| Balance Sheet |
A financial statement that shows an individual's assets,
liabilities, and net worth as of a specific date. |
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| Balloon Loan |
A loan that has level monthly payments that will amortize it
over a stated term (e.g., 30 years) but that requires a lump sum payment of the
entire principal balance at the end of a shorter term (e.g., 10 years). |
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| Balloon Mortgage |
A mortgage that offers lower interest rates for a shorter term
financing, usually seven years, and requires final payment or refinancing at
the end of the term. |
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| Balloon Note |
A 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 maturity. |
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| Balloon Payment |
The final lump sum payment that is made at the end of the
shorter term for a balloon loan and pays the loan in full. |
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| Bankrupt |
A person, firm, or corporation that is financially unable to
pay debts when due. The debtor seeks relief through a court proceeding to work
out a payment schedule or erase debts. In some cases, the debtor must surrender
control of all assets to a court-appointed trustee. |
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| Bankruptcy |
A proceeding in a federal court in which a debtor who is
financially unable to pay debts when due seeks relief to work out a payment
schedule or erase debts. |
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| Bidder |
A contractor, subcontractor or material supplier who is asked
to submit a price quotation or bid on a project. |
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| Bill Of Sale |
A written document that transfers title to personal property
from seller to buyer. |
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| Binder |
An offer to purchase property which is accompanied by a sum of
money, smaller than a down payment, to show good faith prior to a formal
agreement. |
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| Biweekly Payment Loan |
A loan that requires payments to reduce the debt every two
weeks (instead of the standard monthly payment schedule). The 26 (or possibly
27) biweekly payments are each equal to one-half of the monthly payment that
would be required if the loan were a standard 30 year fixed rate loan, and they
are usually drafted from the borrower's bank account. The result for the
borrower is faster amortization leading to substantial interest savings from
faster principal reduction. |
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| Blanket Mortgage |
A mortgage covering at least two pieces of real estate as
security for the same mortgage. |
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| Blockbusting |
The illegal practice of inducing panic selling in a
neighborhood by making representations of the entry, or prospective entry, of
members of a minority group; Panic Peddling. |
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| Bond |
An insurance agreement by which one party is insured against
loss or default by a third party. In the construction business a performance
bond ensures the interested party that the contractor will complete the
project. |
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| Borrower |
A person who receives funds in the form of a loan with an
obligation to repay principal with interest. |
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| Breach |
A violation of terms of any legal obligation. |
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| Breach of Contract |
Failure, without legal excuse, of one of the parties to a
contract to perform according to the contract. |
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| Break Even Point |
Point at which total income equals total expenses. |
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| Bridge Financing |
A form of interim loan, generally made between a short term
loan and a long term loan, when the borrower needs to have more time before
taking on long term financing. |
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| Bridge Loan |
A loan, usually short term, that finances the portion of the
purchase price not provided by the mortgage loan and the down payment. A bridge
loan is commonly used when a purchaser has not sold his existing home before he
closes on his purchase of a new home. The bridge loan is paid off when the old
home is sold, out of the proceeds of that sale. |
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| British Thermal Unit (B.T.U.) |
Unit of heat required to raise one pound of water one degree
Fahrenheit. |
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| Broker |
A real estate professional who has acquired a higher level of
training and experience than a sales agent. A minimum number of classes must be
taken along with passing a state exam to acquire a brokers license. Generally
they are a legal representative or a proprietor of the office. Brokers usually
charge a fee or receive a commission for their services. |
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| Brokerage |
For a commission or fee, bringing together parties interested
in buying, selling, exchanging, or leasing real property. |
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| Budget |
A detailed plan of income and expenses expected over a certain
period of time. A budget can provide guidelines for managing future investments
and expenses. |
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| Builder |
An individual or company that constructs buildings or other
structures with employees and/or subcontractors; also referred to as a general
contractor. |
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| Building permit |
Written authorization from a government entity that regulates
construction and allows the builder to proceed with a project if the plans are
approved. |
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| 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. |
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| Building Code |
Regulations that specify minimum structural requirements for
design of, construction of, and materials used in a home or office building.
Building codes are based on safety and health standards. |
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| Bundle of Rights |
Ownership in real property implies a group of rights, such as
the right of occupancy, use and enjoyment, the right to sell in whole or in
part, the right to control the use, the right to bequeath, the right to lease
any or all of the rights, the right to the benefits derived by occupancy and
use of the property, etc. |
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| Buydown |
With a buydown, the seller pays an amount to the lender so
that the lender can give you a lower rate and lower payments, usually for an
early period of a loan. The seller may increase the sales price to cover the
cost of the buydown. |
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| Buy-down Mortgage |
A mortgage loan, usually offered to first-time buyers, that
carries a temporarily reduced initial interest rate. |
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| Buydown Account |
An account in which funds are held so that they can be applied
as part of the monthly loan payment as each payment comes due during the period
that an interest rate buydown plan is in effect. For example, if a seller
agrees to help reduce a buyer's monthly payment during the first year of a
loan, the seller may put money in a buydown account which is then paid to the
lender each month to reduce the buyer's monthly payment. This is more commonly
done through a buydown paid directly to the lender at closing. |
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| Buyer Agent |
An agent who represents the buyer in a real estate
transaction. |
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| Buyer's Broker |
A licensee who has declared to represent only the buyer in a
transaction, regardless of whether compensation is paid by the buyer or the
listing broker through a commission split. Some brokers conduct their business
by representing buyers only. |
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| Buyers Market |
A market condition which occurs in real estate where more
homes are for sale than there are interested buyers. |