Sarasota Real Estate Terms

A-frame design

An A-frame design is an architectural style with steeply a steeply sloped roof culminating in a peak, resulting in a triangular building shape.  A-frame construction originated in New York State in the 1950s.  A-frames are ideal for colder climates, with the steep construction allowing for efficient snow runoff.  In addition, the surface area of the exterior is reduced with an A-frame design, reducing the extent of exterior maintenance required.  A-frame interiors restrict living space by limiting usable space near the top of the "A" and, because of their open design, can be more difficult and more expensive to heat and cool.

Abstract of judgment, law

An Abstract of Judgment or Abstract of Law is a document filed with the county recorder summarizing a court judgment regarding debt.  The document sets forth how much debt is owed to the creditor by the debtor, with specific information regarding method and frequency of payment and rate of interest.  By filing an abstract with the recorder, one creates a public record which can be easily accessed subsequently by any party to a transaction involving the real property in question.  If the judgment is ignored-that is, if the debtor does not pay the amount owed to the creditor-the creditor has the option of forcing the debtor to sell property and can recover the proceeds from such sale to settle the outstanding debt.

Accelerated cost recovery system

An accelerated cost recovery system (ACRS) is a tax calculation that allow for greater depreciation, or reduction in the value of a property over time, at the beginning of property ownership.  The ACRS was established in 1981 by the Economic Recovery Tax Act.  Under the original ACRS, property was allowed to be depreciated at a faster rate than before 1981, when a straight-line depreciation method was used.  The system was later modified; today the applicable depreciation system is the MACRS-the Modified Accelerated Cost Recovery System, introduced in 1986.  The MACRS is less favorable to property owners than the ACRS, but still allows for faster depreciation than the straight-line method.

Accelerated depreciation

Accelerated depreciation is a bookkeeping method that depreciates property faster in the early years of ownership of property. Over time, real property becomes less valuable, and the expense required for repairs and maintenance generally increases, decreasing the overall value of the property to the owner.  Such subsequent costs are offset by accelerated depreciation, allowing property owners to deduct more from taxes owed in the initial period of ownership of a property, even though the actual value of the property is likely not to have decreased as much during that period as it is expected to do at a later time. 

Acceleration clause

An acceleration clause is a provision in a contract, such as a note (a written promise to pay a debt, specifying an amount, applicable interest rate, and method and time of payment) or a mortgage, that gives a lender of money the right to collect the balance of a loan if a borrower misses a payment.  An acceleration clause is most commonly creditor-friendly, allowing the creditor to demand full payment without notice and to require that the full payment is made immediately and under the terms specified in the initial contract in which the acceleration clause is found.  Some jurisdictions look with disfavor on acceleration clauses, as they can be devastating to the debtor.

Acceptance

Acceptance refers to the seller´s agreement to a buyer's offer of a purchase price for real estate.  Once the seller has issued an acceptance of an offer price for real property, the buyer is bound to pay that purchase price, subject to certain extraordinary circumstances such as a contentious home inspection report.  Acceptance is never automatic, so silence should not be construed by a buyer to constitute the seller´s approval of the offer.  Effective acceptance requires actual communication to the buyer making the offer or his/her representative (such as a Realtor or attorney).  Until acceptance is communicated, the buyer can change his/her mind and revoke the offer. 

Access

Access means the method by which a person can gain admission to a place or a right to use something.  Access may be physical, as a road or a door, or intangible, such as a right to enter a property granted by a property owner.  Access to real property by a buyer is almost always obtained through a Realtor; many properties listed for sale have a lock box with a key, allowing Realtors to show the property to potential buyers without the seller of the property present, and often recording the frequency with which the home is shown and the identity of any Realtor who has shown it. 

Accessibility

Accessibility is the degree to which a property is accessible to persons with physical disabilities.   For example, for a building to be considered accessible to a person in a wheelchair, it must have a ramp to allow the person to navigate stairs or curves, an automatic entry/exit door, and handicap-accessible restroom facilities.  The Americans with Disabilities Act of 1990 (ADA) prohibits discrimination against persons with disabilities, and among the Act´s enforceable requirements are specifications for what type of access a public building or retail location must have; private homeowners are not subject to the ADA requirements when selling personal real estate.

Accretion

Accretion is a gradual, ongoing addition that increases the size or volume of something over time.  With respect to real property, accretion refers to a gradual deposit of sand or silt to a shore or bank of a waterway.  The accumulated sediment increases the amount of physical land on real property, which is particularly important to property that lies in a floodplain-a normally-dry water basin that is susceptible to flooding.  The added land accumulated through accretion helps protect a property from erosion, the process by which earth is removed from a property by wind or heavy rain resulting in water runoff.

Acknowledgment

In real estate transactions, an acknowledgment is a written, signed document affirming that the party signing the document acted voluntarily with respect to the subject matter of the document.  An acknowledgment makes a transaction or agreement legally valid, so that the person acknowledging his or her voluntary participation cannot subsequently claim that what the transaction or agreement was against his or her will.  For example, a buyer of real property may be required to sign an acknowledgment of receipt of disclosures by the seller regarding the property, such as a disclosure regarding the existence or non-existence of lead-based paint, mold, or termites on the property.

