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B HORIZON - layer of soil that lies beneath the top layer. The action
of percolating water changes the composition of the B horizon.
BACK POINTS - Points paid by a lender to a mortgage broker that surpass
the points paid by the borrower.
BACK TITLE LETTER - Also referred to as a starter or back title
certificate, it is a letter issued by a title insurance company to an
attorney, who examines the title for title insurance purposes.
BACKFILL - Used to brace a foundation or structure, it replaces the
ground that is removed during the construction.
BACKUP OFFER - A second or "backup" offer to purchase a property, in the
event that too many problems arise and the first offer doesn't work out.
BACKWATER - Water from a river or a stream that is stopped in its course
or flows back to its source because of a dam or an impediment.
BACKWATER VALVE - valve in a lateral sewer line that automatically
prevents sewage from flowing back to its source, such as a building.
BALANCE - value of real property when opposing influences are equal
BALANCE SHEET - statement of the company' assets and liabilities that
determine its equity (net worth).
BALANCED EXCHANGE - Under Section 1031 of the Internal Revenue code, a tax-free
exchange of real estate properties that must be invested by the taxpayer.
BALLOON - A payment or final installment that is larger than the
preceding ones in an installment or term loan.
BALLOON MORTGAGE - short-term mortgage that
carries small payments until the end of the term when the balance is due in
BALLOON NOTE - note calling for periodic payments which are
insufficient to fully amortize the face amount of the note prior to
maturity, so that a principal sum known as a "balloon" is due at
BALLOON PAYMENT - last payment, the full balance, of a balloon note.
BALUSTER - supporting beams of a handrail in a staircase.
BALUSTRADE - succession of balusters that is used to support a
BANK - An institution, Commercial Bank, whose purpose is to sell
short-term loans and collect deposits that are demanded.
BANKRUPT - Upon petition invoked by the debtor's creditors or upon
voluntary petition, debtor may file for bankruptcy. As a result, debtor's
assets are distributed among the creditor to absolve debt.
BANKRUPTCY -A debtor who has filed for bankruptcy because he/she is
seeking relief from an overwhelming sum of debt.
BARGAIN AND SALE DEED - In
the Statute of Uses, a contract or deed that can also signify a legal
BARN - A farm infrastructure that houses livestock, machinery, and
stores food for livestock and grain.
BASE MAP - map that contains "base" information, such as city
boundaries, city, county, and state.
BASE MOLDING - Molding that is installed on the top of the base.
BASE RENT - A minimal amount that is used as the minimum in rent payment
of a lease.
BASE SHOE MOLDING - A carpet strip or carpet molding that installs
molding on the bottom of a baseboard.
BASE TITLE - result of an examination of title for an internal use
of a title insurance company. Usually covers a large area and is done in
anticipation of future sales or subdividing of the area.
BASE YEAR - year upon which a direct expense escalation of rent is
BASEBOARD - A board or molding covering an interior wall where it meets
BASEBOARD HEATING - system of perimeter heating in which the baseboard
is replaced by the heating units.
BASEMENT - Generally, the story of a building below ground level.
BASIC CAPACITY - In connection with highway use, the greatest number of
cars per hour, which can pass a given point under ideal driving conditions,
will give the basic capacity of a lane or road.
BASIC CROPS - Crops usually subject to government price supports and is
considered the basis of our agricultural economy, such as wheat, corn,
oats, rice, and similar crops.
BASIS - purchase price of a piece pf property, including all
expenses related to the purchase.
BASIS FOR DEPRECIATION - value of property for purposes of
depreciation. An example is a purchased asset. The basis is cost, whether
fully paid for or not. The method for determining the basis is different
for gift, inheritance, etc.
BASIS POINT - finance term that signifies a yield of 1/100th of 1%.
BATHROOM - room that contains a toilet, sink, and bathtub or
bathtub-shower combination. In appraisal for federally insured mortgages, a
toilet and sink (no bathtub or shower) equal a half bathroom; a toilet,
sink and stall shower equal a three quarter bathroom.
BATT - strip of insulation that fits closely between the studs of a
BATTEN - narrow strip that is used to cover seams between siding
BATTER - slope of a structure, such as a wall or bank, that is expressed
in terms of the vertical rise per horizontal distance, such as 3 inches
(vertical) per 10 feet (horizontal).
- land between a riverbank and the edge of the water when the water
level is lower than normal.
