[
Dictionary of Terms ]
 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
B
BACKFILL
the replacement of excavated earth into a hole or against a structure.
BACKUP
CONTRACT a contract to Buy real estate that becomes effective
if a prior contract fails to be consummated.
BALANCE,
PRINCIPLE OF in real estate appraisal, there is an optimal mix
of inputs that, when combined with land, will result in the greatest
land value. Inputs, or factors of production, include labor,
capital, and entrepreneurship.
BALANCE
SHEET a financial statement in table form showing assets, liabilities,
and equity, in which assets equal the sum of liabilities plus
equity.
BALLOON
MORTGAGE a mortgage with a balloon payment.
BALLOON
PAYMENT the final payment on a loan, when that payment is greater
than the preceding installment payments and pays the loan in
full
BAND
OF INVESTMENT an income property appraisal technique where the
overall interest rate is derived from weighting mortgage and
equity rates.
BASELINE
part of the Rectangular Survey or Government Rectangular Survey
method of land description.
BASE
PERIOD a point of time that serves as a benchmark for reflecting
the change in an index.
BASE
RENT the minimum rent due under a lease that has a percentage
or participation requirement.
BaseValueª the
deeded interest properties appraisal amount and reserve fund,
divided by the deeded interest. BaseValueª, is Copyrighted
and Trademarked by World Deed Exchange.com, inc.
BASIC
INDUSTRY MULTIPLIER in economic base analysis, the ratio of total
population in a local area to employment in basic industry. Basic
industry is considered to be any concern which attracts income
from outside the local area.
BASIS(TAX)
the point from which gains, losses, and depreciation deductions
are computed.
BASIS
POINT one 100th of 1%.
BearerDeedª a
deeded interest that does not indicate the grantee name. Title
is held by whoever holds the Deed. BearerDeedª,
is Copyrighted and Trademarked by World Deed Exchange.com, inc
BEARER
INSTRUMENT a security that does not indicate the owner; payable
to whoever presents it.
BEDROOM
COMMUNITY a residential community in the suburbs, often near
an employment center, but itself providing few employment opportunities.
BEFORE-AND-AFTER-RULE
in an eminent domain award, many jurisdictions appraise the property
value before the taking, then the property value after the taking,
considering enhancement or injury to the property that was the
result of condemnation.
BEFORE-TAX
CASH FLOW cash flow prior to deducting income tax payments or
adding income tax benefits.
BEFORE-TAX
EQUITY REVERSION same as after-tax proceeds from resale, except
it does not consider income taxes.
BELOW-MARKET
INTEREST RATE (BMIR) in some government-subsidized housing, the
owner is charged a low interest rate with the requirement that
savings be passed on to tenants in the form of reduced rent.
BENCHMARK
a permanently affixed mark that establishes the exact elevation
of a place; used by surveyors in measuring site elevations, or
as a starting point for surveys.
BENEFICIARY
the person who receives or is to receive the benefits resulting
from certain acts.
BEQUEATH
to specify by will the recipient of personal property. Compare
devise.
BEQUEST
that personal property given by the terms of a will.
BETTERMENT
an improvement to real estate.
BIANNUAL
occurring twice a year. Same as semiannual. Contrast with biennial.
BIENNIAL
occurring every 2 years.
BILATERAL
CONTRACT a contract under which each party promises performance.
BI-LEVEL
a house built on 2 levels in which the main entrance is situated
above the lower level but below the upper level.
BILL
OF ASSURANCE the name given, in some states, to the total collection
of restrictive covenants that apply to a group of contiguous
lots.
BILL
OF SALE a written instrument given to pass title of personal
property from a seller to a buyer. Used when furniture and I>ortable
appliances are sold.
BINDER
an agreement, accompanied by a deposit, for the purchase of real
estate, to evidence good faith on the part of the purchaser.
BIWEEKLY
LOAN a mortgage which requires principal and interest payments
at two-week intervals. The payment is exactly half of what a
monthly payment would be. Over a year's time, the 26 payments
are equivalent to 13 monthly payments on a comparable mortgage
loan. As a result, the loan will amortize much faster than loans
with monthly payments.
BLANKET
MORTGAGE a single mortgage that covers more than one parcel of
real estate.
BLEEDING
A PROJECT 1. in new construction, overstating expenses and fees
so as to divert a larger than normal amount of the project costs
to the developer's profit. 2. managing an existing piece of real
estate so as to obtain the highest possible current income from
it, to the extent that many normal operating expenses are forgone.
BLENDED
RATE an interest rate, applied to a refinanced loan, that is
higher than the rate on the old loan but lower than the rate
offered on new loans.
BLIGHTED
AREA a section of a city in which a majority of the structures
are dilapidated.
BLIND
POOL an investment program in which monies are invested into
an association without investors knowing which properties will
be purchased.
BLOCKBUSTING
a racially discriminatory and illegal practice of coercing a
party to sell a home to someone of a minority race or ethnic
background, then using scare tactics to cause others in the neighborhood
to sell at depressed prices.
BLUEPRINT
a detailed set of plans used as the guide for construction of
a building.
BLUE-SKY
LAWS state laws requiring the offeror of securities to give full
disclosure, and register the offering as required by federal
and state law.
BOARD
OF EQUALIZATION a government entity whose purpose is to assure
uniform property tax assessments.