Acre

An acre is a unit of measurement of land equaling 43,560 square feet, 4,840 square yards, or approximately 4,047 square meters.  When researching the value of a parcel of real estate, one will frequently find statistics regarding "per-acre land value," which refers to the dollar amount one acre of the land in question is worth.  Sometimes, real property is considered more desirable because of its "acreage," essentially the amount of land the property encompasses.  Other terms one may encounter are "builder´s acre" or "horse acre"-these colloquial terms do not amount to a full legal acre.

Acre foot

An acre foot is the volume of material needed to cover one acre of land to one foot of depth.  This amounts to 43,560 cubic feet.  The acre foot measurement is most commonly used to refer to water used to fill a basin one foot deep.  In the United States, on average, one acre foot of water is considered generally to be the amount of water used by a family of four in one year.  The acre foot standard is particularly important in many southwest states, where water is scarce and conservation is an important consideration. 

Active solar system

An active solar system is a system that transfers solar energy for use or storage by utilizing electric pumps or fans.  Solar energy is energy that is derived directly from the sun, and is generally considered to be a more environmentally-friendly source of energy.  An active solar system converts captured solar energy into energy that can be used directly for ventilation or cooling purposes, or to store the energy for use in the future.  The conversion is accomplished with pumps, electrical technologies which pump the energy to its intended source, or fans, which propel energy to the intended source.

Actual age

The actual age of a property is the actual number of years a real estate structure has been standing.  The actual age is an objective measure that represents the simple passage of time since construction of the property was completed.  This is in contrast to the effective age of a property, which is subjective and varies with respect to the condition of the structure in question, taking into account, for example, maintenance, repairs, and renovations made to the property.  Actual age may be an important consideration for buyers of real estate, but a home with a younger actual age will not necessarily be in better condition than an older home.

Add-on interest

Add-on interest is the interest a borrower of money pays on the principal amount of a loan for the duration of the loan.  Add-on interest is calculated by multiplying the full amount of the loan by the interest rate specified in the lending contract, and multiplying the total cost of interest by the period of time covered by the loan.  The total amount to be repaid by the borrower is the principal amount of the loan plus the total amount of interest to be paid.  This total is divided by the number of payment installments, so that each payment includes a portion of the loan principal as well as a portion of the interest due on the loan.

Addendum

An addendum is an addition or a change to a contract.  Addenda (the plural of addendum) are useful in real estate contracts because many times real estate transactions involve the use of standard forms that may not represent the complete agreement between the buyer and seller in the transaction.  Any variation from a standard form or addition thereto can be documented in an addendum, such as a contingency agreement (as when the sale or purchase of a property is, by agreement of the parties, contingent on some other event or occurrence) or a lead-based paint addendum (wherein the buyer usually has a specified time to act on discovery of traces of lead-based paint, after which time he/she agrees to accept the property "as is").

Additional principal payment

An additional principal payment is an extra amount of money paid along with the minimum required for each monthly payment to wards a loan.  Any additional money paid on top of the loan´s monthly minimum requirement reduces the principal amount due on the loan and serves to shorten the term of the loan.  A smaller principal due and a shorter term result in a decrease in the amount of interest the debtor ultimately pays on the loan.  Some lenders may charge a penalty for paying too much at a time or for paying a loan off too soon, since lending institutions make money from the interests rates charged on loans.

Adjustable-rate mortgage (ARM)

An adjustable-rate mortgage (ARM) is a loan with an interest rate that does not remain constant for the duration of the loan repayment period.  Instead, an ARM loan is periodically adjusted to reflect changes in a specified financial index, which is a percentage calculated to standardize interest rates.  Common indexed ARMs include treasury-indexed ARMs, indexed to the weekly average yield of securities of the United States Treasury, and initial fixed period ARMs, which protect borrowers against rapid interest rate fluctuations in the early years of their loan by imposing a non-variable interest rate for a period of three, five, seven, or ten years, with rates becoming adjustable after the given time period.

Adjustment period

An adjustment period is the amount of time between interest rate adjustments in an adjustable-rate mortgage (ARM).  The adjustment period for a given loan depends on the type of ARM used.  Most common is a one-year ARM, with which the interest rate on the loan cannot change more frequently than once every twelve months.  The allowable change in interest rate for every one-year period is limited to 2%.  For a three-year ARM, the adjustment period would occur every three years; for a five-year ARM, every five years; and so on.  There is also a cap on how much the interest rate can change over the full duration of the loan.

Administrator

An administrator is an individual who has the authority and responsibility to manage and distribute the estate of someone who has died intestate, or without a will.  The estate of a person who has died intestate passes to his or her heirs through what is known as intestate succession, with some variation in extraordinary circumstances.  It is the role of the administrator, who must be approved by the court, to ensure all debts owed by the deceased or his/her estate are paid and all other financial obligations fulfilled, and to distribute the remaining estate according to the intestate succession laws of the applicable jurisdiction.

