Real Estate Glossary Terms Beginning With – B

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Terms Beginning With - B

Property Development & Investment Glossary, Terms & Definitions

B Loan

With an AB Structure, the subordinate tranche.

B Notes

In a CMBS structure, a subordinate tranche.

B Pieces

CMBS tranches with a rating of BB or below, which are considered below investment grade.

Back-door approach

A preliminary financial feasibility assessment in which the maximum amount of equity funding that investors may commit to a project given their minimum acceptable current return is estimated.

Back-to-back escrow

When one person buys and sells two properties at the same time, an escrow is set up to help them do both things. John Lark must sell his two-bedroom home in order to get the $20,000 down payment for a new three-bedroom home. It's possible for John to set up a "escrow" that will close the sale of his old home and then use the money to buy a new one. An escrow company could do this for him.

Back-to-back lease

A deal made by a landlord as a concession to a potential tenant, in which the landlord agrees to take over the tenant's existing lease in exchange for the tenant agreeing to rent space from the landlord in the landlord's business building (office building, industrial park). As a concession, I will say this:

Backfill

When foundation walls are done, they need to be filled in around them. They also need to be filled in with earth or a chosen material, like aggregate.

(An excavated hole) should be refilled with the stuff dug out of it.

Backflow

The inadvertent flow of water into a plumbing system's supply pipes.

Backing

The frame is used to support the lumber that are mounted between the walls.

Backing Frame

This is a piece of timber installed between the studs of a wall to offer additional support for handrail brackets, cabinets, and towel bars. This approach allows items to be screwed and put into solid wood rather than a fragile drywall, which could cause anything connected to the wall to fall off.

Backing, Carpet

The part of a carpet that is facing the ground.

Backout

A frame contractor's work was used to prepare for a Rough Frame Inspection.

Backup Block

A non-exposed structural wall that backs a finished surface in the construction of a wall system.

Backup contract

An agreement to invest in property that takes effect if a previous deal fails to fulfill its obligations.

Backup offer

It is an offer to buy from a person who already has a deal with someone else; this is a second offer. Sometimes, the seller accepts the backup offer only if the first buyer doesn't buy the item in a certain amount of time. It's important for the seller to be careful, though, when the time for the buyer to do what they agreed to has passed. Make sure that the seller has done everything they agreed to do, or that they've given the first buyer a full and adequate offer of that performance. Sellers should not agree to sell the same property to two different people, or they could be legally bound to do so. The best thing to do is to get a release from the person who bought it.

If the real estate agent wants the seller-client to break a contract in order to accept a better second offer, he or she should be careful. The agent could be sued by the first buyer for the crime of intentionally interfering with a deal.

Buyers should think about reserving the right to back out of the backup offer at any time before the seller cancels the first contract. In this way, the buyer has some flexibility as he or she looks for more homes.

Real estate purchase contract that becomes active if the current contract fails to close.

Backward pass

The estimation of network operations' late conclusion and late start dates. It is computed by reversing the scheduling logic from the project's finish date.

Bad debt allowance

An allowance used to lower the possible gross revenue; it is calculated based on the likelihood that some of the rental income would be uncollectible.

Bailment

The bailor gives the bailee personal property with the understanding that the bailee will return the property or account for the property when the bailment is done, like leaving a car with a parking attendant. People who store things in a mini warehouse may have to follow a set of rules called bailment law.

Describes a common law relationship in which actual possession of personal property, or a chattel, is transferred from one person (the 'bailor') to another (the 'bailee'), who then has possession of the property.

Balance sheet

A balance sheet is a financial summary that lists all resources, obligations, and equities, with the assets matching the liabilities and equity.

If you or your business have assets, liabilities, and net worth (the difference between assets and liabilities) at a certain date, this is called a financial statement. It is a very quick look at the business. Most lenders want to see a balance sheet from a person who wants to get money for real estate, usually on a form that comes with the loan application. Some lenders also want to see a profit and loss statement that shows income and expenses. Some states have passed false statement laws to punish people who make up statements that are used in the process of getting a loan.

Balcony

Platform: A railing or parapet that surrounds a platform that comes out from the wall of a building and is used by tenants or people who want to get outside and get to upper floors. When a balcony is roofed and enclosed and has operable windows, it is part of the room that it serves.

Ballast

A transformer regulates the current to the bulbs and supplies enough voltage to turn them on.

Balloon

A loan that is not completely amortized over time, with the remaining principle balance paid at the conclusion of the period.

Balloon frame wall

This diagram shows how to frame a gable wall and how to build it.

Balloon framing

Platform framing, in which each story is framed separately, is a timber framework that extends the full height of the structure from foundation plate to rafter plate.

Balloon loan

A loan repayment plan during which the unpaid principal sum is due at a certain point in time.

A loan with an amortization duration that is longer than the loan term. A balloon payment is required to pay off the remaining loan debt in full since the loan balance will not be zero at the conclusion of the loan period.

Balloon mortgage

A balloon loan is another term for a loan with a fixed interest rate.

Balloon payment

Paying off the debt in full with a big final payment that's bigger than the previous installments; paying off the debt in full with the last payment. Balloon payments are often used in second mortgages (to keep payments low when paying first and second mortgages at the same time) and in other situations where the monthly payment doesn't cover the full principal balance over the life of the debt. Partial amortized loans are sometimes called loans that have a lump sum payment at the end of the term, like a note or a debt.

For example, Mr. Clay sells his condo studio apartment for $150,000, with a down payment of $15,000 and a balance of $135,000 that he will pay back over 30 years at a 10% interest rate. He will pay $809.39 per month (amortized over 30 years), and the balance will be due in full at the end of five years. After five years of payments, if the buyer makes them all at once, they'll owe only $9,376.40. The buyer will have to pay $125,623.60 in the final balloon payment. If the buyer chooses to pay off the contract in a shorter amount of time, the balloon payment will be bigger. Charts can show how much of a fully amortized loan still needs to be paid and how much the balloon payment will be. When federal truth-in-lending rules are in place, the amount of a balloon payment must be clearly stated in the agreement.

The last payment on a loan that has been partially amortized.

Baluster

It is one of a group of small poles that hold up the handrail on stairs.

Balusters Vertical

A railing can be supported by any of a variety of closely spaced supports. Various symmetrical supports, such as furniture legs or spindles, swell toward the bottom or top of the structure.

Band

In the electromagnetic spectrum, a certain frequency or range of frequencies.

Band of investment

An economic valuation that calculates the overall rate of interest by considering debt and credit rates.

Band of investment (BOI)

An appraisal method used to figure out how much money a buyer has to put down on a home and how much money he or she has to put down on a home. This is the sum of the buyer's mortgage and equity positions. This method is used a lot to figure out the right discount (risk) rate. Equity investors want to get the best deal on financing so that they can get the most benefit from leverage.

The range of investment for a specific property is based on the mortgage and equity rates that market data shows to be true for similar properties. The right "CAP rate" is the sum of the mortgage requirement rate (a constant that shows how much interest and how much of the property's value is owned by the mortgage) and the equity rate (a constant that shows how much of the property's value is owned by the equity) (the anticipated cash flow to the equity investment, as indicated by comparable sales). There are many ways to think about how much each part of a property's interest or ownership is worth. For example, each part is multiplied by the return rate needed to get money to invest in that type of investment.

Band of investment technique

A method for determining a property's weighted average cost of capital. Each source's cost is weighted by a factor equal to the proportion of total money obtained from that source.

Band or box sill

Parts of foundations that are made up of piers and beams. When the boards are put together, they make a right angle. The joist is placed at the same angle. This perpendicular placement gives the foundation the rigidity it needs.

Bank

A banking instrument that is permitted to offer a wide range of financial services.

Bank insurance fund (BIF)

It was the name of a fund run by the Federal Deposit Insurance Corporation (FDIC). It got money from commercial and savings banks to cover their deposits. There is now only one fund for deposit insurance. The Federal Deposit Insurance Act of 2005 abolished BIF and created a single fund for deposit insurance.

Bankruptcy

When a person is unable to pay their debts, they seek help from the courts.

A state of financial insolvency in which a person's liabilities exceed their assets and the person can't pay their debts right now. Because some debtors choose to file for bankruptcy on their own, it can either be voluntary or forced, like when a debtor can't pay $1,000 or more.

