Abandonment
The voluntary surrendering of property rights but not transferring title to someone else.

Abode
Home, residence.

Absentee Owner
Landlord who lives elsewhere

Abutment
Supporting structure (column) at the end of a bridge or arch.

Abutment Piece
The bottom plate of a wall.

Abutting
Property adjoining or bordering another property.

Acceptance
An offeree’s consent to enter into a contract and be bound by the terms of the offer.

Access
A means of entering a property or building. Ability to reach something.

Accessory Building
Building which is secondary to the main structure on the same piece of property such as a shed or garage.

Account
Record of financial transactions. Credit extended. Commercial relationship involving credit. A customer. A financial fund.

Accountant
Person who specializes in keeping, inspecting and adjusting financial records.

Accounts Payable
Money owed to someone else.

Accounts Receivable
Money owed to you.

Accouple
To join together.

Accrual Accounting
Recording income as accounts receivable when earned and recording debts as accounts payable when they are incurred. Also called accrual basis accounting.

Accrual Basis
Recording income as accounts receivable when earned and recording debts as accounts payable when they are incurred. Also called accrual basis accounting.

Acquisition
The securing of ownership or controlling interest in a property or other object through either purchase or a merger.

Acquisition Loan
Money borrowed for the sole purpose of purchasing property.

Acre
Land measurement equaling 43,560 square feet.

Act of God
Action occurring without the intervention of man which could include but not be limited to hurricanes,earthquakes, floods, lightening, etc.

Actual Size
The actual size of a piece of material, as opposed to its nominal size.

Addition
Joining of a thing to another thing. A thing or part added, such as a porch onto a house.

Adjoining Owners
Property owners with property touching a common property and who have a legal right to notification when a zoning variance or change to the common property is being formally considered.

Adjoining Property
Contiguous property sharing a common border.

Adjusted basis
The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.

Adjusted Cost Basis
Tax purpose cost measuring method that allows cost to be increased by the cost of capital improvements or reduced due to depreciation. The cost of a home would be increased by the amount paid to install a permanent improvement such as air conditioning.

Affordability analysis
A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that you might expect to pay.

A-Frame
Outer shape of a structure which has steeply sloped roofs and is in the shape of an A, hence the name.

After-completion Costs
Expenditures incurred after the completion of a building.

Agency
The relationship between two people or entities where one is a principal and the other is an agent representing the principal in activities with other parties, such as a real estate agent buying or selling for a client.

Agency Closing
The use of a Title company or another firm to complete a loan.

Agent
Anyone who has the authority to act on the behalf of another, representing the business interests of that person.

Amortization
The gradual repayment of a mortgage loan by installments.

Amortization Schedule
A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principal and shows the remaining balance after each payment is made.

Amortization Tables
Mathematical tables used to calculate a monthly payment on a loan.

Amortization term
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.

Amortize
To repay a mortgage with regular payments that cover both principal and interest.

Amortized Mortgage
Mortgage where the interest and principal have been fully repaid by the mortgagee.

Apartment Building
A structure with individual apartment units and a common entrance and hallway.

Apartment House
Multi-family housing complex of rental apartments managed by the property owner or a resident manager.

Appraisal
A written analysis of the estimated value of a property prepared by a qualified appraiser. Contrast with home inspection.

Approval
A confirmation of an amount able to be borrowed by an individual, based upon assessment of his ability to repay said loan. Alternatively, an authorization obtained from governmental authorities for a building project to proceed.

Asking Price
Seller’s initial price asked for a property.

Asset
Item of value, i.e. cash, securities, investments, real estate, etc.

Assumption
The transfer of the seller’s existing mortgage to the buyer. See assumable mortgage.

Assumption Clause
Provision allowing a buyer to take over transfer of the mortgage, which is held by the seller.

Assumption Fee
Fee the lender charges to process the paperwork for the buyer assuming the existing loan.

Back-end Fees
Commission received by a syndicator when real estate is sold and are typically paid after the investors receive their initial investment plus return.

Back-end Ratio
Lender calculations by which debt (principal, interest, property taxes and insurance + other monthly bills) is compared with gross monthly income.

Balance Sheet
Statement of financial condition, which lists assets, liabilities and stockholder’s equity. The net worth of an individual is assets minus liabilities.

Balloon Loan
A mortgage in which the monthly payment is not intended to repay the entire loan. The final payment is a large lump sum of the remaining principal.

Balloon Payment
The final lump sum payment of a balloon loan.

Balloon Note Mortgage
A loan that is only partial amortized and requiring a lump sum repayment at maturity.

Bankruptcy
A legal procedure by which an insolvent debtor can be relieved of repayment of certain obligations. Bankruptcies remain on a credit rating for 7 to 10 years. This may become a problem in obtaining financing.

Bargain and Sales Deed
The most widely used type of real estate deed, this makes the transfer of property from one individual to another for a consideration in the form of a sale.

Bearing Wall
Wall that supports its weight and the weight of other parts of the structure and are necessary for the stability of a structure. Bearing walls often include one or more interior walls, as well as the exterior walls. Openings cut into bearing walls must be reinforced and a different load path used through the use of headers carry the loads across the top of the opening.

Bedrock
Soil with solid rock underneath which provides a foundation on which to construct a building.

Before-tax Income
Total income prior to deduction of taxes.

Belvedere
A summer house on a height or an upper-story open-roofed gallery designed to give a view of the scenery.

Beneficiary
The lender, who is making a loan, is called either a mortgagee or a beneficiary. The borrower is the mortgagor.

Beneficiary Statement
Lien holder’s statement showing the unpaid balance on a trust deed note.

Bid Price
Price a purchaser is willing to pay for a certain item.

