Ameraco

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ABANDONMENT
Abandonment occurs when a person with a right or interest in a property voluntarily gives up that right or interest, either by physically ‘abandoning’ the property or by showing the intention to give up the right or interest.

ABATEMENT
A decrease or reduction in the price of a property (or in rent chargeable to a tenant). Usually occurs as a result of the discovery of a negative fact about the property which decreases its value from the price originally agreed upon by the parties.

ABSTRACT OF TITLE
A summary listing of the documents registered in the local land registry office and which affect title (ownership) of a particular property.

ACCEPTANCE
A positive response to an offer or a counter-offer that creates a binding agreement between the parties. Acceptance may be conditional upon the occurrence of certain events.

ACCESS
The right to enter a property. Access may be restricted to certain times, to certain persons and to certain purposes (i.e. access for the purpose of inspection).

ACCESSORY BUILDING
A structure on a property that serves a specific purpose, complementing the home or main building. A garage or storage shed.

ACKNOWLEDGEMENT
A statement by a person to the effect that they are aware of a certain fact. May also be a sworn document to the same effect, which further states that the person signing the document did so voluntarily.

ACQUISITION
The process of taking title to or ownership of something.

ACQUISITION COST
The cost to the purchaser of obtaining title to anything, including real property. Acquisition cost includes the cost of the transaction of obtaining title, including legal fees and expenses, interest charges on mortgages, land transfer tax, etc.

ACTUAL AUTHORITY
With reference to an agent or representative. The limits of the power the agent or representative has to bind her principal to an agreement or to a statement.

ACTUAL POSSESSION
As opposed to constructive possession. When the owner of a property occupies the property on a day-to-day basis. Constructive possession is when the owner takes actions to establish and maintain his ownership of a property without actually occupying it himself (i.e. leasing it to tenants, removing squatters, hiring a security firm).

ADDENDUM
An addition to a document that forms part of it. Similar to a Schedule to an Agreement of Purchase and Sale. May be used to add specific and detailed information material to the contract or upon which contractual terms are based.

ADJUSTED SALES PRICE
The result of estimating the value of a property by comparison to comparable properties. Take the actual sale price of a property compa­rable to the subject property, then add the value of any extras which the subject property has but the comparable property did not, then subtract the value of any deficiencies in the subject property not shared by the comparable property.

ADJUSTMENTS
In real estate sales, the changes made to the selling price to account for the advantages and disadvantages of the subject property, market conditions etc. When closing a real estate transaction, the changes to the purchase price made as a result of realty taxes over- or under-paid by the Vendor, fuel oil provided, tenant’s rental payments etc. (Contained on the Statement of Adjustments).

AFFIDAVIT
A sworn statement setting out facts which the affiant states are true. Sworn before a Commissioner for swearing Oaths, Notary Public or other public official.

AFTER-TAX PROCEEDS FROM RESALE
The net proceeds from the sale of a property. The sale price minus legal fees and expenses, realty commission, any taxes paid, mortgage payout etc.

AGENCY
The relationship between a person (the Principal) and another person (the Agent) who was appointed, selected, empowered, given authority by the Principal to represent the interests of the Principal in dealings with third parties and to bind the Principal to statements, warranties or contracts.

AGENT
A person empowered by a Principal to act on behalf of the Principal in dealings with third parties. The third party is entitled to rely upon the agreement, assurances or statements of the Agent as being binding on the Principal.

AGREEMENT OF SALE
Also known as Purchase Agreement, Agreement of Purchase and Sale, Land Agreement etc. A legal contract in which one party agrees to buy and another agrees to sell a property or chattel. Contains terms and conditions of the transaction and is signed by the parties.

AGREEMENT
A legally binding contract between two or more people, representing a meeting of minds on one or more issues.

ALTERATION
A change made to an executed contract which has not been approved by the parties to the contract. An alteration may constitute fraud if it has the impact of significantly affecting the rights of a party to the contract and was intentionally carried out by another party. If fraud is found, the innocent party may void the contract.

AMENITIES
Positive features of a particular property (such as a pool, central air conditioning, etc.) or attractions located near a particular property (highways, school, shopping, etc.) which have the effect of enhancing the property’s value.

AO (ACCEPTED OFFER)
A short form used by agents to designate that an offer to purchase has been accepted by the offeree.

