Real Estate Dictionary
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Dictionary Real Estate

Dictionary Real Estate

ACCRUED - Expenses or other items that accumulate over time and eventually must be paid. Property tax expenses are an example of an expense that continues to accrue over time and must be paid at the end of each tax year.

ABANDONMENT - Surrendering the possession of real property (real estate) voluntarily with the goal of terminating any possession of or interest in the property, yet without vesting the specific interest in the real property to another party.

ABSTRACT OF TITLE - Prepared by a title examiner’s investigation of land records, the abstract of title is a concise summary of the title of a particular parcel of real property (real estate), and serves as a condensed history of the property’s ownership.

The abstracts of title also include all recorded issues concerning the title, including all transfers of ownership as well as all liabilities including liens (e.g., mortgages), wills, and any other encumbrances affecting the real property.

Typically an attorney or title insurance company reviews the title for any defects that may require clearance in order to provide a clear and free, marketable, and insurable title that a buyer may purchase.

An abstract of title cannot, in and of itself, guarantee or assure a title’s validity because it only reveals items included in the public record, and there is a chance that such things as encroachments and forgeries may not be disclosed.

ABUT - To touch, join, or reach adjoining property (e.g., land). If two pieces of real property (real estate) abut, they share a common boundary.

ACCELERATION CLAUSE - A clause in a written mortgage, note, bond, conditional sales contract, or deed of trust allowing the lender to accelerate (push forward) the due date of the entire balance of the loan if the borrower violates (defaults upon) the agreed upon conditions of the loan. For example, a lender may be able to demand full repayment of a loan if the borrower neglects to maintain their homeowner’s insurance coverage. In the event of a default, the lender may declare the entirety of the principal and interest to be payable at once.

ACCEPTANCE - The expression by a seller (offeree) of an intention (consent) to enter into a contract and be bound by the terms of the offer received from a buyer.

ACCRETION - New land created naturally and gradually due to deposits of a stream or river. Property owners whose land borders water may be entitled to any new land created by natural causes.

ACKNOWLEDGMENT - A declaration or other formal process typically made before a notary public or other public official who is authorized to take such acknowledgments veryifying that a particular document is being signed by the appropriate person and also that the person is signing the document voluntarily (e.g., a free and voluntary act).

ACRE - A unit of land measurement (measure of land) equal to: 4,840 square yards; 43,560 square feet; and 160 square rods.

ACT OF GOD - An act of nature, such as an earthquake, flood, hurricane, tornado, etc. These events are considered beyond the control of any person, and thus are considered “Acts of God.”

ACTUAL AGE - The chronological age of a particular building. Appraisers of real property are more interested in the “effective age” which takes into account various factors in the property’s present condition.

ADJUSTABLE MORTGAGE LOAN - A mortgage loan that has an interest rate which may be adjusted either downward or upward periodically during the life (term) of the loan. 

The interest rate on an Adjustable Mortgage Loan is usually reset in accordance with an assigned index that fluctuates reflecting market conditionsor a specific designated market indicator (e.g., weekly average of 1-year United States Treasurey Bills). When the interest rate changes, then the monthly payments that are due also typically change.

The interest rate adjustments on an Adjustable Mortgage Loan typically occur on a regular basis (e.g., every 12 months), and usually with a pre-set rate cap that sets a limit on how much the interest rate may increase (e.g., 2% annualy and 6% total over the term of the loan). 

Also called Adjustable Rate Mortgage (ARM); Variable Rate Mortgage.

ADJUSTABLE RATE MORTGAGE (ARM; Adjustable-Rate Mortgage) - A mortgage loan that has an interest rate which may be adjusted either downward or upward periodically during the life (term) of the loan. 

The interest rate on an Adjustable Rate Mortgage is usually reset in accordance with an assigned index that fluctuates reflecting market conditions or a specific designated market indicator (e.g., weekly average of 1-year United States Treasurey Bills). When the interest rate changes, then the monthly payments that are due also typically change.

The interest rate adjustments on an Adjustable Rate Mortgage typically occur on a regular basis (e.g., every 12 months), and usually with a pre-set rate cap that sets a limit on how much the interest rate may increase (e.g., 2% annualy and 6% total over the term of the loan). 

