ABANDONMENT:
Abandonment occurs when a person with a right or interest in a property
voluntarily gives up that right or interest, either by physically
"abandoning" the property or by showing the intention to give up the right
or interest.
ABATEMENT:
A decrease or reduction in the price of a property (or in rent chargeable
to a tenant). Usually occurs as a result of the discovery of a negative
fact about the property which decreases its value from the price
originally agreed upon by the parties.
ABLE:
Quite literally, being capable. A Purchaser is ready, willing and able to
complete a transaction when she has funds and has signed the documents
required to transfer title to a property. If the Vendor is not ready,
willing and able to complete the transaction on the date set for
completion, the Purchaser may tender upon the Vendor and sue as a result
of the failure to complete the transaction.
ABSENTEE OWNER:
An owner of a property who lives elsewhere, leaving tenants in control and
occupation of the property.
ABSORPTION RATE:
Expressed as a percentage, the number of properties that can be bought or
sold in a particular market. May be broken down as to types and sizes of
properties.
ABSTRACT OF TITLE:
A summary listing of the documents registered in the local land registry
office and which affect title (ownership) of a particular property.
ABSTRACT
PLANT:
See Title Plant.
ABSTRACTION (EXTRACTION) METHOD:
A method by which the value of land may be established. Uses comparable,
improved properties and establishes a ratio of their original land value
to their value after they have been developed. Call us for lofts for
sale in Chicago.
ABUT:
Adjoin or share a common boundary, or share even a small portion of a
boundary.
ACCELERATED DEPRECIATION:
Depreciation is the reduction of the value of a property or chattel as a
result of the passing of time (i.e. a new car may be worth $20,000.00,
$18,000.00 after one year, $16,000.00 after two years etc.). Usually used
for tax purposes, the depreciation in the value of a property may be used
as a tax deduction. If a property or chattel loses its value quickly, this
depreciation rate may be accelerated so that most of the value is lost in
the first few years and then the depreciation rate decreases later in the
property's life span. Also known as "Writing down" the value of a property
(or a chattel).
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ACCELERATION CLAUSE:
A clause in a mortgage or loan. If the borrower fails to live up to her
obligations under the mortgage, the lender has the legal right to demand
that the full principal of the mortgage may become due and payable
immediately upon the failure.
ACCEPTANCE:
A positive response to an offer or a counter-offer that creates a binding
agreement between the parties. Acceptance may be conditional upon the
occurrence of certain events.
ACCESS:
The right to enter a property. Access may be restricted to certain times,
to certain persons and to certain purposes (i.e. access for the purpose of
inspection).
ACCESSIBILITY:
The ease with which one can reach a certain place, person or thing. A
property may be inaccessible because it is located far back along a
winding, mountainous road that is often blocked in winter. A property may
also be said to have good accessibility to highways, shopping, schools
etc.
ACCESSORY BUILDING:
A structure on a property that serves a specific purpose, complementing
the home or main building. A garage or storage shed.
ACCREDITED ASSESSMENT EVALUATOR (AAE):
A professional designation. A property evaluator who has achieved the
requirements of the International Association of Assessing Officers.
ACCREDITED LAND CONSULTANT (ALC):
A professional designation. A person who has met the requirements of the
Realtors Land Institute to aid in the marketing of real property.
ACCREDITED RESIDENTIAL MANAGER
(ARM): A professional designation for a person trained to manage
residential properties. A person who has earned the designation by
fulfilling the requirements of the Institute of Real Estate Management (IREM),
which is an affiliate of the National Association of Realtors. We have
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ACCRETION:
The growth in size of a parcel of land as a result of the actions of such
natural forces as wind or water.
ACCRUED:
An adjective describing something that has come into existence but has not
yet been claimed by or distributed to its rightful owner.
ACCRUED DEPRECIATION:
From a tax standpoint, the amount of value of a property or chattel which
has already accumulated (but has not been claimed) as a result of the
decrease in the value of that property due to the passage of time and the
use of the property or chattel.
ACCRUED INTEREST:
Interest which has already been earned but has not yet been paid.
ACKNOWLEDGEMENT:
A statement by a person to the effect that they are aware of a certain
fact. May also be a sworn document to the same effect, which further
states that the person signing the document did so voluntarily.
