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ABSORPTION RATE - 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.
ABSTRACTION METHOD - 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.
ACCESSORY BUILDING - A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.
ACCRETION - The natural growth of a piece of land resulting from forces of nature.
ACRE - 43,560 square feet. A measurement of area.
ACTUAL AGE - The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE
AD VAL OREM TAX - Taxes assessed based on the value of the land and improvements.
ADDENDUM - 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 form.
ADJUSTED SALES PRICE - An estimate of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.
AESTHETIC VALUE - The additional value a property enjoys based on subjective criteria such as look or appeal.
AFFIRMATION - A declaration that a certain set of facts are truthful.
AGENT - A person who has been appointed to act on behalf of another for a particular transaction.
AMENITY - 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 other recreation.
AMERICAN SOCIETY OF APPRAISERS - An organization of appraisal professionals and others interested in the appraisal profession.
APPRAISAL - A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.
APPRAISAL FOUNDATION - 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 (USPAP).
APPRAISAL INSTITUTE - A world-wide organization dedicated to real estate appraisal education, publication and advocacy.
APPRAISAL PRINCIPLES - The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
APPRAISAL REPORT - 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 estimated value of the subject property and support that estimate with corroborating information.
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.
APPRAISED VALUE - The estimated fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.
APPRAISER - 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.
APPRECIATION - 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.
ASSESSED VALUE - The value of a property according to jurisdictional tax assessment.
ASSESSMENT - The function of assigning a value to a property for the purpose of levying taxes.
ASSESSMENT RATIO - The comparative relationship of a property's assessed value to its market value.
ASSESSOR - The jurisdictional official who performs the assessment and assigns the value of a property.
ASSET - Any item of value which a person owns.
ATTACHED HOUSING - 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 well.
BANKRUPTCY - 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 loan.
BILL OF SALE - A physical receipt indicating the sale of property.
BLIGHTED AREA- Any region of a city or town that has fallen into disrepair or otherwise has become undesirable.
BONA FIDE - Any genuine offer, made without intent to defraud or deceive.
BROKER - An individual who facilitates the purchase of property by bringing together a buyer and a seller.
BUFFER ZONE - 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.
BUILDING CODE - 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.
BUILT-INS - 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.
BUNGALOW - A one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.
CAPE COD COLONIAL - A single-story house style made popular in New England. Often characterized by a steep roof with gables.
CAPITAL - Accumulated goods and money which is most often used to generate additional income.
CAPITAL EXPENDITURE - An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.
CAVEAT EMPTOR - 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 OCCUPANCY - Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
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.
CHATTEL - 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.
CLEAR TITLE - Ownership of property that is not encumbered by any counter-claim or lien.
CLOSING - 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).
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.
CLOSING STATEMENT V - The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
COLLATERAL - An asset which is placed at risk to secure the repayment of a loan.
COMMON LAW - As opposed to statute law. Laws that have been established by custom, usage and courts over many years.
COMMISSION - 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.
COMMON AREAS - 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.
COMMUNITY PROPERTY - 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.
COMPARABLES - An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property who's value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.
CONCESSIONS - Additional value granted by a buyer or seller to entice another party to complete a deal.
CONDEMNATION - The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.
CONDOMINIUM - A development where individual units are owned, but common areas and amenities are shared equally by all owners.
CONDOMINIUM CONVERSION - 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.
CONSTRUCTION LOAN - 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 is completed.
CONTIGUOUS - Connected to or touching along an unbroken boundary
CONTINGENCY - 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 the requires a complete home inspection before it becomes official.
CONTRACT - A legally binding agreement, oral or written, between two parties.
CORPORATE RELOCATION - 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.
CUL-DE-SAC - 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.
DEED - 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, who's 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.
DEFAULT - The condition in which a borrower has failed to meet the obligations of a loan or mortgage.
DEPOSIT - Cash given along with an offer to purchase property, Also called EARNEST MONEY.
DEPRECIATION - The natural decline in property value due to market forces or depletion of resources.
DETACHED SINGLE-FAMILY HOME - A single building improvement intended to serve as a home for one family.