The debtor's assets are given to a court-appointed trustee or receiver, who sells them to pay the debtor's general creditors. When someone files for federal bankruptcy, all of their assets become the property of the trustee or receiver. This means that when someone files for bankruptcy, they won't have to pay any more of their debts. The exceptions are debts that aren't on the bankruptcy schedule: tax debts; alimony and support payments; liability for malicious injury or fraud; debts not on the bankruptcy schedule; and debts that haven't been paid. If you file for bankruptcy, most credit bureaus keep it on your record for ten years.

Normally, a creditor of the bankrupt who has a mortgage on real property is entitled to the money that comes from that property before the bankrupt's assets are given to other creditors. People who file for bankruptcy are usually able to get their debts paid off. But liens against their property aren't erased. Fraudulent conveyances, on the other hand, are not valid, and the trustee in bankruptcy may cancel the transfer of the debtor's property to a creditor within a certain amount of time after filing for bankruptcy. This allows a preferred creditor to get a bigger share of the debt than other creditors. One of the main goals of bankruptcy is to make sure that creditors get the same amount of money.

The bankruptcy of one of the parties to a real estate agency agreement (listing) ends the agency because the trustee in bankruptcy gets the title to the home. A real estate licensee usually isn't free from the penalties that come with paying money out of the state licensing agency's real estate recovery fund to people who were defrauded by them.

It's important for a broker who works for the debtor in a bankruptcy case to keep these three things in mind: (1) The broker must be someone who is not interested in the deal. (2) A broker must get permission from the court before they can work for you. (3) Once the sale is done, the bankruptcy court must agree to the commission, which can't be more than a reasonable amount.

Most leases and contracts for deeds say that bankruptcy of a lessee or buyer is a reason to break the terms of the deal, but this doesn't always happen. Many leases and contracts for deeds have bankruptcy default clauses that give the owner-landlord the right to evict the buyer-tenant if he or she goes bankrupt. People who live in the United States live under the Federal Government.

Bankruptcy Act, on the other hand, may make forfeiture and termination clauses that depend on insolvency or bankruptcy unenforceable.

Before foreclosure proceedings have started, the bankruptcy of the person who owes money to a trust deed note or the person who owns the house will have an effect on them if the bankruptcy is filed before the foreclosure process has started. In these cases, the trustee in bankruptcy takes ownership of the property, and the judge of the bankruptcy court must give the go-ahead for the foreclosure process. In bankruptcy, when you file a petition, the foreclosure process in state court is put on hold for good.

Other types of bankruptcy are used to reorganize and save a debtor's business. These actions have the debtor's "rehabilitation" at the top of their list of goals. It doesn't affect debts that are secured by liens, like mortgage loans or real estate taxes. It does, however, stop any foreclosure proceedings that are already in progress. A court-appointed referee is in charge of setting up the reorganization of the business. The debtor can keep the property while they work out a payment plan. Such proceedings only deal with property that isn't owned by anyone else. The court can order a halt to all actions by a mortgagee, which would stop them from foreclosing.

Bar chart

A graphical representation of scheduling data (with or without a timeline).

Bargain and sale deed

It used to be a contract between the buyer and seller, but now deeds are used to transfer all of the grantor's rights in a piece of land to the buyer. A bargain and sale deed usually doesn't include promises about the title of the property that is being sold. However, the grantor implies that he owns, claims, or has an interest in the property that is being sold. The courts usually say that the grantor promises only that the grantor hasn't done anything to cause a defect in title and isn't liable for defects that aren't known at the time of the grant. Trustees, fiduciaries, executors, and officers of the court often give real property they own to someone else by way of a bargain and sale deed, sometimes with a promise not to do something bad to the person who owns it.

A deed that transmits ownership interests rather than the property itself.

Bargain sale

In this case, a sale of property for less than what it would be worth on the open market. Part of the time, the Internal Revenue Service might think of this sale as a part-gift and part-sale deal.

Barge

Shorter rafters are supported by a beam rafter, which is normally horizontal.

Bargeboard

A ornamental board that covers the gable end's fly rafter.

Base (in lease terminology)

A quoted dollar amount that shows the rate or rent in dollars per square foot per year. This is usually called the "base rate."

Base line

1. One of a set of imaginary lines that run east and west that surveyors use as a guide when describing land under the government survey method.

2. This could be the topographic centre line of a survey, like the path of a freeway.

Surveyors use imaginary lines going east and west for guidance while finding and characterizing land using the government survey technique of property description.

The first and mutually agreed-upon plan for the project's activity.

A reference point that runs east and west and is a component of government rectangle surveys.

It runs east and west on a governmental piece of territory, with townships marked by a specified base line.

Base period

A time period or starting point for calculating certain business and economic data, which is often used in escalation clauses to show how quickly things are going up. The determination of the base period is very important in commercial leases, where it is used to figure out the cutoff year before rent increases. The parties usually come up with a complicated formula for figuring out the base index, which is usually set at 100. From there, they can raise rents to keep up with rising operating costs, utilities, services, and property taxes.

Suppose that 2013 was used as the base year in a lease. If costs rose 8% in 2014 compared to 2013 prices, then the 2014 index would rise to 108 and lease rents would be raised if this was stated in the lease document.

Base rent

The bare minimum of rent payments below a lease with a participation clause.

Amount paid in percentage leases by retail tenants independent of the quantity of sales generated by the tenant's business.

In a percentage lease, the minimum amount of rent that must be paid. This is called the "base year." In English, the second and every year after that is called a comparison year.

The least amount of rent you owe your landlord. Most of the time, it's a fixed amount. This is the amount of rent that is stated in the contract. The annual base rate is the number that is used to figure out how much the rate will go up.

Base shoe

In some places, molding is used to make a line where the floor meets the baseboard. This is also known as a carpet strip.

Molding is used to fill in the spaces between the floor and the baseboard.

Base top molding

Moldings have gaps between them, so they need to be filled in with a thin strip of wood. This is called a stile.

Base year

When applying the escalation clause, the year of the lease period is used as the standard. When compared to the base year, the production costs are either above or below the following year.

Baseboard

There is a piece of wood that goes around the bottom of the wall, running perpendicular to the floor. A baseboard covers the gap between the floor and the wall, protects the wall from scuffs, and adds a decorative touch. It's also called wains.

A board that forms the inner wall's foot.

Baseflow

Groundwater contributes a percentage of streamflow; it is a constant flow that is sluggish to alter even during rainless times.

Baseline

The first and mutually agreed-upon plan for the project's activity.

A reference point that runs east and west and is a component of government rectangle surveys.

Basement

A room with a full-story height that is below the first floor, either completely or partially below the outside grade. It is usually not used for living space. Basement space can't be part of a home's finished gross living area at a certain level.

Basement window

The window frame and glass unit in the window buck are repaired.

Basic employment

Export-oriented or export-driven jobs are those that involve activities that make money by selling goods and services in markets outside of the local economy.

Basic rate

The weighted average cost of capital plus the equity buildup factor used to calculate the appropriate overall capitalization rate.

Basis

It is from this value that profits, loss, and depreciation are estimated for calculating taxes.

This is the amount of money the Internal Revenue Service gives to an asset so that it can be depreciated over time and how much money it makes or loses when it is sold. All property has a value that is important when it comes to taxes when it is sold. Once that value is found, it is very important for tax reasons. If you bought a piece of property, your basis is the cost of the property, the value of any capital expenditures for improvements to the property, and any cost recovery depreciation that you took or were allowed to take. If the new property is a replacement for a home sold under the two-year rollover rules of Section 1034, or if the new home is bought through an exchange or an involuntary conversion, the new home's basis is also reduced by any untaxed gains that are "carried over." There is a new value for this property, which is called its adjusted basis.

If the donor gave the property to the donee over a long period of time, the donor's basis at the time of the gift is used to figure out how much the donee owes in gift taxes and how much depreciation the donee is allowed to take. This figure is then reduced by any depreciation the donee is allowed to take. A gift and a sale can happen in some cases, but the maximum basis is the fair value of the property at the time it was given away, plus any capital expenditures by the new owner to improve the property, minus any depreciation that was allowed or was taken by the new owner. This is called the "maximum basis."

A person who inherits something will use the "stepped-up" basis of that thing as the basis for figuring out how much money they made. This is usually what the property was worth when it was given to them, or if they chose, six months later, if they wanted to.

