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

baby boomers
Persons born between 1946 and 1964. Baby boomers represent nearly 20 percent of the American population and have significant impact on the economy. Baby boomers are often the target of marketing and business plans.

back-end qualification
When qualifying a prospective buyer for financing, the ratio of the borrower’s income to monthly debt obligation is a primary consideration. Based on “back-end qualification,” the ratio of a prospect’s income to their total housing expense plus their long-term debt obligation should not exceed 36%. (See front-end qualification, prequalify)

back-end ratio
The ratio of monthly housing costs (PITI) plus long-term debt service to total monthly income. (See front-end ratio, PITI)

backfill
Backfill is the dirt placed against the foundation of a structure after the concrete used to create the foundation wall has cured and the wood forms in which the concrete was poured have been removed. (See foundation)

backup offer
An offer to buy, submitted to a seller, with the understanding that the seller has already accepted a prior offer; a secondary offer. Sometimes the seller accepts the backup offer contingent on the failure of the sales transaction on the part of the first purchaser within a specified period of time. The seller must be careful how he or she proceeds, however, when the time for the buyer’s performance, under the first contract, has expired.

bail bond lien
A real estate owner who is charged with a crime for which he or she must face trial, and may post bail in the form of real estate rather than cash. The execution and recording of such a bail bond creates a specific, statutory, voluntary lien against the owner’s real estate. If the accused fails to appear in court, the lien may be enforced by the sheriff or another court officer. (See lien)

bait and switch
An illegal sales tactic whereby a seller advertises a product with a low price with the intention of persuading customers to purchase a more expensive product. When a seller uses this tactic, they frequently tell the customer the original product is sold out or no longer available and push the customer to purchase a costlier product. This tactic can be considered false advertising if the seller is not actually providing the original product. In general, no legal action can be taken if the item is available but the seller strongly encourages the customer to purchase the more expensive item.

balance
The appraisal principle that states that the greatest value in a property will occur when the type and size of the improvements are proportional to each other as well as the land. (See appraisal)

balance of payments
A record of all transactions by the citizens of one country with another country or countries. (See balance of trade)

balance of payments
Also known as balance of international payments. Balance of payments summarizes a national economy’s transactions with the rest of the world for a specified time period. It encompasses all transactions involving goods, services and income; financial claims on and liabilities to the rest of the world; and transfers such as gifts. The balance of payments classifies these transactions in two accounts: the current account and the capital account. The current account includes transactions in goods, services, investment income and current transfers, while the capital account mainly includes transactions in financial instruments. Balance of payments transactions and international investment position together constitute an economy’s set of international accounts.

balance of trade
A record of the goods and services transferred between one country and another country or countries. An unfavorable balance of trade means imports exceed exports. A favorable balance of trade means exports exceed imports. (See balance of payments)

balance sheet
A summary of the assets, liabilities and ownership equity of a sole proprietorship, a business partnership or a company, as of a specific date.

balanced trust
A “combination trust” is referred to as a “balanced trust” in California. (See combination trust)

balloon frame
The balloon frame is a house built on a frame of light lumber, held together with nails. Heavy posts are not used. The wallboard sheathing on the frame provides strength. The term balloon frame derives from the fact that such light frame homes seem to be constructed overnight; inflated like balloons.

balloon note
A loan in which a borrower makes only interest payments for a set period of time. At the end of the term, the borrower repays the entire principal in one payment. A balloon loan may be useful when the borrower expects interest rates to be low at the end of the term, allowing him or her to refinance the loan. There is often a risk of default because not all borrowers have the cash to repay the loan in one payment.

