Term

Definition

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.

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.

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.

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.

ACCRETION

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

ACRE

43,560 square feet. A measurement of area.

ACTUAL AGE

The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE

AD VAL OREM TAX

Taxes assessed based on the value of the land and improvements

ADDENDUM

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.

ADJUSTABLE-RATE
MORTGAGE (ARM)

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

ADJUSTED 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.

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.

ADJUSTMENT DATE

The date the interest rate changes on an adjustable rate mortgage.

AESTHETIC VALUE

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

AFFIRMATION

A declaration that a certain set of facts are truthful.