Also called Adjustable Mortgage Loan; Variable Rate Mortgage.

ADJUSTED BASIS - A property’s original cost plus the value of capital expenditures paid for improvements to that property, minus any depreciation that is taken on the property.

ADJUSTMENT DATE - The date that the interest rate on an Adjustable Rate Mortgage (Adjustable Mortgage Loan; Variable Rate Mortgage) changes.

ADJUSTMENT PERIOD - The period of time between adjustment dates on an Adjustable Rate Mortgage (Adjustable Mortgage Loan; Variable Rate Mortgage).

ADJUSTMENTS - Monies credited to the seller and buyer during the closing process of a real estate transaction. These monies credited include such items as the down payment and taxes.

ACTUAL EVICTION - A legal process used to evict tenants from rental units when they have breached the lease agreement.

ACTUAL NOTICE - Known facts and information. When someone is made personally aware of facts they have “actual knowledge,” which is different from “constructive notice” that involves the recording of documents at the courthouse and thus providing “notice to the world.”

ADA - See Americans with Disabilities Act.

ADDENDUM - A change in the original conditions and/or terms of an existing contract or agreeupon document. Typically an Addendum includes the time and date of the Addendum and also the signatures of the parties to the original contract/agreement.

ADJUSTMENTS - The credit of monies to the seller and buyer of a property during the closing process of a real estate transaction. Typical adjustments include taxes, down payment, 

AD VALOREM - A Latin term that means, “based on value” or “according to valuation,” and designates an assessment (levying) of taxes on real property.

ADDITIONAL PRINCIPAL PAYMENT - A borrower’s payment of more than the scheduled amount of principal due. The Additional Principal Payment serves to reduce the loan’s remaining balance.

ADMINISTRATOR/ADMINISTRATRIX - A court-appointed man or a woman tasked with settling the estate of someone who has passed away without a will. Also see Executor/Executrix.

ADVERSE POSSESSION - A method (right) of an occupant of land to aquire title/ownership of real property (real estate) from (against) its current owner based solely on: the notorious, visible, and open use and continuous possession of that property over a statutory period of time which is dictated by local and state statutes and usually ranges from 7 to 15 years, and includes paying taxes on the property.

AFFIDAVIT--A written statement that is signed and sworn to before a person that is authorized to take such an oath.

AGENCY - A relationship between an agent (normally the broker) and a principal (e.g., a home buyer or home seller), with the principal delegating some authority to the agent a right to act on behalf of the principal during the course of a business transaction. 

Within this agency agreement the agent owes the principal fiduciary duties.

Dictionary Real Estate Continued

AGENCY COUPLED WITH INTEREST - An Agency agreement in which the Agent has an interest in the property that is more than the typical interest of earning a commission for selling the property.

AGENT - A person or firm (e.g., a Real Estate Broker) authorized by a Principal (e.g., a home buyer or home seller who appoints the Principal) to act on their behalf during the course of a business transaction. The Agent, who has the authority to enter into binding agreements on the Principal’s behalf, owes Fiduciary Duties to the Principal (the Client), and must act in their best interests in the course of the business transaction. The Agent can also create liability for a Principal if the Agent causes harm during the course of carrying out their duties.

AIR RIGHTS - Rights of ownership that include the use of the open space that extends directly above (vertically) over real property. The rights to this vertical plane above a property are limited by governmental controls over air space above a particular height.

ALIENATION - The transfer of ownership, or an interest in ownership, in a piece of real property from one person to another. 

ALIENATION CLAUSE - A provision in a note (e.g., mortgage) requiring that the complete balance of a secured debt will  become due and must be paid to the lender if the particular real property associated with the note is transferred. Also see Due-OSale Clause.

AMERICANS WITH DISABILITIES ACT - A federal law that prohibits discrimination against persons with disabilities. The law defines a disability as any mental or physical impairment which substantially limits one or more major life activities including hearing, speaking, seeing, working, or learning.

