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Backfill – The replacement of excavated earth back into a hole or against a structure.

Backup offer – A real estate purchase contract that only becomes effective if the current contract cannot close.

Bailiff – A official of a court who is usually a sheriff’s officer or deputy.

Bailment – The delivery of personal property to be held in trust for a certain purpose along with a contract under which it is either expressed or implied that the property will be returned or accounted for once the purpose has been accomplished.

Balance – The amount left over after subtracting any principal balance owed on a loan or the amount in an account.

Balance sheet – A statement of the financial condition of a business as of a certain time showing its assets, liabilities and capital.

Balloon mortgage – A mortgage loan where payment is due at some point in the future which is bigger than the normal monthly or periodic payment which also pays off the loan. See Balloon payment.

Balloon payment – An installment payment on a promissory note which is usually the final one and which is significantly larger than the other installment payments provided under the terms of the note that discharges the debt.

Balustrade – A supporting column of a stairway handrail.

Band of investment – A method of developing a capitalization rate by combining the weighted average rates attributable to the different components of the invested capital.

Banker’s rule – The belief used when doing prorations and some other calculations that a month consists of 30 days and a year of 360 days.

Bankruptcy – The inability of a debtor to pay one’s financial debts when due and where relief has been sought and has been granted though a special court action that makes it possible to resolve or eliminate the debtor’s debts.

Bargain and sale deed – A deed that conveys title to real property but which does not guarantee its clarity which is often used by court officials and fiduciaries who are only holding title under law. See Grant deed, Quitclaim deed and Warranty deed.

Barred – A prevention of legal recovery under the Statute of Limitations because the statory time peoiod has passed during which a party may legally assert his or her rights.

Barter – The exchange of goods or commodities by one party for other goods or commodities of another party.

Base – The side or plane upon which the figure is resting, as in the base line of a triangle.

Base and meridian – The imaginary lines in the rectangular survey or the government survey system where the base lines run east and west and the meridian lines run north and south which are used by surveyors to establish township boundaries and serve as a reference to find and describe the location of private or public land.

Base line – A parallel line that serves as a reference for other parallels.

Base line –The parallel lines which serve as a reference line for other parallels as part of the rectangular survey system.

Base molding – The molding used at the top of a baseboard.

Base shoe – The ¼ round molding used where a baseboard meets the floor and is used to hide any irregularities in the floor and which is sometimes known as a carpet strip.

Baseboard – A board placed against the wall next to the floor all around a room.

Baseboard heating – A system of heating in which the radiators or convectors are located in or on the wall that replaces the baseboard itself.

Basic income – That income which is received from outside the community.

Basis – The financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset. See adjusted cast basis and cost basis.

Batten – The narrow metal or wooden strips used to cover joints in wall surfaces and which may be used for a decorative effect.

Beam – A horizontal load-supporting member.

Bearer instrument – A security document that does not indicate who is the owner and which is payable to whoever possess it.

Bearing wall – A wall or partition that supports in addition to its own weight any load above which is usually another floor or the roof.

Bedroom community – A suburban community in which a large number of workers from a major city live.

Beltline highway – A limited-access highway surrounding a city.

Benchmark – A permanent monument placed on durable objects at important points by surveyors to establish the elevation of the point usually relative to mean sea level for tidal observations or local topographical surveys.

Beneficiary – (1) A party entitled to the benefit of a trust. (2) A party who receives profit from an estate, the title of which is vested in a trustee. (3) The lender on the security of a note and trust deed. (4) A party to whom a insurance policy is payable.

Beneficiary statement – A statement showing the unpaid balance of a trust deed loan and the condition of the debt.

Bequeath – The giving of personal property by will. See Bequest.

Bequest – The personal property given according to the terms of a will. See Bequeath.

Betterment – An improvement to property which increases the value of the property which is considered to be a capital asset rather than maintenance and repair or replacement item whereby the original character or cost basis would remain unchanged.

Biannual – A occurrence that happens twice a year and means the same as semiannual. See Biennial.

Bid – The amount a party offers to pay.

Biennial – A occurrence that happens every second year. See Biannual.

Bilateral – An undertaking by, done or obligating two sides. See Unilateral.

Bilateral contract – A contract under which two parties exchange promises for the performance of certain acts such as when Mr. A promises to buy Mr. B’s house and Mr. B promises to transfer its title to Mr. A.

Bi-level – A house built on two levels where the main entrance is situated above the lower level but below the upper level.

Bill of sale – A written instrument which shows evidence of the transfer of title to personal property from the vendor, seller, to the vendee, buyer.

Binder – 1. A written agreement to consider the down payment for the purchase of real estate as evidence of good faith on the part of the purchaser. 2. A notation of coverage on an insurance policy issued by an agent and given to the insured prior to issuing of the policy. See Title insurance.

