O

A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z

obedience
The fiduciary relationship obligates the agent to act in good faith at all times, obeying the principal’s instructions in accordance with the contract. However, that obedience is not absolute. The agent may not obey instructions that are unlawful or unethical. Because illegal acts do not serve the principal’s best interests, obeying such instructions violates the broker’s duty of loyalty. On the other hand, an agent who exceeds the authority assigned in the contract will be liable for any losses that the principal suffers as a result. (See fiduciary)

objective
External to the mind.

obligation
The act of binding oneself by a social, legal, or moral tie. A social, legal, or moral requirement, such as a duty, contract, or promise that compels one to follow or avoid a particular course of action.

obligatory advance
Any advance which, under the terms of the credit line deed of trust or other agreement, the secured party has legally obligated itself to make in the absence of a default, breach, or other such event. Obligatory advances include, but are not limited to, advances which the secured party has agreed to make as a term or condition of the credit line deed of trust or other related agreement; obligations arising out of the occurrence of a condition, event or circumstance contemplated by the agreement; obligations arising on a specified date or time; or advances made upon application therefor by the grantor under the credit line deed of trust or by another obligor whose indebtedness is secured by the deed of trust.

obligor
Obligor means a borrower, co-borrower, cosigner, or guarantor obligated to repay a home mortgage loan.

observed condition method
Breakdown method; depreciation computed by estimating the loss in value caused by every item of depreciation, whether curable or incurable. (See depreciation)

occupational information
Information about a specific cluster of jobs.

Occupational Safety and Health Act (OSHA)
Congress created OSHA under the Occupational Safety and Health Act, which was signed by President Richard M. Nixon on December 29, 1970. OSHA’s mission is to prevent work-related injuries, illnesses and deaths.
OSHA Website

offer
An offer is a promise made by one party, requesting something in exchange for that promise. The offer is made with the intention that the offeror will be bound to the terms if the offer is accepted. The terms of the offer must be definite and specific and must be communicated to the offeree. (See offeree, offeror)

offer and acceptance
Two essential components of a valid contract; a “meeting of the minds.” (See acceptance, offer)

offeree
The person to whom an offer is made – usually the owner. (See offer)

offeror
The party who makes an offer – usually the buyer. (See offer)

office
The office is the Office of Financial Regulation. OFR programs oversee and regulate a wide range of financial enterprises and individuals, such as banks, credit unions, mortgage loan originators, securities industry participants, consumer finance companies, money transmitters, foreign currency exchangers and payday lenders. www.flofr.com

Office of Fair Housing and Equal Opportunity (FHEO)
The Office of Fair Housing and Equal Opportunity (FHEO) was organized to respond to the agency’s expanding role in monitoring the progress of access to fair housing initiatives, and it is also responsible for implementing the agency’s affirmative action and equal opportunity programs for minority- and women-owned business enterprises in New York.

Office of Federal Housing Enterprise Oversight (OFHEO)
The federal regulatory body that oversees the government-sponsored entities (GSEs), Freddie Mac and Fannie Mae. It was established as an independent entity within the Department of Housing and Urban Development by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The OFHEO works to ensure the capital adequacy and financial safety of the two housing GSEs.

Note: Under the Housing and Economic Recovery Act of 2008 (HERA), OFHEO was merged with the Federal Housing Finance Board (FHFB) to create the Federal Housing Finance Agency (FHFA).
www.fhfa.gov

Office of Real Estate Appraisers
In 1989, Title XI of the federal Financial Institutions Reform, Recovery and Enforcement Act was adopted by congress mandating states to license and certify real estate appraisers who appraise property for federally related transactions.

In response to the federal mandate, the Real Estate Appraisers Licensing and Certification Law was enacted by the California Legislature in 1990 (AB 527, Chapter 491 of 1990). OREA was established within the Business, Transportation and Housing Agency, and charged with developing and implementing a real estate appraiser licensing and certification program compliant with the federal mandate.
OREA, which is entirely funded by licensing fees, is a single program comprised of two core components, licensing and enforcement.

The Licensing Unit sets the minimum requirements for education and experience, according to criteria set by the federal government and California law, to ensure that only qualified persons are licensed to conduct appraisals in federally related real estate transactions. Applicants must meet minimum education and experience requirements and successfully complete a nationally approved examination.

