Real Estate Glossary

Absorption Rate

The ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market. Back to Top

Abstraction Method

This method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land. Back to Top

Acceleration Clause

A provision in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances, usually when the borrower defaults on the loan.

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Accessory Building

A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed, or garage.

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The natural growth of a piece of land resulting from forces of nature. Back to Top


43,560 square feet. A measurement of area. Back to Top

Actual Age

The amount of time that has passed since a building or other structure was built.

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Ad Val Orem Tax

Taxes assessed based on the value of the land and improvements. Back to Top


A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form. Back to Top

Adjustable Basis

The value of an asset (property or otherwise) that includes the original price plus the value of any improvement and less any applicable depreciation.

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Adjustable-Rate Mortgage (ARM)

A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate. Back to Top

Adjusted Sales Price

An opinion of a property's sales price, after adjustments have been made to account for differences between it and another comparable property. Back to Top

Adjustment Date

The date the interest rate changes on an adjustable rate mortgage (ARM).

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Aesthetic Value

The additional value a property enjoys based on subjective criteria such as look or appeal. Back to Top


A declaration that a certain set of facts are truthful. Back to Top

Affordability Analysis

A calculation used to determine an individual's likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs, and on-going mortgage payments.

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A person who has been appointed to act on behalf of another for a particular transaction. Back to Top


Any feature of a property that increases its value or desirability. These might include natural amenities, such as location or proximity to mountains, or man-made amenities like swimming pools, parks, or other recreation.

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American Society of Appraisers

An organization of appraisal professionals and others interested in the appraisal profession.

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The repayment of a loan through regular periodic payment. Back to Top

Amortization Schedule

The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees. Back to Top

Amortization Term

The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years. Back to Top


A measure of electric current describing the magnitude. Back to Top

Annual Percentage Rate (APR)

The rate of annual interest charged on a loan. Back to Top


A sum of money paid at regular intervals, often annually. Back to Top


A form used to apply for a mortgage loan that details a potential borrower's income, debt, savings, and other information used to determine credit worthiness.

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A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser. Back to Top

Appraisal Foundation

A not-for-profit educational organization established by the appraisal profession in the United States in 1987. It is dedicated to the advancement of professional valuation and responsible for establishing, improving, and promoting the Uniform Standards of Professional Appraisal Practice (USPAP). Back to Top

Appraisal Institute

A world-wide organization dedicated to real estate appraisal education, publication, and advocacy.

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Appraisal Principles

The basic building blocks of the property valuation process, including property inspection, market analysis, and basic economics.

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Appraisal Report

The result of the appraisal process usually consists of one major standardized form, such as the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional information. The purpose of the report is to convey the opinion of value of the subject property and support that opinion with corroborating information. 

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Appraisal Standards Board (ASB)

An independent board of the Appraisal Foundation, which writes, amends, and interprets USPAP. The ASB is composed of up to seven appraisers appointed by the Foundation's Board of Trustees. The ASB holds public meetings throughout the year to interpret and amend USPAP. Back to Top

Appraisal Value

An opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals. Back to Top


An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property. Back to Top


The natural rise in property value due to market forces. Back to Top

Arms Length Transaction

Any transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property. Back to Top

Balloon Mortgage

A short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a specific time.

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A proceeding in a federal court in which a borrower who owes more than his or her assets, can relieve the debts by transferring hir or her assest to a trustee. Different chapters or types of bankruptcy exist. If a person files bankrptcy, a record of the filling appears on the borrower's credit reprot for up to 10 years.

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Anyone who had to borrow money to pay for an expense.

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