BAUHAUS - (1919-1933) A school of design that is most noted for its
architecture and founded by Walter Gropius in Germany.
BAY - opening between two columns, walls, etc., which forms a
room-like space. May be industrial space, parking space, barn space, or
other use. Also, a bending or curving of the shoreline so as to form a
partially enclosed body of water.
BAY WINDOW - window that projects in a curve outwards from a wall,
giving a bay- like effect to the interior.
BEACH - That portion of the shore between ordinary low and high water
marks. Any sandy area adjacent to a body of water.
BEAM - vertical or horizontal member of a structure; may be of wood,
steel, concrete, or other strong material, and, unless decorative only, is the
load-bearing part of the structure.
BEAMED CEILING - ceiling that has one or more of its beams exposed.
BEARER - A person that holds the commercial paper.
BEARER INSTRUMENTS - Checks, notes, drafts, bonds, etc., which is payable
to whomever has possession of the instruments: i.e. the bearer.
BEARING - The relative position or direction of one object to another or
to a compass point. Also, supporting a load, such as a bearing wall.
BEARING VALUE - In construction, the ability of soil to bear the weight
of the structure to be built.
BEARING WALL - wall that supports the weight of a part of a structure
in addition to its own weight.
BED A TREE - Preparation of a path (bed) on which a tree is to fall so
that it will not be damaged.
BEDROCK - A solid rock beneath the soil, distinguished from rocks or
BEDROOM COMMUNITY - area primarily residential. The people living
there commute to work.
BEFORE AND AFTER METHOD - appraisal method used in both condemnation
and modernization. In condemnation the method is used in a partial taking. In
modernization, an appraiser may take the value of property before and after
remodeling to determine if the value increased from than modernization
BELT HIGHWAY - A by-pass or limited access highway carrying traffic
around an urban area, with entrances and exits to principal streets.
BENCH MARK - A surveying mark made in some object that is permanently
fixed in the ground, showing the height of that point in relation to sea
BENEFICIAL ESTATE - estate, the right to possession of which has been
postponed, such as a devise under a will. More commonly, an estate, the
legal ownership of which has not yet vested, similar under a land contract.
BENEFICIAL INTEREST - equitable, rather than legal ownership of
property, such as under a land contract.
BENEFICIAL USE - doctrine, applicable in some areas, pertains to
water rights, giving priority to those who uses the water most
BENEFICIARY - A person whose benefit a trust is created. Also, in states
in which deeds of trust are commonly used instead of mortgages, the lender is
referred to as the beneficiary.
BENEFICIARY'S DEMAND - Written instructions by a beneficiary under a
deed of trust stating and demanding the amount necessary for issuance of a
full or partial reconveyance.
BENEFICIARY'S STATEMENT - statement by a lender under a deed of trust,
setting forth the pertinent information necessary to assume said deed of
trust, such as the unpaid balance, monthly payment, and interest rate.
BENEFIT OF THE BARGAIN - rule of damages under which a defrauded
purchaser may recover the difference between the actual and misrepresented
value of the property purchased, even if it is greater than the actual loss
BENEFITS - term used in eminent domain, referring to an increase in
value to land not taken, which is produced by the taking.
BENEVOLENT ASSOCIATIONS - Non-profit groups that have a philanthropic or
BENT - transverse frame of a building or bridge that is designed to
support horizontal or vertical loads.
BEQUEATH - A will that states to issue personal property.
BEQUEST - gift of personal property that is traditionally in a will.
Modernly, a gift of personal or real property.
BERM - bench, ledge, or other resting place part way up a hill or
slope. Also, a mound used to control drainage by diverting all or part of
BETTERMENT - improvement to a structure that is other than a repair,
restoration, or enlargement.
BI - prefix that signifies "every two" or "twice
BI-LEVEL - Two levels in reference to construction of a house.
BIANNUAL - Twice per year.
BID - offer, usually in competition with others, such as at auction.
A builder may bid for the right to do construction Also, used in some
states to describe an offer to purchase real estate.
BIENNIAL - Every two years.
BILATERAL (RECIPROCAL) CONTRACT - contract that is formed by an
exchange of promises. Performance of the contract takes place at a later date
BILL DISCOUNTED - promissory note where the interest is deducted in
BILL OF SALE - instrument that transfers personal property.