Biweekly payment loan – A mortgage which requires principal and interest payments at two-week intervals which is exactly half of what a monthly payment would be which over a year’s time, the 26 payments are equivalent to 13 monthly payments on a comparable mortgage loan and as a result, the loan is amortized much faster than loans with the standard monthly payments.

Blacktop – Another term for asphalt paving.

Blanket mortgage or trust deed – A loan that covers two or more properties and often an entire subdivision where those properties are pledged or conveyed as security for the debt and which permits the borrower to obtain a partial reconveyance when a parcel is sold and to be released from the lien upon payment of a previously agreed-upon amount.

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. In managing existing real estate so as to obtain the highest possible current income from it, to the extent that many normal operating expenses are not made which usually results in the rapid deterioration and loss of property value.

Blight – The physical decay caused by the failure to maintain the quality of the real estate and public services in a neighborhood.

Blighted area – A district affected by detrimental influences as a result of adverse land use and/or destructive economic forces to such an extent that real property values are rapidly depreciating and there is no recognizable prospects for improvement without governmental intervention bring used to produce a resurgence.

Blockbusting – An illegal practice of unscrupulous people of inducing an abnormally high turnover or panic selling of homes at prices below market value by exploiting the prejudices of home owners in neighborhoods where the ethnic make-up is or appears to be on the verge of changing.

Blueprint – A detailed set of plans used as the guide for the construction of a property.

Blue-sky laws – The federal and state laws that regulate the registration and sale of investment securities.

Board foot – A unit of measurement for lumber that is 1 foot wide, 1 foot long and 1 inch thick and is 144 cubic inches.

Board of directors – The people elected by stockholders to govern a corporation or nonprofitable organization who establish the day-to-day operation of the organization.

Board of equalization – A state agency that determines assessed value of public utility properties, supervises county assessors and tax collectors in order to create uniformity in tax assessment and also collects state sales taxes.

Board of zoning appeals – See Appeals board.

Boiler plate – The uniformly agreed upon standard language found in contracts which is often seen in preprinted material.

Bona fide – In good faith and being authentic and without fraud or deceit

Bona fide purchaser – A party who purchases a particular property in good faith, paying a fair consideration in the belief that there was no notice of any adverse claims or rights of third parties and that the vendor had a right to sell.

Bond – A written instrument given by a corporation or government entity as evidence of a debt and also indicating a performance guarantee.

Book depreciation – An accounting concept which an allowance is taken to provide for the recovery of invested capital

Book sale – A sale of real property in name only to the state when a taxpayer is delinquent in paying property tax.

Book value – The current value for accounting purposes of an asset that is expressed as the original cost, plus any capital additions and less accumulated depreciation.

Boot – Something not of like kind such as cash or its equivalent or mortgage relief that is given to equalize any difference in value or equity between two properties in a tax deferred exchange.

Borough – A land division of a city having its own Charter.

Bounds – A reference to direction.

Bracing – The lumber nailed at an angle between floor joists or rafters in order to provide rigidity. Also known as Bridging.

Bracketing – The selecting of a value used in the sales comparison approach that falls within the highs and lows of recent selling prices of comparable properties.

Branch office – An additional real estate business location that is different than the main office in which business is also conducted but is managed by another licensed real estate broker on behalf of the broker of record.

Breach – The breaking or violating of a law or duty either by commission, doing, or omission, not doing, or the failure to meet a contractual obligation.

Breach of contract – The failure to perform a contract in whole or part without having any legal excuse such as the failure to make a loan payment when due.

Breakeven point – The amount of income needed to simply meet the total amount of expenses for a project.

Breezeway – A covered passage, open on two sides, connecting a house with a garage or other parts of the house.

Bridge loan – A short-term financing instrument secured by the equity in an as-yet-unsold house with the funds to be used for a down payment and/or closing costs on a new house on which principal and in some cases interest payments may or may not be deferred until the house is sold or the end of the loan term whichever comes first. See Gap loan and Swing loan.

Bridging – The small wood or metal pieces inserted between floor joists to give them lateral rigidity. Also known as Bracing.

British Thermal Unit, BTU – The amount of heat required to raise the temperature of one pound of water one degree Fahrenheit.

Broker – A natural or legal person employed by another for a fee to carry on any legally-identified broker activity.

Brokerage – The business in which brokers are engaged to earn money by assisting people to buy, sell, rent or lease, manage or finance property or a property’s rights.

Broker-salesperson relationship agreement – A written agreement required by state regulations setting forth the material aspects of the relationship between a real estate broker and each salesperson or broker performing licensed activities under the supervising broker.

Broom clean – A description of the condition that property is to be in such as flours cleared of trash and swept when being turned over to the buyer or next tenant.

Brownfields – A commercial or industrial site that has been abandoned by an owner which often contain toxic waste materials.

Brownfields legislation – The federal and states laws that provide funding to localities to facilitate brownfields site clean up.