balloon payment
Under an installment loan agreement, a final payment that is substantially larger than the previous installment payments and repays the debt in full; the remaining balance that is due at maturity (stop date) of a note or obligation. (See amortization, fully amortized, stop date)

balloon payment small lender
While a loan with a balloon payment generally cannot be a Qualified Mortgage, a small lender can make a loan with a balloon payment that is a Qualified Mortgage in certain circumstances. See Fannie Mae Small Lenders List

baluster
Any of the vertical supports for a stair, balcony or railing. (See construction terms)

band of investment method
A method of developing a discount rate based on (1) the rate of mortgage interest available, (2) the rate of return required on equity, and (3) the debt and equity share in the property. A variation of this method is used to compute an overall capitalization rate.

bank (MA)
Bank means any association or corporation chartered by the commonwealth under the provisions of M.G.L. c. 168, 170, 171, or 172, or any individuals, association, partnership, or corporation incorporated or doing a banking business in the commonwealth, subject to the supervision of the commissioner.

bank fraud
Bank fraud is the illegal practice of knowingly executing or attempting to execute a scheme to defraud a bank or other financial institution or to obtain property owned by or under the control of a bank or other financial institution by means of false or fraudulent pretenses, representations, or promises.

bank reconciliation
A scheduled task to balance the debits and credits of a recordkeeping system with figures shown on a back statement.

Bank Secrecy Act
The Bank Secrecy Act of 1970 (BSA), also known as the Currency and Foreign Transactions Reporting Act, is a U.S. law requiring financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. (See Suspicious Activity Report)

bank-owned property
A bank asset property that has been taken back by a lender through the legal process of foreclosure detailed in a borrower’s mortgage.

banker’s rule
Using a 360-day year for prorations.

bankruptcy
A condition of financial insolvency in which a person’s liabilities exceed assets and the person is unable to pay current debts.

bankruptcy score
A scoring system to indicate risk of borrower default. (See bankruptcy)

Bar Treaty
An agreement no longer in effect that established certain documents the escrow holder may prepare and those it may not as they relate to legal advice. The State Bar of California revoked the agreement in 1979.

bargain and sale deed
A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion.

base rent
Base rent is the minimum fixed amount that a tenant agrees to pay a landlord for the use of a leased property, excluding any additional costs such as utilities, maintenance, or operating expenses. It is typically expressed as a monthly or annual rate and forms the primary financial obligation in a lease agreement. Base rent does not include variable expenses, which may be billed separately or incorporated into the lease as additional rent.

base value
For property tax assessment purposes, the full cash value of a parcel of real estate as of February 28, 1975, or the date of a subsequent sale or other reassessment event.

baseline
Baselines are one of a set of imaginary lines running east and west used by surveyors for reference in locating and describing land under the government survey method of property description. (See meridians, rectangular (government) survey system)

basic competency skills
Reading, writing, listening, speaking, mathematics.

basic form homeowner’s policy
The most common homeowner’s policy is called a basic form. It provides property coverage against fire and lightning; glass breakage; windstorm and hail; explosion; riot and civil commotion; damage by aircraft; damage from vehicles; damage from smoke; vandalism and malicious mischief; theft; and loss of property removed from the premises when it is endangered by fire or other perils. (See homeowner’s insurance policy)

basis
The dollar amount that the Internal Revenue Service attributes to an asset for purposes of determining annual depreciation or cost recovery, and gain or loss in the sale of the asset. The determination of basis is of fundamental importance in tax aspects of real estate investment. All property has a basis. If property was acquired by purchase, the owner’s basis is the cost of the property plus the value of any capital expenditures for improvements to the property, reduced by any cost recovery depreciation actually taken or allowable. The basis is also reduced by any untaxed gain “carried over” to the new property in cases where the new property is a replacement of a former residence or is acquired through a like-kind exchange or through an involuntary conversion. This new basis is called the property’s adjusted basis. (See adjusted basis, depreciable basis, original basis)

basis point
One hundredth of a percentage point (0.01%). Basis points are often used to measure changes in or differences between yields on fixed income securities, since these often change by very small amounts.

bearing wall
A bearing wall is a main or supporting wall referred to as a load-bearing wall, usually supporting a roof above. It is usually of stronger construction than other members and is usually left alone when remodeling. It is possible for a bearing wall to be built in a variety of angles to a door. (See construction terms)

bedbug (AZ definition)
“Bedbugs” means any insect in the genus cimex and its eggs.

