Real Estate Glossary


Terms and concepts to improve your real estate understanding.
Browse the glossary using this index

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abstract of title

is the work summarizing the ownership interests and documents found during the title search of a subject property. The abstract will identify ownership transfers and liens placed against the property; and whether or not they have been released or satisfied – as well as any other pertinent information found in the search. Based on the abstract, the title insurance company or its attorney/agent will issue a certificate of title.

acceleration clause

This clause says that the lender may declare the entire debt due and payable immediately if the borrower defaults. Without this clause, the lender would have to sue the borrower every time a payment was overdue.

accession

acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.

accretion

is the process or natural action of wind and water occurring from a body of water, such as a lake or river, slowly depositing soil on the edges of the land which may cause an expansion of the land.

accrued depreciation

is the sum of all diminished value associated with the improvements. That is, any loss in value suffered by the improvements from any and all causes would be included in accrued depreciation. Accrued depreciation measures actual value loss and not theoretical value loss. Accrued depreciation is the difference between the cost new of improvements and the present worth of those improvements.

There are only three categories of accrued depreciation. Accrued depreciation can be categorized as physical depreciation, functional obsolescence, or economic obsolescence.

accrued items

Expenses to be prorated (such as water bills and interest on an assumed mortgage) that are owed by the seller but will be paid late by the buyer. Therefore, the seller pays for these items by giving the buyer credits for them at closing.

acknowledgment

is an affirmation by the preparer of a document in front of a notary public (or other judicial official) that the signature is that of the preparer and the signature was given freely and willingly usually for the pupose of making the document legally valid.

actual age

refers to the chronological age or actual 'physical' age of an improvement and does not account for any maintenance, repair or upkeep of structure.

Adjustments for differences in actual age of the improvements accounts for value differences associated with different amounts of depreciation taking place in the improvements. Those differences are most notable in the first 15 to 20 years of the improvement’s existence.

actual agency

is an agency when an agent is in fact employed by a principal

actual notice

one of the three ways the law presumes an indivual has notice of an event. Actual notice occurs when an individual has been informed in some way of the event, such as; overhearing a conversation, presented a document, or in some other way being made aware of the fact that the event occurred.

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