Brownstone – A nineteenth-century-style house, usually having 4 or 5 stories with a stoop leading up to the first floor with common side walls and with the house on both sides. Also known as Row house or Townhouse

BTU – See British Thermal Unit.

Budget – An itemized list of expected income and expenses prepared on a weekly, monthly or annual basis.

Budget mortgage – A type of amortizing mortgage which includes the principal, interest and other costs such as taxes and fire insurance commonly referred to as PITI in the monthly payment.

Buffer zone – An area of land set aside to separate one type of land use such as residential from another such as commercial and which is often done as a park, jogging or bike trail, etc.

Builder – A party who improves land by erecting structures. See Developer.

Builder warranty – A guarantee as to the quality of construction offered by a building contractor or a developer. Also known as a Homeowners warranty program.

Building capitalization rate – In appraising. the capitalization rate used to convert an income stream into a lump sum value and where the rate for the building usually differs from that of the land because the building is considered to be a wasting asset which loses value over time.

Building codes – A systematic method established by ordinance or law of that regulates and sets minimum construction standards for buildings within a municipality to protect the public’s safety and health.

Building contract – An agreement relating to the construction of a proposed structure between an owner or lessee and a building contractor which sets forth the terms.

Building inspection – 1. A physical review of property as construction progresses to ensure that each major component such as its foundation, plumbing, electrical wiring, roofing, materials meets the building codes. 2. A periodic inspection of existing public buildings for health and safety compliance.

Building line – A line established by law or a deed restriction that determines the distance from a street, sides or back over which an owner cannot build.

Building paper – A heavy, waterproof paper used as sheathing protection in wall or roof construction.

Building permit – An authorization given by a local government for the erection, alteration or remodeling of improvements within its jurisdiction.

Building residual technique – In appraisal, a method of determining the contribution of an improvement to the current value of the entire property. See Land residual technique.

Building restrictions – The limitations established by zoning legislation, covenants or deeds that limits the type, size and use of buildings.

Build-to-suit – A contract whereby an owner of land offers to construct a building on his or her land as specified by a potential tenant and then to lease land and building to that party.

Built-ins – Those features constructed as part of the house such as cabinets, etc.

Bulk Sales Law – Division 6 of the Uniform Commercial Code regulates for the protection of the seller’s creditors and the buyer the sale of the inventory of a business. See Uniform Commercial Code.

Bulk sales transfer – A sale of the entire stock of a business along with its real estate as opposed to it being sold in the ordinary course of its business. See Uniform Commercial Code.

Bundle of rights – A concept or theory of ownership that holds that the entire set of legal rights are included with the land ownership including the rights to possess, use, encumber, dispose and exclude.

Bungalow – A small, early-twentieth-century-style, one-story house noted for having an open or enclosed front porch.

Bureau of Land Management – A federal bureau within the Department of the Interior that manages and controls certain lands owned by the U.S.

Business opportunity – The sale or lease of an existing business enterprise including its goodwill.

Business-government relations – The framework of laws, codes, regulations and contracts between business and government within which business operates.

Buy-back agreement – A contractual provision in which the seller agrees to repurchase the property at a named price upon the occurrence of a specified event within a certain period of time.

Buy-down – A mortgage financing technique in which the interest rate has been reduced over the first few years of the loan because the lender received an initial payment from the builder, seller, buyer, lender, or developer to reduce the rate, or in effect a discount, thus reducing the monthly payments for a fixed time period.

Buyer’s agent – A real estate broker or salesperson who represents a prospective purchaser or tenant in a real estate transaction as a principal and who owes the buyer/tenant/principal common-law or statutory agency duties.

Buyer’s broker – See Buyer’s agent.

Buyer’s market – A market in which buyers can fulfill their desires at lower prices and on more advantageous terms than those existing earlier and which has many properties available and few potential users seeking them at existing prices.

Buyer’s market – The condition which exists when a buyer is in a better position as to price and terms because the real property for sale is in greater supply in relation to demand.

Buyer-agency agreement – A principal-agent relationship in which the broker is the agent for the buyer and owes fiduciary responsibilities to the buyer/principal under the law of agency.

Buying subject to – A phrase used to identify that no personal liability is being assumed regarding the mortgage debt that exists against real estate at the time of its purchase.

Buying, assuming and agreeing to pay – A phrase used to indicate that the buyer is undertaking and promising to pay the seller’s personal liability for a debt upon closing.

Buyout – An agreement by a building owner to take on a tenant’s remaining lease term liability in a different building which releases the tenant from that lease obligation and permits him or her to execute a lease in the owner’s building.

Buy-sell agreement – A pre-established pact among stockholders, partners or co-owners where some will agree to buy out the interests of others upon the happening of some named event.

By-laws – The generally, self-imposed rules for conducting of the internal affairs of a corporation or other organization such as a home owner association to regulate the day-to-day operations and which usually are appendixed to a master deed and recorded.

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