Before and after method
A method of determining just compensation when a portion of an owner’s property is seized for public use. The value of the owner’s remaining property after the taking is subtracted from the value of the whole parcel before the taking. The result is the total amount of compensation due to the owner.

before-tax cash flow
The result when the annual debt service is subtracted from the net operating income. (See annual debt service, net operating income)

behavior
The manner of conducting oneself; anything that an organism does involving action and response to stimulation; the response of individual, group, or species to its environment.

behavior-based questions
Questions that require you to describe a past experience in a work situation, e.g. in problem solving, decision making, communication etc. The reason employers prefer this questioning is that your past behavior is an indicator of future success.

bell curve
The shape of a graph line indicating the normal distribution of values; if the data are perfectly symmetrical, the mean, median, and mode are all equal and are shown at the highest point of the curve.

benchmark
1. A permanent reference mark or point established for use by surveyors in measuring differences in elevation. 2. A bench mark is an identification symbol on stone, metal, or other durable matter permanently fixed to the ground from which differences of elevation are measured, such as tidal observations or topographical surveys.

benchmark rate
Benchmark rate means the interest rate that the borrower can reduce by paying bona fide discount points. This rate may not exceed the weekly average yield of United States Treasury securities having a maturity of five years, on the 15th day of the month immediately preceding the month in which the loan was made, plus four percentage points.

beneficiary
A person who receives benefits from the gifts or acts of another. With a trust, the trustee holds some form of title (either naked title or actual title), but the beneficiary enjoys the benefits of ownership.

beneficiary
The person to whom the trust funds belong, such as the owner of rental property.

beneficiary statement
The escrow agent obtains a beneficiary statement when an existing loan is to be paid or assumed by a buyer. The statement includes the balance due on the loan so the buyer receives the proper amount of credit.

Beneficiary under a deed of trust
A Deed of Trust is a three party document prepared, signed and recorded to secure repayment of a loan. The Borrower (property owner) is named as Trustor, the Lender is called the Beneficiary, and a party that holds the power of sale contained in the deed of trust is the Trustee.

benefit assessment
Amount owed by owners of property that is enhanced by the construction or renovation of improvements.

bequest
A bequest is the transfer of property (particularly personal property) by will.

best-faith estimate
The acquisition cost is the purchase price plus a “best-faith estimate” of all settlement costs. (See acquisition cost)

BIF
Bank Insurance Fund

bilateral contract
A contract in which each party promises to perform an act in exchange for the other party’s promise to perform. The usual real estate contract is an example of a bilateral contract in which the buyer and seller exchange reciprocal promises respectively to buy and sell the property. If one party refuses to honor his or her promise and the other party is ready to perform, the nonperforming party is said to be in default.

bilateral instructions
Escrow instructions prepared for both parties and under which both parties are bound. (See final escrow instructions, joint escrow instructions, lender’s escrow instructions, escrow, supplemental instructions)

bill of sale
A written agreement by which one person sells, assigns or transfers to another his or her right to, or interest in, personal property. A bill of sale is sometimes used by a seller of real estate to evidence the transfer of personal property, such as when the owner of a store sells the building and includes the store equipment and trade fixtures.

billing information
Any data that enables any person to access a customer’s or donor’s account, such as a credit card, checking, savings, share or similar account, utility bill, mortgage loan account, or debit card.

bimetallism
A monetary system in which a government recognizes coins composed of gold or silver as legal tender. The bimetallism or the bimetallic standard backs a unit of currency to a fixed ratio of gold and/or silver.

binder
An agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchaser’s good faith and intent to complete the transaction. (See earnest money)

binder policy
A type of title insurance policy offered by some title companies which allows for a refund of the basic title insurance rate if the property is sold within a specified period of time. (See title insurance)

binding contract
Executed with proper legal authority, and contains the elements of a valid legal agreement; “a binding contract.”

