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Glossary of Real Estate
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balance sheet
A financial statement that shows assets, liabilities, and net worth as of a
specific date.
balloon mortgage
A mortgage that has level monthly payments that will amortize it over a
stated term but that provides for a lump sum payment to be due at the end of
an earlier specified term.
balloon payment
The final lump sum payment that is made at the maturity date of a balloon
mortgage.
bankrupt
A person, firm, or corporation that, through a court proceeding, is relieved
from the payment of all debts after the surrender of all assets to a
court-appointed trustee.
bankruptcy
A proceeding in a federal court in which a debtor who owes more than his or
her assets can relieve the debts by transferring his or her assets to a
trustee.
A legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed. In the majority of cases, however, bankruptcy is initiated by the debtor (the bankrupt individual or organization). Read more >>
basis
See "cost
basis".
before-tax income
Income before taxes are deducted.
beneficiary
The person designated to receive the income from a trust, estate, or a deed
of trust.
better business
bureau (BBB)
BBB is an unbiased organization that sets and upholds high standards for
fair and honest business behavior. Businesses that earn BBB membership
contractually agree and adhere to the organization’s high standards of
ethical business behavior. BBB provides objective advice, free business
Reliability Reports and charity Wise Giving Reports, and educational
information on topics affecting marketplace trust. To further promote trust,
BBB also offers complaint and dispute resolution support for consumers and
businesses when there is difference in viewpoints. The first BBB was founded
in 1912. Today, 128 BBBs serve communities across the U.S. and Canada,
evaluating and monitoring more than 3 million local and national businesses
and charities. Please visit www.bbb.org for more
information about the BBB System.
bequeath
To transfer personal property through a will.
betterment
An improvement that increases property value as distinguished from repairs
or replacements that simply maintain value.
bill of sale
A written document that transfers title to personal property.
binder
A preliminary agreement, secured by the payment of an earnest money deposit,
under which a buyer offers to purchase real estate.
biweekly payment mortgage
A mortgage that requires payments to reduce the debt every two weeks
(instead of the standard monthly payment schedule). The 26 (or possibly 27)
biweekly payments are each equal to one-half of the monthly payment that
would be required if the loan were a standard 30-year fixed-rate mortgage,
and they are usually drafted from the borrower’s bank account. The result
for the borrower is a substantial savings in interest.
blanket insurance policy
A single policy that covers more than one piece of property (or more than
one person).
blanket mortgage
The mortgage that is secured by a cooperative project, as opposed to the
share loans on individual units within the project.
bona fide
In good faith, without fraud.
bond
An interest-bearing certificate of debt with a maturity date. An obligation
of a government or business corporation. A real estate bond is a written
obligation usually secured by a mortgage or a deed of trust.
breach
A violation of any legal obligation.
See also, default.
bridge loan
A form of second trust that is collateralized by the borrower's present home
(which is usually for sale) in a manner that allows the proceeds to be used
for closing on a new house before the present home is sold. Also known as
"swing loan."
broker
A person who, for a commission or a fee, brings parties together and assists
in negotiating contracts between them. See mortgage broker and
real estate broker.
broker's price opinion (BPO)
Often used by real estate agencies or home loan banks and brokers
to estimate the value of a home - and since they are generally compiled by
real estate brokers or sales agents, they usually will be not as in depth as
a value estimate provided by a licensed appraiser. BPO's help lenders determine
what a home would sell for versus an appraisal that will tell the investor what
the value
may be. The investor wants to know from a broker what they feel this home
would sell for in a certain amount of time. Very often this is not the same
value as the appraised value.
See Also
BPO forms
- http://www.freddiemac.com/sell/forms/pdf/1092.pdf
- http://www.reoexperts.net/Forms/Aegis/BPO FORM.doc
budget
A detailed plan of income and expenses expected over a certain period of
time. A budget can provide guidelines for managing future investments and
expenses.
budget category
A category of income or expense data that you can use in a budget. You can
also define your own budget categories and add them to some or all of the
budgets you create. "Rent" is an example of an expense category. "Salary" is
a typical income category.
building code
Local regulations that control design, construction, and materials used in
construction. Building codes are based on safety and health standards.
building permit or construction
permit
A permit required in most
jurisdictions for new
construction, or adding
onto pre-existing structures, and in some
cases for major renovations. Generally,
the new construction must be inspected
during construction and after completion to ensure compliance with national,
regional, and local building codes.
Failure to obtain a permit can result in significant fines
and penalties, and even
demolition of
unauthorized construction if it cannot be made to meet code.
buyers' market
Simply put, a market in which the number of homes exceeds the number of
buyers looking for homes. Since sellers are in competition with each other
for the attention of the buyer, the result is an overall adjustment to lower
prices for homes. See
Law of Supply and
Demand.
buy-down mortgage
A temporary buy-down is a mortgage on which an initial lump sum payment is
made by any party to reduce a borrower’s monthly payments during the first
few years of a mortgage. A permanent buy-down reduces the interest rate over
the entire life of a mortgage. This type of mortgage is often offered by
builders of new construction as an incentive to buy buy their home.
bylaws
Internal rules for how to conduct activities. In real estate they usually
refer to condominium and homeowner associations.