The Enforcement Unit investigates the background of applicants and licensees to ensure they are fit for licensure. The Enforcement Unit also investigates complaints of violations of national appraisal standards filed against licensed appraisers.

OREA is responsible for the accreditation of educational courses and providers for real estate appraisers.

Note: The Office of Real Estate Appraisers is now called the Bureau of Real Estate Appraisers (BREA) and is part of the Department of Consumer Affairs.
www.brea.ca.gov

Office of the Comptroller of the Currency (OCC)
Office of the Comptroller of the Currency (OCC) is the federal agency that charters, regulates, and supervises all national banks. It also supervises the federal branches and agencies of foreign banks. Headquartered in Washington, D.C., the OCC has four district offices plus an office in London to supervise the international activities of national banks. The OCC was established in 1863 as a bureau of the U.S. Department of the Treasury. The OCC’s nationwide staff of examiners conducts on-site reviews of national banks and provides sustained supervision of bank operations. The agency issues rules, legal interpretations, and corporate decisions concerning banking, bank investments, bank community development activities, and other aspects of bank operations. See www.occ.treas.gov

Office of Thrift Supervision (OTS)
Monitors and regulates the savings and loan industry. OTS was created by FIRREANote: The Office of Thrift Supervision (OTS) became part of the Office of the Comptroller of the Currency (OCC); the merger was completed as of July 21, 2011, and the OTS no longer exists. The OCC now has supervisory responsibility for federal savings and loans and federal savings banks. See www.occ.treas.gov

office property
Income-producing commercial property from which a particular service is rendered.

offsite improvements
Improvements made outside of a property’s boundaries, such as sidewalks and streets.

oil and gas lease
A grant of the sole and exclusive right to extract oil and/or gas from beneath the surface of land. Such a lease is generally for a designated term of years and is subject to a payment of royalties in the event of production, the commencement of drilling operations on or before a specified date and the performance within a specified time of a certain amount of development work. Typically, an express or implied easement is granted to enter the property in order to drill.

oligopoly
A market in which there are only a few sellers of a good or service. (See imperfect markets)

oligopsony
A market in which there are only a few buyers of a good or service. (See imperfect markets)

on center
On Center (O.C.) indicates the center line of a stud. Stud spacing is usually 16″ O.C. This means that the distance between the center line of adjacent studs is 16″ on center. (See construction terms)

one stop center
a single point-of-entry to a network of employment, training, and educational programs and providers in each community. Also known as Workforce Investment Centers

one stop shopping
An arrangement where settlement and service providers are all available through the broker.

one-hundred-percent commission plan
Some firms have adopted a 100 percent commission plan. Salespersons in these offices pay a monthly service charge to their brokers to cover the costs of office space, telephones and supervision in return for keeping 100 percent of the commissions from the sales they negotiate. The 100 percent commission salesperson pays all of his or her own expenses.

online
Accessible via a computer network or the Internet.

online community
Asynchronic communication (members participate at different times) conducted over the Internet; access may be restricted to members or open to all.

online forum
A forum is a public meeting or assembly for open discussion. An e-forum is a discussion forum that enables geographically distant participants to share ideas and enhance teamwork via the Web.

onsite construction
Traditional construction, built by contractors. It is built on site from the foundation up without significant use of factory-made modular or panelized elements.

onsite wastewater treatment facility
Any conventional septic tank system or alternative system installed at a site to treat and dispose of wastewater, predominantly of human origin, generated at that site. A conventional system consists of a septic tank that discharges effluent to a leach field or disposal field, usually configured as a trench (or trenches) or bed.

open door policy
An open door policy means, literally, that every manager’s door is open to every employee. The purpose of an open door policy is to encourage open communication, feedback, and discussion about any matter of importance to an employee.

open house
The common real estate practice of showing listed homes to the public during established hours.

open listing
A listing given to any number of brokers who can work simultaneously to sell the owner’s property. The first broker to secure a buyer who is ready, willing and able to purchase at the terms of the listing earns the commission. In the case of a sale, the seller is not obligated to notify any of the brokers that the property has been sold.

