AACA – AMERICAN ASSOCIATION OF CERTIFIED APPRAISERS – A professional appraisal organization
ABA – AMERICAN BANKERS ASSOCIATION – A trade organization for officers of commercial banks. Publishes the monthly ABA Banking Journal and several other specialized banking periodicals.
A/C – Air conditioning
ACLI – AMERICAN COUNCIL OF LIFE INSURANCE – A LIFE INSURANCE-related trade association that offers historical data on INTEREST rates and LOAN terms for COMMERCIAL PROPERTY MORTGAGES.
ACRS – ACCELERATED COST RECOVERY SYSTEM – A method of DEPRECIATION introduced by the Economic Recovery Tax Act of 1981 and modified in 1984 and 1986.
ACV – ACTUAL CASH VALUE – 1) The cost of replacing or restoring PROPERTY at prices prevailing at the time and place of the LOSS, less DEPRECIATION, however caused; 2) REPLACEMENT COST minus DEPRECIATION.
ADA – AMERICANS WITH DISABILITIES ACT OF 1990 – Federal law that prohibits DISCRIMINATION against individuals with physical handicaps, including hiring practices and design of buildings intended to serve the public.
ADC LOAN – ACQUISITION, DEVELOPMENT AND CONSTRUCTION LOAN – Example: a DEVELOPER owns LAND and wants to build a retail strip mall on the LAND. Their first step is to get LEASES from future TENANTS, then they must get a COMMITMENT for FINANCING, then they may secure an ADC LOAN.
ADR – ASSET DEPRECIATION RANGE – Used to determine class lives for PROPERTY and equipment, a range of DEPRECIABLE lives allowed by the IRS for a particular ASSET.
AIA -AMERICAN INSTITUTE OF ARCHITECTS – A professional organization of architects, designers, and DEVELOPERS. Publishes the monthly AIA Journal and other periodicals.
AIDS – ACQUIRED IMMUNE DEFICIENCY SYNDROME – A fatal, incurable disease caused by a virus that can damage the brain and destroy the body’s ability to fight off illness.
AIREA – AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS – Also known as THE INSTITUTE – A professional APPRAISAL organization.
ALTA – AMERICAN LAND TITLE ASSOCIATION – A national association of title companies, ABSTRACTORS, and attorneys established to standardize INSURANCE COVERAGE on a national basis.
AMI – ALTERNATIVE MORTGAGE INSTRUMENT – Any MORTGAGE other than a FIXED INTEREST RATE, level payment AMORTIZING loan.
AML – ADJUSTABLE MORTGAGE LOAN – 1) Any MORTGAGE that does not have a FIXED INTEREST RATE and a fixed PAYMENT for the TERM of the LOAN; 2) a loan that does not AMORTIZE to zero at the end of the set TERM when required PAYMENTS are made on time
AMT – ALTERNATIVE MINIMUM TAX – A type of flat-rate TAX that applies to taxpayers who have certain types of INCOME. A twenty-six or twenty-eight percent rate applies to broadly based INCOME of individuals. A twenty percent rate applies to CORPORATIONS. If this TAX exceeds the regular INCOME TAX, then the alternative minimum TAX is to be paid instead of the regular INCOME TAX.
APA – AMERICAN PLANNING ASSOCIATION – A professional organization of regional and urban planners for the purpose of promoting professional standards, research, and education. The merger of the American Institute of Planners (AIP) and the American Society of Planning Officials (ASPO) formed APA which publishes a monthly magazine, Planning, and a quarterly journal, Journal of the APA.
APP – APPRECIATION (in appraisal terminology) – An increase in PROPERTY value from any cause, either under the owner’s control (EARNED INCREMENT) or from outside the property (UNEARNED INCREMENT).
APR – ANNUAL PERCENTAGE RATE – The total cost of financing a LOAN per year, expressed as a percentage. It is the sum of the INTEREST and all other credit fees, such as discount points, compared to the PRINCIPAL amount of the LOAN.
ARES – AMERICAN REAL ESTATE SOCIETY – An organization of scholars, researchers, and practitioners who are mainly concerned with solving business problems related to REAL ESTATE. Publishes the Journal of Real Estate Research, Journal of Real Estate Literature and Journal of Real Estate Portfolio Management.
AREUEA – AMERICAN REAL ESTATE AND URBAN ECONOMICS ASSOCIATION – An organization of scholars, researchers, and practitioners concerned with economic analysis of REAL ESTATE related problems. Publishes Real Estate Economics quarterly.
ARM -ADJUSTABLE-RATE MORTGAGE – A MORTGAGE LOAN that allows the INTEREST RATE to be changed at specific intervals over the MATURITY of the LOAN.
ASA – AMERICAN SOCIETY OF APPRAISERS – 1) A professional appraisal organization. ASA publishes the biannual journal Valuation; 2) a senior professional designation offered by the AMERICAN SOCIETY OF APPRAISERS. The ASA designation is awarded upon meeting rigorous requirements that include extensive experience, education, and approved demonstration reports. Designations offered include urban and rural real estate, and non-real estate disciplines such as business valuation, machinery and equipment, fine arts, appraisal education, and administration.