If the property was bought in a tax-deferred exchange, the basis of the new property is based on the basis of the old property that was traded. Often, though, tax-deferred exchanges become a little taxed because the recipient gets cash or other different property in addition to the property of the same kind. As long as cash or other goods are exchanged, the profit is taxed only if they are given as part of the deal. In this way, when a portion of a gain is recognized, the basis of what you get is based on the value of the property you traded for. This value is reduced by other property or cash you get, and the amount of taxable gain is added to the value of what you get.

Because a home is not "property used in a trade or business" or "property held for the production of income," it is not depreciable for tax purposes. The taxpayer should keep good records and receipts of big home improvements so that the original value of the property can be raised by the amount of money that was spent on them. To figure out how much money someone made or lost when they sold something, they compare the amount of money they made or lost to how much money they made or lost on the sale.

An important thing to think about is how the base is set up. A taxpayer who buys real estate that can be depreciated has to divide the cost of the land and the improvements, which can be depreciated. Taxpayers often use the same allocation as the state tax assessor, but this is not required or binding on them. The taxpayer must also figure out how much depreciation, gain, or loss each part of the building will have. When a lot of work is done on a piece of property, the cost of that work must be added to the taxpayer's depreciable basis.

Tax advisors, tax lawyers, and commercial-investment brokers can all help real estate investors get good advice on how to make a real estate investment, but they can't help them if they don't know what they're talking about.

The total amount of money paid for a property, including the amount of cash and debt.

Basis point

A tiny fraction of a percentage.

1/100 of 1% This word is used to describe the amount of change in the market price of bonds and other debt instruments, such as mortgages, over time. To give an example, 50 basis points is the difference between a 13% rate and 13% rate.

Basis risk

The possibility that payments from an investment do not match the required payments to bondholders. This is due to a mismatch in the indexes that the investment and liabilities are connected to.

Basket provision

Insurance companies, savings and loan associations, and mutual savings banks must follow certain rules when they invest their money. A provision in these rules lets them invest a small percentage of their assets in things that aren't allowed by the rules. It would be called a basket (bucket) money loan if it was made under this provision, like a high-yield second mortgage or a wrap-around mortgage. These kinds of transactions are put in a separate basket, so to speak.

Bat

A brick that has been split into two equal parts.

Batt

A slab-shaped insulating material used in the construction of buildings.

Batten

Decorative strips of wood or metal are used to cover joints on both the inside and outside of a home.

A little piece of wood used for a variety of purposes in construction, such as covering cracks between boards, reinforcing particular doors, or providing a base for lathing.

Bay

Between a row of columns and the bearing wall, there is an unfinished region or space. This is often the minimum area that a building level can be divided into.

People who work in factories and warehouses often have an unfinished area or space between a row of columns and the wall that holds them up. Usually, the smallest part of a building floor that can be divided up is called a "room."

Bay depth

The measurement between the corridor wall and the actual window or wall.

Bay window

In a room, a window that is part of a bay, extends from the wall, and is held in place by its own foundation.

A room alcove that projects from an exterior wall and has its own window.

Beach

Land near a sea, lake or river. If the tide goes up and down over the land, it is called tideland; land that isn't affected by the tide is called shore/and.

Beam

A part of a structure that holds a load in two directions.

The roof or floor above is frequently supported by a horizontal structural element.

Bearing

0° to 90° is a term used in surveying to describe the direction of a course or distance in relation to true north or south.

Bearing Header

(a) A perpendicularly placed beam to which joists are attached in framing for a chimney, stairs, or other entrance.

(b) A lintel made of wood.

(c) A horizontal structural element that spans a gap.

Bearing Partition

A structure designed to support enormous loads.

Bearing Point

This is when structural weight is focused and conveyed to the foundation at a specific spot.

Bearing wall

People call this "load-bearing" wall because it usually holds up the roof above. In a condominium, all of the walls that support the structure are owned by the apartment owners. Non-bearing walls, like some partitions, are owned by the apartment owners.

A wall that can hold more weight.

Bed-and-breakfast

A part of a single-family home that is rented out for a short time, usually in a vacation area. Breakfast may also be served in the home of the owner. Local laws should be checked to see if homestays can be used.

Bedrock

The solid rock that is under the soil and other things that are on the ground.

Solid rock that has been coated with dirt or rock pieces in most areas.

Bedroom community

A part of the community that serves as a home for people who live in a nearby or next-door metropolis. Also known as a "dorm town."

Before-and-after method

It's called the federal rule because it's used to figure out how much land should be compensated for when it's been taken by the government. Property taken: The difference in value between the value of the whole thing before it was taken and what it is worth now. If you use the before-and-after method, the amount of compensation you get in a condemnation case for taking land and severance damages is the difference between the value of the whole thing before and the value of the rest after. This is how you figure out how much money you'll get in the end.

People sometimes get more money for their homes after they're taken away. This "special benefit," however, could lower their federal condemnation award. In most states, special benefits can only be used to pay for severance damages, not the part that was taken.

There are also times when appraisers use the before-and-after method to figure out whether the value of a home went up more than the costs of modernizing it.

Before-tax cash flow

Net operational profits for the year minus yearly debt service

Before-tax cash flow (BTCF)

Prior to paying income taxes, the cash flow accessible.

Before-tax cash flow multiplier

The equity split by the before-tax cash flow is the return technique.

Before-tax equity reversion (BTER)

The net selling revenues less the mortgage loan's outstanding balance.

The difference between the estimated sales price and any selling expenses, minus any outstanding mortgage amount at the point of transaction.

Before-tax investment value

The total of the mortgager's and the mortgagee's current property values.

Belly-up

The term is used when a real estate project or business doesn't work out.

Benchmark

A criterion used to assess the relative performance of a certain asset or management operating on behalf of an investor.

1. A standard from which specific estimates are made.

A permanent reference mark (PRM) is a mark that is permanently attached to a durable object, like an iron post or a brass marker that is embedded in a sidewalk. It is used to establish elevations and altitudes above sea level over a surveyed area; it is also used in tidal observation. The PRM is also used to measure the height of the tides.

The heights are based on the official datum, and each benchmark has its own official height. Thus, a surveyor can start at any point in order to measure the elevation. Surveyors use the base elevations set by the U.S. Geological Survey when there is no datum for a place where they work.

2. In this case, a major court decision that is used as a precedent or guideline for future decisions.

Benchmarking

Update and/or revise a data series in response to new information or methodological modifications.

Beneficiary

A person who has received or will get benefits in the form of particular actions.

Real owner: The person who gets something from someone else's gifts or actions, like in the case of someone who is named to get the money from an insurance policy or a will. The trustee only holds legal title. With a trust, the trustee has the legal title, but the beneficiary gets to enjoy the benefits of owning the things that are in the trust.

Beneficiary statement

In the case of a deed of trust, this is a statement of how much money is still owed and how it is being paid off.

Benefit cost ratio

An different financing technique for calculating the ratio of benefit to cost, usually on a payback period basis.

Benefit-of-bargain rule

This is a rule of damages that allows a buyer who was defrauded to get the difference between how much money he or she lost when they bought something and how much money he or she lost when they bought something else.

Benefits

Measurable returns created by the project after completion.

People who have had their private property taken in an eminent domain case have seen their lives get better as a result. Benefits can be general, which help all the properties in the area, or specific, which help only the subject property or a very small group of properties.

Benn

A low, linear earth and dirt mound.

Bequeath

A bequest is when you leave something to someone else in your will. To leave real estate in your will is to make a will. In modern language, the word "bequeath" is used a lot to talk about giving something away in a will, whether it's real or personal property.

BER

The break-even ratio, which determines if the property's income is sufficient to cover all operating expenses as well as all mortgage repayment obligations.

Berm

It's like a ledge or shoulder, like at the edge of a paved road.

Best efforts

An insurer of a restricted partnership's effort in raising equity for a deal.

Beta

When a manager exposes a client's capital to the market and takes a certain degree of market risk, the result is called a market return.

Betterment

Improvements to real property, like adding a sidewalk or road, that make the property more valuable. Measure of value is not how much the improvement costs, but how much it adds to the value of your home. It doesn't come from buying new property, and it's not just a simple restoration of the property. It's a capital expense, not a repair or replacement.

Biannual

Taking place twice a year, or semiannually. People might have to pay real estate taxes twice a year, in November and May.

Bid

The price that a person is willing to pay.

1. An offer to buy property for a set price, such as at an auction, foreclosure, or probate sale. Frequently, the owner of a property put up for auction will place a protective bid to prevent the property from being sold at a loss. A mortgagee may bid up to the amount of the outstanding loan at a foreclosure auction. 

