Glossary of Re-Gentrification Terms A to B
A

AAA tenant: A rating given to a prime tenant with the highest credit rating. The term is often used to describe the credit rating of a retail store. For example, a developer who plans to build a shopping center will seek a "triple A" tenant to help secure financing.

Absorption rate: A rate that is a forecast of how quickly properties can be sold or leased in a given area. For example, if a developer can lease 20% of the units available to the market in a given area for a given time, the absorption rate is 20 percent.

Abstract of title: A condensed history of the title of a property. An abstract of title should be a chronological history of recorded instruments that affect the title of the subject property. In some states, an attorney does a title search using an abstract. After a title search, the attorney issues an opinion that can be used to obtain title insurance.

Abstract of title: A summary of the public records relating to the title to a particular piece of land. An attorney or title insurance company reviews an abstract of title to determine whether there are any title defects which must be cleared before a buyer can purchase clear, marketable, and insurable title.

Abut: Connect or join. If two pieces of property touch each other, they abut each other.

Abutment: A load-bearing vertical member of a structure. A wall or a column are examples of abutments.

Acceleration clause: A clause in a note, bond, mortgage or deed of trust giving the lender the right to demand the remaining balance due and payable before its original date because regular mortgage payments are not made or for breach of other conditions of the mortgage.

Accessory building: A building or structure detached from but on the same property as a main building. Examples of accessory buildings are garages, storage buildings and guest houses.

Accident and health premium: A premium paid by a mortgagor for an insurance policy to ensure the continuance of mortgage payments if the borrower is disabled or ill.

Accommodation party: One who accommodates another by signing a note or a bill without receiving compensation (a note being a negotiable instrument such as a promissory note).

Accrued interest: Interest earned but not paid since the last due date.

Acoustical tile: Tile that absorbs sound. Acoustical tile is often used in the ceilings of apartment units and offices.

Acre (AC): Land that measures 43,560 square feet. A lot 208.71' x 208.71' is 4,840 square yards, 4,047 square meters, 160 square rods, 0.4047 hectare or 43,560 square feet.

Act of God: An event that causes damage by nature such as a flood, earthquake or winds; an occurrence not caused by man.

Action to quiet title: A court action to establish ownership of real property. This court action usually removes any interest or claim to title of real estate. The action results in removing any cloud on the title. Normally a lender will not commit to a mortgage with a cloud on the title. If the complainant is successful in the court action, the title is made quiet, or is clean.

Ad valorem: A method of taxation using a fixed proportion of property value; for example, real estate taxes collected at the rate of a specific dollar amount of appraised value or assessment. People use the ad valorem method as a formula to decide how much tax to pay the government. A commonly used formula for computing taxes is as follows (assumptions: properties are assessed at 25% of valuation, appraisal is $100,000 and the tax rate is $7.50 per $100): $100,000 x 25% = $25,000 1�2 $100 = 250 ($100 units), 250 x $7.50 = $1,875 1�2 12 (12 months) = $156.25 per month

Adaptive reuse: Providing a new use for an older, but sound, structure. An example would be an abandoned warehouse converted into business or residential condominiums.

Add-on interest: Interest added to the amount of the loan on the front end, or beginning of the loan repayment period. The balance is then paid by installments. This form of interest is much more expensive than simple interest paid on the entire amount for the entire term of the loan.

Adjoin: Connect or join. If two pieces of property touch each other, they adjoin or abut each other.

Adjustable living expenses: Expenses you can change, such as costs of groceries, utilities, telephone.

Adjustable Mortgage Loans (AML): See Adjustable Rate Mortgage

Adjustable-Rate Mortgage (ARM): A mortgage where the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate. The rate is usually based on indexes tied to the nation's economy. You may also see ARMs referred to as AMLs (adjustable mortgage loans) or VRMs (variable-rate mortgages)

Adjusted basis: The original cost of the property plus improvements (including what it cost to sell the property), less depreciation. Calculate the gain on the sale by subtracting the adjusted basis from the sale price.

Advance: To give someone a draw or payment by making them a loan.

Affordable Housing Program (AHP): A program of the Federal Home Loan Bank system which allows the Regional Banks of the System to make subsidized funds available through member institutions for the production of affordable housing to serve families below 80 % of their area median income (AMI).