ASREC – AMERICAN SOCIETY OF REAL ESTATE COUNSELORS – A professional organization of real estate investment counselors and consultants. Affiliated with the NATIONAL ASSOCIATION OF REALTORS. CER publishes the journal Real Estate Issues.
ASFMRA – AMERICAN SOCIETY OF FARM MANAGERS AND RURAL APPRAISERS – A professional APPRAISAL organization.
ASO – ADMINISTRATIVE SERVICES ONLY PLAN – An arrangement under which an INSURANCE carrier or an independent organization will, for a fee, handle the administration of CLAIMS, BENEFITS and other administrative functions for a self-insured group.
ATA POLICY – Also known as ALTA or LENDER’S POLICY – Usually paid for by the borrower , a TITLE INSURANCE POLICY issued for the benefit of a LENDER as well as any future holder of the LOAN.
BMIR – BELOW-MARKET INTEREST RATE – In some GOVERNMENT-SUBSIDIZED HOUSING, the owner is charged a low INTEREST RATE with the requirement that savings be passed on to TENANTS in the form of RENT reduction.
BOMA – BUILDING OWNERS AND MANAGERS ASSOCIATION – An organization of practitioners who own and manage BUILDINGS, notably office space.
BOY – BEGINNING OF YEAR
BSPRA -BUILDERS AND SPONSORS PROFIT AND RISK ALLOWANCE – An amount above the cost of APARTMENTS that is allowed to be included in the project cost for purpose of determining the loan amount in certain government-sponsored programs.
BTU – BRITISH THERMAL UNIT – A unit measure for calculating heating and cooling capacities.
CACI – A service provider of demographic information. Given a location, it can identify the population and income level within concentric circles.
CAD – See CASH AVAILABLE FOR DISTRIBUTION, CENTRAL APPRAISAL DISTRICT, COMPUTER-AIDED DESIGN.
CAI – COMMUNITY ASSOCIATIONS INSTITUTE – A not-for-profit educational and research organization concerned with the problems of managing HOMEOWNERS’ ASSOCIATIONS and other COMMUNITY ASSOCIATIONS. CAI sponsors educational seminars and publishes various handbooks and brochures.
CBA – CONTROLLED BUSINESS ARRANGEMENT – A REAL ESTATE BROKERAGE office that provides related services through SUBSIDIARY COMPANIES that operate within the BROKERAGE office. The arrangement allows a BROKER to provide financing, TITLE and HAZARD INSURANCE, and other ANCILLARY SERVICES without violating the REAL ESTATE SETTLEMENT PROCEDURES ACT.
CBD – CENTRAL BUSINESS DISTRICT.
CCIM – CERTIFIED COMMERCIAL INVESTMENT MEMBER – A professional designation of the REALTORS NATIONAL MARKET INSTITUTE (RNMI).
CCRs – CONDITIONS, COVENANTS, AND RESTRICTIONS – Often found in a
CONDOMINIUM or a subdivision, these are rules written into the DEEDS or BYLAWS that define how PROPERTY may be used. They prevent PROPERTY owners from making changes to their individual PROPERTIES that could result in an unattractive or inharmonious setting which could adversely affect other owners.
CD – CERTIFICATE OF DEPOSIT– A type of savings account that carries a specified minimum deposit and term and generally provides a higher yield than passbook-type savings accounts.
CERCLA – COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT – Federal law, known as SUPERFUND, passed in 1980, reauthorized by SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT (SARA) in 1986. The law imposes strict joint and several LIABILITY for cleaning up environmentally contaminated land. Potentially responsible parties include any current or previous owner, generator, transporter, disposer, or party who treated hazardous waste at the site. STRICT LIABILITY means that each and every party is LIABLE for the full cost of remediation, even parties whom were not contaminators. JOINT AND SEVERAL LIABILITY makes each party LIABLE for the full cost of cleanup. A DE MINIMIS SETTLEMENT is an agreement with the EPA to allow a party who had a minor role in contamination to pay a small amount to be released from the litigation.
CFP – CERTIFIED FINANCIAL PLANNER – Professional who has attained a high degree of technical competency in financial planning and has passed a series of professional examinations.
CGL – COMMERCIAL GENERAL LIABILITY POLICY – Commercial LIABILITY POLICY drafted by the INSURANCE SERVICES OFFICE containing two coverage forms – an OCCURRENCE form and a CLAIMS-made form.
CHFC – CHARTERED FINANCIAL CONSULTANT – An individual who has attained a high degree of technical competency in the fields of financial planning, INVESTMENTS and LIFE and HEALTH INSURANCE and has passed ten professional examinations administered by The American College.
CIC – CERTIFIED INSURANCE COUNSELOR – Professional in PROPERTY and LIABILITY INSURANCE who has passed a series of examinations by the SOCIETY OF CERTIFIED INSURANCE COUNSELORS.
CLO – COMPUTERIZED LOAN ORGANIZATION – A computer-based network of lenders that allows affiliated REAL ESTATE BROKERS, builders or advisors to originate LOANS at the site of the home. Provides a streamlined process whereby a person can buy a home and apply for a LOAN at the same place and time.