ACQUISITION:
The process of taking title to or ownership of something.
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ACQUISITION COST:
The cost to the purchaser of obtaining title to anything, including real
property. Acquisition cost includes the cost of the transaction of
obtaining title, including legal fees and expenses, interest charges on
mortgages, land transfer tax, etc.
ACRE:
An imperial measure for land. Equals 43,560 square feet; 4,047 square
meters; or 0.047 hectares.
ACT OF GOD:
When used in insurance policies, an event caused by natural forces such as
rain, lightning, floods or earthquakes which results in damage to property
or chattels.
ACTION TO QUIET TITLE:
A legal proceeding begun for the purpose of settling competing claims to
property and establishing clear legal title in one party.
ACTUAL AGE:
As opposed to effective age. The objective age in years of a building
measured simply by the passage of time since it was constructed. Effective
age is a subjective measurement of the condition of a building, influenced
mostly by the maintenance and upkeep carried out on the building over the
years. We have real estate property for sale, call us.
ACTUAL
AUTHORITY:
With reference to an agent or representative. The limits of the power the
agent or representative has to bind her principal to an agreement or to a
statement.
ACTUAL CASH VALUE:
An insurance term, the value of a building calculated by subtracting the
decrease in value caused by age and wear and tear from the cost of
replacing the building entirely.
ACTUAL DAMAGES:
An award of the court to compensate an injured party for losses incurred
as a result of the actions or omissions of another party.
ACTUAL
EVICTION:
Wrongful removal of a tenant from possession of a premises, usually by a
landlord, contrary to the terms of the lease.
ACTUAL POSSESSION:
As opposed to constructive possession. When the owner of a property
occupies the property on a day-to-day basis. Constructive possession is
when the owner takes actions to establish and maintain his ownership of a
property without actually occupying it himself (i.e. leasing it to
tenants, removing squatters, hiring a security firm).
AD VALOREM:
Latin meaning "according to value." Taxes that are said to be ad valorem
are assessed according to the value of the property.
ADC LOAN:
A loan that finances the three major phases of a land development project:
(i) acquisition, (ii) development and (iii) construction.
ADDENDUM:
An addition to a document that forms part of it. Similar to a Schedule to
an Agreement of Purchase and Sale. May be used to add specific and
detailed information material to the contract or upon which contractual
terms are based.
ADDITIONAL PRINCIPAL PAYMENT:
A one-time or lump-sum payment made by a borrower in addition to the
regular payments on a loan or mortgage which reduces the principal owing
on the debt.
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ADEQUATE PUBLIC FACILITIES
ORDINANCE:
An ordinance by the local level of government controlling development by
requiring that infrastructure works (roads, sewers, hydro lines) be
completed prior to or concurrent with the building of dwellings or
commercial buildings in a new development.
ADJACENT LAND:
An inexact term used to described any property which is situated near or
abutting a certain piece of property. Note, an abutting property will
always be adjacent but an adjacent property may not be abutting.
ADJUSTABLE RATE MORTGAGE (ARM):
Also known as a Variable Rate Mortgage, a loan secured against land which
has an interest rate that changes according to some outside index -- such
as the federal prime rate or the interest rate paid on government bonds --
over the term of the mortgage. The change in interest rate will result in
a change in the periodic payments due under the mortgage.
ADJUSTED COST BASE:
For the purposes of determining capital gains or losses. The acquisition
cost of a property or chattel, plus the cost of any improvements to the
property.
ADJUSTED SALES PRICE:
The result of estimating the value of a property by comparison to
comparable properties. Take the actual sale price of a property comparable
to the subject property, then add the value of any extras which the
subject property has but the comparable property did not, then subtract
the value of any deficiencies in the subject property not shared by the
comparable property. Call us for all your real estate needs in
Chicago.
ADJUSTMENT DATE:
Mortgage term usually preceded by the word "Interest" (i.e. "Interest
Adjustment Date"). The date soon after the completion of a purchase and
mortgage transaction on which the borrower must make a payment of
accumulated interest only, usually used to place the periodic payment
dates for the mortgage at the first day of the month (i.e. you borrow on
March 18, your interest adjustment date is April 1 and your first regular
monthly payment is May 1).