biography/professional brief (bio)
In a one page brief, the “bio” documents credentials and experience to support the applicant’s expertise. In some instances, a paragraph is all that is needed for a bio.

bird dogs
See centers of influence.

bit
Short for “binary digit.” (See bits per second [bps])

bits per second
A common measure of data speed for computer modems (See bit)

biweekly loan
A loan with twice-monthly payments to match a borrower’s payroll schedule.

blanket loan
A mortgage covering more than one parcel of real estate, providing for each parcel’s partial release from the mortgage lien upon repayment of a definite portion of the debt.

blanket trust deed
A trust deed secured by several properties or a number of lots. A blanket mortgage is often used to secure construction financing for proposed subdivisions or condominium development projects. The developer normally seeks to have a “partial release” clause inserted in the mortgage so that he or she can obtain a release from the blanket loan for each lot as it is sold, according to a specified release schedule. (See trust deed)

blended delivery
A mixture of two or more delivery methods, such as online and workbook.

blended rate
An interest rate for a newly financed loan that is higher than the existing rate but lower than the current market rate.

blends
A blended loan is a type of loan that combines multiple loans into a single, new loan with a weighted average interest rate.

blind advertising
Failure by a licensee to indicate license status in any advertising of services for which a license is required. Licensees in California are prohibited from using blind ads.

blockbusting/panic selling
An illegal and discriminatory practice whereby one person induces another to enter into a real estate transaction from which the first person may benefit financially by representing that a change may occur in the neighborhood with respect to race, sex, religion, color, handicap famial status or ancestry of the occupants. A change possibly resulting in the lowering of the property values, a decline in the quality of schools or an increase in the crime rate. Also called panic selling or panic peddling.

blog
A web log (blog) is an easy to set up and use content management tool that is usually free. When you blog, you are instantly adding (publishing) new content, like your thoughts, ideas, links, or whatever to your site via a Web interface.

blog
A personal web page on which individuals record opinions, links to other sites, etc. on a regular basis.

blood
The fluid that circulates in the heart, arteries, and veins carrying nourishment and oxygen to and bringing waste products and carbon dioxide from all parts of the body. (See circulatory system)

blue-sky provision
Requiring full disclosure of all risks in a limited partnership solicitation under the Uniform Partnership Act. (See Uniform Partnership Act)

board
The board is the governing body of the Pennsylvania Housing Finance Agency.

board foot
A board foot is a measure of lumber one foot square by one inch thick: 12″ x 1″ x 12″ = 144 cubic inches. There is no standard shape. For example, a piece of wood 6″ x 6″ x 4″ contains one board foot.

Board of Mortgage Loan Originators
The Board of Mortgage Loan Originators oversees mortgage loan originators, independent contractor loan processors and underwriters, and mortgage companies.

BOD meeting minutes and notes
Boards of directors (BODs) generally keep notes of what is discussed at their regular meetings. These notes can be reviewed by any unit owner and should be reviewed extensively by any potential unit buyer.

boilerplate loan contract
A boilerplate loan contract, often referred to as a “standard” or “template” loan agreement, is a pre-written, standardized contract used by financial institutions and lenders to outline the terms and conditions of a loan. It’s called “boilerplate” because many of its provisions are generic and not customized to the specific borrower or loan transaction. These agreements provide a consistent framework for various types of loans and can help streamline the lending process.

BOMA building class definitions
The Building Owners and Managers Association (BOMA) building class definitions categorize office buildings into three classes: Class A, Class B, and Class C. Class A buildings represent the highest quality in terms of construction, location, and amenities, often commanding the highest rents and attracting premium tenants. Class B buildings are slightly older with good quality and management, while Class C buildings are older, located in less desirable areas, and offer fewer amenities and lower rents.

bona fide
In good faith, honestly, openly, and sincerely and without deceit or fraud. In an attitude of trust and confidence, without notice of fraud.