Administrator's deed

An administrator´s deed is legal document used by an estate administrator to transfer the property of the deceased.  The property of a person who has died without a will is generally sold, and the proceeds are used first to pay off any creditors to whom the deceased owed money at the time of his or her death; the balance of the proceeds are then distributed to heirs according to the applicable laws of intestate succession.  The special deed makes it possible for someone other than the actual owner of the property (the deceased) to sell the property.  An administrator´s deed is filed by the administrator with the county probate court.

Adverse possession

Adverse possession refers to the process of acquiring title to, or ownership of, property by possessing it for a specified time without the consent of the property owner.  The length of time over which the possession must occur to confer title upon the adverse possessor varies from jurisdiction to jurisdiction.  Requirements for adverse possession to result in acquisition of title to a property are that the possession be visible and open so that it is possible for the true owner of the property to discover it; hostile, meaning that the adverse possessor does not have the true owner´s consent; exclusive; and continuous over the prescribed period of time.

Adverse use

Adverse use is the access and use of another´s property without the consent of the true owner.  Adverse use can be use for any reason, so long as the owner of the property has not given permission for entry upon his or her land by the adverse user.  Adverse use is not the same as adverse possession, as title does not transfer from the true owner to the adverse user by virtue of the use.  Adverse use need not be continuous or even frequent; every instance of unapproved access and use of another´s land qualifies as an occasion of adverse use. 

Aeolian soil

Aeolian soil is soil that is composed of materials deposited onto a parcel of land by the wind.  When wind blows across land where there is little vegetation, it easily picks up particles of sand, dust, and soil, and carries it up into the air.  The wind then transports the particles and ultimately drops them on another parcel of land.  Aeolian soil deposition can cause dunes to form and can alter real property by taking away and/or adding surface and near-surface soil.  The Aeolian transport process contributes to soil erosion by taking away land that may be used for support of a structure on a given parcel of real property.

Affiant

An affiant is a person who makes a sworn statement, as in an written affidavit.  The affiant states facts according to his or her best, most complete knowledge, that are in some way relevant or potentially relevant to a legal matter.  The facts are recorded in an affidavit which the affiant signs before a public official, such as a notary public, and the affiant swears or affirms under oath that the facts contained in the affidavit are true.  An affiant who is knowingly dishonest regarding his or her contentions is guilty of perjury, a felony, and may be heavily punished. 

Affirmation

An affirmation is a substitution made for the commonly-used oath, which is granted to people for religious reasons.  To give testimony of any kind, written or oral, the affiant or witness is required to attest to the truthfulness of his or her statements.  Generally, an oath is administered; however, some people have religious objections to using a traditional oath, and are therefore permitted to offer instead an affirmation of the truth of their statements.  An affirmation holds the same weight as an oath, an obligates the affirmer in the same way an oath would, subjecting him or her to punishment for perjury should he or she prove dishonest.

Agency

Agency refers to the relationship of trust established between a buyer or seller and his or her agent.  In real estate transactions, the agent is typically the realtor.  The agency relationship is established through a written contract, and sets out in detail the rights, responsibilities, and obligations of the parties to one another, as well as any limitations.  For example, an agency relationship between a home buyer and his or her realtor may bestow upon the realtor the right to negotiate a purchase price for a property on behalf of the buyer, while requiring that any offers made to a seller be approved by the buyer first.

Agency closing

An agency closing is the process by which a lending institution that issues a loan to a buyer for purposes of a purchase of real estate utilizes a title company or other firm as an agent to complete the loan process.  The agent title company will typically prepare any documents required by the lender for signature by the borrower at the real estate closing.  The company will protect the lending institution against any potential defects in the title to the property in question.  In addition, the agent is usually responsible for ensuring all necessary documents are filed and recorded as required by local laws.

Agent

An agent in the field of real estate is a person licensed by a given state to conduct real estate transactions.  Licensing requirements, both initial and continuing, vary from state to state.  An agent represents a buyer or seller in a real estate transaction and is compensated by receipt of a commission, an agreed-upon percentage of the sale price of the property.  Agents are commonly employed by real estate agencies, and frequently the agreement between an agent and his or her client-the buyer or seller in a transaction-will specify that it is the agency, rather than the agent, who is liable for any losses incurred or problems experienced by the client during the course of the transaction.

Agreed boundary

An agreed boundary is boundary on which property owners agree as a compromise in order to resolve a dispute about where the property limit of one ends and that of another begins.  A compromise of this type between property owners among themselves saves the time and expense of a professional survey or, in worst-case scenarios, litigation.  However, the agreed boundary may not in fact be the legal boundary; in such cases future problems have the potential to arise, as if one or both property owners subsequently sell their property and later owners question the validity of the agreed boundary.

