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(Disclaimer: Always seek advice regarding
questions for: Legal,
Tax, Accounting, Lending, Surveying, Inspecting, etc. from those other areas of
expertise. They may best answer questions regarding these
matters! Additionally, please allow that
"typos" / errors / changes may occur at this site and / or
other sites, herein referred / linked to... Information is presented only for your convenience. Any corrections
or suggestions are gladly
received! Thanks for visiting our site! Quigley Team, Realty World - John Horton &
Assoc.)
Abstract (of Title) A historical summary of all the recorded transactions that affect the title to the property. An attorney or a title company will review an abstract of title to determine if there are any problems affecting the title to the property. All such problems must be cleared before the buyer can be issued a clear and insurable title.
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Acceleration Clause: A loan provision giving the lender the power to declare all sums owing lender immediately due and payable upon the violation of a specific loan provision, such as the sale of the property, or the failure to make loan payments on time. Example: John sells his property to Mary who takes over John's mortgage payments. They do not notify the lender of this transaction. Eventually, the lender
will find that the title to the property has been transferred
and they will "call the loan." The loan documents state "that the note is due on the sale of the property." John is
now liable to pay his lender in full!
Accretion: The addition to land through natural forces like wind or water. Example: A deposit of (new) soil carried by a river onto the property.
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Agreement of Sale: A written signed agreement between the seller and the purchaser in which the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms of the agreement. Also known as contract of purchase, purchase agreement, offer and acceptance, earnest money contract or sales agreement.
Acknowledgment: Formal declaration before a public official (typically a Notary Public) that one has signed a document. Required before recording real estate legal documents, such as deeds of trust.
Acre: A measure of land equal to 43,560 square feet.
Adjustable Rate Mortgage (ARM): Also known as a variable rate mortgage. The interest rate on these mortgages changes periodically. See also
Index.
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Adjustment Period: This is the length of time for which the interest rate is fixed on an adjustable
loan. Therefore if the adjustment period is six months, then the interest rate will remain fixed for six months, after which time it will
be adjusted.
Amortization: A gradual paying off of a debt by periodic installments, which pay principal and interest.
Annual Percentage Rate (APR): The effective rate of interest for a loan per year. When closing on a loan the Stated APR rate is higher than the ACTUAL rate because the closing costs are added in to the first year’s rate. Remember closing costs are only one-time charges and the APR calculated for any following year will be lower. Caution: the APR is sometimes computed differently by different lenders and can be misleading / confusing.
Appraisal: An opinion or estimate of the value of a property at a given date.
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Arm's length transaction: A transaction among the parties of a transaction where each party acts in his or her own best interest, without any other involvement, like in "father to son", "partner to partner", etc.
Assessment: A tax levied against a property for a specific purpose such as, adding streetlights.
Assumable Mortgage: A mortgage loan, which allows a new homebuyer to take over the obligation of making loan payments with no change in the terms of the loan. Assumable loans do not have a due-on-sale clause. The lender has to be notified and agree to the assumption. The lender may require the buyer to qualify for the loan and may charge an assumption fee. The seller should obtain a
written release from the lender stating clearly that he
/ she is no longer liable to make
the mortgage payments. See also "Subject To."
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Attorney In Fact: One who is authorized to act for another under a power of attorney which may be general or limited in scope. Example: John wants to sell his house but has to be out of the country for 4 months. John gives authorization to Mary to sign the grant deed to sell the property to a buyer. Mary becomes John's Attorney In Fact.
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AUSTIN "STATS"