Bona fide loan discount points
Bona fide loan discount points are loan discount points knowingly paid by the borrower funded through any source, for the purpose of reducing, and which in fact result in a bona fide reduction of, the interest rate or time-price differential applicable to the loan, provided that the amount of the interest rate reduction purchased by the discount points is reasonably consistent with established industry norms and practices for secondary mortgage market transactions.

bona fide purchaser or encumbrancer for value
A bona fide purchaser or encumbrancer for value is anyone acting in good faith who purchases the residential real property from the equity purchaser for valuable consideration or provides the equity purchaser with a mortgage or provides a subsequent bona fide purchaser with a mortgage, provided that they had no notice of the equity seller’s continuing right to, or equity in, the property prior to the acquisition of title or encumbrance, or of any violation of this section by the equity purchaser as related to the subject property.

bona fide tenant
A lease or tenancy is bona fide if the tenant is not the mortgagor or the parent, spouse, or child of the mortgagor, the lease or tenancy is the result of an arms-length transaction, and the lease or tenancy requires rent that is not substantially lower than fair market rent or that is reduced or subsidized due to a Federal, State, or local subsidy.

bond
1. A debt instrument; an obligation to pay; a security issued by a corporation. 2. A written promise that accopmpanies a mortgage and is evidence of the debt secured by the mortgage. 3. An interest-bearing certificate issued by a government to finance public projects. (See security)

bonds and notes
Bonds and notes are the bonds and notes that the agency is authorized to issue.

bookmarks/favorites
A feature of web browsers that when activated from the browser controls will save and display favorite websites for future reference. (See browser)

boot
Money or other property that is not like-kind, which is given to make up any difference in value or equity between exchanged properties. Boot may be in the form of cash, notes, gems, the market value of an asset such as a mortgage, land contract, personal property, goodwill, a service or a patent offered in an exchange. The taxable gain in the like-kind exchange is recognized immediately to the extent of boot, whereas, other gain from the exchange may be deferred until subsequent transfer. (See exchange, like-kind)

booting
Starting a computer.

borrower
A borrower is a person obligated to repay a mortgage loan, including a coborrower, cosignor, or guarantor.

boycott
Individuals or businesses acting as a group withdraw from commercial relations with another organization, as a punishment or protest.

bracing
Use of one or more construction methods, such as plywood wall sheathing, to enable a structure to withstand the pressures caused by high winds and earth movement. Information on bracing systems can be found at the Web site of the Engineered Wood Association.
www.wallbracing.org

brainstorming
Brainstorming is a way of solving a problem by holding a spontaneous group discussion.

branch manager
A branch manager is the licensed loan originator in charge of, and responsible for, the operation of the branch office of a mortgage broker or mortgage lender.

branch office
A secondary place of business apart from the principal or main office from which real estate business is conducted. A branch office usually must be run by a licensed real estate broker working on behalf of the broker.

branch office
A branch office is a location other than a mortgage broker’s or mortgage lender’s principal place of business where the office’s address appears on business cards, stationery, or advertising used by the licensee in connection with mortgage-related business; the licensee’s name, advertising or promotional materials, or signage suggests that mortgage loans are originated, negotiated, funded, or serviced; or mortgage loans are originated, negotiated, funded, or serviced by a licensee.

brand
A brand is a type of product manufactured by a particular company under a particular name.

breach letter
A breach letter is a formal letter sent by a lender to a borrower in an attempt to avoid foreclosure action. The lender hopes the letter will encourage the borrower to contact them to work out a loan modification.

breach of contract
Violation of any of the terms or conditions of a contract without legal excuse; default; nonperformance. The nonbreaching party can usually seek one of three alternative remedies upon a material breach of the contract: rescission of the contract, action for money damages or an action for specific performance.

break-even analysis
A break-even analysis in the context of rental property is a financial calculation used to determine the point at which the property begins to generate profit, covering all associated costs. This analysis is crucial for real estate investors as it helps them understand the financial viability of a rental property.