Agreement of sale

An agreement of sale is a document produced by the buyer (or, usually, his or her agent), specifying the details of the purchase price of a property and the terms of a transaction, which the seller approves by his or her signature.   An agreement of sale should include a clause regarding financing; for example, how much time is available to a buyer to secure a mortgage before the cancellation of the contract.  An agreement also usually specifies that a buyer of real property has the right to conduct a home inspection, as well as noting any aspects of a property that a seller requires the buyer to accept "as is." 

Alcove

An alcove is a recessed section of a room, which may or may not be partially enclosed to provide separation from the rest of the larger room.  Examples of alcoves include breakfast nooks located off of kitchens, or sitting areas located off of bedrooms.  An alcove not enclosed by walls may be set off from the main room by draperies, pillars, columns, or balustrades.  Alcoves are especially popular in homes with large rooms and open spaces, to allow for a set-of area with an element of privacy and coziness.  A breakfast nook, for example, can be a more intimate dining area than a formal dining room; a bedroom alcove can be used to house a bed, loveseat, or home office.

Alienation clause

An alienation clause is a provision in a contract that requires a borrower of money to pay the outstanding balance of a loan in a lump sum after the property involved in the particular transaction is sold or transferred.  In a mortgage deed, the alienation clause is often known as a "due-on-sale" clause, indicating that the full amount of the loan is due on sale (alienation) of the property by the loan borrower.  The rationale behind an alienation clause is that the applicable loan was secured for the purpose of purchasing the property in question.  The lender thus wishes to be informed and be able to approve and subsequent sale or transfer.

Alkali

Alkali is a mineral salt found in some soils.  Common examples include sodium hydroxide (also known as lye), sodium carbonate (the mineral is left behind when a body of water evaporates), and potassium carbonate (also called potash).  The presence of an alkali in soil makes the soil alkaline, meaning it has a pH of 7.4 or greater.  pH is the unit of measure used to describe how acidic (low pH) or alkaline (high pH, also called "basic") the soil on a piece of property is.  Alkali is an important consideration for landscaping and vegetation, as plants and grasses vary with regard to what pH level is most conducive to their growth.

Alkaline soil

Alkaline soil is soil that contains a higher concentration of mineral salt, or alkali, than it does of natural acid.  Natural acid existing in the soil will make the soil pH lower, while base compounds such as alkali salts increase the soil pH.  If the amount of alkaline soil present on a parcel of land is greater than the amount of acid naturally existing in the soil, the overall pH balance of the soil will be above 7.4 and the soil will be considered alkaline.  Some plants thrive in soil that is more alkaline, but most vegetation prefers soil that is neutral or slightly acidic, so alkaline soil can hamper growth and development.

Alley

An alley (also commonly called an alleyway) is a lane behind or between buildings.  An alley may run between two larger passages, such as roads, or may reach a dead end at one end, in which case it is known as a "blind" alley.  Usually narrow and best for navigation by pedestrians rather than vehicles, alleys are frequently found in older cities, particularly in European countries, or in large urban areas such as New York City or Chicago in the United States, although alleys do exist in smaller and newer municipalities.  Recent development trends include construction of planned communities that include alleys to enhance the old-world neighborhood environment. 

Allowances

Allowances are budgets offered by new-home builders to homeowners for the purchase of various home amenities, such as carpet, flooring, fixtures, or appliances.  In general, allowances are for a fixed amount, established up-front in a contract between the home builder and the home buyer, and permit the buyer to allocate that amount as they please to select the details they desire the builder to include in their new home.  Any selections for flooring, lighting, and the like that exceed in cost the allowance amount are paid for by the buyer in addition to the price of his or her new home.

Alternative mortgage

An alternative mortgage is any home loan that does not conform to a standard fixed-rate mortgage.  Alternative mortgages are most frequently used by purchasers of property who either need a loan quickly or who require more flexibility than a traditional home mortgage can offer, or by persons with poor credit or severe debt.  One example of an alternative mortgage is a "hard money loan," an option commonly used when a property does not yet qualify for traditional financing; a hard money loan usually comes with a much higher interest rate than a traditional mortgage due to the riskiness of the real estate purchase.

Aluminum siding

Aluminum siding is an exterior metal covering that offers owners of wood homes an alternative to paint.  Advantages of aluminum siding include its longevity, ease of installation, low maintenance requirements, waterproof properties, and excellent insulation capabilities.  In addition, aluminum siding is good at preventing leaks, both air and water, and at resisting damage from insects.  The major disadvantage is that aluminum siding is very susceptible to dents and scratches, and once such problems occur, repairs can be time consuming and/or expensive.  However, if only minor damage has occurred, it is fairly simple to replace only the damaged section of the siding, rather than an entire piece as would be required with wood.

