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Real Estate Terms / Real Estate Dictionary

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Backup Offer
A real estate purchase contract that only becomes effective if the contract of the primary buyer fails to perform.

Balance Sheet
A financial statement of the condition of a business showing its assets, liabilities and capital as of a specific date.

Balloon Mortgage
A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term. This payment is usually larger than the other installment payments (thus the balloon).

Balloon Payment
The lump sum payment that is made at the maturity date of a balloon mortgage. It is usually the final payment for discharging the debt.

Banker's Rule
The belief used when doing prorations and some other calculations that a month consists of 30 days and a year of 360 days.

A person, firm, or corporation, through a court proceeding, whose debt is resolved or eliminated after the surrender of all assets to a court-appointed trustee.

A proceeding in federal court in which a debtor who owes more than his /her assets are valued can relieve or resolve the debts by transferring his/her assets to a trustee.

The exchange of goods or commodities for other goods or commodities.


A Barzebo is a portable shelter, gazebo or pavilion having an integrated service bar joining two or more adjacent support panels.

Bay Window
A large window, or a combination of window units joined together, that projects from the outer wall of a building and forms a recess within.


Before Tax Income
Income before taxes are deducted. Also known as Gross Income.

The person(s) designated to receive income or assets from a benefactor, trust, estate, or a deed of trust.

The transfer of personal property through a will.

An improvement that increases property value. This is different from repairs or replacements made that simply maintain value.

Bill of Sale
A written document that transfers the title of personal property. It's a good idea to have all involved parties sign the Bill of Sale in front of a Notary Public.

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

Biweekly Payment Mortgage
A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). They are usually drafted from the borrower's bank account. The result is a substantial reduction in interest paid by the borrower.

Blanket Insurance Policy
Any insurance policy that covers one or more broad classes of persons or property, without identifying the specific subjects of insurance in the contract.

Blanket Mortgage
Mortgage in which one loan is secured for several properties.

Bona Fide
Made in good faith without fraud or deceit.

A written instrument given by a corporation or government entity as evidence of a debt and also meaning a guarantee of performance. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust.

A violation of any legal obligation.

A covered passage, open on two sides, connecting a house with a garage or other sections of the house.

Bridge Loan
Mortgage financing that falls in between the termination of one loan and the beginning of another loan. This allows the proceeds to be used for closing on a new house before the present home is sold. Also known as Gap Loan or Swing Loan.

A person who, for a commission or a fee, brings parties together to assists in negotiating contracts between them.


An itemized list of expected income and expenses prepared on a weekly, monthly or annual basis.

udget Category
A category of income or expense data that you can use in a budget. You can also define your own budget categories and add them to some or all of the budgets you create. Housing, Food, and Utilities are examples of Expense Categories. Salary is an example of an Income Category.

Budget Mortgage
A type of amortizing mortgage which includes the principal, interest and other costs such as taxes and homeowners insurance. This is referred to as a PITI monthly payment.

Builder Warranty
A guarantee as to the quality of construction offered by a building contractor or developer. See also Homeowners warranty.

Building Codes
Local regulations established by ordinance or law to regulate and set minimum construction standards for buildings within a municipality to protect the public's safety and health. It may control design, construction, and materials used in construction.

Building Inspection
A physical review of property as construction progresses to ensure that each major component — foundation, roofing, plumbing, electrical wiring, materials meets the building codes.

Building Permit
The authorization by a local government for the erection, alteration or remodeling of improvements to a home within its jurisdiction.

Bully Barn
A storage shed that is shaped like a barn.

A small, early-twentieth-century-style, one-story home noted for having an open or enclosed front porch which extends across the front.

Buy-back Agreement
A contractual provision in which the seller agrees to repurchase the property at a specific price upon the occurrence of a specified event within a certain period of time.

A mortgage financing technique in which the interest rate is reduced over the first few years of a loan because the lender received an initial payment from the builder or seller to reduce the rate, or in effect a discount, thus reducing the monthly payments for a fixed time period.

Buydown Account
An account in which funds are held so they can be applied as part of the monthly mortgage payment as each payment comes due during the period that an interest rate buydown plan is in effect.

Buydown Mortgage

A mortgage in which an initial lump sum payment is made by a party to reduce a borrower's monthly payments during the first few years of a mortgage.

Buy-Sell Agreement
An agreement among stockholders, partners or co-owners where some will agree to buy out the interests of others upon the happening of some event.

Buyer's Agent
A real estate broker or salesperson who represents a prospective purchaser or tenant in a real estate transaction exclusively and whose duties and obligations are to the buyer or tenant.

Buyer's Market
A buyer's market exists when real estate for sale exceeds the number of buyers seeking to purchase real estate. In this case, a Buyer is in a better position as to price and terms because of this abundance.

1. The purchase of the entire holdings or interests of an owner or investor.
An arrangement by an owner of a building agreeing to take on the liability for the remaining lease term of a tenant in a different building which releases the tenant from the old lease obligation and permits him/her to negotiate a lease in the owner's building.

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