Bid Time
Time between asking for a bid and when it is due to be received.

Bidding War
Multiple offers to purchase a piece of property or a house or competition between realtors for the listing of a piece of property or house.

Bilateral Contract
A reciprocal contract in which the parties involved give mutual promises.

Bilateral Listing
Agreement between broker and seller agreeing on mutual performance, the broker to advertise at the agreed upon terms and the seller to sell the listed property. It may also mean listing two separate realtors.

Bill of Material
Listing of parts of an item as shown in a drawing.

Bill of Sale
A document transferring ownership.

Biweekly Mortgage
Mortgage that is paid every two weeks, rather than monthly, thus repaying the loan more quickly.

Black Iron
Iron without any finish on it, which is really gray-black in color.

Blanket Insurance Policy
Insurance policy covering multiple persons or pieces of property.

Blanket Mortgage
A mortgage covering more than one property owned by the same owner.

Blended Loan
Mortgage refinancing in which the new interest rate takes into account the interest rate on the prior loan and the prevailing current market rate.

Blended Rate
Interest rate of a blended loan, which exceeds the rate on the old loan but is less than the rate on new loans.

Board of Trustees
An appointed or elected body overseeing the management of an organization and rendering advice on issues and are legally responsible for their decisions.

Breach of Warranty
Inability, on the part of the seller, to pass along clear title to a buyer.

Broker
A person who acts as a conduit between two parties. A real estate broker is licensed to handle property transactions. A mortgage broker matches, for a specific fee, borrowers to lenders and loan programs.

Brokerage
The bringing together of two parties in exchange for a fee or commission. Also, a company or firm employing agents acting as brokers.

Broker’s Agreement
Contract to act on behalf of a principal in selling real estate, wherein the principal agrees to pay a commission to the broker when a buyer is produced who is ready, willing and able to meet the terms of the sale.

California Ranch
Long, one-story house with sloping roof with skylights and contemporary windows.

Call Option
Loan agreement clause allowing the lender to ask for the balance due at any time.

Capital Assets
Assets purchased for use over long periods of time, such as land and buildings, rather than for resale and can be fixed assets consisting of tangible assets such as plants and equipment and intangible assets, such as patents.

Capital Gains Tax
Taxes placed on profits from the sale of investments or real estate. (US tax)

Capital Loss
Loss from an investment resulting from the sale of that real estate.

Cash Accounting
Keeping records of money received or expended.

Cash Basis
Method of accounting in which expenses are recorded when cash is paid and revenue is recorded when cash is received.

Cash Equity
Amount, in cash, invested in property.

Cash Equivalency
Price for which real estate would be sold if all cash was involved.

Cash Flow
Cash remaining on a rental property when the operating expenses and loan payment are deducted from the gross rental.

Cash Flow Statement
Financial records of receipts and expenditures during a specific period.

Cash Value
Expected market value of property if sold today.

Cash-out Refinance
Refinancing of a mortgage where the money received from the new loan is greater than the amount due on the old loan. These funds can then be used in any manner by the borrower.

Ceiling Loan
Maximum loan that can be borrowed by a potential debtor.

Ceiling Rate
A controlled or administered price, which is set for property by a federal or local agency, usually in extraordinary circumstances.

Certificate of Sale
Document issued by the court at a judicial sale, entitling the purchaser to receive a deed once the court approves the purchase.

Certificate of Title
Attorney’s opinion of the status of a title, which is attached to the abstract of title.

Chapter Seven
Type of bankruptcy filing, a provision of the 1978 Bankruptcy Reform Act, which provides for a person’s property to be divided among creditors to satisfy unpaid debts.

Chapter Eleven
Type of bankruptcy filing allowing restructuring and reorganization of existing debts which is used most often by businesses. Creditors must vote on a debt-paying plan and a judge must approve.

Chapter Thirteen
Type of bankruptcy filing in which a person’s obligations are paid back within a three year period, allowing the obligated party to pay off debts without liquidating assets.

Classified Property Tax
Tax rate that varies depending on the usage of the property in question.

Cleaning Deposit
Nonrefundable fee to pay for the painting and cleaning of an apartment or office after a tenant vacates the premises.

Closed Mortgage
Mortgage in which the collateralized property cannot be used as security for another loan.

Closing
Legal procedure in which property ownership is transferred.

Closing Costs
Expenses incidental to the closing of title, which are in addition to the price of the property. These items include loan, title and appraisal fees.

Cloud on Title
A claim, lien or encumbrance, which, if valid, may impair the owner’s title to the property. Property can be transferred but its market value may be reduced.

Cluster Housing
Planned subdivision where detached housing is located in close proximity to each other and share common open space including recreation areas and parking.

Co-brokerage
Two or more authorized brokers who agree to cooperate together in representing a principal for the completion of a real estate sale.

Collateral Security
Additional security supplied by borrower to obtain a loan.

Commercial Bank
A financial institution, providing business loans, credit cards, checking and saving accounts, etc. Commercial banks are the largest financial intermediaries directly involved in the financing of real estate.

Commercial Broker
Real estate broker who specializes in the listing and selling of commercial property such as businesses, industrial, apartments, office buildings, etc.

Commercial Listing
Lists of business properties.

Commercial Property
Business property, such as office buildings, medical centers, hotels, stores, etc., which are intended to operate with a profit.

Commercial Real Estate
Real estate usable in a trade or business.

Community Property
A classification of property peculiar to certain states and referring to property accumulated through the efforts of both husband and wife.

Commute
Distance and time between a person’s workplace and home.

Comparative Market Analysis
The estimated value of property based on the comparison of like properties.

Concurrent Ownership
Ownership in a property by two or more owners, simultaneously.