AMENDMENT--A change/modification to an existing contract, the modification being mutually agreed upon by all parties to the contract. Examples of amendments to a contract may include such things as changing the closing date for the sale of real property (real estate) or changing the sale price due to problems found during a home inspection.

AMENITY - A feature that enhances and/or adds attractivenss to real property (real estate), increasing its desirability and the user’s/occupant’s satisfaction, yet is not essential for the use of the property. An amenity provides a nomonetary benefit to the owner of the property.

Examples of natural amenities include nearby beaches and parks, or the great ocean views from the property. Examples of mamade amenities include swimming pools, tennis courts, a spa, and other recreational facilities.

AMERICANS WITH DISABILITIES ACT (ADA) - A federal law that prohibits discrimination against persons with disabilities and defines a disability as any mental or physical impairment which substantially limits one or more major life activities including hearing, speaking, seeing, working, or learning.

AMORTIZATION - The gradual repayment of a debt such as a home loan (e.g., mortgage) over time through systematic payments (installments) of both principal and interest. These periodic (regular) installments over a pre-determined time period have the result of achieving a zero balance, and thus fully repaying the loan. Conventional amortization periods are typically either 15 or 30 years.

AMORTIZE - To repay a loan (e.g., a home loan) with periodic (regular) installments that cover interest as well as principal. At the end of the pre-determined time period of systematic payments, the debt is repayed in full.

AMORTIZED LOAN - A loan that is paid back in periodic (regular) installments that include both principal and interest, resulting in a zero balance after the last regular payment. A loan of this nature is considred fully amortized. The word “amortized” means “to kill off slowly.”

AMORTIZED MORTGAGE - A mortgage loan which requires periodic (regular) installments to cover principal as well as interest. When the systematic payments have been completed, the result is that the loan is repayed in full. See Self Amortized Loan.

AMORTIZATION SCHEDULE - A definitive timetable that specifies the periodic installments for the repayment of a mortgage home loan or other debt. 

The Amortization Schedule states: the remaining balance of the loan after each payment is made; specifically how much of each loan payment will be applied to the interest; and how much of each loan payment is applied to the principal of the loan.

ANCHOR TENANT - A large, established sotre within a big commercial development or mall. This Anchor Tenant serves to draw (attract) many visitors and provides an increased exposure for the overall project. Large scale malls may usually have multiple anchor tenants located at the different ends and/or sections of the mall.

ANNEXATION - The addition to real property (real estate) by attaching something to the property. For example, if you buy a new front door and attach it to your home, the door becomes annexed and is now part of the real property.

ANNUAL MEMBERSHIP--The amount of money that is charged annually to a potential borrower who has established a line of credit with a lender. This fee is typically charged to the potential borrower whether or not they use the line of credit.

ANNUAL PERCENTAGE RATE (APR) - This is the interest rate that reflects the true and actual cost of a loan (e.g., mortgage loan), and is expressed as an annual rate. The APR is a direct calculation using the amount of the loan as well as the total Finance Charges including all upfront costs associated with the loan. 

The Federal Truth-In-Lending Law requires the accurate disclosure of the Annual Percentage Rate on all home mortgages.

The Annual Percentage Rate states, as an annual rate, the actual cost of the mortgage. Included in this calculation are all broker fees, points, and the stated interest rate on the loan as well as any other costs that are being charged to the borrower. Thus the APR is typically higher than the advertised simple interest rate on the mortgage.

The APR is useful in comparing different mortgages offered by different companies, because it provides a more accurate reflection of the actual cost of the mortgage than simply comparing mortgages by their advertised simple interest rates.

ANTICIPATION - A principle used in appraisals that refers to property values either decreasing or increasing based upon an expectation of future events. For example, if it becomes publicly known that a large company is coming to the area and will be hiring thousands of workers, the anticipation of this happening would have a tendency to increase local property values.

ANTITRUST LAWS - Antitrust laws prohibit monopolistic practices, price fixing, and restraint of trade, with the overall goal of promoting a competitive business environment. Although real estate brokers work to some degree with their competitors through multiple listing services, they may not conspire to set prices or limit the consumer’s choices in any way. 