2. Formal procedure for submitting sealed proposals by a list of contract bidders to perform specific work at a cost specified in the proposal, usually within a specified time frame. Intended to provide the client and contractors with an objective and competitive method of meeting job requirements at the lowest possible cost.

A contractor's formal offer to complete a specific project at a given price and under the terms and circumstances indicated in the offer.

Bid Bond

A contractor's supply bidding procedure to the project owner to ensure that the winning bidder would carry out the contract on the conditions that they Bid security Funds or a bid.

Bid Shopping

It is the practice of disclosing a contractor's or subcontractor's bid to competing contractor(s).

Bid-Rent curve

A functional relationship that represents the exact maximum rent that a company with a certain profit profile may pay while still finding it worthwhile to stay in business.

Bid-Rent model

Model of how land users compete for a site that exposes impacts on how land use density is established, how competing urban land uses sort out their locations, how urban land value is determined, and why land uses vary over time.

Bidding requirements

The terms and conditions that must be followed while submitting a bid document.

Biennial

This happens every two years. Some states require real estate licenses to be renewed every two years.

Bifold Door

Closet doors typically have apertures that allow them to be folded into two sections.

Bikeways

Bike paths are paths that are specifically designed for bicycle traffic.

Bilateral contract

An agreement where both parties must fulfill their obligations.

A contract in which each party promises to perform an act in exchange for the promise to perform of the other party.

The standard real estate sales contract is an example of a bilateral contract in which the buyer and seller exchange reciprocal promises to buy and sell the property, respectively. If one party refuses to keep a promise and the other is willing to fulfill it, the non performing party is said to be in default. Neither party is obligated to the other until the non-defaulting party performs or tenders performance. As a result, if the buyer refuses to pay the purchase price, the seller is usually required to tender the deed into escrow to demonstrate readiness to perform. However, in some cases, tender is not required.

A listing form, depending on how it is worded, may be considered a bilateral contract, with the broker agreeing to use best efforts to find a ready, willing, and able purchaser for the property and the seller promising to pay the broker a commission if the broker finds such a buyer or the property is sold. When signed by both the broker and the seller, a listing contract becomes legally binding on both parties.

Bill of sale

A written document that transfers the actual title of the property from a sales perspective.

A written agreement in which one person sells, assigns, or transfers a right to or interest in personal property to another. When the owner of a store sells the building and includes the store equipment and trade fixtures, the seller of real estate may use a bill of sale to evidence the transfer of personal property. Personal property can be transferred by mentioning it in the deed or, more commonly, by a separate bill-of-sale document. A bill of sale may include or exclude warranties covering property defects or unpaid liens.

Binder

An advance payment deposit is a payment made to protect a piece of real estate under terms agreed.

1. A contract formed by the receipt of an earnest money deposit for the purchase of real estate as proof of the purchaser's good faith and intention to complete the transaction. The agreement binds the parties until a more formal contract can be prepared and executed. The receipt of the binder money, also known as the deposit, is usually documented in the sales contract.

2. A written instrument that provides immediate fire and extended insurance coverage until a regular insurance policy can be issued, which is sometimes obtained while a real estate transaction is being completed.

3. A title insurance temporary contract in which the insurer agrees to issue a specific policy within a specified time frame. Any defects, liens, or encumbrances affecting the title that exist between the date of the binder and the date of conveyance to the proposed insured are excluded from coverage.

Because a preliminary report is not a commitment to insure the title, it is sometimes necessary to obtain a binder or commitment from the title insurer stating its willingness to insure the title, especially in complex transactions with multiple simultaneous closings.

A sort of deposit document used to preserve a buyer's and seller's right to acquire a home at a predetermined price and term.

Binder Deposit

The portion of a property's total price that a buyer pays to the seller in exchange for the right to buy the property.

Bipass doors

They are commonly used for closets and slide one behind the other.

Bird dog

1. A salesperson whose sole responsibility it is to "flush out" new listings. When a lead is obtained, the bird dog salesperson transfers the transaction to a broker or a more experienced salesperson.

2. Any person who can provide leads, such as a postal carrier, mover, barber, or beautician.

Biweekly Mortgage

Is a payment plan for a mortgage loan in which the borrower makes payments to the principle and interest every two weeks rather than once a month.

Biweekly payment loan

A loan that requires 26 half-month payments per year, resulting in a loan retirement date that is earlier and lower total interest costs than a typical fully amortized loan with regular monthly payments.

Blacktop

Asphalt paving is a type of pavement that is commonly found in streets and driveways.

Blanket mortgage

A loan that covers multiple pieces of real estate.

The commitment of two or more pieces of property as security for a single debt.

A mortgage secured by a number of properties or lots. A blanket mortgage is frequently used to secure construction financing for planned subdivisions or condominium developments. The developer typically seeks to have a "partial release" clause inserted into the mortgage in order to obtain a release from the blanket mortgage for each lot as it is sold, according to a specified release schedule. For example, if a developer obtains a $500,000 mortgage to cover the development of 50 lots, he may be required to pay off $12,500 of principal to release each lot from the blanket mortgage.

Land developers may include a "special recognition" clause in their blanket mortgage, under which the lender agrees to recognize the rights of each individual parcel owner even if the developer defaults and a foreclosure occurs. On rare occasions, the federal government obtains a blanket lien against all properties owned by people who have fallen behind on their income taxes.

A blanket mortgage is also used when a buyer buys a house and an adjacent vacant lot and finances the transaction with a single mortgage that covers both properties. It may also be used in cases where the equity in a single property is insufficient to meet the lender's requirements.

Blankets Fiberglass or rockwool

Insulator is used for unique handling, lengths, and widths required for metal building, which is available in large rolls of 15 or 23 inches wide.

Blended rate

A newly refinanced loan with an interest rate that is higher than the existing rate but lower than the current market rate; frequently used with a wraparound mortgage.

Blended rate mortgage

A rate of interest that applies to a refinanced mortgage and is calculated as the average of the past and present rates.

Blighted area

A declining area, usually in the city centre, where real property values are seriously impacted by negative influences such as encroaching inharmonious property use mixtures or rapidly depreciating buildings, with no immediate prospect of improvement.

Blind Ad

An advertisement that does not include the advertiser's name or address, only a phone number or post office box address. Blind ads are generally prohibited by state license laws for licensed brokers.

Blind fund

A real estate investment trust that has received funds but has yet to invest in any properties.

Blind pool

A company's business investment in which the property is not identified in advance but is purchased after the funds have been raised.

A securities offering of unspecified and yet-to-be-determined properties; a non-specified property offering in which an investor typically relies on the general partner's ability to locate and put together suitable investments. Some states, such as New York, prohibit blind pool offerings, which means that securities can only be offered in existing, selected properties or specific properties proposed for development. Other states allow blind pool offerings that meet certain

Blind pool syndication

A sort of limited partnership in which the promoter gathers a group of investors to acquire an undesignated asset of a specified type.

Block out

To install a barrier within a foundation wall so that concrete does not enter the arena.

Blockbusting

An illegal and discriminatory practice in which one person induces another to enter into a real estate transaction in which the first person stands to profit financially.

An illegal and discriminatory practice in which one person induces another to enter into a real estate transaction from which the first person may profit financially by inferring that a change may occur in the neighborhood with respect to the occupants' race, sex, religion, color, handicap/disability, familial status, or ancestry, a change possibly resulting in the lowering of property values, a decline in the quality of schools, or an increase in the crime rate. In general, blockbusting violates both state and federal anti-discrimination laws governing fair housing.

Blocked (door blocking)

Shims of wood are used between door frames to keep doors semi-open, allowing controlled access and egress to the shaft.

Blocked (rafters)

It is used to keep rafters and ceiling joists from twisting at their bearing points.

Blocking

A collection of small pieces of wood used to space, join, or reinforce members.

Blow insulation 

It's utilized to insulate existing walls with no exposed framing components.

Blue book

One of a plethora of useful reference books that list new and used values as well as amortization and balloon payment tables.

Blue laws

Colonial-era laws prohibiting business transactions on Sundays and certain religious holidays. The name comes from the practice of printing these laws on blue paper in the beginning.

Blue print(s)

This is a copy of a technical drawing that documents architecture or engineering design.

Blue Sky Laws

States enacted that safeguard the public from securities fraud.