Agrarian: Something that relates to land or to a distribution or division of land.

Agreement of sale: Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties.

Air rights: The right to use the space or air above the ground but not the ground itself. Air rights can be sold or leased. Ownership of land includes air rights above the property. Some use of air rights, such as traveling through airspace by airplane no longer require the approval of the property owner.

Alcove: A recessed room connected to a main or larger room.

Alienation clause: A clause closely associated in meaning with Due-On-Sale Clause and Acceleration Clause. An alienation clause in a mortgage can give the lender the option to call the loan (declare the entire balance due) when the property owner transfers ownership, title or interest without the lender' s consent.

Alienation: A transfer or conveyance of property. Alienation is voluntary when it is with the consent of the owner. Involuntary alienation is a transfer of property without the consent of the owner, as in a foreclosure, adverse possession and eminent domain.

All Inclusive Trust Deed (AITD): Also known as a Wraparound Mortgage. A junior lien on a property which encompasses the senior financing. Enables the borrower to increase the amount of borrowing without paying off the original loan or paying the higher interest rates associated with other types of secondary financing. The borrower makes one payment (usually to the seller) from which the senior financing is paid with the balance going to ward the holder of the Note. May be advantageous to the seller in that he can experience an additional return on money (the senior financing) which he never loaned.

All-Inclusive Trust Deed (AITD): A new deed of trust securing a balance due on an existing note plus new funds advanced. This technique is similar to a wraparound mortgage.

Allodial system: Ownership of land with the owner having full and absolute dominion over the property. This system is the basis for our property rights in the United States. A contrasting system is the feudal system, which gives ownership to a king or sovereign who gives rights to the citizenry to occupy the land for a period of time.

Allowance for vacancy and income loss: An allowance used on pro-forma or profit-and-loss projections for income properties. You subtract an allowance for vacancy from gross income to decide net effective income (income before expenses). An investor cannot use rental property that is 100% occupied. Depending on the market area, the vacancy allowance for income properties such as apartments is usually from 5% to 10% of the gross rental.

Alluvion: The gradual building up of soil deposited by water against a shore.

Alluvium: Soil deposited by accretion along the shore or bank of a river.

Amenity: A natural or man-made feature that increases the value of property. Examples would be a view of a golf course or the ocean, or a beautifully landscaped yard.

American Bankers Association (ABA): A professional organization of banks based in Washington, D.C., that lobbies the federal government and monitors federal and state laws and regulations on issues pertinent to the banking industry.

American Institute Of Architects (AIA): A professional organization of architects. All registered architects subscribe to AIA' s standards of ethical practice.

American Institute Of Certified Public Accountants (AICPA): A professional organization of certified public accountants. AICPA is responsible for developing "GAAP" accounting -- generally accepted accounting principles. AICPA awards the CPA designation.

American Institute Of Real Estate Appraisers (AIREA): Formerly,.a member organization of the National Association of REALTORS (NAR). AIREA severed its affiliation with NAR in 1990 and merged with the Society of Real Estate Appraisers to form The Appraisal Institute. The Appraisal Institute officially began operation on January 1, 1991.

American Land Title Association (ALTA): An organization comprising title insurance companies, abstractors and attorneys specializing in real property law. ALTA has adopted many title insurance policy forms that standardize coverage nationally for property owners and lenders. Many states require ALTA standardized title insurance policies.

Amortization schedule: A list showing the payment number, interest payment, principal payment, total payment and unpaid principal balance. People sometimes call an amortization schedule a curtail schedule.

Amortization schedule: A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance.

Amortization: A payment plan which enables the borrower to reduce his debt gradually through monthly payments of principal. Fully amortized loans are paid in full at the end of the loan term.

Amortization: Loan amortization is paying off a debt or mortgage, usually by monthly payments. Regardless of whether a loan is a level payment mortgage, graduated payment mortgage, adjustable graduated mortgage or variable-rate mortgage, if it is an amortized loan there will be a portion for interest and a portion for principal reduction in every payment of the loan.

Amortization: The repayment of loan principal through equal payments over a designated period of time.

Amount financed: The base loan amount without regard to closing costs, discount points or mortgage insurance premiums. This dollar amount is associated with a disclosure statement used in compliance with the Truth-in-Lending Act.

