BACKFILL the replacement of excavated earth into a hole or against a structure.
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BACKUP CONTRACT a contract to Buy real estate that becomes effective if a prior
contract fails to be consummated.
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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.
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BALANCE SHEET a financial statement in table form showing assets, liabilities, and
equity, in which assets equal the sum of liabilities plus equity.
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BALLOON MORTGAGE a mortgage with a balloon payment. Often found when buying a new home.
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BALLOON PAYMENT the final payment on a loan, when that payment is greater than the
preceding installment payments and pays the loan in full
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BAND OF INVESTMENT an income property appraisal technique where the overall
interest rate is derived from weighting mortgage and equity rates.
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BASELINE part of the Rectangular Survey or Government Rectangular Survey method of
land description.
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BASE PERIOD a point of time that serves as a benchmark for reflecting the change in
an index.
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BASE RENT the minimum rent due under a lease that has a percentage or participation
requirement.
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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.
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BASIS(TAX) the point from which gains, losses, and depreciation deductions are
computed.
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BASIS POINT one 100th of 1%.
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BEARER INSTRUMENT a security that does not indicate the owner; payable to whoever
presents it.
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BEDROOM COMMUNITY a residential community in the suburbs, often near an employment
center, but itself providing few employment opportunities. Usually built from new homes for sale.
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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.
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BEFORE-TAX CASH FLOW cash flow prior to deducting income tax payments or adding
income tax benefits.
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BEFORE-TAX EQUITY REVERSION same as after-tax proceeds from resale, except it does
not consider income taxes.
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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.
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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.
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BENEFICIARY the person who receives or is to receive the benefits resulting from
certain acts.
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BEQUEATH to specify by will the recipient of personal property. Compare devise.
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BEQUEST that personal property given by the terms of a will.
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BETTERMENT an improvement to real estate.
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BIANNUAL occurring twice a year. Same as semiannual. Contrast with biennial.
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BIENNIAL occurring every 2 years.
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BILATERAL CONTRACT a contract under which each party promises performance.
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BI-LEVEL a house built on 2 levels in which the main entrance is situated above the
lower level but below the upper level.
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BILL OF ASSURANCE the name given, in some states, to the total collection of
restrictive covenants that apply to a group of contiguous lots.
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BILL OF SALE a written instrument given to pass title of personal property from a
seller to a buyer. Used when furniture and portable appliances are sold.
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BINDER an agreement, accompanied by a deposit, for the purchase of real estate such as new homes for sale, to
evidence good faith on the part of the purchaser.
New Homes For Sale
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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.
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BLANKET MORTGAGE a single mortgage that covers more than one parcel of real estate.
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BLEEDING A PROJECT 1. in new home construction or commercial building, 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.
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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.
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BLIGHTED AREA a section of a city in which a majority of the structures are
dilapidated.
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BLIND POOL an investment program in which monies are invested into an association
without investors knowing which properties will be purchased.
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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.
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BLOG a website or weblog that contains articles and user generated content.
New Homes Real Estate Blog
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BLUEPRINT a detailed set of plans used as the guide for construction of a building or a new home.
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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.
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BOARD OF EQUALIZATION a government entity whose purpose is to assure uniform
property tax assessments.
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BOARD OF REALTORS a local group of real estate licensees who are members of the
State and National Association of Realtors.
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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
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BOILER PLATE standard language found in contracts. Preprinted material.
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BOMA Building Owners and Managers Association.
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BONA FIDE in good faith, without fraud.
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BOND a certificate that serves as evidence of a debt and of the terms under which
it is undertaken.
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BOOK VALUE the carrying amount of an asset, as shown on the books of a company.
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BOOT unlike property included to balance the value of like properties exchanged.
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BOTTTOMLAND 1. low land near a river, lake, stream, which is often flooded 2. land
in a valley or dale.
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BOUNDARY same as property line.
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BOY beginning of year.
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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.
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BREAK-EVEN POINT the amount of rent or the occupancy level needed to pay operating
expenses and debt service. Also called default point.
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BRIDGE LOAN mortgagee financing between the termination of one loan and the
beginning of another loan.
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BROKER a state-licensed agent who, for a fee, acts for property owners in real
estate transactions, within the scope of state law.
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BROKERAGE 1. the business of being a broker. 2. the commission received by a broker
for his services.
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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.
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BUDGET MORTGAGE a mortgage that requires monthly payments for taxes and insurance
in addition to interest and principal.
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BUFFER ZONE a transitional area between 2 areas of different predominant land uses.
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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.
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BUILDER WARRANTY a guarantee on the quality of construction offered by the
developer or building contractor.
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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.
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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.
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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.
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BUILDING LOAN AGREEMENT an agreement whereby the lender advances money to an owner
at specified stages of construction.
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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
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BUILDING PERMIT permission granted by a local government to build a specific
structure at a particular site.
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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.
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BUILDING RESTRICTIONS provisions in building codes that affect the orientation,
size, and appearance of a building.
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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.
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BUILT-INS appliances, machinery, and other equipment that are constructed as part
of a building rather than left freestanding and moveable.
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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.
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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.
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BUNGALOW a small, early-twentieth-century-style, I-story house that usually has an
open or enclosed front porch.
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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.
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BUSINESS DAY a standard day for conducting business. Excludes weekends and
holidays.
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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.
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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.
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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.
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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. A Buyers Market results in less expensive new homes for sale.
New Homes For Sale
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BUY-SELL AGREEMENT a pact among partners or stockholders under which some agree to
buy the interests of others upon some event.
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BYLAWS a set of regulations by which an organization conducts its activities.
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