State securities laws are intended to protect the public from deceptive practices in the promotion and sale of securities ("promising the sky"), such as limited partnerships, syndications, and bonds. Blue-sky laws typically require that securities be registered with the securities commissioner in the state where the offers are being made, and that the issuer disclose to prospective purchasers all relevant facts about the investment (typically in a prospectus). Unlike federal securities laws, some state laws impose qualitative standards on securities issuers and require that each offering be "fair, just, and equitable." This requirement may be used to limit the amount of commissions or other compensation paid, the nature of the investment, or other related matters.

Blue stake

Another way to say Utility Notification. It is used to notify the owners and operators of underground facilities.

Blueprint

A working plan used by trades people on a construction site; an architectural drafting or drawing that is transferred to chemically treated paper by exposing it to strong light, causing the paper to turn blue and thus reproducing the drawing in white.

A plan created by an architect to explain a structure's drawing.

Board

1. A local chapter of the state REALTOR® association, which is affiliated with the National Association of REALTORS®.

2. Occasionally used to refer to the state real estate commission.

3. Occasionally refers to a condominium or cooperative community's board of directors.

Board Approval

A provision in a cooperative sales contract that states that one of the requirements for completing the transaction is that the buyer be accepted by the board of directors.

Board foot

A one-foot square by one-inch thick piece of timber; 144 cubic inches = 1' x1' x 1 "

A specialized unit of lumber volume measurement. It's the volume of a one-foot length of one-foot-wide-by-one-inch-thick-board.

Board of adjustment

In municipal zoning law, a board of citizens is selected by the governing body to hear and rule on zoning variance appeals. The board of adjustment is special in that its decisions are definitive rather than just suggestions to the governing body. They can only be challenged in court.

Board of directors

A corporation's governing body, which is allowed to carry out and regulate the company's business activities and whose members are chosen by shareholders on a regular basis. Unless otherwise specified in the bylaws, directors are not obliged to be shareholders of the corporation. The minimum number authorized is set by state law, as is the amount that must be inhabitants of the state.

A director who works as a broker in negotiating the sale or acquisition of corporate property may not earn a commission for services unless the board of directors expressly authorizes him or her to do so.

A board of directors normally governs a condominium owners' organization. Among other things, the board is obligated by law to ensure that proper insurance is secured if the bylaws demand it. Individual directors might face personal culpability if they do not comply.

Board of REALTORS®

A local organization of licensed real estate brokers and salespeople known as REALTORS® and REALTOR-ASSOCIATES® who are members of the National Association of REALTORS® and the state REALTORS® associations. In the United States, there are over 1,800 local boards of REALTORS®, however some are referred to as organizations.

Body corporate

A legal corporation in charge of the administration and upkeep of a unit site's common areas. It is made up of a group of owners who have elected a committee.

Owners of offices, dwelling units, flats, town houses, and other communal property form a legal administrative group.

Body corporate levy

The fee that a group of people pay to a body corporate to pay for things like administrative costs for the group's common property.

Boiler room

A dubious promotional practice in which land sales businesses make frequent "cold pitch" phone calls to the general public in order to generate leads for the sale of real estate, generally unoccupied land or property in another area or state. Real estate licenses are frequently needed by telephone solicitors.

Boilerplate

A contract's conventional, established wording, such as that found in most mortgages, contracts of sale, contracts for deed, leases, and CC&Rs (covenants, conditions, and restrictions). If the language is overly one-sided, the contract may be deemed an adhesion contract. Any vague or confusing clauses in a form contract or lease are construed against the party that provided the form.

BOMA

The Building Management teams Association is a non-profit organization that represents building managements.

BOMA standard method

BOMA created a standard way to measure office building.

Bona fide

Real, truthful, and sincere

Bona fide purchaser (BFP)

A party that purchases property in good faith and for a valuable consideration without knowledge of the prior rights or equity of third parties, whether actual or constructive. BFPs are usually protected by state recording legislation from third parties that have a prior unrecorded interest in the same property.

Bond Market

Is a financial market where treasury bonds can be bought and sold.

Bond or bonding

A contractor's license is protected by terms and conditions.

Submitted with a bid as a promise to the bidder's recipient that, if the offer is accepted, the contractor would execute the contract in compliance with the contract documents' bidding conditions.

1. A written commitment that usually comes with a mortgage and serves as the primary proof of the debt obligation covered by the mortgage; also known as a completion bond or a performance bond.

2. A debt instrument; a financial obligation; a security issued by a company to borrow money. A mortgage bond might be secured or unsecured (debenture).

3. A government-issued interest-bearing certificate used to fund real estate developments and community enhancements such as schools and parks. Property taxes will be used to pay back general obligation debts.

Is a loan instrument issued by the government or a corporation to raise funds for the purpose of obtaining a contractor's license.

Bonus clause

A prepayment clause in an installment contract, deed of trust, mortgage, or note that requires the lender to make a special payment if the loan is paid in full or in part before the due date.

Book value

The initial cost of the property includes the amount of any modifications, less any tax deductions. This is the value that is recorded in the financial statements of the owner.

The value at which assets are recorded on a company's books of account (i.e., its accounting records); typically, cost minus accrued depreciation or cost recovery allowances.

The value of an asset on a person's, partnership's, association's, or corporation's financial records.

Based on the technique used for computing depreciation throughout the asset's recovery period, book value is the capitalized cost of an asset less depreciation taken for accounting reasons. It is the asset's adjusted basis, which is frequently different from its assessed or market value. The basis for calculating profits or losses from a sale is book value. By adding the depreciated value of the improvement to the assigned value of the land, the book value of a property may be easily calculated.

Boom

A device that is used to elevate or lower a load.

Boot

The similar asset that is added in a property trade to balance the transaction's value.

"Money or other non-like-kind property supplied to make up any value or equity differential between swapped goods." Cash, notes, diamonds, or the market worth of an item such as a mortgage, land contract, personal property, goodwill, or a service or patent supplied in return can all be used as a boot. In a like-kind exchange, taxable gain is recorded immediately up to the amount of the boot, but extra gain can be postponed until a later transfer.

Assets obtained in return for what would otherwise be an exchange of totally like-kind assets. Boot receipt may result in tax liability in what would otherwise be a tax-deferred transaction.

BOQ A bill of quantities (BOQ)

Materials, parts, and labor (along with their costs) are enumerated in this form, which is used in construction tenders.

Bottom chord

A truss's lowest longitudinal member. It is normally horizontal, although depending on the truss design, it may be inclined.

Bottom-up approach

A method for creating an analysis using the most disaggregated data available.

Bottom-up approach to investing

A top down investing strategy in which large-scale trends in the general economy are examined and assets selected that are likely to benefit from those trends, as opposed to bottom up investing in which large-scale trends in the general economy are examined and assets selected that are likely to gain from those trends.

Bottomland

When both parties to a property transaction assume liabilities (mortgages, deeds of trust), the liabilities' amounts are tallied to establish a net boot. An excess amount of obligation acquired by one of the exchange parties is passed on to the other. This is true regardless of whether the party receiving the property admits the obligation or just accepts the property subject to the liability.

Bottom plate

The horizontal beam on which partition studs are installed. Also known as the 'sole plate.'

Boulevard

A large street with or without a median strip that is usually shorter than a freeway and serves through traffic on a continuous path.

Boundaries

The boundaries or perimeters of a parcel of property as defined by legal description." Boundary disputes are disagreements between adjacent property owners about the correct position of the dividing line between their properties. Some adjoining property owners sign into a boundary agreement in which they agree that a certain separating line, such as a fence, acts as the genuine boundary of the properties.

A common source of contention is when the branches of a tree on one owner's land grow over the boundary line into the property of a neighbour, infringing the neighbor's air rights. In certain places, the neighbour can chop the branches up to the boundary line or file a lawsuit for monetary penalties and nuisance abatement. Prudent buyers request the seller to stake or survey the property to reduce the danger of boundary disputes.

Bounds

A direction reference based on terminal points and angles. In a metes-and-bounds legal description, metes symbolizes length measurement and limits the length to a certain region.

Box Crib

A wooden tool used during construction to support heavy objects.

Brace

An inclined piece of framing lumber used as a support for a wall or floor to strengthen the structure.

Bracing

To add stiffness, framing timber is fastened at an angle.

Branch office

Any company location other than the major or main office where real estate transactions are handled. In general, each branch office must have a broker-in-charge, sometimes known as a branch manager, who is in control of the branch's activities. This manager may simply need to be a salesman in some states. In most states, each branch office must be registered and given a unique license.

Breach of contract

A breach of a contract's terms that results in a default.