Ampere: Measure of electrical current equal to the current produced by the force of one volt through the resistance of one ohm.

Anaconda mortgage: A mortgage that uses the subject property as collateral for all debts from various loans owed to the lender. Courts may disagree with what an anaconda mortgage intends since they may require a direct relationship between each loan and the collateral acquired by the loan proceeds.

Anchor bolt: A bolt that attaches the sill of a house to the foundation wall.

Anchor tenant: A retail store in a shopping center used as a major draw to the center. The presence of an anchor tenant helps secure financing for the center and enhances the chance of success for other tenants as it draws the public to its store. The store is normally part of a major chain and is a name easily recognized by the public. Depending on the size of the shopping center, there can be several anchor tenants.

Ancillary income: Income that is secondary in nature and not the main reason for being in the business; income that an investor would not receive if they were not in a particular business.

Annex: To attach or add; to add to something else.

Annual Debt Service (ADS): The total amount of principal and interest to be paid each year to satisfy the obligations of a loan contract.

Annual Percentage Rate (APR): A measure of the cost of credit, expressed as a yearly rate. It includes interest and points as well as other charges. It provides consumers with a good basis for comparing the cost of any loan, including a proposed mortgage loan.

Annual Percentage Rate (APR): A method for calculating an interest rate to the interest collected, discount points charged to either purchaser or seller or both, certain costs related to closing and mortgage insurance premiums.

Annual percentage rate or APR: The cost of a borrower's credit as a yearly rate. Defined by the federal Truth in Lending Act, it includes finance charges as well as the contractual interest rate.

Annuity: An assured income for life or for a given time. This term normally relates to the insurance industry, but is sometimes used in comparison with certain kinds of high-quality income from real estate investments.

Appointments: Decorative items such as furnishings and equipment in a building.

Apportionment: A division of expenses, liabilities, responsibilities or property among individuals.

Appraisal institute: An organization that officially began operation on January 1, 1991. The Appraisal Institute is the result of a merger of the former American Institute of Real Estate Appraisers (AIREA) and the Society of Real Estate Appraisers. The surviving designations are the MAI (Member of the Appraisal Institute) and SRA (Senior Residential Appraiser).

Appraisal report: A written opinion of value. The report contains the estimate of value; date of valuation; certification and signature of the appraiser; the purpose, qualifying conditions and description of the subject property and its ownership; a neighborhood description; the approaches to value; and the final determination of value. An appraiser shall report the present market value for existing properties and proposed developments. The appraiser may report a value as of the conclusion of construction and as of the projected date when stabilized occupancy is achieved.

Appraisal: An estimate of a property's fair market value by a licensed professional. Lenders take the appraisal into account when deciding whether or not to make loans.

Appraisal: An expert judgment or estimate of the quality or value of real estate as of a given date. Relies upon one or more of three different types of valuation approach depending upon the property type and current or anticipated usage: The Market Approach, Cost Approach or Income Approach.

Appraisal: An opinion of estimated value for a specific purpose of a described property on a given date. An appraisal can be either written or verbal.

Appraised value: The dollar amount of value given to the property appraised. There are three major approaches to estimating value of real estate. The market approach bases value on the sales of other comparable properties. The cost approach bases value on what it will cost to replace the property. The income approach bases value on the income produced by owning the property. In most appraisals all three approaches will be used, with the appraiser stating what approach was most influential in making the final determination of value.

Appraiser: One who estimates value on a professional level. Many appraisers have designations such as MAI (Member of the Appraisal Institute), SRA (Senior Residential Appraiser), SREA (Senior Real Estate Analyst) and SRPA (Senior Real Property Appraiser).

Appreciation: An increase in the value of a house due to changes in market conditions or other causes.

Appreciation: An increase in the value of property. The opposite of depreciation.

Appropriation: The private taking of property and dedicating it to public use. It is also the dedication of public land for a private use.

Appurtenance: An item attributable to the land, such as improvements or an easement. Something that comes from outside the property but is considered part of the property and transfers with the property upon sale or other transfer. A utility easement is an example of an appurtenance.

Apron: An area such as the entrance to a driveway or the concrete portion around a swimming pool.