BILLBOARD - structure annexed to land for the purpose of posted
BINDER - report issued by a title insurance company setting forth the
condition of title to certain property as of a certain date, which also sets
forth conditions that, if satisfied, will issue a policy of title
insurance. Also, a policy of title insurance that calls for a reduced rate
for a future policy if the property is sold within a specified period.
BIRD DOGGING - To obtain the initial lead regarding property, buyers,
investors, potential home improvement customers, etc. The lead is then
followed up by one who is empowered to make the deal.
BIRTH RATE - number of births in a given area during a given period
of time, that is based on per thousand populations.
BIWEEKLY ACCELERATED MORTGAGE - A accelerated mortgage repaid by
biweekly payments. A biweekly payment is equal to one-half the regular
monthly payment. This reduced payment is then paid biweekly or 26 times per
year. Under this accelerated plan, the borrower pays off more principal
than a borrower making monthly payments.
BLACK ACRE - A fictitious name used by legal
writers to describe a specific property without a more descriptive
BLACKTOP - black paving surface that contains coal or asphalt
BLANKET INSURANCE POLICY - policy that covers more than one property.
Commonly used by builders of a tract.
BLANKET MORTGAGE - mortgage that covers more than one property of the
owner of the mortgage, such as a mortgage covering all the lots of a
builder in a subdivision. Also, a mortgage covering all real property of
the owner of the mortgages, both present and future. When used in this
meaning, it is also called a "general mortgage".
BLENDED RATE - interest rate that is higher than the original loan
but less than the current market rate.
BLIGHT - To whither and decay. Applied both to diseased plants and to
neighborhoods where normal real estate maintenance has ceased.
BLIGHTED AREA - A term used in urban renewal, referring to an area that
BLIND AD - ad that is usually found in a newspaper or magazine that does
not identify the party who placed the ad.
BLIND CORNER - corner where building or vegetation extends to the
property line and obstructs the vision of motorists to an angle of traffic.
BLIND NAILING - To nail so that the nails are sunk into the wall and
covered with putty so the nail heads do not show.
BLOCK - In a city, square or rectangular area that is enclosed by
streets. Also, in some states that is a part of a subdivision legal
description, such as Lot 1, Block 1, and Tract 1.
BLOCK BUSTING - illegal method of obtaining houses at below fair
market value by telling the inhabitants that people of a different race or
religion, moving into the area, will cause the property values to fall.
BLUE LAWS - Laws regarding the conducting of business on Sunday.
BLUE SKY LAWS - Laws that regulate the sale of securities to avoid
investment in fraudulent companies or high-risk investments without
disclosure of the risks to the investor.
BLUEPRINT - plan of a building in such detail as to enable workmen to
construct it from the print. The name comes from the photographic process that
produces the plan in white on a light blue background.
BOARD - A terms refers to a piece of lumber less than 2 inches thick,
and 8 or more inches wide. Also, a group of people authorized by law to
exercise management and control, either of a public function, such as a
board of supervisors, board of health, etc., or a private corporation, such
as a board of directors.
BOARD AND BATTEN - siding constructed of wide boards (usually one foot
wide) placed 1/2 inch apart; 3-inch wide battens cover the seams.
BOARD OF ALDERMEN - governing body of a municipal corporation.
BOARD OF EQUALIZATION - State board charged with the duty to bring
equitable uniformity to the various local property tax assessments.
BOARDFOOT - unit of measurement for lumber. One board foot is
equivalent to 144 cubic inches or 12" X 12" X 1".
BOARDING HOUSE - house where one can rent a room and receive board
(meals), for which the cost is included in the rent.
BOATEL - name that is issued to a hotel or motel adjacent to a marina
and caters to boat travelers.
BOILER PLATE - The printed form language that is contained in deeds,
deeds of trust, CC&R's, and other documents and contracts.
BOILER PLATING - Using a form language for a contract, CC&R's
BONA FIDE - legal term that refers to any actions, situations, or
persons that are honest, in good faith, and without fraud.
BONA FIDE PURCHASER - purchaser in good faith, without notice or
knowledge of adverse claims of others. Sometimes abbreviated as B.F.P.
BOND - insurance agreement by which one is insured against the loss
by acts or defaults of a third party. In construction, a performance bond
insures that the builder will finish his project. The insured could be a
lender, purchaser, or another interested party. Also, a method of financing
long-term debt, issued by a government or private corporation, which bears
interest and has priority over stock in terms of security.
