Reverse Mortgage Lady's
Real Estate Glossary
The 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.
This method of estimating the value of property uses similar properties
available in the same market to extract the value of a parcel of land.
A 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.
A 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
The date the interest rate changes on an adjustable rate mortgage.
AD VAL OREM TAX
Taxes assessed based on the value of the land and improvements.
A 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
ADJUSTABLE-RATE MORTGAGE (ARM)
A type of mortgage where the interest rate varies based on a particular
index, normally the prime lending rate.
The value of an asset (property or otherwise) that includes the original
price plus the value of any improvement, and less any applicable depreciation.
ADJUSTED SALES PRICE
An opinion of a property's sales price, after adjustments have been
made to account for differences between it and another comparable
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.
A 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
Any 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
AMERICAN SOCIETY OF APPRAISERS
An organization of appraisal professionals and others interested in
the appraisal profession.
The repayment of a loan through regular periodic payment.
The 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.
ANNUAL PERCENTAGE RATE (APR)
The rate of annual interest charged on a loan.
A sum of money paid at regular intervals, often annually.
A form used to apply for a mortgage loan that details a potential
borrower's income, debt, savings and other information used to determine
A ''defensible'' and carefully documented opinion of value. Most commonly
derived using recent sales of comparable properties by a licensed,
A 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
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.
The 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 corroborating
APPRAISAL STANDARDS BOARD (ASB)
An 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.
An opinion of the fair market value of a property as developed by
a licensed, certified appraiser following accepted appraisal principals.
An 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.
ARMS LENGTH TRANSACTION
Any 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 another company.
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.
Any 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
The slope of the ground around a house.
BALL COCK VALVE
The valve inside a toilet tank that controls the filling of the tank.
A 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.
When 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 structural supporting member.
BILL OF SALE
A physical receipt indicating the sale of property.
A 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.
An 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 new purchase.
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 cooling capacity.
A 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.
Regulations 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.
BUILDING LINE OR SETBACK
The statutory distance between buildings and the property line, imposed
by municipalities, home associations, or other agreements.
Specific 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.
Extra 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.
Associated 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.
CAPE COD COLONIAL
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 additional
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
Literally translated: ''Let the buyer beware.'' A common business
tenet whereby the buyer is responsible for verifying any and all claims
by the seller of property.
CERTIFICATE OF DEPOSIT
A document showing that the bearer has a certain amount of money,
at a particular amount interest, on deposit with a financial institution.
CERTIFICATE OF DEPOSIT INDEX
An index based on the interest rate of six month CD's. Used to set
interest rates on some Adjustable Rate Mortgages.
CERTIFICATE OF ELIGIBILITY
A document issued by the Veterans Administration that certifies eligibility
for a VA loan.
CERTIFICATE OF OCCUPANCY
Issued by an appropriate jurisdictional entity, this document certifies
that a building complies with all building codes and is safe for use
CERTIFICATE OF REASONABLE VALUE (CRV)
Usually based on an independent appraisal, a CRV for a particular
property establishes the maximum amount which can be secured by a
CERTIFICATE OF TITLE
A document designating the legal owner of a parcel of real estate.
Usually provided by a title or abstract company.
CERTIFIED GENERAL APPRAISER
Generally, 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.
CERTIFIED RESIDENTIAL APPRAISER
A sub-classification of appraiser who is only licensed to appraise
residential property, usually up to four units.
CHAIN OF TITLE
The complete history of ownership of a piece of property.
Any 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 are overloaded.
Ownership of property that is not encumbered by any counter-claim
A 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).
All 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 deal.
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 property.
An asset which is placed at risk to secure the repayment of a loan.
The 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.
A percentage of the sales price or a fixed fee negotiated by an agent
to compensate for the effort expended to sell or purchase property.
COMMON AREA ASSESSMENTS
Fees 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.
Any 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.
In 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.
An 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 Standards of
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.
The 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 high humidity.
A development where individual units are owned, but common areas and
amenities are shared equally by all owners.
Commonly, 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.
A 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
Connected to or touching along an unbroken boundary.
Something 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.).
A mortgage that begins as and adjustable, that allows the borrower
to convert the loan to a fixed rate within a specific timeframe.
A 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.
A 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.
COST OF FUNDS INDEX (COFI)
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.
A 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.
A 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.
DATE OF APPRAISAL
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 monetary.
DEBT EQUITY RATIO
The 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.
DEED-IN-LIEU (OF FORECLOSURE)
A document given by a borrower to a lender, transferring title of
the property. Often used to avoid credit-damaging foreclosure procedures.
DEED OF TRUST
A document which transfers title in a property to a trustee, whose
obligations and powers are stipulated. Often used in mortgage transactions.
DEED OF RECONVEYANCE
A document which transfers ownership of a property from a Trustee
back to a borrower who has fulfilled the obligations of a mortgage.
DEED OF RELEASE
A document which dismisses a lien or other claim on a property.
DEED OF SURRENDER
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
Cash given along with an offer to purchase property, Also called EARNEST
The natural decline in property value due to market forces or depletion
DETACHED SINGLE-FAMILY HOME
A single building improvement intended to serve as a home for one
Points 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.
EARNEST MONEY DEPOSIT
A 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
The 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.
The 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
The 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.
ENERGY EFFICIENCY RATIO
An efficiency rating system for air conditioning units that corresponds
to the number of BTU's output per watt of electricity used.
EQUAL CREDIT OPPORTUNITY ACT (ECOA)
U.S. federal law requiring that lenders afford people equal chance
of getting credit without discrimination based on race, religion,
age, sex etc.
The difference between the fair market value of a property and that
amount an owner owes on any mortgages or loans secured by the property.
The natural increase in the amount of equity an owner has in a property,
accumulated through market appreciation and debt repayment.
ERRORS AND OMISSIONS INSURANCE
An insurance policy taken out by appraisers to cover their liability
for any mistakes made during the appraisal process.
An 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 real property.
An 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.
An 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.
EXAMINATION OF TITLE
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.
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