Arm's-length transaction: A transaction between individuals who do not have a conflict of interest or reason for collusion. The parties are as strangers to each other. The value of property should be questioned for fairness or accuracy if there is not an arm's-length transaction between the seller and buyer. An appraiser should not use comparable sales not closed by an arm's-length transaction in the market approach to value.

Arrears: At the end of a period. You pay interest on home mortgages in arrears. You pay rent in advance. For example, a mortgage payment due May 1 is for the interest for April; rent due May 1 is for the month of May. The term can pertain to delinquent mortgage payments. A mortgage loan that is three months delinquent can be said to be three months in arrears.

Artesian well: A deep well where water rises to the surface by natural pressure.

As is: Property sold in its present condition with no warranties made about the plumbing, heating, electrical system or infestation of termites is said to be sold "as is."

Assemblage: Combining pieces of property to make one large, attractive property. The added value is plottage. People often use option contracts with the practice of assemblage.

Assessed valuation: The dollar amount or value on what real estate tax is levied. If a property worth $100,000 is assessed for tax purposes at 50% of value, the assessed valuation is $50,000. County or township tax assessors normally make appraisals for tax reasons. Many state laws require properties to be reappraised periodically. If the taxpayer disagrees with the appraisal, he or she can appeal to a board of appeal or board of equalization.

Assessed value: Dollar amount assigned to taxable property for tax purposes by the county tax assessor. It is usually a statutory percentage of market value. (Not to be confused with appraised value.)

Assessed value: The valuation placed upon property by a public tax assessor for purposes of taxation.

Assessed value: The value of real property established by the tax assessor for the purpose of levying real estate taxes.

Assessment: (1) The fair market value of property for tax purposes. (2) An expense appropriated to a unit of a whole such as a condominium assessment for common grounds, maintenance or an additional charge for improvement. (3) A levy for adding a product or service to a neighborhood, such as curbs or sewers. (4) A value given to a property owner for the taking of the property by the process of condemnation.

Assessor: Commonly called a tax assessor, an assessor is the individual charged with determining the fair market value for tax purposes. Tax assessors do not set the tax rate; they merely set the value for tax purposes.

Asset: Something of value that you own. An asset could be a car, a retirement fund, stocks or bonds, or even a valuable piece of furniture.

Assign: The act of transferring rights or property to another.

Assignee: One who receives rights or property. An assignee stands in the place of the assignor for rights, liabilities and interest in the property.

Assignment of Mortgage (A/M): A transfer of a mortgage from one mortgagee to another. Sometimes, FHA will accept an assignment of a mortgage to help a qualified, distressed mortgagor.

Assignment of servicing: A process of assigning the servicing rights from one lender to another.

Assignment: Transfer of one person's rights under a contract to another.

Assignor: One who assigns rights or property.

Assumability: When a home is sold, the seller may be able to transfer the mortgage to the new buyer. This means the mortgage is assumable. Lenders generally require a credit review of the new borrower and usually charge a fee for the assumption. Most mortgages now contain a due-on-sale clause, which means that the mortgage may not be transferable to a new buyer. Instead, the lender may insist that the entire balance is paid in full when the home is sold. Assumability may benefit the seller especially during periods of higher interest rates or after periods of property depreciation.

Assumable mortgage: A mortgage that can be taken over ("assumed") by the buyer when a home is sold.

Assumption of mortgage: An obligation undertaken by the purchaser of property to be personally liable for payment of an existing mortgage. In a full assumption, the purchaser is substituted for the original mortgagor in the mortgage instrument and the original mortgagor is to be released from further liability in the assumption, the mortgagee's consent is usually required. The original mortgagor should always obtain a written release from further liability if he desires to be fully released under the assumption. Failure to obtain such a release renders the original mortgagor liable if the person assuming the mortgage fails to make the monthly payments. (Not to be confused with a subject-to purchase.)

Assumption: The transfer of the seller's existing mortgage to the buyer.

Atrium: Usually a space in the center of a building with a translucent ceiling and sometimes decorated with such amenities as a water fountain and tropical plants.

Attachment: The actual taking of property into the custody of a court to serve as collateral for a judgment sought in an impending suit. Law, not private consent, creates the lien. This form of legal action is not available for obligations secured by collateral, as in the case of a mortgage.

Attestation: The act of witnessing a signature on an instrument.