Unlike an exclusive listing, an open listing need not contain a definite termination date. The listing terminates after a reasonable time, usually whatever is customary in the community. Either party can, in good faith, terminate the agency at will. (See listing agreement)

open meetings law
All meetings of any public body shall be public meetings and all persons so desiring shall be permitted to attend and listen to the deliberations and proceedings. A.R.S. § 38431.01(A).It is the public policy of this state that meetings of public bodies be conducted openly and that notices and agendas be provided for such meetings which contain such information as is reasonable necessary to inform the public of the matters to be discussed or decided. A.R.S. § 38-431.09.

open office
Open office is an office design that resembles the corral or bull pen arrangement that has been used for a number of years in the real estate industry. The appeal is that people can more freely interact with one another without barriers of individual office walls, which inspires creative thinking and joint problem solving.

open-buyer-agency-agreement
This agreement is a nonexclusive agency contract between a broker and a buyer. It permits the buyer to enter into similar agreements with an unlimited number of brokers. The buyer is obligated to compensate only the broker who locates the property the buyer ultimately purchases.

open-end loan
Loan in which the borrower is allowed to re-borrow against principal that has been paid so far. It is basically a credit card that is secured by real property.

open-end trust deed
An expandable loan in which the borrower is given a limit up to which he or she may borrow, with each incremental advance to be secured by the same trust deed. (See trust deed)

open-ended mortgage
A mortgage loan that is expandable by increments up to a maximum dollar amount, the full loan being secured by the same original mortgage.

open-market operations
The buying and selling of government securities by the Federal Reserve to control the amount of money in circulation. (See easy monetary policy, reserve requirements, tight monetary policy, The Federal Reserve System)
Federal Reserve Website

operating budget
A projection of income and expenses for the operation of a property over a one year period.

operating expense ratio
The ratio of total operating expenses to effective gross income.

operating expenses
Those recurring expenses that are essential to the continuous operation and maintenance of a property. Operating expenses are generally divided into the following categories: fixed expenses such as real property taxes and building insurance; variable costs such as utilities, payroll, administration and property management fees; and reserves for replacement. Operating expenses do not include items such as mortgage payments, capital expenditures and depreciation.

operating statement
The written record of a business’s gross income, expenses, and resultant net income.

operating system
The instructions that a copmuter uses to “operate” its various systems. (See DOS)

operation of law
A way in which someone acquires certain rights or responsibilities automatically without taking individual action or being the subject of a court order.

opinion of title
An opinion of the marketability of a title given by an attorney based on the abstract of title. (See abstract of title)

opportunistic networks
Chance encounters that are helpful in the job search process.

opportunity cost
Resources are very often scarce. Individuals and societies must choose between the competing uses of limited resources. Once a choice is made, what is given up is the ‘opportunity cost’ that must be paid for a particular choice.

opportunity cost of capital
The money you would have earned on cash you held in financial assets if you didn’t take that money to cover a shortfall on a negative cash flow property. Let’s say you took $10,000 from your bank account in a year to cover negative cash flow on a property. You might have earned $500 (at 5.0%) if that money had stayed in your financial investment accounts, but it didn’t because you had to cover a cash flow shortfall. So the $500 you did not earn due to this, is your “opportunity cost of capital.”

opt-out
The choice to not participate.

optical character recognition (OCR) software
1) OCR software converts digitally scanned static documents into manageable electronic text files; 2) Software that scans resumes into company databases.

optimum price
The optimum price, often referred to as the optimal pricing point, is the price at which a product or service yields the maximum return on investment or profit, balancing between volume sales and profit margin. This pricing strategy considers various factors including production costs, consumer demand, market conditions, competitor pricing, and price sensitivity of the customer base. For instance, in real estate, the optimum price of a property would be the amount that maximizes the seller’s profit while being attractive enough to quickly draw buyers in a competitive market. Achieving this balance ensures that the product or service is competitively priced to maximize sales without sacrificing profitability.

optimum rent
Optimum rent refers to the rental price that balances maximizing income for the property owner while remaining attractive and competitive in the market. This rent level ensures a desirable occupancy rate, avoiding vacancies that can occur from setting the price too high. It is determined by considering factors such as market demand, the condition and location of the property, and comparable rental rates in the area.

option
An agreement to keep open, for a set period, an offer to sell or lease real property.