break-even point
In income property, the figure at which rental income is equal to expenses and debt service.

breaker
A switch-like device in electrical panel boxes used to keep the electrical current from exceeding the recommended load for the wire size connected to the breaker.

breaker panel
A large rectangular shaped electrical box used to distribute electricity throughout a house after passing through protective breakers located within the box. (See breaker)

breakeven ratio
The ratio of operating expenses plus the property’s annual debt service to potential gross income.

bridge loan
A short-term loan made to cover the period between the termination of one loan, such as an interim construction loan, and the beginning of another loan, such as a perminent takeout loan. (See interim financing, swing loan, takeout)

British Thermal Unit (B.T.U.)
One British Thermal Unit (B.T.U.) is the amount of heat required to raise one pound of water one degree Fahrenheit in temperature.

broad-form homeowner’s policy
Covers falling objects; damage due to the weight of ice, snow or sleet; collapse of all or part of the building; bursting, cracking, burning or bulging of a steam or hot water heating system or of appliances used to heat water; accidental discharge, leakage or overflow of water or steam from within a plumbing, a heating or an air-conditioning system; freezing of plumbing, heating and air-conditioning systems and domestic appliances; and injury to electrical appliances, devices, fixtures and wiring from short circuits or other accidentally generated currents.

broker
Broker means any person who, for compensation, solicits, processes, places, or negotiates home mortgage loans for others or who closes home mortgage loans that may be in the person’s own name with the funds provided by others, and which loans are thereafter assigned to the person providing the funding of the loans. Broker may not include a person who is an attorney providing legal services in association with the closing of a home mortgage loan who is not also funding the home loan and is not an affiliate of the lender.

broker cooperation
Working with outside licensed real estate brokers who have prospective tenants in exchange for a finder’s fee or commission split.

broker of record
The licensed real estate broker whose license is connected with the brokerage to be responsible and liable for all licensees within the brokerage.

broker protection clause
A broker protection clause provides that a broker is still entitled to a commission for a set period of time after the listing has expired if the property is sold to a prospect, who was introduced to the property by the broker, during the period of the listing.

broker’s price opinion (BPO)
broker’s price opinion (BPO) is an estimate of property value that is not an appraisal but is developed by a real estate broker based on comparable sales in the area.

broker-officer
A licensed broker who is an officer of a brokerage that is set up as a corporation and who is designated as the broker responsible for supervision of licensed employees of the brokerage.

brokerage
The bringing together of parties interested in making a real estate transaction. The business of a broker is acting as a third party agent to a transaction. (See broker)

brownfields
Economically depressed urban areas suffering from real or perceived hazardous material contamination.

browser
A software program that displays web pages. Examples of web browsers are Internet Explorer, Netscape, Firefox, Safari.

budget loan
A loan with payments set up to cover taxes and insurance in addition to interest and principal reductions.

buffer zone
A strip of land, usually used as a park or designated for a similar use, separating land dedicated to one use from land dedicated to another use (e.g., residential from commercial).

build-out
A tenant build-out, also known as tenant improvement (TI), refers to the customization or renovation of a commercial space to meet the specific needs and preferences of a new tenant. This process involves modifying the interior of the leased space, which may include changes to walls, floors, ceilings, lighting, and HVAC systems. The buildout is typically negotiated between the landlord and tenant, with costs and responsibilities outlined in the lease agreement.

build-up rate
The discount or interest rate used in the selection of the capitalization rate for an investment property. (See capitalization rate)

building code
An ordinance that specifies minimum standards of construction for buildings to protect public health and safety. (See construction terms, Uniform Building Code)

building inspection
An overall inspection of a home or building performed by a qualified contractor or inspector. The inspection usually covers all major systems including foundation, plumbing, electrical, roof, heating and air conditioning.