Attic: The portion of a house between the ceiling of the top floor and the underside of the roof. There must be access to an attic. By inspecting an attic you can check for signs of structural problems in the rafters and joists and assure that there is adequate ventilation.

Attornment: A tenant's formal recognition of a new landlord. A mortgagee, who becomes an owner by foreclosure, with the tenant recognizing the mortgagee as the new landlord, has a defense against claims for rent by the defaulting mortgagor. Attornment starts a new tenancy between the new owner and the tenant.

Attractive nuisance doctrine: A legal doctrine holding that a property owner must protect children from injuring themselves by an attractive danger such as a swimming pool. As an example of adhering to this doctrine, a property owner should build a fence around a swimming pool.

Average life of a mortgage: The average number of years one dollar of principal investment remains outstanding in a mortgage loan. The average life is used in deciding the true yield of a mortgage. A 30-year mortgage is said to have an average life of 12 years; a 10- to 15-year mortgage has an average life of 7 years. Investors base the yield of a mortgage on the average life as opposed to the original term.

Avulsion: The sudden removal of land by action of a body of water, such as a river.

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B

Backfilling: The act of putting back dirt removed for construction. You backfill by filling the gap between the foundation wall and the yard so that water will drain away from the building.

Backup contract: A term often used with contracts to buy real estate. A backup contract is a contract that will replace a prior contract in the event of failure to perform or close by the parties of the prior contract. The seller should get a release from the buyer on the first contract before canceling the contract and proceeding with the second, or backup, contract.

Balloon mortgage: A mortgage loan with periodic payments of principal and interest that do not completely amortize the loan. The balance of this type of mortgage loan is due and payable in a lump sum at a specified time in the future. The borrower pays interest regularly, but may or may not make small principal repayments during the loan period. The unpaid balance is due at a specific time in the future as stated in the mortgage or deed of trust. For example, if you borrow $30,000 for 5 years, or 60 months, and the interest rate is 15%, your monthly payments will be only $375. But the payments cover interest only, with the entire principal due at maturity in five years. Thus, the borrower must make 59 equal monthly payments of $375 and a final balloon payment of $30,375 (the principal plus the last interest payment). If the borrower cannot make the final payment, the borrower must refinance (if refinancing is available) or sell the property. Some lenders guarantee refinancing when the balloon payment is due, although they do not commit to a specified interest rate. The rate at refinancing could be much higher than the borrower's current rate. Other lenders do not offer automatic refinancing. Without such a guarantee, the borrower could be forced to start the whole business of shopping for mortgage funds again, besides paying closing costs and front-end charges a second time. A balloon mortgage can be a senior or junior mortgage; i.e., a first or second mortgage.

Balloon note: A Promissory Note which requires only partial or no amortization (principal reduction.) Balloon Notes result in an eventual Balloon Payment. A Balloon Note may be coupled with an Extendible Rider which allows for the extension of the loan term as long as certain conditions are met. (Such as on 5/25 and 7/23 loans.)

Balloon payment: Amount of loan principal remaining unamortized and outstanding at the end of the mortgage term.

Balloon payment: The final payment in a balloon mortgage. The balloon payment ends the mortgage; the mortgage is paid in full. This final payment is called the balloon or bullet.

Balloon payment: The final payment of the balance due on a partially amortized loan.

Baluster: The support for the rail in a staircase; one of a series of upright posts.

Bank Holding Company (BHC): A corporation that owns interests in one or more banks.

Bankrupt: A corporation, firm or person who files for relief from the courts and surrenders all assets. Bankruptcy is a condition in which liabilities exceed assets and the person or business is unable to pay the creditors. Bankruptcy may be voluntary or involuntary. Involuntary bankruptcy is when a creditor forces payment of a debt of $1,000 or more and the debtor cannot pay. There are several chapters of bankruptcy. A lender will most likely encounter the following chapters:

* Chapter 7 covers liquidation of the debtor's assets.
* Chapter 11 covers reorganization of a bankrupt business.
* Chapter 13 covers repayment of debts by individuals (commonly called wage-earner). Som e plans may provide for full payment of debts, while others arrange for payment of reduced debts.

