Real Estate Dictionary

B

balloon payment: a final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized.

bargain and sale deed: see deed without warranty.

base line: one of a set of imaginary lines running east and west and crossing a principal meridian at ad definite point, used by surveyors for reference in locating and describing land under the rectangular survey (or government survey) system of property description.

basis: the dollar amount associated with an asset to determine annual depreciation and gain or loss on the sale of the asset. The owner's basis is the cost of the property; adding the value of any capital expenditures for improvements to the property and subtracting any depreciation allowable or actually taken yields the adjusted basis.

bench mark: a permanent reference mark or point established for use by surveyors in measuring differences in elevation.

beneficiary: 1. The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. 2. A lender who lens money on real estate and takes back a note and trust deed from the borrower.

bequest: the transfer of personal property to a legatee in accordance with a will.

bilateral contract: See contract

bill of sale: a written instrument given to pass title to personal property.

biweekly payment plan: a loan that calls for 26 half-month payments a year, resulting in an earlier loan retirement date and lower total interest costs than with a typical fully amortized loan.

blanket mortgage: a mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien on repayment of a definite portion of the debt.

blockbusting: the illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or prospective entry of minority persons into the neighborhood.

blue-sky laws: common name for state and federal laws that regulate the registration and sale of investment securities.

boot: money or property given to make up any difference in value or equity between two properties in an exchange.

branch office: a secondary place of business apart from the principal or main office from which real estate business is conducted. A branch office generally must be run by a licensed real estate broker working on behalf of the broker who operates the principal office.

breach of contract: violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due.

broker: one who buys and sells for another for a commission. See also real estate broker.

brokerage: for a commission or fee, bringing together parties interested in buying, selling, exchanging, or leasing real property.

broker-salesperson: a person who has passed the broker's licensing examination but works on behalf of another licensed broker.

buffer zone: zoning districts that gradually change from a higher-intensity use to a lower-intensity use.

building code: an ordinance that specifies minimum standards of construction for buildings to protect public safety and health.

building line: a line fixed at a certain distance from the front and/or sides of a lot beyond which no structure can project. See setback.

building permit: a permission used by a city for the construction of a building to ensure compliance with building codes.

bundle of legal rights: the concept of land ownership that means ownership of all legal rights to the land- for example, possession, control within the law, and enjoyment-rather than ownership for the land itself.

business cycle: upward and downward fluctuations in business activity through the states of expansion, recession, depression, and revival.

business interruption insurance: a form of coverage that provides income to a business in the event the premises become untenable.

buydown mortgage: a mortgage on which a cash payment, usually measured in points, has been made to the lender to reduce the interest rate a borrower must pay; usually `bought down" for the first two or three years of the loan.

buyer agency: an agency relationship between the broker and the buyer, with fiduciary duties owed to the buyer.

buyer representation agreement: a contract that establishes a broker-buyer agency relationship.

buyer's broker: a licensee who has declared to represent only the buyer in a transaction, regardless of whether compensation is paid by the buyer or the listing broker through a commission split.