APPLICATION FEE - The fee charged by a mortgage broker/lender upon application (paid upon application) to cover the processing costs for a loan application. The application fee typically includes property appraisal and credit report fees.

APPRAISAL - An estimate by a licensed professional Appraiser of the cost, in dollars and on a given date, of the fair market value of a piece of real property. 

A typical Appraisal will analyze many factors that affect the property’s value including its location, any improvements that were made to the property, the cost of comparable properties, or comps (examples of similar properties) and any other relevant factors.

Following the Appraiser’s research and analysis they typically prepare a report on the property’s fair market value for the customer. The accuracy of the Appraisal depends on the Appraiser’s experience and expert knowledge, and as such an Appraiser only provides an estimate or opinion of the property’s fair market value.

APPRAISAL--A determination of fair market value. In real estate, a professional appraiser is a qualified expert who estimates the value of the property by examining the property and conducting research including the home’s initial purchase price and recent sales of similar properties.

Real estate appraisals are done for various purposes including foreclosures, bankruptcy, condemnation, and probate. Insurance companies use appraisals to ascertain the damage done to a property when settling an insurance claim. Real estate companies and banks use appraisals to determine the worth of property for lending requirements.

APPRAISED VALUE - An estimate or opinion of the fair market value (monetary value) of real property (real estate) based upon the research and analysis of a licensed appraiser who considers the value of nearby comparable properties as well as other factors. Also see Appraiser.

APPRAISER - A licensed independent professional who is trained in the process of providing an unbiased estimate of the fair market value of real property (real estate) for a fee.

 APPRECIATION - An increase in the fair market value (estimated worth) of an asset (e.g., real property). The cause of Appreciation may be either an improvement to the property or a change in market conditions (e.g., a steep rise in average home prices in the area). Appreciation is the opposite of Depreciation.

APPURTENANCE - Anything which is part of the land, used with the land, or affixed to the land, and thus passes to a buyer when the land is sold. An appurtenance is in essence a right or privilege.

ARBITRATION - A dispute resolution method (process) in which a third party - an Arbitratorwho is fair and neutral - hears each of the two sides in a dispute as the parties state their respective cases. 

The Arbitrator then makes a decision on how to resolve the situation. (See Binding Arbitration.)

ARM (Adjustable Rate Mortgage; Adjustable-Rate Mortgage) - A mortgage loan that has an interest rate which may be adjusted either downward or upward periodically during the life (term) of the loan. 

The interest rate on an Adjustable Rate Mortgage is usually reset in accordance with an assigned index that fluctuates reflecting market conditions or a specific designated market indicator (e.g., weekly average of 1-year United States Treasurey Bills). When the interest rate changes, then the monthly payments that are due also typically change.

The interest rate adjustments on an Adjustable Rate Mortgage typically occur on a regular basis (e.g., every 12 months), and usually with a pre-set rate cap that sets a limit on how much the interest rate may increase (e.g., 2% annualy and 6% total over the term of the loan). 

Also called Adjustable Mortgage Loan; Variable Rate Mortgage.

Dictionary Real Estate Continued

ASBESTOS - A mineral/fiber material mined from metamorphic rock deposits and previoulsy widely used for insulation and fireproofing in homes and buildings.

Asbestos was highly-valued due to its ability to resist fire, but links to respiratory illnesses (e.g., lung diseases) due to asbestos exposure led the United States government to ban asbestos in 1978. 

If an existing home has asbestos present, this must be disclosed by law in any real estate transaction involving the property.

ASKING PRICE - The amount of money stated (requested) for a piece of real property (e.g., a house) which is for sale. Also called List Price or Listing Price.

ASSEMBLAGE - Combining/Joining two or more parcels of real property (real estate) into one tract of land.

ASSESSED VALUATION (Assessed Value) - An assessment by a government entity of the value of a particular piece of real property (real estate) in order to determine the amount of real property taxes owed. 

The Assessed Value is typically determined by a public official known as the tax assessor. This value will be multiplied by the local tax rate to determine how much the property will have to pay in real property taxes.

The assessed value of a piece of real property will likely differ from that same property’s fair market value and appraised value. Also called Assessment.