BOOK COST - actual cost as carried in the account ledger.
BOOK DEPRECIATION - Depreciation reserved by an owner for future
replacement or retirement of an asset.
BOOK VALUE - value of a property as a capital asset.
BOOM - A barrier that forms an enclosure for logs or timber. Also, a beam
of a crane that is used for guiding whatever it lifts.
BOOT - Something that is given in addition to. Generally used in
exchange to refer to something given other than the major properties to be
exchanged, in order to equalize value.
BORING TEST - A study of soil by boring holes and removing samples.
BOROUGH - part of a city that has authority over certain local
BORROW - Material such as sand or gravel used for grading that is
brought from another location.
BORROW BANK - places from which borrowed material is taken.
BORROW PIT - pit that is left after the removal of borrow material.
The pit is filled as a lake and stocked by some states for fishing.
BORROWER - party that receive funds that must be repaid, usually
with interest. Also, one who uses anything belonging to another with an
agreement to return.
- Low land along a river that is formed by alluvial deposits. Also low
lying ground such as a valley or dale.
BOULEVARD - wide street usually lined with trees that has a median or
BOUNDARY - natural or artificial separation that marks the division of
two contiguous properties.
BRACED FRAMING - Framing that reinforced with post and braces, forming a
frame that is more rigid than the balloon framing.
BRADLEY SINK - circular lavatory found in industrial buildings, that
is capable of use by several persons at the same time by utilization of a
center column containing multiple water jets operated by foot pedals.
BREACH OF CONTRACT - Failure to perform a contract, in whole or part,
without legal excuse.
BREACH OF COVENANT - failure to do or to refrain from doing that was
BREACH OF WARRANTY - In real property, the failure of the seller to pass
title as either expressed or implied (by law) in the document.
BREAK EVEN POINT - In income property, the point where there is neither
a positive nor a negative cash flow.
BREAKDOWN METHOD - Estimating accrued depreciation by using all three
reasons (physical deterioration, functional obsolescence, economic obsolescence)
for a loss in value.
BREAST-HEIGHT - height at which the diameter of a tree is measured.
BREATHER ROOF - storage tank roof that rises or lowers depending on
the level of the stored gas or liquid.
BREEZEWAY - In construction of a home with no garage, a canopy that extends
from the house over the driveway serving as a protection from the weather
for an automobile and for those people going between the house and the
automobile. Also, a covering over a porch or patio, connecting two sections
of a house or a house and garage.
BRICK - building material made from clay that is molded and heated.
The effect of the heat on the iron in the clay gives it its red hue.
Addition of lime or magnesia will produce a yellow color.
BRIDGE - structure over a waterway, highway, or another obstruction
that facilitates passage and for the benefit of travelers.
BRIDGE LOAN - short-term loan secured by the equity in an
as-yet-unsold house, with the funds to be used for a down payment and/or
closing costs on a new house. There is no payment of principal until the
house is sold or at the end of the loan term, whichever comes first.
Interest payments can or cannot be deferred until the house is sold.
BRIDLE PATH (ROAD) - Technically a private road that is designated as a
bridle road without specific use. More modernly, a road designated for
BRITISH THERMAL UNIT (B.T.U.) - Unit of heat that is required to raise
one pound of water one degree Fahrenheit. Used to express the capacity of
heating and cooling systems.
BROKER, REAL ESTATE - A person who is licensed by the state to carry on
the business of dealing in real estate. A broker may receive a commission
for his or her part in bringing together a buyer and seller, landlord and
tenant, or parties to an exchange.
BROKERAGE - person or company, who works for a commission or a fee,
brings parties together and assists in negotiating contracts between them.
BROOM CLEAN - term used to describe the condition of a building that
is delivered to a buyer or tenant. The floors are swept and free of debris.
BUCKED - tree that is cut into logs.
BUDGET - In reference to condominiums and planned developments, the
common expenses shared by the unit owners that determines the amount each
unit will be charged for expenses of the common area, such as taxes,
insurance, maintenance, etc.
BUFFER STRIP (BUFFER ZONE) - parcel of land that separates two other
parcels or areas, such as a strip of land between an industrial and
BUILD TO SUIT - method of leasing property whereby the lessor builds
to suit the tenant (according to the tenant's specifications). The cost of
construction is figured into the rental amount of the lease that is usually
for a long-term.
