Real Estate Glossary

Back title letter

A letter that a title insurance company gives to an attorney who then examines the title for insurance purposes.

Backup offer

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

Balance sheet

A statement that shows the assets, liabilities and net worth of an individual.

Balloon loan

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.

Bankruptcy

A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. Bankruptcies remain on a credit record for seven years and can severely limit a person's ability to borrow.

Bargain sale

The sale of a piece of property for less than market value.

Base Building

The existing condition of a building prior to tenant improvements.

Baseboard electric heat

Heating units installed in the floor that can be controlled by a central thermostat.

Basis Point

A basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points.

Bed Tax

A fee collected by the city, also called transit tax. Exceptions to the payment of this tax are persons who stay at the motel for more than 30 days, state employees and some city and county employees. This is paid quarterly and is a good check on the reported gross income. Keep in mind the exceptions. The bed tax totals will not always match the reported gross income, however, should be close. The owners must approve your looking at the bed tax roll before the clerk will show them to you.

Before-tax income

Total income before taxes are deducted.

Beneficiary

The lender who makes a loan, also called a mortgagee. The person borrowing money is the mortgagor.

Bequest

Personal property given to a person through a will.

Betterment

An improvement that increases a property's value as opposed to repairs that maintain the value.

Bidding war

Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale.

Bilateral contract

A contract in which the parties involved give mutual promises. Also called "reciprocal" contracts.

Bill of sale

A document that transfers ownership of personal property.

Binder

A report issued by a title insurance company that details the condition of a home's title and provides guidelines for a title insurance policy.

Biweekly mortgage

A mortgage that requires payments every two weeks and helps repay the loan over a shorter term.

Blanket insurance policy

A policy that covers more than one person or piece of property.

Blanket mortgage

A mortgage that covers more than one property owned by the same borrower.

Blighted area

A neighborhood that has deteriorated.

Blind nailing

Nails driven into a wall and concealed with putty.

Blue sky laws

Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks.

Blue-ribbon condition

A house maintained close to its original condition. Also called mint condition.

Board of Equalization

A state board charged with ensuring that local property taxes are assessed in a uniform manner.

Boilerplate

Form language used in deeds, mortgages and other documents. Details can be added by individual parties.

Bona fide

A legal term that refers to actions or persons that are honest and in good faith.

Bond

An agreement that insures one party against loss by acts or defaults of another party.

Book value

The value of a property as a capital asset based on its cost plus any additions, minus depreciation.

Borough

A section of a city that has authority over local matters.

Boundary

The dividing line between two adjacent properties.

Braced framing

A construction method in two-story homes in which the frame is reinforced with posts and braces.

Breach of contract

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

Breach of covenant

The failure to obey a legal agreement.

Breach of warranty

A seller's inability to pass clear title to a buyer.

Break-even point

The point in which the owner's rental income matches expenses and debt.

Bridge loan

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

Broker

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

Brokerage

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

Broom clean

The ideal condition of a building when it is turned over to an owner or tenant.

Brownstone

A vintage row house constructed of red sandstone.

Buffer strip

A parcel of land that separates two or more properties.

Build-to-Suit

A lease transaction where the landlord builds the improvements to the tenant's specifications, with the tenant sharing the improvement cost as part of the rent.

Builder upgrades

Extra house features or better finishing materials that a builder offers.

Building and loan association

An organization that raises money to helps its members purchase real estate or construct a building.

Building code

A comprehensive set of laws that controls the construction or remodeling of a home or other structure.

Building inspector

A city or county employee who enforces the building code and ensures that work is correctly performed.

Building line or setback

Guidelines that limit how close an owner can build to the street or an adjacent property.

Building moratorium

A halt on home construction to slow the rate of development.

Building paper

A thick, water-resistant paper that serves as insulation.

Building permit

A permit issued by a local government agency that allows the construction of home or renovation of a house.

Building restrictions

Regulations that limit the manner in which property can be used.

Built-ins

Appliances or other items that are framed into a home or permanently attached.

Bundle of rights

The various interests or rights an owner has in a property.

Bungalow

A small one-story house or cottage.

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.

Buyer's remorse

An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house.

Bylaws

The rules and regulations that a homeowners association or corporation adopts to govern activities.