Aluminum-clad windows

Aluminum-clad windows are wooden windows with an aluminum covering on the exterior.  Aluminum-clad windows allow for the desirable aesthetic if wood while offering the durability and insulation associated with metal.  Aluminum is attached to the outside of a wooden window and provides for better protection against exterior elements such as wind and water.  Installation is simple and exterior maintenance easier than traditional windows.  The main disadvantage of aluminum-clad windows is their expense, which may be considerably higher than that of other types of windows; however, the cost is usually balanced with savings from less-frequent maintenance and repairs or replacements.

Amenities

Amenities are anything offered by developers of planned communities to enhance the value of a neighborhood and to entice homebuyers to purchase property therein.  Examples of amenities are playgrounds, parks, green spaces, swimming pools, basketball or tennis courts, football or soccer fields, baseball diamonds, health-club facilities, spas, walking or hiking paths, bike paths, community centers, party rooms, lakes and ponds, and so on.  Amenities may also extend beyond the boundaries of a community, as with desirable school districts or proximity to retail and dining establishments.  Maintenance of community-specific amenities is commonly funded by the homeowners themselves, as through dues paid to a Homeowners´ Association. 

American Society of Home Inspectors

The American Society of Home Inspectors (ASHI) is a professional association whose members are independent home inspectors. ASHI members are bound by a code of ethics which they must follow when conducting a home inspection, and are held to certain standards of practice to ensure uniformity, accuracy, and completeness in home inspections.  ASHI has over 80 chapters and more than 6,000 members; the organization offers its members ongoing educational opportunities so that they are able to stay current on pertinent home inspection topics.  A home inspector who is a member of ASHI can be found, and more information about the organization is available, online at www.ashi.org, or by telephone at (800) 743-2744.

Americans with Disabilities Act

The Americans with Disabilities Act (ADA) is a law that was passed in 1990 to protect persons with disabilities and to allow them the same access to facilities as is available to those who do not have disabilities.  The ADA outlaws discrimination against any person with a physical or mental disability with respect to housing, employment, public accommodations, access to government services, transportation, or telecommunications services.  Among other things, the ADA sets out specific standards for construction that must be conformed to in order to comply with the ADA.  Further information about the ADA and construction requirements under the act are available at the website of the United States Department of Justice, at www.usdoj.gov.

Amortization

Amortization is the process of making payments on home loan, both payments toward the principal of the loan and interest on the loan, through regularly scheduled installments.  Amortization is a unique repayment option in that it provides for each payment to include both a portion of the full loan principal and a portion of the total interest due on the loan over the applicable time period.  With the amortization method, a greater part of each payment at the beginning of the repayment period comes from the amount owed in interest, while a greater portion payments near the end of the period goes to repayment of the principal on the loan.

Amortization tables

Amortization tables (also called amortization schedules) are mathematical tables used by lending institutions in order to  calculate the monthly payment owed by a borrower.  The amount of a payment is determined by an amortization calculator, which is available through downloadable software or online.  Amortization tables usually require the first payment to be made following the first "period" (usually monthly) after the loan has been secured by the borrower, not on the first day of the loan.  Amortization tables not only determine the payment amount and the proportion of principal versus interest of each payment, they also show how much principal and interest have been paid in total as of the date of a payment and how much of each remains outstanding.

Amperage

Amperage refers to the strength of an electrical current, measured in amperes.  Amperage is also called "current," and the unit ampere is commonly shortened to "amp."  Electrical products, such as appliances or heating or cooling systems, require electricity to function.  Those that need more energy use more amps, while those that require little energy to run utilize less amperage.  In general, the higher amperage required for an appliance to function, the more expensive it is to run that appliance.  For example, a large refrigerator consumes more amps than a small blender, as well as running continuously, and thus costs more to use.

Anchor bolt

An anchor bolt is a large steel bolt, a threaded fastener secured by a nut (a threaded hole) used to hold things in place, which is anchored in concrete and attached to a building in order to prevent the building from moving.  The bolt is tightened to an anchor, or a solid mass from which it will not move-in real estate, a concrete foundation-and tightened to prevent the movement of the structure it supports.  The bolt is permanently in place, as it is set in the concrete during pouring of the foundation, after which the concrete hardens around it. 

Annual

An annual is a plant that must be planted every year, lasting only one growing season.  This is in contrast to a perennial plant, which once planted, given appropriate conditions, can remain alive and healthy over several years, in many cases indefinitely.  Over the course of a single year, an annual will germinate (the beginning of growth, when most plants embryos sprout), flower (or bloom), and die.  Annuals include some common flowers preferred by homeowners to enhance their landscape, such as snapdragons, petunias, zinnias, and marigolds.  Vegetables and fruits that are annuals include corn, cauliflower, peas, and watermelon.

Annual mortgagor statement

An annual mortgagor statement is a yearly statement provided to borrowers that provides details regarding the amount of principal remaining to be paid on a loan and the amounts already paid by the borrower for taxes and interest related to the loan.  An annual mortgagor statement is typically sent out by the lending institution and received by the borrower by the end of January of each year, and reflects the financial information related to the loan from the preceding year.  The tax information in the statement is used when filing the tax return the April following receipt of the statement.