BOARD
OF REALTORS a local group of real estate licensees who are members
of the State and National Association of Realtors.
BOECKH
BUILDING VALUATION MANUAL a book, frequently updated, that offers
estimates of the replacement cost or reproduction cost for different
types of buildings. Address: Boeckh 525 East Michigan P.O. Box
664 Milwaukee, WI 53201-0664
BOILER
PLATE standard language found in contracts. Preprinted material.
BOMA
Building Owners and Managers Association.
BONA
FIDE in good faith, without fraud.
BOND
a certificate that serves as evidence of a debt and of the terms
under which it is undertaken.
BOOK
VALUE the carrying amount of an asset, as shown on the books
of a company.
BOOT
unlike property included to balance the value of like properties
exchanged.
BOTTTOMLAND
1. low land near a river, lake, stream, which is often flooded
2. land in a valley or dale.
BOUNDARY
same as property line.
BOY
beginning of year.
BREACH
OF CONTRACT a violation of the terms of a legal agreement; default.
Breach of contract allows the non-breaching party to rescind
the contract, sue for damages, or sue for performance of the
contract.
BREAK-EVEN
POINT the amount of rent or the occupancy level needed to pay
operating expenses and debt service. Also called default point.
BRIDGE
LOAN mortgagee financing between the termination of one loan
and the beginning of another loan.
BROKER
a state-licensed agent who, for a fee, acts for property owners
in real estate transactions, within the scope of state law.
BROKERAGE
1. the business of being a broker. 2. the commission received
by a broker for his services.
BROWNSTONE,
BRICK ROW HOUSE, OR EASTERN TOWNHOUSE a nineteenth-century-style
house, usually having 4 or 5 stories with a stoop leading up
to the first floor. There are common side walls with a house
on either side.
BUDGET
MORTGAGE a mortgage that requires monthly payments for taxes
and insurance in addition to interest and principal.
BUFFER
ZONE a transitional area between 2 areas of different predominant
land uses.
BUILDERS
AND SPONSORS PROFIT AND RISK ALLOWANCE (BSPRA) an amount above
the cost of apartments that is allowed to be included in the
project cost for purpose of determining the loan amount in certain
government-sponsored programs.
BUILDER
WARRANTY a guarantee on the quality of construction offered by
the developer or building contractor.
BUILDING
CAPITALIZATION RATE in appraisal, the capitalization rate is
used to convert an income stream into one lump sum value. The
rate for the building may differ from that for the land because
the building is a wasting asset.
BUILDING
CODES regulations established by local governments describing
the minimum structural requirements for buildings; includes foundation,
roofing, plumbing, electrical, and other specifications for safety
and sanitation.
BUILDING
LINE a line fixed at a certain distance from the front and/or
sides of a lot, beyond which the building may not project.
BUILDING
LOAN AGREEMENT an agreement whereby the lender advances money
to an owner at specified stages of construction.
BUILDING
OWNERS AND MANAGERS ASSOCIATION (BOMA) an organization of practitioners
who own and manage buildings, notably office space. Address:
Building Owners and Managers Association 1221 Massachusetts Avenue
NW Washington, DC 20005
BUILDING
PERMIT permission granted by a local government to build a specific
structure at a particular site.
BUILDING
RESIDUAL TECHNIQUE an appraisal technique whereby income to land
is subtracted from net operating income to result in the building
income. Building income is capitalized into building value.
BUILDING
RESTRICTIONS provisions in building codes that affect the orientation,
size, and appearance of a building.
BUILD
TO SUIT an arrangement whereby a landowner offers to pay to construct
on his or her land a building specified by a potential tenant,
and then to lease land and building to the tenant.
BUILT-INS
appliances, machinery, and other equipment that are constructed
as part of a building rather than left freestanding and moveable.
BULLET
LOAN typically a loan with a 5- to 10-year term and no amortization.
At the end of the term the full amount is due.
BUNDLE
OF RIGHTS THEORY the theory that ownership of realty implies
a group of rights such as occupancy, use and enjoyment, and the
right to sell, bequeath, give, or lease all or part of these
rights.
BUNGALOW
a small, early-twentieth-century-style, I-story house that usually
has an open or enclosed front porch.
BUREAU
OF LAND MANAGEMENT an agency of the U.S. Department of the Interior
that oversees the management of much of the land owned by the
U.S. government, particularly national forests and other relatively
undeveloped land.
BUSINESS
DAY a standard day for conducting business. Excludes weekends
and holidays.
BUY-BACK
AGREEMENT a provision in a contract under which the seller agrees
to repurchase the property at a stated price upon the occurrence
of a specified event within a certain period of time.
BUY
DOWN 1. the action to pay additional discount points to a lender
in exchange for a reduced rate of interest on a loan. The reduced
rate may apply for all or a portion of the loan term. 2. a loan
that has been bought down by the seller of the property for the
benefit of the buyer.
BUYER'S
BROKER an agent hired by a prospective purchaser to find an acceptable
property for purchase. The broker then represents the buyer and
negotiates with the seller in the purchaser's best interest.
BUYER'S
MARKET a situation where buyers have a wide choice of properties
and may negotiate lower prices. Often caused by overbuilding,
local population decreases, or economic slump.
BUY-SELL
AGREEMENT a pact among partners or stockholders under which some
agree to buy the interests of others upon some event.
BYLAWS
a set of regulations by which an organization conducts its activities.
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