Acknowledgement - A written declaration affirming that a person acted voluntarily.

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

Addendum - An addition or change to a contract.

Additional principal payment - Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.

Add-on interest - The interest a borrower pays on the principal for the duration of the loan.

Adjustable-rate mortgage (ARM) - A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.

Adjustment period - The amount of time between interest rate adjustments in an adjustable-rate mortgage.

Agency - The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.

Agent - A person licensed by the state to conduct real estate transactions.

Agreement of sale - A document the buyer initiates and the seller approves that details the price and terms of the transaction.

Alienation clause - A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.

Alternative mortgage - Any home loan that does not conform to a standard fixed-rate mortgage.

American Society of Home Inspectors - A professional association of independent home inspectors.

Amortization - The process of paying the principal and interest on a loan through regularly scheduled installments.

Annual percentage rate (APR) - The cost of the loan expressed as a yearly rate on the balance of the loan.

Application - A document that details a potential borrower's income, debt and obligations to determine credit worthiness.

Appraisal - An opinion of the value of a property at a given point in time.

Appraisal report - A detailed written report on the value of a property based on recent sales or comparable sites in the area.

Appreciation - An increase in the value of a home or other property.

Arbitration - A method of resolving a dispute in which a third party renders a decision.

As-is condition - The purchase or sale of property in its existing condition.

Asking price - A seller's initial price for a property.

Assessed value - A tax assessor's determination of the value of  a home in order to calculate a tax base.

Assessment - The estimated value of a piece of real estate or a levy placed on property in addition to taxes.

Assumable mortgage - A mortgage that can be transferred to another borrower.

Assumption clause - A provision that allows a buyer to take responsibility for the mortgage from a seller.

Back-up offer - A secondary bid for a property that the seller will accept if the first offer fails.

Balloon - A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal.

Breach of contract - The failure to perform provisions of a contract without a legal excuse.

Bridge loan - A short-term  loan for borrowers who need more time to find  permanent financing.

Brokerage - The act of bringing together two or more parties in exchange for a fee or commission.

Broker - A person licensed by the state to deal in real estate.

Buy-down mortgage - A home loan in which the lender receives a premium as an inducement to reduce the interest rate during the early years of the mortgage.

Buyer broker - A real estate broker who exclusively represents the buyer's interests in a transaction and whose commission is paid by the buyer rather than the seller.

Buyer's market - A slow real estate market in which buyers have the advantage.

Bylaws - The rules and regulations that a homeowner's association adopts to govern activities.

Cancellation clause - A clause that details the conditions under which each party may terminate the agreement.

Capital gains - Profits an investor makes from the sale of real estate or investments.

Caveat emptor - A legal principle derived from Latin that means "let the buyer beware".

Clear title - A property that does not have liens, defects or other legal encumbrances.

Closing - The final procedure in which documents are signed and recorded and the property is transferred.

Closing costs - Expenses incidental to the sale of real estate, including loan, title and appraisal fees.

Closing statement - A document which details the final financial settlement between a buyer and seller and the costs paid by each party.

Commission - The negotiable percentage of the sales price of a home that  is paid to the agents of the buyer and seller.

Comparables - Properties used as comparisons to determine the value of a certain property.

Comparative market analysis - An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.

Compound interest - The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.

Conditional commitment - A promise by a lender to make a loan if the borrower meets certain conditions.

Contingency - A condition specified in a purchase contract, such as a satisfactory home inspection.

Contract - An agreement between two or more parties that creates or modifies an existing relationship.

Contract to purchase - A contract the buyer initiates which details the purchase price and conditions of the transaction and is accepted by the seller. Also known as an agreement of sale.

Conventional loan - A long-term loan a lender makes for the purchase of a home.

Convertible adjustable-rate mortgage - A mortgage which starts as an adjustable-rate mortgage loan, but allows the borrower to convert the loan to a fixed-rate mortgage during a specified period of time.

Conveyance - The transfer of title of property.

Cooperating broker - A real estate broker who finds a buyer for a property that another broker has listed.

Co-signer - A second party who signs a promissory note and takes responsibility for the debt.

Counter-offer - A response to an offer.

Covenants, conditions and restrictions (CC&Rs) - Rules and regulations for a development, such as acceptable landscaping or improvements that can be made to individual units.

Deposit - Money given by the buyer with an offer to purchase property. Also called earnest money.

Depreciation - The decline in value of a piece of property.

Disclosure - A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.

Discount points - Fees that the borrower pays at the time the lender makes the loan. A point equals 1 percent of the total loan amount.

Down payment - The amount of money a buyer agrees to give the seller when a sales agreement is signed. Complete financing is later secured with a lender.

Dual agency - A relationship in which a real estate agent or broker represents both parties in a transaction.

Due-on-sale clause - Standard language in a mortgage which states that the loan amount be paid when a home is sold.