Annual Percentage Rate (APR)

The annual percentage rate (APR) of a loan is the cost of the loan expressed as a yearly rate on the balance outstanding on the loan.  The APR is expressed as one single percentage that reflects the actual cost of the loan over the entire course of the repayment period, including any related fees or costs.  The APR is useful to borrowers because it is a single, standardized number that can be compared with rates offered by other lenders.  All lending institutions (including mortgage providers, banks, and credit card companies) in the United States are required to clearly disclose their applicable APR before an agreement for a loan is finalized with the borrower.

Annuity

An annuity is a payment at a fixed amount and at regular intervals to an investor.  Annuities have a number of advantages, including tax deferral (the money paid into an annuity is not taxable until it is withdrawn), limitations on creditor access (creditors may not be able to reach the money in an annuity as they would be able to get money owing for debts from the debtor´s other assets), and flexibility with regard to investment options.  Annuities are often utilized by persons planning for retirement, as they are guaranteed growth of funds paid into the annuity until retirement and regular payment out of the annuity after retirement which is taxed at a rate equal to the regular income tax.

Anticipatory breach

Anticipatory breach (also called anticipatory repudiation) is a breach of an agreement by one party to the agreement through some communication informing the other party or parties that the obligations of the original contract will not be fulfilled.  For example, in a real estate transaction, an anticipatory breach may occur if, following signing by both buyer and seller of a purchase agreement, the buyer writes a letter to the seller explaining that he or she will not be able to purchase the property in question at the mutually agreed-upon price.  An anticipatory breach communicated by one party relieves the other party from his or her obligations under the same agreement.

Application

An application is a document that relays detailed information regarding a the financial situation of a potential borrower to determine whether or not that borrower should receive credit from a lending institution.  Lending institutions vary in the standards they use to determine an applicant´s credit worthiness, but most consider the applicant´s actual income, and debt owed by him or her, assets owned by him or her, and future financial obligations, among other considerations.  Lenders evaluate such applications to figure out whether or not an applicant is likely to be able to repay a loan should one be granted to him or her.

Application fee

An application fee is a fee charged by a lending institution at the time a potential borrower of money files a loan application to process the application.  Processing a loan application involves evaluating the applicant´s current financial situation and future financial outlook, including income and assets as well as debts and obligations, to ensure that a loan, if granted, is likely to be paid back in a timely manner by the applicant.  The fee charged to process the application covers the time and manpower spent on the evaluation of the application, as well as material resources such as copies and postage.

Appraisal

An appraisal is an opinion of the value of a property at some particular point in time.  Real estate appraisals may be accomplished using one of three methods: the market approach, which compares a property to similar properties and adjusts the price according to any differences; the income approach, by which the potential cost to rent the property is considered in light of rental costs for similar properties; or the cost approach, which determines the cost to purchase an empty parcel of land and construct a home like that on the property in question.  The appraisal is conducted by a professional called an appraiser and considers the highest and best use of the property.

Appraisal fee

An appraisal fee is the fee charged by an appraiser-that is, the professional who presents an opinion regarding the market value of a property by utilizing a prescribed evaluation method-to estimate the property´s value.  The appraisal fee associated with the valuation of a particular property will vary depending on the specific appraiser, the specific property, and the geographical location of the property.  Fees will be different for rural versus urban properties, for single-family homes versus condominiums, and so on.  Additional charges may also apply, such as administrative costs of having an appraisal recorded, copied, and forwarded to the property owner.

Appraisal report

An appraisal report is a detailed written report resulting from a professional appraisal of a property, presenting the estimated value of the property.  An appraisal report includes information regarding how the valuation was conducted-that is, the method used to evaluate the property value-and the final determination of what the property is worth on the applicable date of appraisal.  A typical report will include information regarding the appraiser, the client, the property owner (if different from the client), and the contact information for each; a detailed explanation of how the analysis of value was conducted; and final conclusions with an estimated monetary property value.

Appraised value

The appraised value of a property is the final opinion of a property´s market value at a given point in time following a professional appraisal.  The value is determined in light of the condition of the property at the time the appraisal is conducted and relative to other, similar properties in the real estate market at that time.  The appraised value is generally based upon the "highest and best use" of a property; in other words, the maximum possible value for a given property, even if the actual use is one that does not take full advantage of the property.  One of three methods is used to appraise the value of a property-a cost approach, an income potential approach, or a sales comparison approach.

Appreciation

Appreciation refers to the increase in the value of real property over time.  The value of a given property can change frequently and for various reasons.  The national economy influences appreciation because, when the economy is more stable and people are more secure in their financial position, they are more likely to buy homes-when the demand for homes outpaces the supply of available homes on the market, the value of each available home is likely to appreciate.  Upgrades, updates, repairs, and aesthetic improvements increase a home´s value.  Other positive influences on appreciation include amenities such as nearby desirable schools and parks, retail development, and the social desirability of a home´s geographic location.

