Sales Comparison Approach
A method of estimating the value of real property by comparing recent sales of comparable properties to the subject property after making appropriate adjustments for any differences. The comparable properties chosen should be substantially similar to the subject property and should be arms-length transactions.

Secondary Mortgage Market
The means by which existing first mortgages are bought and sold. The secondary mortgage market provides a lender with an opportunity to sell a loan before its maturity date, thereby providing greater availability of funds for additional mortgage lending.

Self-Amortizing Loan
A mortgage loan that requires level annual payments sufficient to meet the interest requirements and fully repay the entire principal over its term.

Servicing Fee
The periodic (monthly or annual) payment made by the purchaser of a mortgage (Lender) to the mortgage banker (correspondent) who originally made the loan for servicing the loan. The fee, which varies from one-eight to one-half percent of the outstanding loan balance, covers the administrative costs of servicing such as collection and payment of property taxes and property insurance premiums. Servicing rights may be bought and sold along with the loan.

Spread
The difference between the rate at which money can be borrowed and the rate at which it is loaned. Typically the rate (percentage amount) that is added to the Treasury Bill by a Lender when quoting a rate to a borrower.

Stabilized
Term associated with the operation of a property wherein the income and expenses have achieved and maintained a consistent level of performance. The minimum is usually established when the property has performed at a specific minimum for ninety (90) days.

Subordinated Ground Lease
A land (ground) lease in which the rent payment due from the lessee (borrower) to the lessor (land owner) is subordinated to the debt service owed by the lessee (borrower) to the mortgagee (lender). Normally, a ground lease contains a subordination clause because without it, construction of improvements may be more difficult. A mortgage lender will consider the full value of the property only with a subordinated ground lease.

Survey
The process by which the precise physical boundaries of a parcel of land are measured. Legal descriptions appear in title reports, sales contracts, deeds, mortgages, notes, and other instruments involving rights and interests in real estate. When land is conveyed from one party to another, the survey provides a visual representation of the legal description.