Abstract of Title – Answer- A condensed history or summary of all transactions affecting
a particular tract of land.
Acceleration clause – Answer- A condition in a real estate financing instrument giving
the lender the power to declare all sums owing lender immediately due and payable
upon the happening of an event, such as sale of the property, or a delinquency in the
repayment of a note.
Accession – Answer- An addition to property through the efforts of man or by natural
forces.
Accretion – Answer- The increasing in land area from the deposit of soil by the natural
action of water.
Acknowledgement – Answer- The act by which a party executing a legal document goes
before an authorized officer (a notary public) and declares the same to be his/her
voluntary act.
Acre – Answer- Equals 43, 560 sq ft or 160 rods.
Actual notice – Answer- Express or implied knowledge of a fact.
Ad valorem – Answer- Latin for “according to value”
Addendum – Answer- Additional pages of material that are added to and become part of
a contract.
Adjustable Rate Mortgage (ARM) – Answer- A mortgage loan which bears interest at a
rate subject to change during the term of the loan, predetermined or otherwise.
Administrator – Answer- A person appointed by the court to settle affairs of an individual
dying without a will.
Adverse possession – Answer- A claim made against the lands of another by virtue of
open and notorious possession of the lands by claimant.
Affidavit – Answer- A sworn statement in writing.
Agency – Answer- The relationship between the principal and the principal’s agent which
arises out of a contract, either expressed or implied, written or oral, wherein the agent is
employed by the principal to do certain acts dealing with a third party.
Agent – Answer- A person authorized to act on behalf of another
Air rights – Answer- The rights in real property to use the air space above the surface of
the land.
Alienation clause – Answer- A clause in a contract giving the lender certain rights in the
event of a sale or other transfer of mortgaged property.
Alluvion – Answer- Increased soil, gravel, or sand on a stream bank resulting from the
flow or current of the water.
Alluvium – Answer- The gradual increase of earth on a shore of an ocean or bank of a
stream resulting from the action of the water.
Alternative dispute resolution (ADR) – Answer- The resolution of disputes by various
means including, but not limited to, negotiation, mediation, and arbitration.
Amendment – Answer- A change in legal document made by adding, altering, or
omitting a certain part of the term.
Americans With Disabilities Act (ADA) – Answer- A federal law protecting the rights of
individuals with physical or mental impairments.
Amortized loan – Answer- A loan to be repaid, interest and principle, in a series of
regular payments that are equal or nearly equal without any special balloon payment
prior to maturity.
Annual percentage rate (APR) – Answer- The relative cost of credit as determined in
accordance with Regulation Z of the Board of Governors of the Federal Reserve
System for implementing the Federal Truth in Lending Act.
Appraisal – Answer- A written statement, independently and impartially prepared by a
qualified appraiser setting forth an opinion in a federally regulated transaction as to the
market value of an adequately described property as of a specific date. It is supported
by the presentation and analysis of relevant market information. An opinion of value.
Appraised value – Answer- An evaluation of a property’s value based on a given point in
time that is performed by a professional appraiser during the mortgage origination
process.
Appraiser – Answer- One qualified by education, training, and experience who is hired to
estimate the value of real and personal property based on experience, judgment, facts,
and use of formal appraisal processes.
Appreciation – Answer- An increase in value.
Asbestos – Answer- A fibrous mineral found in many building materials that, when
improperly disturbed, can cause serious lung disease.
Assessed value – Answer- A valuation placed on piece of property by a public authority
as a basis for levying taxes on the property.
Assignee – Answer- Those to whom property or interests therein will have been
transferred
Assignment – Answer- A transfer of benefits or obligations within a contract to a 3rd
party who is not originally a party to the contract.
Assignor – Answer- One who assigns or transfers property
Associate broker – Answer- A licensed real estate broker who chooses to work under
the name and supervision of another broker.
Associate licensee – Answer- A licensee who is licensed under a broker, or who has
written into a written contract with the broker to act as the broker’s agent in a real estate
transaction.
Assumption of mortgage – Answer- The taking of a title to property by a grantee wherein
the grantee assumes liability for payment of an existing note secured by a mortgage or
deed of trust against the property, becoming a co-guarantor for the payment of a
mortgage or deed of trust note.
Attachment – Answer- The process by which real or personal property of a party to a
lawsuit is seized and retained for payment of an existing note secured by a mortgage or
deed of trust against the property, becoming a co-guarantor for the payment of a
mortgage or deed of trust note.
Attorney-in-fact – Answer- One who holds a power of attorney for another, allowing him
to execute documents such as deeds, mortgages, etc. on behalf of the person granting
the power.
Avulsion – Answer- A sudden and perceptible loss of land by the action of water as by a
sudden change in the course of a river.
Balloon mortgage – Answer- A mortgage in which the scheduled payment will not
amortize the loan over the mortgage term; therefore, for the debt to be fully satisfied , a
final payment called a balloon payment, larger than the uniform payments, is required.
Balloon payment – Answer- An installment payment on a promissory note, usually the
final one for discharging the debt, which is significantly larger than the other installment
payments provided under the terms of the promissory note.
Bargain and sale deed – Answer- Any deed that recites a consideration and purports to
convey the real estate; a bargain and sale deed with a covenant against the grantor’s
act is one in which the grantor warrants that grantor has done nothing to harm or cloud
the title.
Base lines – Answer- Imaginary east-west lines which intersect meridian lines to form a
starting point for the measurement of land.
Bench mark – Answer- A monument used to establish the elevation of the point, usually
relative to Mean Sea Leve;, but often to some local datum.
Beneficiary – Answer- The lender on the security of a note and deed of trust.
Bilateral contract – Answer- A contract in which each party promises to do something.
Bill of sale – Answer- A written instrument given to a pass title of personal property from
vendor to vendee.
Blanket mortgage – Answer- A single mortgage which covers more than one piece of
real property.
Blockbusting – Answer- The illegal practice of inducing homeowners to sell their
properties by making representations regarding the entry, or the prospective entry of
minority persons into the neighborhood.
Boot – Answer- Cash received in a tax-deferred exchange.
Breach of contract – Answer- A violation of the terms or conditions of a contract without
legal excuse.
Brokerage – Answer- The business of bringing buyers and sellers together and assisting
in negotiations for the terms of sale for real estate.
Building code – Answer- A systematic regulation of construction of buildings within a
municipality established by ordinance of law.
Bundle of rights – Answer- The rights of an owner of a freehold estate to possession,
enjoyment, control, and disposition of real property.
Buyer agency agreement – Answer- An employment contract that appoints a brokerage
firm as a buyer’s agent for the purpose of finding a suitable property for the buyer.
Capital gain – Answer- The profit realized from the sale of real estate or other
investment. Capital loss occurs when an investment property or another type of
investment is sold at a loss