CLU – CHARTERED LIFE UNDERWRITER – An individual who has attained a high degree of technical competency in the fields of LIFE and HEALTH INSURANCE and who is expected to abide by a CODE OF ETHICS. Must have minimum of three years of experience in LIFE or HEALTH INSURANCE sales and have passed ten professional examinations administered by The American College.
CMA – COMPARATIVE MARKET ANALYSIS – An estimate of the VALUE of
PROPERTY using only a few indicators taken from sales of COMPARABLE PROPERTIES, such as price per square foot. The VALUE estimates are not APPRAISALS and do not meet the standards of APPRAISAL as defined by USPAP.
CMO – COLLATERALIZED MORTGAGE OBLIGATION – A SECURITY backed by a POOL of MORTGAGE LOANS that may be separated into various CLASSES with varying MATURITIES. Note that REMICS are the standard vehicle for INVESTING in MORTGAGE instruments.
CMSA – CONSOLIDATED METROPOLITAN STATISTICAL AREA – An area with two or more PRIMARY METROPOLITAN STATISTICAL AREAS. A CMSA must also include a population of at least one million.
COB – COORDINATION OF BENEFITS – The mechanism used in GROUP HEALTH INSURANCE to designate the order in which the multiple carriers are to pay BENEFITS and to prevent duplicate payments.
COAL-N – Also known as AGENT’S RESPONSIBILITIES TO PRINCIPAL: – The five duties of an AGENT to a PRINCIPAL under a FIDUCIARY RELATIONSHIP are (1) Care, (2) Obedience, (3) Accounting, (4) Loyalty and (5) Notice.
COLA – COST OF LIVING ADJUSTMENT – A change in payments, such as the amount of RENT, based on a change in an INDEX that measures INFLATION.
CPP – COMMERCIAL PACKAGE POLICY – A COMMERCIAL POLICY that can be designed to meet the specific INSURANCE needs of business firms. PROPERTY and LIABILITY COVERAGE forms are combined to form a single POLICY.
CPCU – CHARTERED PROPERTY AND CASUALTY UNDERWRITER – Professional who has attained a high degree of technical competency in property and LIABILITY INSURANCE and has passed ten professional examinations administered by the American Institute for Property and Liability Underwriters.
CPI – CONSUMER PRICE INDEX – The most widely known of many such measures of PRICE LEVELS and INFLATION that are reported to the U.S. government. It measures and compares, from month to month, the total cost of a statistically determined typical market basket of goods and services consumed by U.S. households.
CPM – CERTIFIED PROPERTY MANAGER – a professional designation awarded to REAL ESTATE managers by the INSTITUTE OF REAL ESTATE MANAGEMENT, an affiliate of the NATIONAL ASSOCIATION OF REALTORS.
CRA – CERTIFIED RESIDENTIAL APPRAISER – One qualified to appraise residences and up to 4 units of housing, under APPRAISER certification law. Standards call for less education, less experience, and less comprehensive exam than for General Certification.
CRB – CERTIFIED RESIDENTIAL BROKER – A designation awarded by the RESIDENTIAL SALES COUNCIL, which is affiliated with the NATIONAL ASSOCIATION OF REALTORS.
CRBM – CERTIFIED REAL ESTATE BROKERAGE MANAGER – A professional designation of the REALTORS NATIONAL MARKETING INSTITUTE (RNMI).
CRE – COUNSELOR OF REAL ESTATE – A member of the AMERICAN SOCIETY OF REAL ESTATE COUNSELORS (ASREC). Membership is based on experience and professional conduct as a REAL ESTATE counselor.
CRS – CERTIFIED RESIDENTIAL SPECIALIST – A professional designation awarded by the RESIDENTIAL SALES COUNCIL, based on education and experience in residential sales. Candidates must hold the GRADUATE REALTORS INSTITUTE (GRI) designation.
CSR – CUSTOMER SERVICE REPRESENTATIVES – Support the work of INSURANCE AGENTS with a variety of tasks that must be done within a company or AGENCY to deliver services to and handle requests from CLIENTS.
DCR – DEBT COVERAGE RATIO – Often used as an UNDERWRITING criterion for INCOME PROPERTY MORTGAGE LOANS, the relationship between NET OPERATING INCOME and ANNUAL DEBT SERVICE.
DERI – DISTINGUISHED REAL ESTATE INSTRUCTOR – A REAL ESTATE teacher, typically of licensing preparation courses, who has been designated by the REAL ESTATE EDUCATORS ASSOCIATION.
DIC – DIFFERENCE IN CONDITIONS INSURANCE – “All-risks” POLICY that covers other perils not insured by basic PROPERTY INSURANCE CONTRACTS, supplemental to and excluding the COVERAGE provided by underlying CONTRACTS.
DRGS – DIAGNOSIS-RELATED GROUPS – System that reimburses HEALTH CARE PROVIDERS fixed amounts for all care given in connection with standard diagnostic categories.
DUST:- The four elements which create VALUE in REAL PROPERTY: (1) Demand, (2) Utility, (3) Scarcity, and (4) Transferability.
