Here are some useful real estate & mortgage terms you may hear.

Acceleration Clause - A clause in the mortgage that allows the lender to demand immediate payment of the loan balance if the borrower breaks the terms of the note or mortgage.

Accretion - The addition of land through natural forces.

Acre - A measurement of land equal to 43,560 square feet.

Adjustable Rate Mortgage (ARM) - A mortgage in which the interest rate changes at predetermined intervals.

Adverse Possession - A method of acquiring title to real property by using the property without the owner's consent and following statutory requirements.

Agency - The relationship between a principal and an agent.

Alienation Clause (Due on Sale Clause) - The clause in a mortgage that allows the lender to make the entire loan balance due if the title to the property is transferred.

Amortization - Repayment of debt through periodic installments.

Appraisal - The Process of estimating an opinion of value.

Appreciation - The increase in a property's value over time.

AS IS - A clause indicating the seller is will not fix any problems with the property.

Attachment - The process of changing personal property to real property.

Balloon Payment - Found in a balloon loan (payments do not fully amortize the loan balance) The remaining loan balance is included in the last payment.

Basis - The original cost of the property plus capital improvements less accrued deprecation.

Beneficiary - The party in a trust who benefits from the assets of the trust.

Bill Of Sale - A list of personal property to convey or be purchased in a transaction.

Certificate of Occupancy - A certificate of occupancy must be issued before a building can be legally occupied. It is issued only after the building is inspected to make sure it complies with building codes.

Chattel - Personal property.

Closing - The consummation of a real estate transaction. Includes delivery of the deed, signing of forms and disbursement of funds to complete the transaction.

Competitive Market Analysis (CMA) - A report giving comparable sales of ones property.

Contract - An agreement among competent parties to do or not to do some legal act(s) and supported by legal considerations.

Covenants - Guarantees given in deeds by the grantor. Covenants include seizin, encumbrances, further assurance, quiet enjoyment and warranty forever.

Deed - A written instrument that transfers title to real property from one owner to another.

Deed of Trust or Trust Deed (Standard In Arizona instead of a MORTGAGE) - An agreement among 3 parties for the purpose of securing a real estate loan. Parties to the trust are the trustor (the borrower), the trustee (usually a title company or bank) and a beneficiary (the mortgagee).

Deed Restriction - A clause in a deed that limits the use of a property.

Discount Point - Interest points charged by a lender to raise the yield of a loan. 1 point = 1 % of loan amount.

Dual Agency - A Broker represents both sides of a transaction.

Earnest Money - A deposit by buyer showing "good faith". Submitted with offer and usually deposited in an escrow account.

Easement - The right to use another's land.

Eminent Domain - The government power to take private land for the public good. Owner must be compensated.

Encroachment - Illegal physical intrusion on another's land.

Encumbrance - A charge, claim, or liability on the property.

Escrow - Placing money, property or documents with a 3rd party to be delivered to a designated person when certain conditions are fulfilled. 3rd party is usually the title company.

Exclusive Agency Listing - A listing in which a seller hires a single broker to sell their property.

FHA Loan - A loan by a lender that is insured by the Federal Housing Administration.

Fiduciary Relationship - A relationship that involves great trust and confidence.

Final Walk Through - The final inspection of a property right before closing.

Fixed Interest Rate - A interest rate that does not change over the course of the loan.

Fixture - A item that was once personal property but has been attached to the real estate and become real property.

FSBO - For Sale By Owner - Someone who is not using a professional to sell their home, rather doing it themselves.

Further Assurance - A guarantee in a deed by which the grantor promises to perform any reasonable acts necessary to correct defects in the title being given.

Gross Rent Multiplier (GRM) - A method of estimating the value of an income producing rental. Multiplier = Sales Price divided by gross monthly rent of comparable properties. GRM = Multiplier X subject properties monthly rent.

Homestead Exemption - A legal life estate that protects a portion of the value of an owner's principal residence from unsecured creditors. Rules are set by state law.

Intestate - One dies without a will.