DISTRESSED PROPERTY - A mortgaged property which has been foreclosed on.
DUPLEX - A single-building improvement which is divided and provides two units which serve as homes to two families.
DWELLING - A house or other building which serves as a home.
EASEMENT - 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.
ECONOMIC DEPRECIATION - The decline in property value caused by external forces, such as neighborhood blight or adverse development.
ECONOMIC LIFE - The amount of time which any income-producing property is able to provide benefits to its owner.
EFFECTIVE AGE - 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 age.
EMINENT DOMAIN - 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.
ENCROACHMENT - A building or other improvement on one property which invades another property or restricts its usage.
ENCUMBRANCE - A claim against a property. Examples are mortgages, liens and easements.
EQUITY - 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.
EQUITY BUILDUP - 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.
ESCROW - 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.
ESTATE - 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.
EXCLUSIVE LISTING - An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.
EXECUTOR - The person named in a will to administer the estate.
FACADE - The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.
FAIR MARKET VALUE - The price at which two unrelated parties, under no duress, are willing to transact business.
FEE APPRAISER - A certified, professional appraiser who estimates the fair market value of property and receives a set fee in exchange.
FEE SIMPLE - A complete, unencumbered ownership right in a piece of property.
FEE SIMPLE ESTATE - A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.
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FINAL VALUE ESTIMATE - The estimated value of a piece of property resulting from an appraisal following the USPAP guidelines.
FIXTURE - Any piece of personal property which becomes permanently affixed to a piece of real property.
FLOOD INSURANCE - Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
FLOOR PLAN - The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.
FRONTAGE - The segment of a property that runs along a point of access, such as a street or water front.
FUNCTIONAL OBSOLESCENCE - A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.
GABLE ROOF - A steeply angled, triangular roof.
GAMBREL ROOF - A ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.
GENERAL LIEN - A broad-based claim against several properties owned by a defaulting party.
GEORGIAN - A classic, English-style hose characterized by simple rectangular shape and multiple stories.
GRADE - The slope of land around a building.
GRANTEE - Any person who is given ownership of a piece of property.
GRANTOR - Any person who gives away ownership of a piece of property.
GROSS AREA - The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.
HALF-SECTION - 320 acres
HAZARD INSURANCE - Insurance covering damage to a property caused by hazards such as fire, wind and accident.
HEIGHT ZONING - A municipal restriction on the maximum height of any building or other structure.
HIDDEN AMENITIES - Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.
HIGHEST AND BEST - The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.
HOME INSPECTION - A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
HOMEOWNER'S ASSOCIATION - An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.
HOMEOWNER'S INSURANCE - A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.
HOMEOWNERS WARRANTY - An insurance policy covering the repair of systems and appliances within the home for the coverage period.
HUD MEDIAN INCOME - Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).
HUD-1 STATEMENT - A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.
IMPROVED LAND - Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.
IMPROVEMENTS - Any item added to vacant land with the intent of increasing its value or usability.
IMPROVEMENT RATIO - The comparative value of a improved piece of land to its natural, unaltered state.
INCOME APPROACH - The process of estimating the value of property by considering the present value of a stream of income generated by the property.
INCOME PROPERTY - A piece of property whose highest and best use is the generation of income through rents or other sources.
INDEPENDENT APPRAISAL - An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.
INSPECTION - The examination of a piece of property, its buildings or other amenities.
INSURABLE TITLE - The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.
INVESTMENT PROPERTY - Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.
JOINT TENANCY - A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.
JUDGMENT - An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payees property as collateral.
JUDICIAL FORECLOSURE - A type of foreclosure conducted as a civil suit in a court of law.
LATENT DEFECTS - Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.
LEASE - A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.
LEASEHOLD ESTATE - A type of property ''ownership'' where the buyer actually has a long-term lease on the property.
LEASE OPTION - A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.
LEGAL DESCRIPTION - The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.
LIABILITIES - A persons outstanding debt obligations.
LIABILITY INSURANCE - Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.
LIEN - Any claim against a piece of property resulting from a debt or other obligation.
LIKE-KIND PROPERTY - Any property which is substantially similar to another property.
