Real Estate “A” Words for the Week

Learning more about Real Estate and the terms in which are used in the industry?  It is time to educate yourself on what it all means.  Below you will find a few “A” words that will help you out this week.  A complete list of all real estate terms will be posted this week under our Helpful Hints Section so come back and check it out.

Abatement
[1] An official reduction or invalidation of an assessed tax value after the initial assessment.  [2] The termination of a nuisance.  [3] The correction of an unlawful or unsafe building condition.

Absorption Rate
The rate at which properties offered for sale or lease are successfully marketed or anticipated to be sold – generally used in forecasting sales.

Abstract (Of Title)
A summary of the public records that identifies transfers, conveyances,  and other facts used as evidence of title including documents, liens, or judgments  that may impair title.  If there are any title defects,  they must be cleared before a buyer can purchase and receive marketable, insurable title.

Acceleration Clause
A clause in a mortgage note or loan contract that allows the lender to [1] speed up the rate at which your loan comes due -or- [2] to demand immediate payment of the entire balance of the loan in the event of default.

Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate is adjusted periodically based upon an index. Also referred to as the renegotiable rate mortgage or variable rate mortgage.

Adjustment Interval
On an adjustable rate mortgage, the time interval between changes in the interest rate and/or monthly payment.

Agreement of Sale
A contract in which a seller agrees to sell and a buyer agrees to buy, under specific written terms and signed by both parties.  Usually referred to as a contract of purchase,  purchase agreement, or sales agreement according to jurisdiction.

Air Rights
The property rights associated with the control, regulation, and use of air space above a tract of real estate.

Amortization
[1] The retirement of a debt and/or capital recovery through scheduled repayments. [2] Loan payment calculated to pay off the debt at the end of a fixed period, including interest on the outstanding balance.

Annual Percentage Rate (APR)
The cost of credit as a yearly rate.

Appraisal
An opinion of the value of property, made by a professional appraiser.

Assemblage
Combining two or more parcels into single ownership or use. Usually to increase highest and best use of the land.

Assumption
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt.

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