a levy placed on property in
addition to taxes.
A public official who evaluate property for the
purpose of taxation.
The agreement between buyer and seller where the buyer
takes over the payments on an existing mortgage from the
seller. Assuming a loan can usually save the buyer money
since this is an existing mortgage debt, unlike a new
mortgage where closing cost and new, probably higher,
market-rate interest charges will apply.
The legal process of seizing the real or personal
property of a defendant in a lawsuit by levy or judicial
order, and holding it in court custody as security for
satisfaction of a judgment. The lien is thus created by
operation of law, not by private agreement. The
plaintiff may recover such property in any action upon a
contract, express or implied.
A competent and disinterested person who is
authorized by another person to act in his or her place.
In real estate conveyance transactions, an
attorney-in-fact, who has a fiduciary relationship with
his or her principal, should be so authorized by way of
a written, notarized and recordable instrument called a
power of attorney.
Computer systems that permit lenders to expedite the
loan approval process and reduce lending costs.
The sudden tearing away of land, as by earthquake,
flood, volcanic action or the sudden change in the
course of a stream.