BUILDER - A person whose occupation is the construction of structures
BUILDING - structure built to shelter people, animals, or goods. May
be a residence, business, or meeting place, such as a church.
BUILDING AND LOAN ASSOCIATION - organization that accumulates a fund
by subscription and savings of its members, to assist them with loans for
building or purchasing real estate.
BUILDING CODE - comprehensive set of laws that control the
construction of buildings, including design, materials used, construction,
use, repair, remodeling, and other similar factors.
BUILDING CONTRACT - contract that sets forth the terms under which
construction is to be undertaken. Price may be set, or based on the
builder's cost plus a profit.
BUILDING LINE - line beyond which there can be no construction. Set by
law, the purpose of such a line is to keep buildings from being built too
close to the street, for safety and aesthetic reasons.
BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) - association of
owners and managers of commercial (mainly office) buildings. The
association shares information on management techniques as well as setting
standards for things such as floor measurement of office buildings.
BUILDING PAPER - waterproof, heavy paper used in the construction of a
roof or wall as insulation.
BUILDING PERMIT - permit given by a local government to construct a
building, or make improvements.
BUILDING RESIDUAL TECHNIQUE - appraisal technique by which building
value is determined by first determining the net return attributable to the
land only, and deducting it from the total return to the property (may be
estimated). The residual amount is capitalized to find the building value.
Best used when land value is easy to estimate and building value difficult
BUILDING RESTRICTIONS - Prohibition by a governmental body (zoning
restriction) or a private party (a former owner) against construction of
certain structures on a property.
BUILT-IN'S - Commonly stoves, ovens, dishwashers, and other appliances
that are framed into the building construction and are not movable.
BUILT-UP ROOF - level roof composed of layers of roofing materials
(tars and waterproof paper) that is covered with fine gravel.
BULK SALE - transfer in
bulk of all or substantially all of the inventory and fixtures of a
BULK SALES ACT - Laws to protect creditors against the secret sale of
all or substantially all of the merchant's goods. Requires certain notice
before sale, and sets forth methods of voiding improper sales.
BULKHEAD - partition in a ship, as well as a retaining wall to hold
back water and extend the shoreline.
BULKHEAD LINE - line established in navigable waters beyond the point
where no solid fill can be used. The Army Corps of Engineers establishes
the bulkhead line and also the pier line, which no pier can be constructed
past the point.
BUNDLE OF RIGHTS - theory that compares property rights to a bundle of
sticks. Each of the usual property rights (possession, alienation, etc.) is
represented by a stick and is considered separately.
BUS - copper bar from which electrical current flows through.
BUS DUCT - metal clad enclosure that contains a bus.
BUSINESS - Any form of activity by which people can earn money.
BUSINESS CYCLE - economic cycle of prosperity and decline.
BUSINESS OPPORTUNITY - sale of a business
(may or may not include the sale of real estate). Some states require a
real estate license for these sales even when real estate is not involved. BUTT
JOINT - meeting end to end (butting)
of two members to form a connection (joint).
BUTTERFLY ROOF - roof that is formed by two gable roofs concave to a
center ridge. The roof resembles the shape of a butterfly's wings, hence
the given name.
BUTTRESS - support for a wall.
BUY-SELL OFFER - offer by one owner of a business or real estate to
buy out the interest of another owner of the same business or real estate.
One can also sell the offerer's interest at the same price or proportionate
price if there is unequal ownership.
BUYDOWN - Money advanced by an individual, such as a builder, seller, buyer,
lender, and developer to lower monthly mortgage payments for a few years or
for the whole term.
BUYDOWN ACCOUNT - account holding funds to be used to pay additional
amounts during the buy down period.
BUYER - AGENCY AGREEMENT - agreement by a real estate broker to
represent a buyer of property. A broker's agreement is to represent a
seller is commonly called a listing agreement.
BUYER'S MARKET - market condition that favors the buyer. In real
estate, when more homes are for sale than there are buyers interested homes.
BUYERS BROKER - real estate agent who represents the interests of the
buyer. Rules of confidentially between buyer and agent are stricter than if
the agent represented both buyer and seller.
BY-LAWS - Rules and regulations that are adopted by an association or
corporation, which govern its activities.
BY-PASS - road that is designed to avoid or pass by a high density
area, such as a business section of a city, in order to ease traffic