Building Owners and Managers Association (BOMA)
A national organization of more than 4,000 professionals in the highrise/office building industry, with 80 local BOMA associations. The Building Owners and Managers Institute (BOMI) is the related educational institute that provides professional training in all aspects of building management and operations via courses in individual study leading to professional certification as a Real Property Administrator (RPA). The seven required courses are Engineering and Building Structures, Real Property Maintenance, Risk Management and Insurance, Accounting and Financial Concepts, Law, Finance and Management Concepts.
Building Owners and Managers Association Website

building permit
Written governmental permission for the construction, alteration or demolition of an improvement, showing compliance with building codes and zoning ordinances. (See construction terms)

building residual technique
A method of capitalization using net income remaining to a building after interest on the land value has been deducted.

building wealth
The process of increasing over time one’s net holdings of all assets, real estate, cash, stocks, bonds, over and above any additional debt one incurs in the process of building net asset holdings. Many times real estate does not build wealth, it can decrease wealth too, and often does diminish one’s wealth. In most cases it takes decades to build one’s wealth, particularly on real estate investments.

building-employment density
Building-employment density refers to the number of employees working within a given amount of building space, typically measured in employees per square foot or per square meter. This metric helps assess how efficiently a building’s space is being utilized for workforce accommodation. High building-employment density indicates a greater number of employees in a smaller space, which can impact factors such as productivity, comfort, and the need for supporting infrastructure and services.

Building-related illness (BRI)
Building-related illness (BRI) refers to diagnosable diseases or conditions directly linked to environmental issues within a building. Unlike sick building syndrome, which involves nonspecific symptoms without a clear cause, BRI includes identifiable illnesses such as Legionnaires’ disease, hypersensitivity pneumonitis, and asthma. These illnesses often result from exposure to contaminants like mold, bacteria, or chemicals present in the indoor environment and typically require medical intervention for diagnosis and treatment.

built-up rate
The built-up rate is a term used to describe the ratio of the total built-up area of a building to the total area of the plot on which it stands. This rate is important for understanding how much of a plot of land is occupied by buildings, including all covered areas like the main building, accessory buildings, and any extensions. In real estate, the built-up rate helps determine the density of development on a property. The built-up rate is similar but not identical to terms like Floor Area Ratio (FAR) or Floor Space Index (FSI), which relate to the ratio of the total floor area of buildings on a certain location to the size of the land of that location. These metrics are used by urban planners and developers to shape the character and use of spaces in urban environments.

bulk sale
Any sale of a large quantity of materials, merchandise, supplies, or other inventory that is not in the seller’s ordinary course of business. Also called bulk transfer. Regulated by the Uniform Commercial Code that is designed to prevent a seller from making such a sale, and then spending or disappearing with the proceeds without first paying his creditors.

Bulk Sales Act
An act that requires the recording and publication of a sale that is not in the normal course of business. The act is intended to give notice to the creditors of the seller so they can protect their interests.

bulk sales transfer
Any transfer in bulk (and not a transfer in the ordinary course of the seller’s business) of a major part of the materials, inventory or supplies of an enterprise. The Uniform Commercial Code (UCC) regulates bulk transfers to deal with such commercial frauds as a merchant selling out stock, pocketing the proceeds and leaving creditors unpaid. The UCC requires the buyer of the goods to demand that the seller provide a schedule of all the property and a list of all creditors and that the buyer give notice to creditors of the pending sale. Failure to comply with UCC means that the transfer or sale is ineffective in respect to the claims of any creditor of the seller. Bulk transfers usually become relevant upon the liquidation or sale of a business.

Under state law, a bulk sale must be reported by the seller to the state tax authorities, and the purchaser must withhold payment until the seller’s tax clearance is received. If the tax clearance is not made, the purchaser may become liable for any unpaid taxes that are a lien against the items sold. (See Uniform Commercial Code)

bulk transfer of goods
Bulk transfer of goods is any transfer in bulk of a substantial part of the materials, supplies, merchandise, equipment or other inventory of an applicable enterprise that is not in the ordinary course of the transferor’s business.

bulk zoning
Zoning for density. Regulates height restrictions, open-space requirements, parking and setback. (See zoning)

bullet loan
A loan that includes a call date earlier than its normal amortization period; also called a renegotiable rate loan or a rollover loan.

bundle of rights
The concept of land ownership that includes ownership of all legal rights to the land, for example, possession, control within the law and enjoyment.

burden of proof
The obligation to prove the truth or falsity of a fact.

