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Real Estate Dictionary from A - Af

"A.L.T.A. Title Policy" - "After tax proceeds from resale"

We try to provide as much information as possible to buyers of Ocala Real Estate. These terms and definitions apply pretty much nation wide, and we try to update with terms specifically relating to Florida Real Estate as soon as we come across something we've missed. We welcome your comments and suggestions!

A.L.T.A. TITLE POLICY:
(American Land Title Association) A type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy. It is a lender's policy.

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.

ABATEMENT OF NUISANCE:
Extinction or termination of a nuisance.

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:
A brief summary.

ABSTRACT OF JUDGMENT:
A condensation of the essential provisions of a court judgment.

ABSTRACT OF TITLE:
A summary or digest of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record which may impair the title.

ABSTRACT PLANT:
See Title Plant.

ABSTRACTION:
A method of valuing land. The indicated value of the improvement is deducted from the sale price.

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 passage 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).

ACCELERATION CLAUSE:
Clause in trust deed or mortgage giving lender right to call all sums owing him to be immediately due and payable upon the happening of a certain event.

ACCEPTANCE:
When the seller or agent's principal agrees to the terms of the agreement of sale and approves the negotiation on the part of the agent and acknowledges receipt of the deposit in subscribing to the agreement of sale, that act is termed an acceptance.

ACCESS RIGHT:
The right of an owner to have ingress and egress to and from his property.

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.

ACCESSION:
Acquiring title by having property added to your property.

ACCESSORY BUILDING:
A structure on a property that serves a specific purpose, complementing the home or main building. A garage or storage shed.

ACCOUNTS PAYABLE:
Money owed by a business. They are considered liabilities.

ACCOUNTS RECEIVABLE:
Money owed to a business. They are considered assets.

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.

ACCRETION:
An addition to land from natural causes as, for example, from gradual action of the ocean or river waters.

ACCRUED:
Accumulated up to this point in time. Accrued interest, accrued depreciation.

ACCRUED DEPRECIATION:
The difference between the cost of replacement new as of the date of the appraisal and the present appraised value.

ACCRUED INTEREST:
Interest which has already been earned but has not yet been paid.

ACKNOWLEDGEMENT:
A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is his act and deed.

ACQUISITION:
The act or process by which a person procures property.

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:
A measure of land equaling 160 square rods, or 4840 square yards, or 43,560 square feet, or a tract about 208.71 feet square.

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.

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 NOTICE:
Knowledge of the existence of a thing or fact.

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:
According to valuation. 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.

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 BOOK VALUE:
Cost of acquisition minus depreciation (if allowed) plus capital improvements. Used when figuring profit for income tax.

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 GROSS INCOME:
Total rents received from income property, after an allowance for vacancies and bad debts.

ADJUSTED SELLING PRICE:
Selling price minus expenses of sale. Used when figuring profit for income tax.

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 the probate court to administer the estate of a person deceased.

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.

ADVANCE FEE:
A fee charged for advertising property or business opportunities in a publication other than a newspaper of general circulation.

ADVERSE POSSESSION:
The open and notorious possession and occupancy under an evident claim or right, in denial or opposition to the title of another claimant.

AESTHETIC VALUE:
A subjective element in the overall market value of a property created by the physical presentation of the land or buildings.

A.F.L.B.:
Accredited Farm and Land Broker.

AFFIANT:
A person who makes a sworn or affirmed statement.