ASSESSED VALUE - The value of real property (real estate) according to a public official (e.g., tax assessor) whose job is to determine the property’s fair market value for the purpose of taxation. The assessed value is multiplied by the local tax rate to determine what the owner must pay for property taxes.

ASSESSOR - A local public official (e.g., government worker) whose job is to determine an assessed valuation of a property for taxation purposes.

ASSESSMENT

1. A fee (levy) collected for a specific purpose such as improvements to real property (real estate). Some examples include installing street lights, a sewer system, street curbs, etc. In the case of condominium owners, they may be charged an assessment for projects to improve the overall site and these fees may be in addition to the usual maintenance fees.

2. A determination by a government entity of the value of a particular piece of real property (real estate) in order to determine the amount of real property taxes owed. 

The Assessment, also called the Assessed Value or Assessed Valuation, is typically determined by a public official known as the tax assessor. This value will be multiplied by the local tax rate to determine how much the property will have to pay in real property taxes.

The assessed value of a piece of real property will likely differ from that same property’s fair market value and appraised value. 

Also see Special Assessment and Common Area Assessment.

ASSET - Something owned by either an individual or a company which has monetary value in exchange. Assests include both realty (e.g., a home) and personalty (personal property) such as stocks, mutual funds, and cash.

ASSIGN - To transfer an interest (ownership) or specific rights, such as rights to real property (real estate).

ASSIGNEE - The receiver of a transfer of interest or the assignment of specific rights (e.g., real property rights). An example is someone who takes over someone else’s lease for an apartment because the original tenant wants to move out before the term of the lease has expired. The new tenant is the assignee, and will assume all of the first tenant’s legal rights and responsibilities (e.g., paying the rent). However, if the new tenant fails to fulfill those responsibilities, the original tenant still remains legally responsible to the landlord.

ASSIGNMENT - The transfer of specific rights (e.g. real property rights) or interests to an asignee from an assignor. Typically an assignor remains liable in the case of non-performance by the assignee. For example, if the landlord approves, a tenant may assign a new tenant the rights to live in their apartment for the remainder of a previously signed lease for that apartment. However, if the new tenant fails to pay the rent, the landlord may hold the original tenant liable for the money due.

ASSIGNMENT OF MORTGAGE - A legal document verifying (providing evidence) that a mortgage ownership has been trasferred to one person from another.

ASSIGNOR - A party who transfers interest (ownership) or assigns specific rights (e.g., real property rights) to another party.

ASSUMABLE HOME LOAN - A mortgage which may be assumed by the purchaser (the new buyer) of a property from the previous owner with the same terms. However, in an Assumable Home Loan, even though the new owner has taken over (assumed) the mortgage, the original owner (e.g., original borrower) may still remain liable unless released by the lender. Also called Assumable Mortgage.

ASSUMABLE MORTGAGE - A mortgage which may be assumed by the purchaser (the new buyer) of a property from the previous owner with the same terms. However, in an Assumable Mortgage, even though the new owner has taken over (assumed) the mortgage, the original owner (e.g., original borrower) may still remain liable unless released by the lender. Also called Assumable Home Loan.

ASSUMPTION CLAUSE - A clause or provision in an Assumable Home Loan that allows the buyer to assume the seller’s responsibility of repaying the original loan, which then does not need to be paid in full by the original borrower upon sale or transfer of the property.

ASSUMPTION OF MORTGAGE - The acquisition of a title to real property (real estate) that already has a mortgage on it. The person acquiring the title to the property is known as the grantee, and assumes (agrees to pay) the debt, and thus is liable for completing all of the payments due on the mortgage, and for fulfilling all of the terms and conditions of the loan. If the property is sold in foreclosure for less than the amount due, the purchaer (grantee) who assumed the mortgage remains liable for the deficiency. Such a transfer of liability must be approved by the lender. Also called Simple Assumption.

ATTACHMENT - A court action that involves the seizing or temporarily taking of property into the legal custody of the court, with the property then being subject to the results of future court proceedings.

The debtor’s property is thus temporarily placed in the custody of the law to behold as security pending the final outcome of the suit brought to court by the creditor.