MANUFACTURED HOUSING - Once known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.
MARGINAL LAND - Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.
MASTER ASSOCIATION - An umbrella organization that is made up of multiple, smaller home owner's associations. Often found in very large developments or condominium projects.
METES AND BOUNDS - A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.
METROPOLITAN AREA - The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.
MINERAL RIGHTS - The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.
MISREPRESENTATION - A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.
MULTI-FAMILY PROPERTIES - Any collection of buildings that are designed and built to support the habitation of more than four families.
NATIONAL SOCIETY OF REAL ESTATE APPRAISERS - An organization founded in 1956 which promotes standards of professionalism in its members.
NATURAL VACANCY RATE - The percentage of vacant properties in a given area that is the result of natural turnover and market forces.
NEIGHBORHOOD LIFE-CYCLE - The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.
NEIGHBORHOOD - A subsection of a municipality that has been designated by a developer, economic forces or physical formations.
NET LEASABLE AREA - The space in a development, outside of the common areas, that can be rented to tenants.
NEW ENGLAND COLONIAL - An architectural style dating from early American history typified by a two-story building with clapboard siding.
NON-CONFORMING USE - The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.
OBSOLESCENCE - The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.
OCCUPANCY - A physical presence within and control of a property.
OCCUPANCY RATE - The percentage of properties in a given area that are occupied.
OFF-SITE IMPROVEMENTS - Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.
OFF-STREET PARKING - Designated parking spaces associated with a particular building or other structure which are not located on public streets.
ON-SITE IMPROVEMENTS - Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.
OPEN SPACE - Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.
ORIGINAL EQUITY - The amount of cash a home buyer initially invests in the home.
OWNER OCCUPIED - The state of property wherein the owner occupies at least some portion of the property.
PARTIAL INTEREST - A shared ownership in a piece of property. May be divided among two or more parties.
PERSONAL PROPERTY - Owned items which are not permanently affixed to the land.
PERSONAL RESIDENCE - The primary domicile of a person or family.
PLANNED UNIT DEVELOPMENT (PUD) - A coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.
PLAT - A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.
PREFABRICATED - Any building or portion thereof which is manufactured and assembled off site, then erected on a property.
PREPAYMENT - Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.
PROPERTY - Any item which is owned or possessed.
PURCHASE AGREEMENT - A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
QUADRAPLEX - Any building designed to accommodate four families.
QUITCLAIM DEED - A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.
RANCH HOUSE - An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.
RAW LAND - Any land which has not been developed.
REAL ESTATE - A piece of land and any improvements or fixtures located on that land.
REAL ESTATE AGENT - A licensed professional who facilitates the buying and selling of real estate.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) - A federal law requiring lenders to give full disclosure of closing costs to borrowers.
REAL PROPERTY - Land, improvements and appurtenances, and the interest and benefits thereof.
REALTOR - A real estate agent or broker who is a member of the National Association of Realtors.
RECORDER - A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.
RECORDING - The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.
RELOCATION SERVICE - Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.
REMODEL - An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.
RESIDENTIAL PROPERTY - A piece of property whose highest and best use is the maintenance of a residence.
RIGHT OF FIRST REFUSAL - An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.
RURAL - An area outside of an established urban area or metropolitan district.
SALE PRICE - The actual price a property sells for, exclusive of any special financing concessions.
SALES COMPARISON APPROACH - An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.
SCARCITY - An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.
SEMIDETACHED HOUSING - Two residences which share a common wall.
SERVICER - A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.
SINGLE-FAMILY PROPERTY - A property designed and built to support the habitation of one family.
SUBDIVISION - A residential development that is created from a piece of land which has been subdivided into individual lots.
SUBJECT PROPERTY - A term which indicates a property which is being appraised.
SURVEY - A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.
SWEAT EQUITY - The method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.
TAX-EXEMPT PROPERTY - Any property which is not taxed.
TENANCY - The right to occupy a building or unit.
TENANCY IN COMMON - A form of holding title, whereby there are two or more people on title to a property, ownership does not pass on to the others upon the death of one individual.
TITLE - A specific document which serves as proof of ownership.
TITLE COMPANY - An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.
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