Abatement is the decrease in amount or intensity and usually refers to decreases in taxes or rent.
Absorption is the rate at which homes are sold in a specific real estate market during a specific time. It is calculated by dividing the number of available homes by the average number of sales per month.
An acceleration clause is a loan provision allowing the lender the right to declare the total principal amount immediately due. It is usually exercised after the violation of a specific loan provision, such as the failure to make payments on time. Acceleration clauses make the full amount of principal due either immediately, or after a brief grace period.
An accredited investor has a consistent annual income of at least $200,000 ($300,000 if married), or a net worth of $1 million (excluding their primary residence).
To accrue is to accumulate or increase. For our purposes, it refers to payments owed by not yet made.
Adjustable Tax Basis
Adjustable tax basis is typically the cost of the property, minus any depreciation, plus any capital expenditures. The adjusted tax basis is vital when calculating final taxes (and tax rates) upon the sale of a property.
An adjustable-rate mortgage is a mortgage (or deed of trust) with an interest rate that fluctuates based on another rate. The mortgage rate is usually tied, or indexed, to a commonly followed rate such as the prime rate or LIBOR, plus a margin.
Amortization is the process of paying debt in regular installments over a period of time.
An anchor tenant is the main tenant, usually in a shopping center. Because the anchor tenant brings customers, it normally pays less rent per square foot than an ancillary tenant.
An ancillary tenant is a shopping center tenant that occupies less space and generates less traffic than an anchor tenant. Ancillary tenants usually pay higher rents per square foot than an anchor tenant.
An appraisal is an expert's estimate of the value of a property. An appraisal will determine both a reasonable offering price and an appropriate loan size.
As Is is used to indicate that a property's condition is without guarantees. It may mean a problem with the property, or just that the seller is not in a position to attest to the property's condition (as in a sheriff's sale following a foreclosure). The premises must be accepted by the buyer or tenant as they are.
An assumable loan is a mortgage that allows the purchaser to assume the obligation of the seller's loan without a change in terms.