Under Chapters 7 and 11, dismissal of bankruptcy means that the debts, but not the liens, are dismissed. The courts must close the bankruptcy to release the liens. Under Chapter 13, dismissal means that the court has thrown a person or business out of bankruptcy. That person or business is no longer under the court's protection and is subject to the action of creditors. In reviewing a loan application from a person who has taken bankruptcy, lenders look at three important points: (1) the reason for bankruptcy, e.g., an inability to work due to bad health, an accident, etc., (2) the type of bankruptcy taken (the chapter) and (3) compensating factors.

Bankruptcy: When a person is declared by a court to be unable to pay her or his debts, that person is in bankruptcy. That person must then turn over any money or properties to a trustee, a person whom the court appoints, for management.

Base line: A surveyor' s term used to show an east-west line.

Base rent: The minimum monthly rent due to the landlord. Typically, it is a fixed amount.

Baseboard: A board that runs along the base of the wall where it meets the floor.

Basement: The space that is below the first floor. Basements are usually wholly or partly below the exterior grade. Basements should be checked for signs of water leakage. Dampness in comers is a sign of moisture problems, and water marks along the base of walls or any cabinets suggest that there is or has been some serious water leakage.

Basis points: A term used in relationship to interest rates. One basis point is equal to 1/100 of 1 percent. Basis points are used to describe the yield of a debt instrument, including mortgages. The difference between 9% and 9.5% is 50 basis points.

Basis: An unadjusted basis is the cost of the property minus the land value. Cost plus capital spent to modify the improvements minus the land value is the adjusted basis. For the purposes of determining capital gain or loss, it is the total cost of the property compared to the sales price minus the costs of the sale.

Basis: The total amount paid for a property, including equity capital and the amount of debt incurred. For a LIHTC project, the initial value that is eligible for tax credits.

Batten: A narrow board normally used to cover a joint or space between boards, often called a batten board.

Baty: The strip of insulation placed between the studs of a wall or joists of a ceiling or floor.

Beam: A load-bearing support that can be made of wood, iron, stone or other strong material.

Bearer bond: A coupon bond payable to the individual who has possession of the bond.

Bedrock: Solid rock for a foundation of a large building.

Bedroom community or suburb: Residential area for commuters who work at a nearby large city or employment center.

Before-tax income: Income used to decide yield from an investment before it becomes taxable to the investor. It is income used in an offering of an investment without regard to the investor's taxable income bracket used in filing income tax returns.

Belly-up: A project, business or venture that has failed is said to have gone belly-up.

Beneficiary: See Deed of Trust.

Billing cycle: The date a bill is sent out and the payment due. Some bills are sent out on the first of the month, some on the fifteenth, some on other dates.

Binder: A preliminary agreement, secured by the payment of earnest money, under which a buyer offers to purchase real estate.

Biweekly mortgages: Mortgage where payments are made every two weeks as opposed to more conventional monthly payments. Biweekly mortgages can be offered in any mortgage amount and term, at a given interest rate. Shorter payment intervals accelerate equity through faster amortization that will shorten the loan maturity.

Blacktop: A paving surface usually made of asphalt.

Blanket mortgage: A single mortgage used to secure a debt for money loaned on several properties such as the lots a builder owns in a subdivision. It is important for the borrower (mortgagor) to ask for a partial release clause in the blanket mortgage. A partial release clause will release each lot that is sold for a stated amount that is a portion of the entire debt. Without a partial release clause, the entire debt
l have to be paid before the mortgage is released.

Blanket mortgage: Mortgage lien secured by two or more property parcels.

Blended rate: (1) A first-mortgage lender can use a blended rate in an advertisement to induce mortgagors to refinance and pay off their old low-interest-rate first mortgage. The first-mortgage lender could offer a 10% interest loan as compared to the going rate of 12% if the mortgagor will refinance the existing mortgage that is at 8 percent. (2) A second-mortgage lender or a wraparound lender will advertise not to pay off the old mortgage with the low rate and short term remaining, but instead, to place a second mortgage or wraparound loan behind the first and have a blended rate below market interest rates for first-mortgage loans.

Blighted area: Usually an inner city area where property values are falling and buildings are deteriorating.

Blockbusting: An illegal practice of promoting panic-selling in an all-white neighborhood because someone of a minority or ethnic background has moved into or is said to be moving into the neighborhood. The blockbuster will try to gain illegally from depressed prices either by buying or listing the properties at far below market values.

