Real Estate Definitions A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Abstract of Title - A summary 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 to real property. Acceleration Clause - A clause in trust deed or mortgage giving the lender the right to call all sums owing him to be immediately due and payable upon the happening of a certain stated event. Acceptance - A legal term referring to the acceptance of an offer. A buyer offers to buy and the seller accepts the offer. Acknowledgment - A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is his act and deed. Ad Valorem - "According to value." A method of imposing a tax on the ownership of real property. 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. Affidavit - A statement or declaration reduced to writing and sworn to or affirmed before some officer who has authority to administer an oath or affirmation. Affirmation - A solemn declaration made under the penalties of perjury by a person who conscientiously declines taking an oath. This is equivalent to an oath. Agency - The relationship between an agent and principal. One who represents another from whom he has derived authority. Agreement of Sale - A written contract between seller and buyer in which they reach a meeting of minds on the terms and conditions of the sale. Amortization - The liquidation of a financial obligation on an installment basis; also recovery, over a period, of cost or value. Appraisal - An estimate of value of property resulting from an analysis of facts about the property. An opinion of value. Appurtenance - Something belonging to the land and transferred with it, such as buildings, fixtures, rights. Assemblage - Putting together two or more lots to form a large parcel. Assessed Value - A value placed upon property by the tax assessor. Assessment - The valuation of property for the purpose of levying a tax, or the amount of the tax levied. Assessor - One appointed to assess property for taxation. Assignment - A transfer or making over to another of the whole of any property, real or personal, or of any estate or right therein. To assign - to transfer or make over to another. Assumption of Mortgage - When a grantee takes a title to real property and the deed contains an assumption agreement, or grantee executes a separate assumption agreement, the grantee becomes the principal guarantor for unpaid portions of the note and is primarily liable for the amount of any deficiency judgment. Attachment - Seizure of property by court order, usually done to have it available in event a judgment is obtained in a pending suit. Attorney-in-Fact - One who is authorized to perform certain acts for another under a Power of Attorney; may be limited to a specific act or acts, or be general. top of page Balloon Payment - Where the final installment payment on a note is greater than the preceding installment payments and it pays the note in full, such final installment is termed a balloon payment. Beneficiary - (1) One entitled to the benefit of a trust; (2) One who receives profit from an estate, the title of which is vested in a trustee; (3) The lender on the security of a note and deed of trust. Blanket Encumbrance A single mortgage or trust deed which covers more than one piece of real estate. Bona Fide - In good faith, without fraud or deceit; authentic; sincere. Breach - Violation of an obligation in a contract. top of page Capitalization - In appraising it is a method of determining the value of property by interpreting the property's net income with a percentage which represents a reasonable return on invested capital. Capitalization Rate - The rate of interest which is considered a reasonable return on the investment. It is used in the process of determining value based upon net income. Cash Flow - Income generated by a property which is determined by subtracting vacancy allowances and collection costs, operating expenses and debt-servicing costs from the property's scheduled gross income. Caveat Emptor - "Let the buyer beware." The buyer must examine the goods or property and buy at his own risk. Chain of Title - A history of conveyances and encumbrances affecting the title from the time it passed from government ownership, or as far back as records are available. Closing Statement - The written statement provided by the escrow company to each of the parties to the loan transaction showing the amounts received and the amounts paid out for various items. Cloud on Title - Any conditions revealed by a title search which affect the title to property; usually relatively unimportant items but which cannot be removed without a quitclaim deed or court action. Codes - A systematic collection of laws in writing. Collateral Security - A separate obligation attached to another contract to guarantee performance of the contract. Collusion - An illegal agreement between two or more persons to defraud another of his rights by the forms of law, or to obtain an object forbidden by law. Color of Title - That which appears to be good title but which is not title in fact. Commingling - The broker's unauthorized and improper mixing of office funds, which are personal or business monies, with trust funds, which are client customer monies. Commission - A payment for the performance of specific duties in real estate; a percentage of the selling price of property, percentage of rentals, etc. Compound Interest - Interest paid on the original principal and on interest accrued from time it became due. Condemnation - The act of taking private property for public use by the sovereign powers; a declaration that a structure is unfit for use. Conventional Loan - A loan that's neither guaranteed nor insured by Federal Housing Administration (FHA) or Veterans' Administration (VA). Conveyance - The transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned. Convenants - Agreements written into deeds and other instruments promising performance or non-performance of certain acts or stipulating certain uses or non-uses of the property.