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Real Estate Dictionary
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Backup Offer - A secondary offer to buy property, used in case the first (primary) offer fails.
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. In a balloon mortgage the monthly payment is only of the interest and the rest is paid at the end. There is also an option to pay all the principal and interest at the end.
Balloon Payment - The final installment paid at the end of the term of a note. For example; a buyer may take out an interest only loan for five years with the principle due at the end of this time period.
Bank Guarantees - Guarantee is a promise (in this case from the bank) to answer for the debt, default or miscarriage of another, if that person fails to meet the obligation. Primary liability for the debt is incurred by the principal debtor. The guarantor incurs secondary liability, that is, the guarantor becomes liable only if the principal debtor fails to pay. If the principal debtor's liability to the bank is void, the guarantor will not be liable.
Bankruptcy - A provision of government law whereby a debtor surrenders his assets to the Court and is relieved of the future obligation to repay his unsecured debts. A Trustee in Bankruptcy administers the assets, selling them to pay as much of the debt as possible. If your seller is in bankruptcy, the Trustee in Bankruptcy owns the property and is the party to sign the contract and make decisions. After bankruptcy, the debtor is discharged and his unsecured creditors may not pursue further collection efforts against him. Secured creditors, those holding deeds of trust or judgment liens, continue to be secured by the property but they may not take other action to collect from the debtor. A proceeding in a 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. By filing in court, an individual or individuals can restructure or relieve themselves of debts and liabilities.
"Bar Reshut" - (Hebrew) A right given for someone to use a property for certain use. Usually refers to the "Moshav" members, who have a three party agreement with the "Minhal" and the Jewish Agency. This agreement gives each member a permission to use the land. Although the right given can come to an end by the power of the grantor, the "Bar Reshut" in the "Moshav" has proprietor's right on the land and it is not yet finished the controversy regarding the specific rights of a "Bar Reshut".
Bathroom - A room containing a toilet, sink and either a bathtub or a bathtub and shower combination. A room with the above but a shower in place of a tub is called a 3/4 bath. If the room has only a sink and toilet it is called a 1/2 bath.
Bearish - Pessimistic, used also in bear market (market goes down).
Benchmark - A survey mark showing the height of that point in relation to seal level.
Beneficial Interest (in a Property) - The right to the use and benefit of property, without having a possession on it. One who used the right for at least 30 years continuously has actually purchased the right and can also right it in the "Tabu". For instance, a right of passage. In Hebrew called "Zikat Hanaa".
Betterment - An improvement that increases property value as distinguished from repairs or replacements that simply maintain value.
Betterment Tax - A tax imposed on the real profit from selling a real estate right. The seller pays it. The tax is on the different between the selling price and the purchase price less all the investments done in the property during the period it was held by the same owner including different expenses paid for purchasing and selling the property. The betterment tax depends in the year the seller has purchased the property and there are also exemptions from paying it. In Hebrew called "Mas Shevach".
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.
Block - In a city a square or rectangular area enclosed by streets. In some states, a part of a subdivision legal description, such as Lot 1, Block 2, Tract 7.
"Bona Fide" - In good faith, without fraud.
Bond - A security issued by a borrower that obligates the issuer to make specified payments to the holder over a specific period. A coupon bond obligates the issuer to make interest payments called coupon payments over the life of the bond, then to repay the face value at maturity. 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. Insurance agreement against loss by acts or default of a third party. In construction a performance bond insures that the builder will finish the projects.
Bond Market - Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same. The same factors that affect the Treasury bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change also during the day.
Book Value - An accounting measure describing the net worth of common equity according to a firm's balance sheet.
Breach - A violation of any legal obligation.
Bridge (Loan) Financing - A form of interim loan, generally made between a short term loan and a permanent or long term loan, when a borrower needs to have more time before taking on long term financing. Not used much anymore, bridge loans are obtained by those who have not yet sold their previous property, but must close on a purchase property. The bridge loan becomes the source of their funds for the down payment. One reason for their fall from favor is that there are more and more second mortgage lenders now that will lend at a high loan to value. In addition, sellers often prefer to accept offers from buyers who have already sold their property.
Broker - Broker has several meanings in different situations. Most Realtors are "agents" who work under a "broker." Some agents are brokers as well, either working form themselves or under another broker. In the mortgage industry, broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans to larger lenders or investors. As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so. Real estate broker is someone who is licensed by the state to carry on the business of dealing in real estate and he is the owner or the manager of a real estate agency. See also Agent, and Realtor.
Brokerage - The commission for the services given by the real estate broker.
Budget - Sum of money for a specific purchase deal. The budget includes all sources of money available- equity and leverage. The budget describes the real ability to close a deal and sometimes is related to the liquidity of alternative assets.
Budget Deficit - The amount by which government spending exceeds government revenues.
Builder - One whose occupation is the construction of structures (homes or buildings).
Building code - Local regulations that control design, construction, and materials used in construction. Building codes are based on safety and health standards.
Building Committee - A committee of a shared building (registrated in the "Tabu" as a shared building), which deals with all the cleaning, maintenance, changes and improvements of the building.
Building Permit - A license permission given by the city building committee to start and build any kind of structure. Only an architect, engineer or technician engineer is qualified to submit the building permit.
Building Restriction Line - A required set-back a certain distance from the road or between two separate building plots, within which no building may take place. This restriction may appear in the original plat of subdivision, restrictive covenants or by building codes and zoning ordinances. A line beyond which there can be no construction.
Building Restriction - Prohibition by a government body (zoning restrictions) or a private party (a former owner) against construction of certain structures on a property.
Building Rights - For every building plot there are specific building rights defined in articles of association bylaws. The building rights can be set as percentages from the size of the land or as a fixed number depend on what the articles of association permits.
Bullish - Optimistic, used also in bull market (market goes up).
Business Cycle - Repetitive cycles of recession and recovery.
Buyers Market - A condition favoring the buyers. More homes for sale then there are interested buyers. The demand is low and the supply is big.
Buy-Sell Offer - An offer by one owner to buy out the interests of another owner, partner or shareholder.
By-Laws - Rules and regulations, adopted by an association or a corporation that govern its activities.
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