Arbitration

Arbitration is a method of resolving a legal dispute in which a neutral third party determines the outcome.  Arbitration is commonly used to avoid courtroom litigation, saving the parties involved and the court system time and money.  The decision of the third-party decision maker in arbitration (called an arbitrator) is legally binding on the parties, just as any other legal judgment would be.  Arbitration requires that both parties to the dispute (in real estate, usually the buyer and the seller) agree to arbitration as an acceptable method of dispute resolution.  If such an agreement is reached, parties sign an a written arbitration agreement acknowledging that they voluntarily consent to arbitration and that they accept that the arbitrator´s decision will be final and binding upon them.

Arbor

An arbor is an area of a property that is shaded by trees, shrubs, or vines on a latticework structure.  An arbor is a decorative lawn or garden feature, commonly used to shade an outdoor seating area.  An arbor may be natural, with plants and trees forming a shady enclosure, or may be manmade, usually wooden arched structure, consisting of latticed sides and a roof piece, often decorated with vines or other flora weaving in and out of the latticework.  Natural arbors can be created by the strategic addition of trees and shrubs; manmade arbors can be built by a homeowner or purchased at home and garden stores.

Arch

An arch is an architectural term for a curved structure that supports weight, usually a wall, over some area, such as a doorway.  Arches have been used historically, including in ancient Chinese, Egyptian, and Roman construction, because of the effectiveness of the shape in supporting a lot of weight.  Today, arches are used for the same reason, as in bridges, as well as for decorative architectural purposes, adding aesthetic elegance to homes, churches, and other structures.  The support of an arch is enhanced by its semi-circular strength, which effectively distributes the weight of what rests on it; the arch itself is held in place by the combined compressive force of what it supports.

Architect

An architect is a licensed professional who plans and designs houses, buildings, and other structures, and often oversees construction.  To be licensed practitioners, architects must meet certain requirements established by individual states.  In every state, a professional architect is required to have an educational degree in architecture and hands-on practical experience (usually accomplished in the course of obtaining one´s degree), and must pass an examination that evaluates his or her knowledge and abilities.  In the home design and building process, an architect´s role is to determine the buyer´s wants and needs, as well as any constraints (such as building code requirements and a client´s financial limitations) and to put them together to create a design for the client´s home.

Architectural fees

An architectural fee is the fee an architect charges for services.  Architects may charge on various bases for their services; fees are commonly calculated either by the hour (time spent on planning, research, design, and time for communication with the client), by the square foot of the property being designed, or by some set percentage of the project budget.  Architectural fees also include material resources used by the architect.  Fees vary depending upon the type of structure, unique requests by the client (more difficult or unusual requirements may cost more to plan and incorporate into a full design), and the demand for architectural services in a given geographical area.

Arpent

An arpent is a French measurement of land.  An arpent is the equivalent of .84625 acres.  While acres are the most commonly used measure of land space in the United States, arpents are used in the Canadian province of Quebec, where French is normally spoken and used in business, and in parts of the State of Louisiana, which was under French control in the 17^th and 18^th centuries and which still retains some French influence.  Use of the arpent as a unit of land measurement may also be found in some limited parts of Alabama, Arkansas, Florida, Mississippi, and Missouri, which were previously part of French Louisiana.

As-is condition

"As-is condition" refers to the condition of real estate as it exists at the time of a purchase or sale.  The term is used in real estate transaction to absolve a seller of property of obligations associated with aspects of the property that may prove undesirable to some buyers.  When a property is listed for sale in as-is condition, buyers should recognize that the seller will not be willing to make changes, improvements, or repairs to the property; the asking price for a property offered in as-is condition is commonly lower than that of a similar property subject to improvements, reflecting those aspects of the property that may need to be repaired or restored but will not be by the seller.

Asbestos

Asbestos is a fire-resistant mineral that was once commonly used for insulation and home products, including vinyl floor or ceiling tiles, roofing materials, and some plasters.  Asbestos has been largely eliminated from use, as it has been found to pose a health hazard.  When asbestos contaminates air or water, it can cause serious diseases, including asbestosis, a lung disease that causes scarring on the lungs and ultimately prevents lungs from functioning properly; skin diseases characterized by rashes and warts; and cancers, including lung cancer and cancer of the larynx or the chest cavity.  Homes built after 1986 were legally prohibited from using asbestos products for construction or insulation.

Asking price

The asking price of a property is the initial price requested by the seller for purchase of his or her property.  Determination of an appropriate asking price requires research and planning by the seller, often in conjunction with a realtor more experienced with respect to asking prices on the market.  The asking price should be competitive-that is, comparable to similar properties with similar amenities and characteristics in the same geographical area.  If an asking price is too high, the seller may keep potential buyers away; on the other hand, the asking price cannot be so low that the seller leaves him- or herself with no room to negotiate.