Violation of a contract's terms and conditions without justification; default; nonperformance. When a contract is materially breached, the nonbreaching party typically has three options: rescission, money damages, or specific performance. (See damages, option of remedies, rescission, and particular performance.)

Break cost

The term refers to fixed rate loans where the borrower ends the loan contract before the fixed rate period is over.

Break-even cash flow ratio

The actual total earnings as a percentage of overall operating costs including debt service.

Break-even point

The amount of money needed to cover all operational expenses as well as debt payments.

The point at which rental revenue equals all needed costs and debt payment in a residential or commercial property. It is the moment at which gross income equals all fixed and variable costs paid in generating that income. The break-even analysis is essential for calculating a building's profitability. Before a permanent lender can support a takeout mortgage on a major commercial project, standby financing obligations normally demand that the project be leased up to its break-even threshold.

The point at which an investment brings in just enough money to cover its regular expenses. For a real estate investment, the break-even point is when normal operating costs, including debt service, equal gross income (the stage at which the next cash flow becomes positive). Also called the starting point.

Break-even ratio

This ratio assesses a property's ability to meet its commitments by dividing its operational expenses, capital expenditures, and debt payment by its prospective gross income.

The link between cash spending requirements and gross revenue from an investment project. A default ratio is a term that is used sometimes.

Breaker panel

A distribution board is an electrical supply system component that separates an electrical power source into subsidiary circuits while providing a protective fuse or circuit breaker for each circuit in a shared enclosure.

Breakpoint

The amount of sales above which a certain percentage of rent is due. It is worked out by dividing the annual base rent by the percentage of the tenant's gross sales that was agreed upon.

Brick Ledge

A brick-resting segment of a foundation wall.

Brick Lintel

Metal brick rests on a structural member placed over an opening in a wall.

Brick mold

A material strip used to fill the space between a brick wall and a door or window in the wall.

Casing is a type of window casing that is used to close the gap between the window frame and the opening.

Brick tie

A short, corrugated metal strip nailed to the wall sheeting or studs.

Brick veneer

A vertical brick face installed against and affixed to the sheathing of a framed wall or tile wall.

Bridge loan

Between the end of one loan and the start of another, a loan application is used.

1. A short-term loan that bridges the gap between the end of one loan, such as an interim construction loan, and the start of another, such as a permanent takeout loan; the loan that bridges the gap between the purchase of a property and its improvement or development to qualify it for a permanent loan. A bridge loan is frequently used to cover the expenditures of converting an apartment building into a condominium.

2. A residential finance strategy in which a new house buyer borrows money and takes out a second mortgage on their or her unsold home to support the purchase of a new property. When the seller of the new house would not accept an offer "subject to the sale of the buyer's home" or when the buyer must raise the down payment by a specified date or risk losing the new property, this loan is beneficial.

Bridging

Between floor joists, insert small wood or metal pieces diagonally. Bridgings distribute weight over neighboring joists, enhancing the load capacity of the floor.

To keep floor or roof joists in place, a brace or a set of braces is installed between them.

Bridging finance

A short-term loan used to cover the time between paying for one property and getting payment for another.

A short-term loan that is used to buy a new home before you sell your old home.

Bring-down search

A take-down search or continuation of a title search to ensure that no liens have been recorded against the property between the time of the original search and the recording of the transfer or mortgage. In several states, the buyer is responsible for the continuation charge.

British thermal unit (BTU)

A heat unit that is used to rate the capacity of air-conditioning and heating systems (radiators, boilers). One Btu is the amount of heat needed to increase the temperature of one pound of water by one degree Fahrenheit, to 39.2°F.

Broker

A person who acts as a middleman between two parties. For the services provided, this person is paid a commission.

A person who works as an agent for another in the process of purchasing, selling, leasing, or managing property rights in exchange for a commission.

A person who serves as a go-between for two parties in a transaction. A real estate broker is a legally licensed party (individual, business, or partnership) who acts as a special agent for others to assist the sale or lease of real property in exchange for a valuable consideration or promise of payment.

A real estate broker is a self-employed businessperson who establishes office policies. A broker employs and oversees staff and affiliate licensees (either salespersons or brokers). The broker has the option of accepting or rejecting agency arrangements with principals.

Brokers represent their principals and undertake fiduciary and/or statutory duties to carry out their instructions with care, expertise, and honesty. A broker's obligations are often limited to promoting property and locating someone who is ready, willing, and able to deal on the conditions provided by and acceptable to the principle. However, legislative action imposes legal constraints on brokers, and federal, state, and municipal fair housing laws put additional social duties on them. Brokers cannot lawfully refuse to exhibit, sell, rent, or otherwise negotiate property listed with them based on race, religion, gender, or national origin. All offers must be submitted to the principal by the broker.

The criteria for becoming a real estate broker are determined by state real estate license rules. In general, the candidate must pass a written test, satisfy educational criteria, demonstrate good character, and pay the necessary costs.

A broker is allowed by law to recruit individuals to help him or her in representing customers. Some brokers continue to actively sell, some are sales managers, and still others are largely administrative brokers who do little or no listing and selling.

In any agency connection with a buyer or seller, the broker is the principal agent. This is true even though the salesmen, who are brokers' agents, have the majority of direct interaction with the buyer or seller client.

Without holding title to the property, an agent who buys or sells for a principal on a commission basis.

Broker license

The permission provided by a state to run a real estate brokerage firm; the most comprehensive sort of real estate license.

Broker price opinion (BPO)

A broker's written assessment of a property's worth, usually in the form of a competitive market study. The broker may charge a separate fee for a BPO, depending on state legislation, as long as it is not used to originate a federally linked loan and is not branded as an appraisal. Relocation businesses and lenders involved in troubled property "short sales" frequently request BPOs.

Broker-dealer

A person who is authorized to offer securities by the Director of Corporations.

One who is authorized to purchase and sell securities. The National Association of Securities Dealers grants a general securities broker-dealer license or a direct participation programme license limited to real estate securities.

Broker-in-charge

A broker appointed by a real estate brokerage company's principle broker and registered with the state real estate license commission as the person directly in control of and responsible to the principal broker for the real estate activities done at a branch office in many states.

Broker's rate of return

A rate-of-return metric that modifies the cash-on-cash return to incorporate equity build-up from debt amortization, resulting in a slightly higher return than the cash-on-cash measure.

Brokerage

A broker's business that encompasses all of the duties required to advertise a seller's property and represent the seller's (principal's) best interests.

The portion of the real estate business dealing with bringing parties together and executing a real estate transaction comprising property swaps, rents, and trade-ins, as well as sales. The brokerage is typically, but not always, rewarded for this service by a commission, which is commonly based on a percentage of the gross sales price deducted from the seller's equity. This commission is given to the broker directly (or brokerage company). who may then reimburse the selling affiliate licensee on a predetermined timetable

Brownfields

The existence or possible presence of a hazardous material, pollutant, or contaminant complicates the growth, redevelopment, or reuse of industrial sites. Brownfields and land rehabilitation initiatives run by the Environmental Protection Agency (EPA) understand that cleaning up and reinvesting in these areas improves the environment, lowers blight, and relieves development pressure on green spaces and working lands. Brownfields initiatives help to examine and clean up brownfields while also creating jobs and enhancing the value of nearby residential homes.

Brownstone

1. A reddish-brown sandstone row home with a narrow street frontage. Typically refers to a building built in the nineteenth century and found in older big cities.

2. A dark-colored red sandstone commonly utilized as a row house face.

Sandstone was previously a popular construction material.

BTCF

The cash flow before taxes

BTER

Equity reversion prior to taxation

Buck

Members of the rough-frame opening.

Budget

A forecast of a property's costs and revenues over a given time period.

A statement of estimated receipts and expenditures, often known as a balance sheet. The cash operational budget shows how a property's positive and negative cash flows change month to month. Depreciation, bad debt losses, and other noncash items are frequently excluded. The capital improvements budget lays out a financial plan for making major repairs, replacements, or additions to a property over a certain time period. A budget is only as trustworthy as the person who develops it.

For a certain project, an itemized summary of probable income and expenses for a given period.

Budget mortgage

A loan with payments that go beyond interest and principal reductions. Monthly payments may include an amount equivalent to 122% of the year's property taxes, a pro rata portion of the fire insurance premium (together known as PIT[), and any other comparable penalties that, if not paid, might result in a foreclosure. A budget mortgage with all-inclusive payments makes it easier for the buyer to pay for these costs and protects the mortgagee in the event that the buyer is unable to pay them all at once when they become due. Budget mortgages are particularly popular in conventional residential mortgage loans, as well as VA and FHA loans.