Blueprint: An architect's or designer's detailed plan for a building. If you remodel your house, you will probably need a blueprint.

Board and batten: Siding with batten boards nailed over cracks between wider boards.

Board foot: A piece of wood that is one foot square by one inch thick; 144 cubic inches = l'x l'x 1".

Board of adjustment: A government body that hears appeals concerning zoning matters. A Board of Adjustment can grant zoning variances.

Board of equalization: A government body that hears appeals concerning real estate tax assessments. If a property owner thinks the assessment is too high, they can appeal to the Board of Equalization. This board can lower assessments, causing a lower real estate tax.

Board of realtors�: The local association of REALTORS� who belong to the State and National Association of Realtors.�

Board of review: See Board Of Equalization.

Boilerplating: Standard language found in contracts, deeds or deeds of trust, and in covenants, conditions and restrictions (CC&Rs).

Bona fide: Genuine; sincere; in good faith. The term can be used in a sentence such as, "this is a bona fide offer to purchase your real estate."

Bond value: The mortgage bond's cash flow (or underlying collateral) that upholds the value of the bond. The mortgage bond's value is restricted to the mortgage loan's unpaid balance.

Bond: A formal certificate that evidences a debt and outlines the terms. It is a formal promise to pay a lender a specified sum of money at a future date -- with or without collateral. The promise must be in writing and signed and sealed by the maker (borrower). The balance owed is paid on a future date with a series of interest payments in the interval.

Bond-type security: An investment security, especially a mortgage-based one, that has the characteristics of a typical corporate bond, including a long-term, fixed rate of return and repayment of principal at maturity.

Book value: An accounting term used to show the value of a business as a whole or particular asset, such as real estate. You show the value by accounting records that give the cost of the assets plus any improvement minus depreciation. It is the value of an asset. Depending on the reason for valuation, book value may be marked down for a distress sale, but it is normally never marked up to reflect an increase in value.

Boot: Cash or other non-real-estate assets exchanged for real property.

Boot: Something of value given to even the exchange of like properties. For example, if parcel A is worth $100,000 and is exchanged for parcel B (worth $80,000) and $20,000 in cash, the boot is the $20,000 in cash.

Boring test: Using samples obtained by boring deep holes in the ground to decide the strength of the subsoil for construction purposes.

Borough: A section of a city, similar to an incorporated village, that has control over local matters. New York City has five boroughs.

Boti'om land: Low land situated near a body of water.

Bottom line: A phrase that means the net result, such as after-tax cash flow, or the final consequence.

Bracing: Placing boards between floor or ceiling joists to prevent them from twisting.

Breach of contract: Failure to perform according to the terms of a contract. The party who has not breached the contract can rescind the agreement and sue for damages or for performance.

Breach of trust: Abuse of the responsibilities or authority as set forth in a trust agreement.

Break-even cash ratio: Equalization of the ratio of operating expense plus debt service to gross income (1:1.) Interpreted as the occupancy level that must be achieved to break even.

Break-even point: A point when gross income will cover operating expenses and the debt service.

Breakpoint: The Sales threshold over which percentage rent is due.

Bridge financing or bridge loan: Short-term mortgage financing between the end of one loan or financing instrument and the beginning of another.

British Thermal Unit (BTU): A unit used to measure the efficiency or capacity of heating or cooling systems. A unit of heat required to raise one pound of water One degree Fahrenheit at sea level.

BTU: See British Thermal Unit.

Buffer strip or zone: Land between two areas of different use, such as commercial and residential.

Builder's risk insurance: Insurance used to protect builders against fire and special risks while they have buildings under construction.

Building code: Local and State Laws that set minimum construction standards.

Building line or setback: Distances from the ends and/or sides of the lot beyond which construction may not extend. The building line may be established by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.

Building permit: A written permit that must be purchased from the local government by anyone doing remodeling or rehabbing work on a property.

Buydown: With a buydown, the seller or borrower pays an amount to the lender so that the lender can offer a lower rate and lower payments, during the earlier portion of the loan term. If the seller pays, he may increase the sales price to cover the cost of the buydown. Buydowns can occur in all types of mortgages; fixed rate, interim fixed and adjustables.

Buyer's agent: A real estate agent who works for the buyer of a house, not the seller.  ¶ 6:29 PM