ADJUSTMENT INTERVAL:
Also known as Adjustment Period. The period of time (i.e. week, month,
year) between changes in the interest rate charged on a adjustable-rate
mortgage.
ADJUSTMENT PERIOD:
See Adjustment Interval.
ADJUSTMENTS:
In real estate sales, the changes made to the selling price to account for
the advantages and disadvantages of the subject property, market
conditions etc. When closing a real estate transaction, the changes to the
purchase price made as a result of realty taxes over- or under-paid by the
Vendor, fuel oil provided, tenant's rental payments etc. (Contained on the
Statement of Adjustments).
ADMINISTRATOR:
A person appointed by a Court to deal with the estate of a deceased person
who died without leaving a will (who dies "intestate"). Note, an executor
is a person who is named in a will to deal with the estate of a deceased
person.
ADVANCE:
Verb: to deliver a portion of money borrowed under a mortgage or loan
before the loan instrument requires the money to be delivered.
Noun: the money so delivered.
ADVERSE POSSESSION:
A method of acquiring or claiming title (ownership) to a piece of land
owned by another by occupying it in defiance of the other's title. Most
jurisdictions have statutes that set out a certain period of time
throughout which the person claiming adverse possession must occupy the
land before title passes to that person by operation of law.
AESTHETIC VALUE:
A subjective element in the overall market value of a property created by
the physical presentation of the land or buildings.
AFFIANT:
One who swears an affidavit.
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AFFIDAVIT:
A sworn statement setting out facts which the affiant states are true.
Sworn before a Commissioner for swearing Oaths, Notary Public or other
public official.
AFFIDAVIT OF TITLE:
A Vendor's statement to the effect that title is good and marketable and
subject to no defects other than those set out in the Agreement of
Purchase and Sale or the Vendor's Deed.
AFFIRMATION:
Instead of a sworn oath, a solemn and formal declaration regarding the
truth of a statement of facts. Often used when a person's religious
convictions preclude swearing an oath.
AFFIRMATIVE FAIR HOUSING
MARKETING PLAN:
In an initiative sponsored by the Department of Housing and Urban
Development (HUD) to foster integration of races in new housing projects,
such a Plan is required before a project becomes eligible for certain U.S.
programs. We have Chicago lofts for sale.
AFTER-TAX CASH FLOW:
The net proceeds from an income-producing property, after all costs
(taxes, mortgage interest, maintenance costs etc.) of owning and operating
the property have been deducted.
AFTER-TAX PROCEEDS FROM RESALE:
The net proceeds from the sale of a property. The sale price minus legal
fees and expenses, realty commission, any taxes paid, mortgage payout etc.
AGENCY:
The relationship between a person (the Principal) and another person (the
Agent) who was appointed, selected, empowered, given authority by the
Principal to represent the interests of the Principal in dealings with
third parties and to bind the Principal to statements, warranties or
contracts.
AGENCY BY ESTOPPEL (OSTENSIBLE
AGENCY):
An agency relationship created by the actions, behavior or statements of
the Principal and/or the Agent upon which a third party relies. Ostensible
Agency may be found by a court where no agency relationship was intended
by the Principal.
AGENCY BY NECESSITY:
An agency relationship where the authority to represent is imputed to the
Agent as a result of an emergency situation to protect the interests of
the Principal.
AGENCY BY RATIFICATION:
An agency relationship which is created after the fact when the Principal
agrees to be bound by the actions of another person who was acting without
authority.
AGENT:
A person empowered by a Principal to act on behalf of the Principal in
dealings with third parties. The third party is entitled to rely upon the
agreement, assurances or statements of the Agent as being binding on the
Principal.
AGREEMENT OF SALE:
Also known as Purchase Agreement, Agreement of Purchase and Sale, Land
Agreement etc. A legal contract in which one party agrees to buy and
another agrees to sell a property or chattel. Contains terms and
conditions of the transaction and is signed by the parties.
AGREEMENT:
A legally binding contract between two or more people, representing a
meeting of minds on one or more issues.
AGRICULTURAL PROPERTY:
Land zoned for agricultural or farming activities.