Buffer

(1) A zone around the perimeter of a marsh or lake where land use activities are restricted in order to protect the water features; (2) a predetermined distance around any map feature in a GIS layer.

Buffer zone

A strip of land dividing one land use from another in zoning. A developer of a big residential development may sometimes leave some land undeveloped as a buffer against adjacent land that is designated incompatibly, such as an industrial park.

This is a zonal area that separates residential districts from commercial areas by lying between two or more other areas.

Build to suit

Land improvements built to the specifications of a renter or buyer.

An arrangement between a builder and a booking in which the developer bears responsibility for fitting up the leased space to the renter's specifications while adhering to building codes. When the space is finished, the tenant takes possession.

With this arrangement, the developer grants permission to a financially powerful tenant to construct a structure according to the tenant's specifications. This agreement ensures that the tenant will have the space they need when it is needed, and it ensures the owner/builder that the space will be completely leased upon completion.

In exchange for a lease commitment from the potential tenant, a lessor undertakes to develop a property or finish a specific area to the standards of the lessee. The cost of completed work, or a portion of it, is often amortized through further rental payments. Possession is transferred upon completion.

Builder’s Risk Insurance

Written fire, liability, and extended-coverage insurance to address the unique hazards of a construction site. Coverage grows automatically as the construction advances and ends when the structure is completed. When the building is ready for occupation, this coverage should be replaced with permanent insurance. Premiums may be calculated using an anticipated "finished value" or a "full reporting clause," in which the builder reports value increases as the project advances.

A type of property insurance that protects against damage to buildings while they are being built.

Building and loan association

A mutual organization that invests its members' cash in residential mortgages and pays out the interest gained in monthly dividends to its member deposits.

Building Codes

Regional government entities set standards to ensure that limited security needs are fulfilled.

The set of legislation that defines minimum requirements for new building construction or alterations to existing structures. Building rules are meant to provide the bare minimum of protection against fire damage and to protect against defective building design.

Local, state, or municipal governments frequently establish rules to control building and construction standards that are based on national norms. Building codes are intended to protect the public's health, safety, and welfare by regulating and managing the design, construction, quality, use and occupancy, placement, and maintenance of all buildings and structures. Building codes are established as a lawful use of the state's police authority, and hence codes are valid limits on an owner's use of his or her property. Building permits and certificates of occupancy, as well as inspections, are used to enforce codes, and offenders are fined.

It is a set of laws, regulations, ordinances, or other statutory requirements enacted by a government legislative body involved in construction inspection.

Building core

A multi-story structure's centre or artery portion that unifies functions and service needs for existing building occupants. Bathrooms, elevator banks, janitorial spaces, utility rooms and mechanical rooms, smoke shafts, and stairwells are examples of such areas.

Building height

The overall height is measured from the bottom level to the top of the roof's exterior surface. Local zoning rules often govern maximum height, sometimes restricting or lowering heights based on a structure's closeness to setback lines.

Building inspection

An inspection is usually done before you buy a house to make sure it's safe to live in. To make a deal, you can make it if the building inspection goes well.

Building Insurance

To protect their home from things like fire and landslides, the owner of the home took out a policy to cover it. Buyers often have to insure their new home when they sign a contract.

A type of property insurance that protects the property from risks such as fire, landslide, and so on.

Building lease

A long-term lease of bare land in which the tenant agrees to pay a certain ground rent and to develop and maintain certain improvements to the property.

Building line

A regular distance, usually measured from a road, behind which structures must be built

A setback line is a line beyond which no improvement may be built. Building line limits can be imposed by including a restriction in the subdivider's deed or by identifying them on a recorded subdivision plat. Building lines establish a right to unimpeded light, air, and view by ensuring a degree of homogeneity in the look of structures.

The minimal distance beyond which no construction may expand in order to maintain the appearance of uniformity in the city's streets.

Building module

A unit of depth and diameter that can be used to standardize a building's plan and facilitate the design and layout of office space. Many of the physical system's elements are constrained in size and shape by the module. Non Modular buildings, on the other hand, can cause a slew of issues during the design phase.

Building owners and managers association international (BOMA)

A trade organization for apartment and office building owners and operators.

Building paper

Bitumen, a natural asphalt derived from coal, petroleum, or another water-resistant chemical, is used to treat fiber-reinforced, waterproof paper. To insulate the home and keep moisture out, building paper is applied between siding and wall sheathing, around door and window frames, and in other spots.

This is a long roll material sheet that is employed in constructions with little regard for its properties or applications.

Building permit

The consent must be secured from the state governmental authority before building may begin.

A documented official permit to construct a new building or other improvement, demolish or substantially repair an existing structure, or install factory-built dwellings. The planned construction must comply with local zoning and building rules, and it is generally inspected and authorized after it is completed. A building permit is usually required prior to the commencement of a project, which provides a handy mechanism for local authorities to check zoning code compliance.

A smart developer should add a condition in the purchase agreement for a prospective development site that not only requires the developer to secure a construction permit, but also that the permit be received within a certain time frame. Otherwise, the developer can take an unreasonable amount of time to obtain the permission while keeping the seller's home off the market.

Any property owner considering an addition or alteration should consult the relevant county or municipal building department first to avoid any building code violations, which would usually leave a seller's title unmarketable. Failure to disclose such infractions might be considered a serious misrepresentation, allowing the buyer to cancel the purchase and receive a refund.

Permission to construct or modify a structure.

Building regulations

Laws that establish material and construction standards that must be followed in order to ensure health, safety, and specific design minimums in any structure or alteration.

Building residual technique

A method of assessing the contribution of an improvement to the present worth of the total property, as used in appraisal.

Typically used for valuing income property. Also used to see if the building's worth after refurbishment is more than the renovation expenditures.

When the appraiser determines the value of land, the appraiser subtracts the amount of net income that must be assigned to the land to justify its value from the property's net income. For example, if the land is worth $10,000 and the current interest rate is 12%, the land must return 12% of its value, or $1,200 a year, in order to justify its purchase price. The income related to or produced by the building is represented by the balance or residual of net income. To arrive at the suggested value of the building, the residual is capitalized at a rate that gives a market-acceptable return on the building and recapture of the wasted asset (building).

The value of the land is added to the total value of the property.

Building restrictions

Zoning laws or private limitations incorporated in a deed or ground lease set limits on the amount and types of improvements that can be made. Building limitations violations may render the title unmarketable.

Building shell

The completed outer layer and interiors are applied to the structure of the building.

Building skin

All of the materials used to create the building's outside casing.

Building standards

The building owner and architect have set particular construction standards in order to ensure a uniform element of design across the structure and to establish a cost foundation for setting up the charges and/or concessions.

The construction elements that the owner/developer decides to employ throughout a structure. The building standard provided to an office tenant, for example, might refer to the type of partitions, doors, ceiling tile, light fixtures, carpet, and draperies, among other things.

Building-related illness (BRI)

A condition produced by harmful chemicals or diseases that persists after an inhabitant has left the building. Hypersensitivity, pneumonitis, asthma, and allergic responses are all possible symptoms. Legionnaires' disease, for example, is caused by a recognized bacteria that may be found in air conditioner cooling towers and spread through the ventilation ducts. After multiple deaths in the 1970s, a large hotel was forced to close for several years.

Buildout

Specific interior finishes are built to a tenant's specifications.

Built-ins

Certain stationary equipment, such as various kitchen appliances, bookshelves, workstations, shelving, cabinets, and furniture, is permanently attached to real estate and is expected to be included when the property is sold. A built-in garage is one that is under the same roof as the primary structure it serves.

Built-up method

An assessment technique for calculating the discount, or interest, rate that will be utilized to determine the proper capitalization rate. The safe rate, burden of management, non liquidity, and risk for the specific type of property being assessed are the four essential components of the discount rate. The summation approach of rate selection is also known as this.

Built-up roof

A roofing material made up of three to five layers of asphalt felt laminated with coal tar, pitch, or asphalt. Crushed slag or gravel is used to finish the top.