Business and Professions Code
What is commonly referred to as Real Estate Law is actually Division 4 of the California Business and Professions Code.
State of CA Legal Information Website

business cycle
The wavelike movement of increasing and decreasing economic prosperity consisting of four phases: expansion, recession, contraction and revival. (See expansion, peak, recession, trough)

business day
A business day is any calendar day except Sunday or the public holidays.

business interruption insurance
A form of insurance that provides protection from the loss of business income resulting from an interruption of business operations due to fire, natural disaster or other covered event. Business interruption insurance is not sold as a separate policy, but added to a property/casualty or comprehensive policy.

business opportunity
Any type of business that is for sale (also called business brokerage). The sale or lease of the business and goodwill of an existing business, enterprise or opportunity, including a sale of all or substantially all of the assets or stock of a corporation, or assets of partnership or sole proprietorship.

business plan
A business plan is a written document describing the nature of a business, the sales and marketing strategy, financing, and projected profit and loss statement. The time spent making a business plan thorough and accurate, and keeping it up-to-date, is an investment that pays big dividends in the long term.

buydown
A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time.

buyer
A broker who represents the buyer in a fiduciary capacity. Some buyer’s brokers practice single agency, in which they represent either buyers or sellers, but never both in the same transaction. Some buyer’s brokers represent only buyers and refer prospective sellers to other brokers. The broker is paid by the buyer, or through the seller or listing broker at closing, provided all parties consent.

Buyer Inspection Notice and Seller
The Buyer Inspection Notice and Seller’s response is not a part of the purchase contract. It is simply a notice given from the Buyer to the Seller that there are items disapproved. The items disapproved are simply listed. The Seller is not obligated to remedy the items, but if the Seller does not agree to remedy the items disapproved, the Buyer has a right to rescind the purchase contract.

buyer listing
An agreement where a buyer agrees to pay a commission if a broker locates a property that the buyer purchases.

buyer representation
Buyer representation describes the relationship between the real estate sales professional performing services for a buyer. The sales professional places the interests of the buyer above all others in the transaction.

buyer’s agent
A residential real estate broker or salesperson who represents the prospective purchaser in a transaction. The buyer’s agent owes the buyer/principal the common-law or statutory agency duties. (See seller’s agent)
Real Estate Buyer’s Agent Council Online
National Association of Exclusive Buyer Agents

buyer’s market
A real estate marketplace where there are more sellers than buyers.

buyer’s remorse
Buyers of expensive items, like a home or automobile, sometimes regret their decision. They wonder if they paid too much or made the wrong selection. This fear of having made a serious mistake is referred to as “buyer’s remorse.”

buyer-agency agreement
A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency. (See fiduciary)

buying motives
Ownership of real estate satisfies certain basic human needs. These needs are what motivate a person to purchase real property. They include: comfort and convenience, desire for profit, pride of ownership, and security.

buying on contract
A type of contract used in connection with the sale of real property where the seller retains legal title to the property until some future date, usually when the full purchase price has been paid. Referred to as one of four terms, all meaning much the same thing: agreement to convey, contract for deed, contract of sale, orinstallment sales contract.

buying signals
Words, actions or facial expressions that signal a prospect’s readiness to buy.

bylaws/CC&Rs
These are the rules that govern a homeowners association (HOA). They cover everything from parking issues to when financials need to be prepared. They can be amended over time subject to the BOD and community members. All community members must live within these rules and the BOD interprets and enforces them.

byte
8 bits (See bit, megabyte)

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