Abstract: A summary of the key components of recorded deeds, mortgages, leases and other factors that affect a property’s title.
Abstracting: The act of composing an abstract.
Abstractor: The person or entity that composes an abstract.
Acknowledgement: Legal validity granted to a document by an authorized official (such as a notary public) who certifies that a document is indeed executed (signed) by the named executor (signer).
Addendum: Something added (additions to a document). Real property sales often have addenda (plural of addendum) as the buyer and seller negotiate fine points.
Adjustable Rate Mortgage (ARM): A mortgage with an interest rate that changes at specific intervals as the loan matures; generally linked to some major benchmark rate such as movements in the economic index. The ARM is commonly offered for one, three, five or seven-year periods. Also referred to as Adjustable Mortgage Loan (AML) and Variable Rate Mortgage (VRM).
Adjustable Mortgage Loan (AML): See Adjustable Rate Mortgages (ARM).
Adjustment Period: The time span between changes in the interest rate of an Adjustable Rate Mortgage (ARM).
Adverse Possession: An unauthorized possession of land for an allotted amount of time that results in the land owner losing land to the occupier.
Affiliated Business Arrangement: An AfBA or ABA – sometimes also referred to as a Controlled Business Arrangement or Joint Venture – is a business established by two or more partner companies, often involved in providing services to consumers in a real estate transaction.
All-Inclusive Rate: In the title insurance industry, this term refers to a price set forth that includes both a title search and a closing. (This varies by company.)
ALTA: The acronym for American Land Title Association, the title insurance industry’s national trade organization.
Agent: A licensed individual enacted to represent the buyer or seller in a real estate transaction.
Amended Value: The actual sale price of a home as adjusted from the previously listed or valued price.
Amortization: Derived from the French word “to kill,” it means paying off a debt through regular partial payments that reduce both the principal and interest of an incurred debt, instead of only paying down the interest.
Annual Percentage Rate (APR): Is the annual rate on the loan and the rate used to calculate the monthly payments. The APR includes both the interest rate and any additional costs or prepaid finance charges such as prepaid interest, private mortgage insurance, closing fees, points, etc. It represents the total cost of credit on a yearly basis after all charges are taken into consideration.
Application Fees: The fees that a mortgage company charges to process a loan application, customarily equivalent to approximately 1% of the loan amount or a flat fee.
Appraisal: A process by which a specialist (a licensed or certified appraiser) estimates a property’s value and submits it in the form of a written statement. An appraisal may take into account the quality of the property, values of surrounding properties and market conditions in the area.
Appraisal Fee: The price that a Lender charges to determine the value of a property on which a loan is requested, usually paid at the time of the loan application.
Appraisal Report: The statement prepared by an appraiser that includes the factual information and reasoning as to how the appraiser arrived at an estimate of the property value.
Arrears: Payment made after the cost has been incurred. For example, rent is usually paid in advance of the time a space is to be used, whereas when you eat at a restaurant you pay after you eat, hence, in arrears.
“As-Is” Condition: The condition in which the buyer is accepting the home at the time of the sale, including its faults. The seller gives no guarantee on the quality of the asset and makes no repairs that may be necessary.
Asking Price: The price for which the seller has placed the property on the market.
Assessment: The placing of a value on property for the purposes of taxation.
Assessor’s Parcel Number (APN): A unique string of numbers that are used to identify a property, referenced on a parcel map.
Assumption Fee: The cost a lender imposes for the purchase of an existing mortgage.
Assumption of Mortgage: A bank-approved agreement to transfer to a new purchaser the responsibility of an existing loan that is tied to a mortgage or deed of trust.
Attorney Fee: Cost for the preparation of the necessary documentation in a real estate transaction.
Attorney In-Fact: An authorization granted by the power of attorney to act as an agent on someone else’s behalf.
Attorney’s Opinion: A written statement documenting the professional opinion of an attorney in regards to the status of a property title.
Authesign: An e-signature system that allows signers to receive, sign and send documents entirely online.