Bulk sales transfer

Any large transfer (not a transfer in the usual course of the seller's business) of a significant portion of an enterprise's materials, inventory, or supplies. The Uniform Business Code (UCC) governs bulk transfers in order to combat commercial frauds such as a merchant selling out stock, pocketing the cash, and failing to pay creditors. The buyer of the goods is required under the UCC to demand that the seller submit a schedule of all the property and a list of all creditors, as well as to notify creditors of the planned sale. Failure to comply with the UCC renders the transfer or sale unenforceable in relation to the seller's creditors' claims. Bulk transfers are generally necessary when a company is liquidated or sold. A bulk transaction must be notified to the state tax authorities by the seller, and the purchaser must withhold payment until the seller receives tax clearance.

If the tax clearance is not obtained, the buyer may be held accountable for any unpaid taxes that are a lien on the assets sold.

Bull nose (drywall)

Corners of drywall are rounded.

Bullet loan

A loan in which the full principle is repaid in a single payment at maturity.

A short-term, interest-only loan with a balloon payment, sometimes with no right to prepay or a significant prepayment penalty if prepayment is permitted.

Bumper

A wooden, rubber, or other material device intended to soften the impact of parking vehicles around a loading dock.

Bundle

The contents of a shingle packet. 3 bundles per square and 27 shingles per bundle are typical.

Bundle of rights

A concept that considers real estate interests to be a collection of land ownership.

The right to sell, lease, encumber, use, enjoy, exclude, and devise by will are all legal rights attached to real property ownership.

These rights also include the rights to use, occupy, cultivate, and explore, as well as the rights to license, dedicate, give away, share, mortgage, trade, and exchange. When buying real estate, the buyer is truly getting the seller's rights, with the exception of those that are reserved or limited in the transaction. Beneficial interests connected with real property interests are the term for these rights.

Bungalow

A modest home with one or two stories.

Burden of proof

In a trial or an administrative hearing, the duty to show the validity or untruth of a fact. The burden of proof is on the complainant in a discrimination case.

Bureau rate

A rating bureau sets a standard rate for hazard insurance and, in certain jurisdictions, title insurance for all firms selling policies in a given region.

Bus duct

Electrical wires connect many circuits in an industrial plant to offer service via a single line.

Business day

A weekday, excluding Saturdays, Sundays, and holidays; a typical working day. The word business day is used over the terms banking day or working day due to recognized tradition and practice.

Some regulations demand notification within five business days, such as when a renter fails to pay rent; other laws apply to calendar days. A disagreement may emerge if a contract fails to specify whether the notice must be given within business days or calendar days, while the typical understanding is that it must be given within calendar days unless otherwise indicated.

Business energy property tax credit

A tax credit to encourage companies to invest in or buy solar water heating, solar space heating, solar thermal electric, solar thermal process heat, photovoltaics, geothermal electric, fuel cells, solar hybrid lighting, direct-use geothermal, or microturbines. Fuel cells and microturbines built in 2006 and 2007, as well as hybrid solar lighting systems constructed on or after January 1, 2006, are now eligible for the credit under the Energy Policy Act of 2005. The tax credits range between 10% and 30%.

Business interruption insurance

Insurance that compensates losses suffered as a result of a business owner's incapacity to do business while a building is being repaired after a fire or other covered disaster.

Business life insurance

A commercial entity purchases life insurance on the life of one of its employees. It is frequently purchased by partnerships to protect surviving partners from loss caused by a partner's death, or by corporations to pay them for loss caused by the death of a key employee. Key employee insurance is another name for it.

Business opportunity

Any form of business that is up for purchase. The selling or leasing of an existing business, enterprise, or opportunity's business and goodwill, including the sale of all or nearly all of a corporation's assets or shares, or the assets of a partnership or sole proprietorship.

A real estate broker's license is usually necessary to sell a business that has real property as an asset. However, because a broker may be unaware of many of the unique issues that arise when selling a business, consulting with an experienced business counselor or attorney may be beneficial. Both the seller and the buyer should be informed of how the bulk transfer regulations apply to the sale of a firm. They should also be aware that any contract involving the sale of products valued at $500 or more must be in writing to be enforceable under the Uniform Commercial Code.

Business Park

A subdivision or development intended for office, warehouse, or similar purposes. It is an offshoot of industrial parks and is also known as an office park.

Business risk

Risk resulting from the prospect of making poor business judgments or misjudging the economic implications of activities.

The uncertainty about whether or not a business venture will make money.

Butt edge

The shingle tabs' bottom border.

Butt hinge

One leaf is attached to the door's edge, while the other is attached to the door's jamb.

Butt joint

The point at which the ends of two timbers meet, as well as where drywall sheets meet on the 4 foot edge.

Buy down

A subsidy (typically paid by a builder or developer) used to lower monthly mortgage payments.

Buy-back agreement

A clause in a sales contract that states that if a specific event occurs, such as the buyer being moved out of the region, the seller (and, in certain situations, the broker) will buy back the property within a given time frame, generally for the original selling price.

Buy-back sales agreement

A clause in a sales contract in which the seller commits to buy the property again in the future.

Buy-sell agreement

A contract between two parties in which one of them can buy the other's interest.

1. A contract between partners or shareholders in which one party sells and another buys a company stake at a certain price if a predetermined event occurs. This type of buy-sell agreement is used in closely held firms and partnerships to cover the risk of a key participant's death or disability. To guarantee that money are available to complete the buyout, life insurance is typically employed.

2. When a building is finished, an interim and permanent lender engage into an arrangement for the sale and assignment of a mortgage to the permanent lender. On the assumption that the mortgagor would have a contractual right to require that the permanent lender acquire the mortgage, the mortgagor is frequently a party to this arrangement.

Buy/rent threshold

The point at which changing market conditions make it clear that money is being spent less on owner-occupied housing and more on rental housing (or vice versa).

Buydown

The deposit of new revenue in order to lower the interest rate on a loan.

A type of financing that lowers the monthly payment for a house buyer during the first few years. In certain buydown schemes, a residential developer, builder, or seller would pay a lender a subsidy (in the form of points) to "buy down," or reduce, the effective interest rate paid by the homebuyer, lowering monthly payments for their buyers for a fixed period of time while diminishing their own profit.

The interest supplement may be constant for the duration of the buydown, or it may be graded, with the subsidy amount decreasing each year. Buydowns are expensive: for example, a three-year buydown with some lenders may pay 2. 7 points for each one-percentage-point decline in interest.

Buyer agency agreement

A real estate brokerage contract between a buyer and a real estate agent. The broker is paid if he or she successfully locates a property for the buyer to purchase.

Buyer's advocate

A service that helps people find a home that fits their needs.

Buyer's agent

A person who locates and negotiates a property purchase on behalf of a potential buyer for a fee.

Buyer's broker

In a statutory or fiduciary position, a broker represents the buyer. Some buyer's brokers use single agency, which means they only represent buyers or sellers in the same transaction. Buyer brokers that represent just buyers and direct prospective sellers to other brokers are known as exclusive buyer brokers. The buyer, or the seller or listing broker, pays the broker at closing, if all parties agree.

Because buyer representation is now widely accepted, the listing company is likely to have a buyer-client interested in one of its listings. Many businesses decide whether to continue representing both customers under a consensual dual agency arrangement or to practice single agency by directing one of the parties to another brokerage.

Buyer's market

When there are more sellers than buyers in a property market, the buyer has the option to negotiate the best purchase rates and terms.

1. A scenario in which the supply of available properties for sale outnumbers the demand. As a result, in order to attract purchasers, sellers are sometimes obliged to cut their prices and occasionally aid with financing (through purchase-money mortgages).

2. A price drop as a result of an overstock.

Buying commission

The fee you pay an agent to assist you in acquiring a specific style of building

By operation of law

Property rights are defined by some affirmative rule or change, by which someone may gain or lose rights without any action on his behalf. For example, the law of dower allows a wife to gain a one-third life interest in her husband's real estate.

Byfold doors

Doors that open in a smaller area than typical swing doors because they are hinged in the centre. Closet doors are frequently made of this material.

Bylaws

A system of rules by which a company or organisation conducts its operations or activities.

A condominium owners' association or corporation's regulations, rules, or laws governing the condominium's management and functioning. The procedure of selection of the board of directors, as well as the duties and obligations of the corporate members, are all covered by the bylaws. These self-imposed guidelines are considered private law. A corporate resolution relates to a single act of the company, but a bylaw is a permanent norm that must be followed on all future occasions. Bylaws for condominiums are created by the developer and are susceptible to modification once the owners' association takes possession. As stated in the original condominium declaration, the bylaws may be amended.

Bypass doors

Closet doors are sliding doors that move past each other.

Glossary Index

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