AIR RIGHTS:
A saleable commodity, the right to occupy or use the air space above a
specific property.
ALIENATION CLAUSE:
A term of a mortgage which allows the creditor to demand payment in full
of principal and interest due upon the sale of the property. We have
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ALLOCATION (ABSTRACTION) METHOD:
Estimating the value of land only by deducting the value of the buildings
etc. on the land from the actual market value of the property as a whole.
ALLODIAL SYSTEM:
The system of ownership of property in the United States, meaning free
from any claims or rights of a monarch or a feudal lord.
ALTERATION:
A change made to an executed contract which has not been approved by the
parties to the contract. An alteration may constitute fraud if it has the
impact of significantly affecting the rights of a party to the contract
and was intentionally carried out by another party. If fraud is found, the
innocent party may void the contract.
AMENITIES:
Positive features of a particular property (such as a pool, central air
conditioning, etc.) or attractions located near a particular property
(highways, school, shopping, etc.) which have the effect of enhancing the
property's value.
AMERICAN LAND TITLE ASSOCIATION
(ALTA):
Trade association of American title insurance companies, with a view to
standardizing the policies nationwide.
AMERICAN RURAL APPRAISER:
A Professional Designation. Awarded by the American Society of Farm
Managers and Rural Appraisers.
AMERICAN SOCIETY OF APPRAISERS:
A Professional Society, for persons involved in the appraisal of both real
and personal property.
AMERICAN SOCIETY OF HOME
INSPECTORS, INC. (ASHI):
A Professional Trade Organization, for persons specializing in the
inspection of the physical condition of homes.
AMERICAN SOCIETY OF REAL ESTATE
COUNSELORS (ASREC):
A Professional Society, for persons specializing in helping people buy and
sell homes.
AMORTIZATION:
The preparation of a payment plan for a loan which allows for equal
payments to be made to the creditor at consistent intervals over the life
of the loan (the amortization period). Each payment covers interest
accrued over the interval period with the remainder of the payment being
applied to reduce the principal owed. If every payment is made on time and
in full over the amortization period, the loan will be completely repaid
at the end of the amortization period.
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AMORTIZATION SCHEDULE:
The printed table of the payments to be made on an amortized loan showing
the date and amount of each payment, the amount of each payment which will
be applied to interest and to principal and the balance of principal still
outstanding on the loan after the payment is made.
ANACONDA MORTGAGE:
A specific kind of mortgage. Contains a clause that states that it secures
all debts owed to the mortgagee by the mortgagor and applies to rules of
the mortgage to all such debts. Clause is also known as a Mother Hubbard
clause.
ANCHOR
TENANT:
Description of a tenant in a shopping mall or center. A "name" store that
will draw shoppers to the mall and, therefore, benefit the other mall
stores. Usually receives a favorable lease. Call us for Chicago
lofts for sale.
ANNUAL DEBT SERVICE:
The total amount required to service a loan in a given year.
ANNUAL LOAN CONSTANT:
Ratio of Annual Debt Service to original principal of the loan. Also known
as a mortgage constant.
ANNUAL MORTGAGOR STATEMENT:
Document sent by the lender to the mortgagor each year which sets out
amounts paid for principal, interest and taxes in the given year and the
amount still owing on the principal of the mortgage at the end of the
year.
ANNUAL PERCENTAGE RATE (A.P.R.):
A rate designed to allow for the comparison of one type of loan to
another. The annual cost of borrowing under a given form of loan (includes
in the calculation compounded interest, cost of borrowing etc.). Required
to be disclosed by the lender under the American Truth in Lending Act,
Regulation Z.
ANNUITY IN ADVANCE:
A form of periodic payment. Payments are made at the beginning of each
payment period rather than at the end of each period, as with a normal
annuity.
ANNUITY:
A form of periodic payment. Made to the recipient at consistent periodic
intervals either for life or for a fixed period of time.
ANTICIPATION, PRINCIPAL OF:
An approach to assessing the future value of land based on possible
contingencies (positive or negative).
ANTITRUST LAWS:
Laws requiring competition and a free market, outlawing monopolies in
certain businesses.
AO (ACCEPTED OFFER):
A short form used by agents to designate that an offer to purchase has
been accepted by the offeree.