APPLICATION FEE
The fees the lender charges the applicant. May include costs of a property appraisal and a credit report on the applicant. May be payable by applicant even if loan is not approved.

APPOINTMENTS
Chattels or decorative touches that may affect the value of a property.

APPORTIONMENT
Also known as adjustment. The division of responsibility for certain costs between the parties to a transaction, such as realty taxes. In America, the purchaser is responsible for such charges from and including the day of closing; in many U.S. jurisdictions, the vendor is responsible for the day of closing and all days prior to it.

APPRAISAL
An estimation of the value of a property on a certain date given by a qualified person, usually after an inspection of the property.

APPRAISAL PRINCIPLES
Elements to be considered by an appraiser in appraising the value of a property, such as competition, supply and demand.

APPRAISAL PROCESS
A standardized approach to appraising a property, to allow for accuracy and consistency.

APPRAISAL REPORT
Documentation to support an appraisal of a property. Varies in length but sets out elements considered, positive and negative aspects of property etc.

APPRAISED VALUE
The estimated market value of a property on a given date, given by a qualified person as a result of an inspection of the property and a consideration of other market forces.

APPRAISER
A licensed professional who has been trained to assess the value of property.

APPROACHES TO VALUE
Different methods by which appraisers estimate the value of a property. Include: (1) cost approach, (2) comparison approach, and (3) income approach.

ARM’S LENGTH’TRANSACTION
A colloquial description of a transaction where none of the parties are related to each other or have common interests — they have each other at ‘arm’s length’. An arms-length transaction is generally at fair market value; in a ‘non-arm’s-length’ transaction, the relationship between the parties may cause one or the other to accept less than they are entitled or pay more than fair market value.

AS IS
Implied in most Agreements of Purchase and Sale, suggests the Purchaser is accepting the property in its current condition and releases the Vendor from any liability for problems found before or after closing.

AS-IS’ AGREEMENT
A statement in the Agreement of Purchase and Sale that confirms that the Purchaser shall accept the property and all chattels included in the Purchase in the condition in which they are found at the time the Agreement is signed.

ASKING PRICE
The price at which the Vendor advertises a property. When used in the advertisement, may suggest flexibility on the part of the Vendor regarding the price.

ASSESSED VALUE
The value assigned to a given property by the municipality for the purpose of establishing realty taxes payable by the owner of the property.

ASSESSMENT
Generally, the apportionment of liability of a general cost among individuals. The act of estimating the value of land for tax purposes or the method by which municipalities raise taxes (property tax assessment).

ASSESSMENT ROLL
Public record of the assessed values of properties. Also includes Assessment Roll Number for each property, the number by which the property is identified in the municipal records.

ASSESSOR
A person who is employed by the municipality to estimate the value of properties for the purpose of taxes.

ASSIGN
To transfer interest in a property, contract, right etc..

ASSIGNEE
The person to whom an interest is transferred. An assignee of an Agreement of Purchase and Sale may buy the property and enforce the contract in the same fashion as the original party.

ASSIGNMENT OF CONTRACT
The transfer of any right, claim or interest to another person or corporation. Often used to refer to the transfer of a mortgage or deed of trust from one person to another. Also a noun describing the document which represents the assignment of the right etc.

ASSIGNOR
The person who assigns a right or interest to another person.

ASSOCIATE BROKER
A qualified real estate broker who works with or for another broker.

ASSUMABLE MORTGAGE
A mortgage that can be taken over (‘assumed’) by the buyer when a home is sold. If interest rates have risen, an assumable mortgage at a low rate may prove a selling point for the property.

ASSUMPTION CLAUSE
The paragraph in the mortgage which sets out the borrower’s right to have the mortgage assumed by a purchaser.

ASSUMPTION OF MORTGAGE
The agreement of a purchaser to take on personal liability for a mortgage already registered on title to the property and to make payments under the mortgage. Purchaser takes the place of the vendor in the contract with the lender.

ATTACHMENT
The binding by a court of a piece of property (real or personal) as security for a debt.

AUCTION
The process of selling property to the highest bidder.

AUTHORIZATION TO SELL
A contract between a property owner and a real estate broker or agent which allows the broker to list the property for sale and which codifies the rights and obligations of the two parties.

Tags: Real Estate Terminology

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