Assessed value

The assessed value of a property is a determination made by a tax assessor regarding the value of a home for purposes of calculating a tax base.  In general, the higher the assessed value of a given property is, the higher the tax owed on that property will be.  Property taxes vary by county, so the difference in property taxes due is relative only within a county; properties with an equal assessed value in different counties will be taxed different amounts.  The assessed value of a property is likely to change with physical improvements to the property, new construction, transfer of ownership, and other factors.

Assessment

An assessment of real estate is the estimated value of a property, or a levy placed on a particular property in addition to taxes.  An assessment is useful to a potential buyer of real property in that it can help him or her determine what price to offer for purchase of the property.  It can also help a seller to determine what his or her asking price for a property should be.  A lending institution can utilize a property assessment value in issuing a mortgage to a purchaser of the property, and the valuation resulting from an assessment is also used to calculate property taxes.

Assessment rolls

An assessment roll is a list of all taxable property within a county, along with the applicable assessment value of each property, that is compiled by the county tax assessor.  A copy of a local assessment roll is available for public inspection at the assessor´s office.  The assessment roll is updated annually, as property values are re-assessed every year.  The assessment roll includes information regarding the parcel of property, its owner, and assessed values, so it is a valuable tool for buyers and sellers to compare asking prices and offers in the course of a potential purchase or sale of real estate.

Assets

Assets are any items of value owned by a person, including cash, securities, investments, and real and personal property (real estate, vehicles, jewelry, etc.).  A person´s actual monetary value is calculated as his or her assets less his or her debts and liabilities.  Real property is considered a "fixed asset," in contrast to intangible assets (such as trademarks, copyrights, and patents).  For accounting purposes, assets are generally listed in what is known as a "balance sheet," a method of financial bookkeeping that keeps track of assets in one column and liabilities in another to provide a complete picture of a person´s or an entity´s monetary worth.

Assignor

An assignor is a person who transfers (or assigns) his or her rights to and interests associated with a property to another person (known as an assignee).  When dealing with real estate, the transfer by an assignor (the assignment) must be in writing in order to be legally effective.  The writing must clearly explain what rights are being assigned by the assignor to the assignee.  A contract which includes a non-assignment clause prohibits an assignee from subsequently becoming an assignor of the rights conferred upon him or her to another.  In real estate, an assignor may not retain any revisionary interest, or right to take back the property after it has been transferred to the assignee.

Assumable mortgage

An assumable mortgage is a mortgage that can be transferred from the original borrower to another borrower.  An assumable mortgage allows a buyer of real estate to take over a mortgage held at the time of the transaction by the seller of the property.  The buyer must qualify for the terms of the mortgage in the same way as the original borrower (the home seller).  The buyer who assumes the existing mortgage takes it subject to existing interest rates and monthly payments, which may be favorable or unfavorable to the buyer, depending on how those amounts have varied since the original loan was made.

Assumption clause

An assumption clause is a statement in the purchase agreement between a buyer and seller of real estate that allows the buyer to assume the seller´s mortgage.  A buyer who signs a contract with an assumption clause must qualify for the terms of the original mortgage originally set by the lending institution at the time the loan was issued, and by signing takes on responsibility to make monthly payments at the applicable interest rate.  If a mortgage as initially issued contains a stipulation in the lending contract that requires a mortgage to be fully repaid before a sale of the property occurs, the mortgage is not assignable.

Assumption fee

An assumption fee is a fee charged by a lending institution to process new records for a buyer of a property who assumes an existing loan issued by that lending institution from the seller of the property.  The person purchasing the property, and thus assuming the mortgage from the property seller, is usually responsible for paying the assumption fee, as he or she benefits from avoiding potentially higher interest rates associated with a new mortgage and any fees required to be paid to a mortgage company for the issuance of a new mortgage.  Assumption fees vary depending on the specific lending institution that issued the mortgage and other factors.

Average price

The average price of a parcel of real estate is the price of a home determined by totaling the sales prices of all houses sold in a specified area in which the home in question is located, and dividing that total by the number of homes included in the calculation.  The average price statistic is useful for gauging the general sales performance of homes in a given area, but can also be misleading, in that the average includes homes of all sizes and in all conditions in the specified area, and even small differences in home details can cause a lot of variation in price, as can issues such as the length of time a property has been on the market.

Avigation easement

An avigation easement is an easement over private property near an airport that limits the height of structures and trees on the property to allow for safe and accurate flight of air vehicles over that property.  An "easement" in general is the right of some person or entity who does not actually own or possess a parcel of land to use that land for a limited, specified purpose.  An avigation easement thus permits airports and air carriers to require that property owners near airports limit the height of structures on their property for the limited purpose of protecting airport approaches and departures by airplanes.

Awning windows

Awning windows are single-sash windows that tilt outward and up.  Awning windows are often placed either over or underneath other windows or high on walls to allow additional light to enter a room.  Awning windows allow fresh air to circulate from the outside of a house into the home while protecting the home´s interior from light rain, which is deflected by the tilted slope of the window when open.  The hinge of an awning window is located at the top of the window, and a crank handle at the bottom is used to open and close the window.