APPARENT AUTHORITY:
Where an agent compels, by actions, omissions or statements, a third party
to believe the agent has the authority to bind a principal. The authority
to bind is apparent due to the behavior of the agent but may not actually
exist.
APPLICATION:
A form filled out in order to allow a lender to consider a person for a
mortgage or loan. Will contain personal and financial and personal
information on the applicant.
APPLICATION FEE:
The fees the lender charges the applicant. May include costs of a property
appraisal and a credit report on the applicant. May be payable by
applicant even if loan is not approved.
APPOINTMENTS:
Chattels or decorative touches that may affect the value of a property.
APPORTIONMENT CLAUSE:
A clause in a policy of insurance. Allows the payment of compensation for
a loss to be divided between insurers holding different policies on the
same property.
APPORTIONMENT:
Also known as adjustment. The division of responsibility for certain costs
between the parties to a transaction, such as realty taxes. In many U.S.
jurisdictions, the vendor is responsible for the day of closing and all
days prior to it.
APPRAISAL:
An estimation of the value of a property on a certain date given by a
qualified person, usually after an inspection of the property.
APPRAISAL PRINCIPLES:
Elements to be considered by an appraiser in appraising the value of a
property, such as competition, supply and demand.
APPRAISAL PROCESS:
A standardized approach to appraising a property, to allow for accuracy
and consistency. We have real estate for sale in Chicago.
APPRAISAL REPORT:
Documentation to support an appraisal of a property. Varies in length but
sets out elements considered, positive and negative aspects of property
etc.
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APPRAISED VALUE:
The estimated market value of a property on a given date, given by a
qualified person as a result of an inspection of the property and a
consideration of other market forces.
APPRAISER:
A professional who has been trained to assess the value of property.
APPRECIATION:
The increase over time in the value of a property caused by many factors:
market conditions, inflation, changes to area around the property, etc.
APPROACHES TO VALUE:
Different methods by which appraisers estimate the value of a property.
Include: (1) cost approach, (2) comparison approach, and (3) income
approach.
APPROVED ATTORNEY:
A lawyer who meets the requirements of title insurance companies to be
able to complete transactions involving title insurance and to render
title opinions.
APPURTENANCE:
A right or entitlement which forms part of the ownership of a property and
which passes to a new owner when title passes (i.e. an easement or right
of way over another property).
ARBITRATION:
An Alternative Dispute Resolution method. Allows an objective third party
to settle disputes between parties without resorting to court. Binding
arbitration involves the parties agreeing to be bound by the decision of
the arbitrator.
"ARM'S LENGTH" TRANSACTION:
A colloquial description of a transaction where none of the parties are
related to each other or have common interests -- they have each other at
"arm's length". An arms-length transaction is generally at fair market
value; in a "non-arm's-length" transaction, the relationship between the
parties may cause one or the other to accept less than they are entitled
or pay more than fair market value.
ARREARS:
Money which is not paid when due, under a payment plan or amortization
schedule. Could lead to enforcement of loan agreement by lender
ARTERIAL STREET:
A main thorough fare or through road, one which is designed to carry
traffic through an area where that area is not the destination of the
traffic.
ARTIFICIAL PERSON:
As opposed to a natural person. A corporation of other legal entity which
has at least some of the legal rights of a human being.
AS IS:
Implied in most Agreements of Purchase and Sale, suggests the Purchaser is
accepting the property in its current condition and releases the Vendor
from any liability for problems found before or after closing.
"AS-IS" AGREEMENT:
A statement in the Agreement of Purchase and Sale that confirms that the
Purchaser shall accept the property and all chattels included in the
Purchase in the condition in which they are found at the time the
Agreement is signed. Call us for lofts for sale in Chicago.
ASKING PRICE:
The price at which the Vendor advertises a property. When used in the
advertisement, may suggest flexibility on the part of the Vendor regarding
the price.
ASSESSED VALUE:
The value assigned to a given property by the municipality for the purpose
of establishing realty taxes payable by the owner of the property.
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ASSESSMENT:
Generally, the apportionment of liability of a general cost among
individuals. The act of estimating the value of land for tax purposes or
the method by which municipalities raise taxes (property tax assessment).
