A summary; an abridgment. Before the use of photo static copying public records were kept by abstracts of recorded documents.

Abstract of Title
A summary of the public records relating to the title to a particular piece of land. An attorney or title insurance company reviews an abstract of title to determine whether there are any title defects which must be cleared before a buyer can purchase clear, marketable, and insurance title.

Acceleration Clause
Provision in a mortgage document stating that if a payment is missed or any other provision is violated the whole debt becomes immediately due and payable.

Formal declaration before a public official that one has signed a document. Prior to recording real estate legal documents, such as grant deeds and deeds of trust, a Notary Public acknowledges the person’s signature on the document.

A measure of land equal to 43,560 square feet.

Action to Quiet Title
A court action to establish ownership of real property. Although technically not an action to remove a cloud on title, the two actions are usually referred to as “Quiet Title” actions.

Adjustable Rate Mortgage (ARM)
A mortgage where the interest rate is not fixed for the life of the loan. These mortgages adjust periodically based on an index that changes with market conditions. The rate of interest is the sum of the index plus a margin ( the margin remains fixed for the life of the loan). Most ARMs have periodic interest rate and payment caps, as well as a life cap. ARM’s may also be referred to as AML’s or VRM’s.

Ad Valorem
Designates an assessment of taxes against property. Literally, according to value; based on the “ability to pay” theory.

Adverse Possession
The actual, exclusive, open notorious, hostile and continuous possession and occupation of real property under an evident claim of right or title. The time required legally to obtain title by adverse possession varies from state to state.

A contract by which the agent undertakes to represent the principal in business transactions, using some degree of discretion.

Person authorized to act on behalf of another in dealings with third parties.

Agreement of Sale
An agreement between parties for the sale of real estate. In some states it is synonymous with a Purchase Agreement, Sales Agreement, or Land Contract. In Texas it is known as an Earnest Money Contract.

Alienation Clause
Provision in a mortgage document stating that the loan must be paid in full if ownership is transferred.

The qualities and state of being pleasant and agreeable. In appraising, those qualities that attach to property in the benefits derived from other than monetary. Satisfactions of possession and use arising from architectural excellence, scenic beauty and social environment.

American Land Title Association
Title policy that assures a lender that it has the proper rights as the beneficiary on a mortgage loan.

Gradual payment of a debt through regular installments that cover both interest and principal.

Annual Percentage Rate (APR)
A measure of the total cost of credit (interest as well as other recurring charges) expressed as a yearly percentage rate. Because all lenders apply the same rules in calculating the annual percentage rate, it provides consumers with a good basis for comparing the cost of loans.

Appraisal and Credit Report Fees
These fees are generally collected by the lender and paid to outside companies performing the services.

Appraised Value
An expert option of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.

Appraisal Report
Estimate of real estate value, presumably by an expert. An appraisal evaluates the property at a given time based on facts regarding the location, improvements, neighborhood and comparable sales. Generally, the value is based on three approaches: cost, market and income.

Increase in value or worth of property.

Payment made after it is due is in arrears. Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance.

“as is”
A clause that is sometimes used in the transfer of property. It means that the present property is being transferred with no guarantee or warranty provided by the seller.

Assessment Base
The total assessed value of all property in a given assessment district.

Assessed Valuation
Value placed on real estate by governmental assessors as a basis for levying property taxes; not identical with appraised or market value.

Transfer of a contract from one party to another.

New owner assumes the responsibility for repaying an existing mortgage. Both FHA and VA loans are fully assumable. Some adjustable rate mortgages may be partially assumable, but the new owners may be required to re-qualify for the loan.

Attached Homes
A home that has one or more common walls adjoining another home. Condominiums and row houses are attached homes.