ATTORNEY-IFACT - A person in an agency relationship who is authorized by another to act in their place. The Attorney-IFact utilizes a written instrument (written authorization) of power of attorney and thus the attorney-ifact’s actions (e.g., the execution of legal documents) on hehalf of the principal are considered legally binding.

ATTORNEY’S OPINION OF TITLE - A instrument (document) which is written and signed by an attorney who has examined the abstracts of title and then stated a formal opinion regarding whether a seller may complete a conveyance of good title (free and clear title).

ATTRACTIVE NUISANCE - A doctrine of law requiring a property owner to use reasonable care in attempting to prevent any unauthorized use of the property by children or others. 

In particular, the property owner should attempt to prevent unauthorized uses that may pose a danger to children, such as an unfenced, ungated swimming pool, abandoned refrigerators, or open pits, which may attract (provide a temptation to) a passing child and endanger their safety.

An attractive nuisance might lead to the property owner being held liable for an injury caused by the potentially dangerous feature of their property, even though the child was trespassing.

AUCTION - A public sale of real property (real estate) in which are accepted, and then the highest bidder is allowed to purchase the property.

AUTOMATED UNDERWRITING - Loan approval is conducted with a technological process (computerized processing) to streamline processing of applications and provide quick approval or denial of the underwriting of a loan without human review, or the application may instead be manually underwritten so that certain information or conditions may be reviewed.

UNDERWRITING - The process of verifying a borrower’s credit history and other information to assess their credit worthiness in order to decide if they may be approved for a particular loan.

Dictionary Real Estate Continued

AVULSION - A rapid loss of land due to the land washing away or falling away by some act of nature, such as a mudslide. 

BACK UP OFFER - An offer that a property seller agrees to accept if the seller’s initial agreement fails to proceed (falls through) due to some contingency of that offer not being met.

BALLOON PAYMENT - A final large payment due at the maturity of a loan (e.g., debt, obligation, or note) that was not fully amortized. This final balloon payment is significantly larger than previous installment payments, and serves to repay in full the unpaid (remaining) balance (the amount due at maturity).

In many states, ballon payments are prohibited in loans for personal services and/or goods, or the law may require that the borrower have an opportunity to refinance the balloon payment before it is due (e.g. before forcing collection).

DBALLOON MORTGAGE - A mortgage that requires monthly payments which are initially based on a 3year fixed amortization schedule. 

However, after a specific time period - usually from five to seven years - the full, unpaid balance is due in one lump sum, and this balloon payment is significantly larger than the preceding payments.

If the borrower meets certain conditions and/or requirements, they may be given an extension of the due date of the balloon payment, at which time the loan may be reset in accordance with the current market conditions. Also see amortized mortgage.

DBANKRUPTCY - A legal action - a filing in court and a court procedure) that is used to declare an inability to pay debts - and which provides an opportunity to restructure debt.

BARGAIN AND SALE DEED - A deed with no warranties except that the grantor (e.g., the seller of real property) holds the title to the property, yet makes no guarantees against encumbrances.

BEFORE TAX INCOME - The sum of your gross income previous to any taxes being deducted.

BENEFICIARY - The party (person) entitled to the proceeds (benefits) of items held in trust (e.g., a standard trust agreement). Some examples that may be held in trust include insurance, wills, trusts, or property.

The term Beneficiary also refers to the legal name of the lender in a deed of trust; the lender on the mortgage note.

BENEFICIARY - The lender whose name is stated on the mortgage note; the party entitled to the proceeds of items held in trust (e.g., property, insurance policies, trusts, wills).

BEQUEATH - The legal term for willing personalty (personal property) to another person.

BILATERAL CONTRACT - A contract between two parties who each promise to perform something with the agreement that the other party will perform something

BILL OF SALE - A written agreement (document/instrument) that sells, transfers, or assigns the rights to personalty (personal property) or interests in personal property to a buyer from a seller. The Bill of Sale includes the conditions and terms of the sale of the property.

BINDING ARBITRATION -  A dispute resolution method (process) in which a third party - an Arbitrator who is fair and neutral - hears each of the two sides in a dispute as the parties state their respective cases. 