ASSESSMENT BASE:
The total of the assessed values of all properties in a municipality.
ASSESSMENT RATIO:
Assessed value as compared to full market value for a particular property
or for all properties as set by the municipality.
ASSESSMENT ROLL:
Public record of the assessed values of properties. Also includes
Assessment Roll Number for each property, the number by which the property
is identified in the municipal records.
ASSESSOR:
A person who is employed by the municipality to estimate the value of
properties for the purpose of taxes.
ASSET:
A thing of value.
ASSIGN:
To transfer interest in a property, contract, right etc..
ASSIGNEE:
The person to whom an interest is transferred. An assignee of an Agreement
of Purchase and Sale may buy the property and enforce the contract in the
same fashion as the original party.
ASSIGNMENT:
The transfer of any right, claim or interest to another person or
corporation. Often used to refer to the transfer of a mortgage from one
lender to another. Also a noun describing the document which represents
the assignment of the right etc.
ASSIGNMENT OF LEASE:
Subject to the terms of the lease, a transfer of either the lessor's or
the lessee's interest in a lease.
ASSIGNOR:
The person who assigns a right or interest to another person.
ASSOCIATE BROKER:
A qualified real estate broker who works with or for another broker.
ASSUMABLE MORTGAGE:
A mortgage that can be taken over ("assumed") by the buyer when a home is
sold. If interest rates have risen, an assumable mortgage at a low rate
may prove a selling point for the property.
ASSUMPTION CLAUSE:
The paragraph in the mortgage which sets out the borrower's right to have
the mortgage assumed by a purchaser.
ASSUMPTION FEE:
A charge levied by the lender (usually against the party assuming the
mortgage) for the privilege of assuming a mortgage. May be a fixed amount
or a percentage of outstanding principal on the mortgage at the time of
the assumption.
ASSUMPTION OF MORTGAGE:
The agreement of a purchaser to take on personal liability for a mortgage
already registered on title to the property and to make payments under the
mortgage. Purchaser takes the place of the vendor in the contract with the
lender. We have lofts for sale in Chicago, call us.
AT-RISK RULE:
A limitation of the amount an investor can claim on his incomes taxes as a
result of losses from real estate investments, under the Tax Reform Act of
1986.
ATTACHED HOUSING:
Duplex, triplex, row housing, or townhouses. Two or more dwellings that
are attached physically but are owned and/or occupied by different people.
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ATTACHMENT:
The binding by a court of a piece of property (real or personal) as
security for a debt.
ATTESTATION:
A statement by a person who has witnessed another person signing a
document to the effect that they did in fact witness the document. May
include statements to the effect that the witness knew the person who
signed personally, that the person who signed understood the contents of
the document when he signed etc. Required in some states for deeds.
ATTORNEY AT LAW:
A person who has met the requirements to practice law in a particular
state of the United States.
ATTORNEY IN FACT:
A person who holds a POWER OF ATTORNEY for another person, which gives the
Attorney the power to act on behalf of that other person and bind that
other person.
ATTORNEY'S OPINION OF TITLE:
A statement of a lawyer's conclusions with regard to the state of the
legal title of a property, issued after the lawyer has completed the
appropriate investigations of title.
ATTRACTIVE NUISANCE:
"Attractive" refers to the response of children to a feature of land
(whether natural or man-made) which has the potential to be harmful (an
uncovered well, a swimming pool, a swift moving stream). Call us for
lofts for sale in Chicago.
AUCTION:
The process of selling property to the highest bidder.
AUCTIONEER:
A professional (real estate broker or auctioneer, depending on local laws)
who sells property at public auctions. Usually paid a percentage of the
sale price.
AUGMENTED ESTATE:
The assets of a deceased person against which a surviving spouse may claim
an interest. Can include property which the deceased person disposed of
while still living if the disposal was in the form of a gift or was not
for value.
AUTHORITY:
The right of an agent, conferred by his principal, to bind the principal
in dealings with third parties.
AUTHORIZATION TO SELL:
A contract between an property owner and a real estate broker or agent
which allows the broker to list the property for sale and which codifies
the rights and obligations of the two parties.