option listing
A listing in which the broker also retains an option to purchase the property for the broker’s own account. In view of the body of litigation involving breach of fiduciary duties by brokers who conceal offers from buyers until after the broker has exercised the option, full and fair disclosure must be given to the seller. (See listing agreement)

oral contract
An unwritten agreement. With few exceptions, unwritten agreements for the sale or use of Real Estate are unenforceable. In most states, contracts for the sale or rental of real estate are, unless they are in writing, unenforceable under the Statute of Frauds. Verbal leases for up to a year are often acceptable.

ordinary income
Income that does not qualify for capital gains treatment.

ordnance
A military weapon or item of destruction (e.g. bullets). (See military ordinance location)

organizational and community affiliations
Professional associations, alumni associations, community or volunteer organizations, philanthropic cultural and civic organizations, certifying or licensing bodies, boards of directors, boards of trustees and advisory boards.

organizational colleagues
Professionals at all levels, including clerical and support staff.

orientation
Orientation is the placement of a structure on a site, ideally to take maximum advantage of street frontage, view, and access to light and air.

orientation programs
Employee orientation programs provide an introduction and process of assimilation for new employees. Major objectives include gaining employee commitment, communicating company expectations, and conveying what he or she can expect from the job and company. It is commonly followed by training for specific job responsibilities.

original basis
The sum of the purchase price of a property plus buying expenses on acquisition. (See basis)

origination fee
A fee, often a percentage of the total principal of a loan, charged by a lender to a borrower on initiation of the loan.

osmosis
Diffusion through a semi-permeable membrane, as of a living cell.

ostensible agency
A form of implied agency relationship created by the actions of the parties involved rather than by written agreement or document. (See implied agency)

other disciplinary action
Other possible disciplinary actions are civil penalty up to $1,000 per violation, issuance of a provisional license, requirement for additional continuing education hours, requirement of a surety bond posting.

other income
Refers to income other than rent, such as vending and laundry machines, storage or parking space income, and so on.

other income
Refers to income other than rent, such as vending and laundry machines, storage or parking space income, common area maintenance dues, etc.

out-of-state bank
Out-of-state bank means any association or corporation authorized to do a banking business, the main office of which is located outside the commonwealth and exists by authority of any state of the United States other than the commonwealth.

Out-of-state branch
Out-of-state branch means a branch of any Massachusetts bank located outside the commonwealth.

out-of-state federal bank
Out-of-state federal bank means a national banking association, savings and loan association, or savings bank that exists by authority of the United States, the main office of which is located outside the commonwealth.

outbound telephone call
A telephone call initiated by a telemarketer to induce the purchase of goods or services or to solicit a charitable contribution.

outlier
In statistics, an extreme variate of a population that is taken out of a calculation of the mean of the variates to avoid distorting the computation.

Over-the-Counter (OTC)
A market for securities made up of dealers who may or may not be members of a securities exchange. OTC firms conduct business over the telephone and act either as principals or dealers (buying and selling stock from their own inventory and charging a markup) or as a broker or agent and charging a commission.

overdraft of groundwater supply
Like an overdraft of a bank account where a person draws out more than the balance, an overdraft of groundwater supply is the drawing out of more groundwater than that which can be recharged. See also safe yield

overriding trust deed
A method of financing in which the new mortgage is placed in a secondary or subordinate position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender. Sometimes called an all-inclusive loan, an overlapping loan or a wraparound mortgage.

owner equity
Owner equity is the combined investments of the owner(s) and the accumulation of profit or losses for the business since it began, expressed in the accounting formula: Net Worth = Assets – Liabilities

owner occupied
A property where the owner physically occupies the property.

owner’s policy
The insurance policy that protects the buyer from title defects.

ownership
The right to use, possess, enjoy, transfer, and dispose of a thing to the exclusion of all others.

ownership in severalty
Separate ownership; ownership of property by one person only. (See severalty)

oxygen
A colorless, odorless, tasteless gas which forms about 21 percent of the atmosphere; oxygen is capable of combining with all elements except the inert gasses, is active in physiological processes, and is involved especially in combustion processes.

oxygen debt
A cumulative oxygen deficit which develops during periods of intense bodily activity and which must be made good when the body returns to rest.

oxygenate
To impregnate, combine, or supply (as in blood) with oxygen.

oxyhemoglobin
Hemoglobin loosely combined with oxygen that releases to the tissue.