The Arbitrator then makes a decision on how to resolve the situation. The two parties in the dispute are then bound to abide by the arbitrator’s decision, as per their prior agreement to do so.

BLANKET LOAN - A mortgage loan covering more than one piece of real estate. Typically a Blanket Loan will have a release clause that deals with the situation of a partial release when just one of the pieces of real estate are sold or transferred.

BONUS TO SELLING AGENT (BTSA) - Money or other compensation offered to a real estate agent who provides a buyer for a particular piece of real property. This “bonus” is provided in addition to any sales commission the agent might earn, and is offered to provide an incentive for the agent to show the listing and produce a buyer for the real estate transaction.

BONA FIDE - Not fraudulent. The term Bona Fide means “In good faith.”

BOND - 

1) A written agreement which is purchased from a bonding company and which guarantees that a particular person will ....

2) An interest-bearing document which is issued by a comany or government entity, providing evidence of a debt.

BREACH - A violation of the terms (one or more terms) of any legal obligation.

BREACH OF CONTRACT - Default or non-performance on a contract due to a violation of one or more of the contract’s terms and conditions, and without any legitimate legal reason (valid excuse). 

One common reason for a Breach of Contract on mortgage loans is the failure to make the scheduled payments when those payments become due. This failure to make timely payments is a Breach of Contract (failure to perform according to the contract) and may result in a foreclosure and loss of the property.

BRIDGE LOAN - A loan that uses a home as collateral with a goal of providing short-term financing in order to bridge a gap in funding the construction or purchase of a new home until the owner/buyer’s previous home sells. Also called Swing Loan.

BROKER - An individual or firm that acts as an intermediary between a buyer and a seller of goods and/or services for valuable consideration. 

In real estate, a licensed real estate broker or mortgage broker serves as an agent (intermediary) between a home buyer and a home seller in a transaction. The valuable consideration in the home sale/purchase transaction is usually a percentage of the sale price of the home.

BROKERAGE - The process of bringing two or more parties (e.g., home buyers and home sellers) together for a business transaction in exchange for a fee or commission. Brokerage also refers to any entity that brings parties together for a business transaction.

Services provided by a Brokerage may include purchases and sales of real estate (real property; realty), rentals, leases of real property, trade-ins, property exchanges, and property management.

BUFFER ZONE - A “buffer” of land between two parcels of land with conflicting uses. For example, land that is zoned commercial may have on its border a buffer of “green space” between nearby residentially-zoned land.

BUILDING CODE - Regulations promulgated by local government entities which dictate the minimum standards of construction and also occupancy and maintenance standards. Building codes are designed to provide for the health, welfare, and safety of the general public.

BUILDING PERMIT - Written permission from the local County Building Department which allows construction of new buildings or building improvements. A Building Permit is required for new construction (e.g., a new home) and also for any significant constructions to improve property (e.g., adding a bedroom, kitchen, or swimming pool).

BULLET LOAN - A short term loan in which the regular payments are applied to interest charges only.

BUNDLE OF LEGAL RIGHTS (Bundle of Rights) - Implies a landowner’s group of rights which are embodied in and attach to the ownership of real property. 

This Bundle of Legal Rights describes the landowner’s rights to control what happens on their real property, subject only to applicable laws and zoning restrictions. 

Included in the Bundle of Rights is the basic right to occupy or lease any or all of the rights to the land, use it, enjoy it, encumber it (in whole or part) as well as the right to conrol the land’s use and the right to sell it or will (bequeath) it.

BUYDOWN - A process that allows a borrower or a neutral third party (e.g., developer) to pay a cash subsidy (typically measured in points) to reduce the initial interest rate on the buyer’s loan for a given period of time (e.g., the beginning years of the loan) and thus the purchaser will have reduced monthly payments during that time. The sale price of the property may be increased to cover this buydown cost. However, since interest is typically deductible from income taxes, a purchaser may be better off paying the lower purchase price and higher interest rate.

BUYER’S AGENT - A broker or real estate agent who represents the buyer’s interests only and completely in a real estate transaction, and thus owes fiduciary duties to the buyer client. Also called Buyer’s Broker.

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