Real Estate Glossary

Back-End Ratio - See payment-to-income ratio.

Balance Sheet - Financial statement that shows assets, liabilities, and net worth as of a specific date.

Balloon Mortgage - Real estate loan having payments that are insufficient to fully repay the loan by the end of the stated loan period, or maturity date, so that a relatively large outstanding balance, known as a balloon payment, remains to be paid at the end of the loan period.

Balloon Payment - Final lump sum payment that is made at the maturity date of a balloon mortgage.

Bank - (1) Financial institution providing savings and checking accounts, loans, business banking, and other services not found in smaller types of financial institutions. Many banks tend to be more active in construction financing rather than long-term real estate loans. (2) Elevated land on each side of a river or stream that tends to keep the water in its natural channel.

Bankrupt - (1) A state or situation of insolvency. (2) Person, firm, or corporation that, through a court proceeding, is relieved of the payment of debts after the surrender of assets to a court-appointed trustee. (3) Anyone unable to pay his debts.

Bankruptcy - Proceeding in federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring certain of his or her assets to a trustee, who then divides the assets among the creditors.

Bargain and Sale Deed - Written document transferring title to real property but without any promises as to the condition of title. See also, trustee's deed.

Base Line - Imaginary line used in surveying to establish "township lines." Properties in both Oregon and Washington are referenced off the same base line established in 1851, which is at 45°31min.11sec. north latitude and runs east-west through the cities of Hillsboro, Portland and Gresham. See also, rectangular survey system.

Beneficiary - One for whose benefit a promise is made or a trust created; person designated to benefit, or receive the income from an insurance policy, trust, estate or deed of trust. (In the case of a deed of trust, the lender is known as the beneficiary.)

Bequeath - To give property through a will; the act of making a bequest.

Bequest - Gift of property through a will.

Betterment - Improvement that increases the value of property and is more extensive than mere repairs. See also, capital improvement.

Bi-Weekly Mortgage - Real estate loan similar to a traditional, fixed-rate, fully amortizing loan, but with 1/2 the monthly payment being made every 14 days, creating the equivalent of 13 monthly payments per year, instead of the normal 12. The increased amount contributed to principal each year results in a substantial savings in interest, and a faster loan payoff, yet lender qualification requirements remain the same as for a traditional loan with monthly payments. A bi-weekly mortgage based on a 30-year amortization, usually pays off in about 22 years.

Bill of Sale - Written document that shows the transfer of ownership for personal property.

Binder - Preliminary written agreement, usually secured by payment of a deposit, that binds together a buyer and seller, pending the completion of certain terms and the execution of the final contract; especially, paperwork used for this purpose in an insurance transaction.

Blanket Insurance Policy - Policy that covers more than one property or more than one person.

Blanket Mortgage - Real estate loan covering more than one property; such a loan covering all of the property, both present and future, of one person; also called a general mortgage.

Bona Fide - Legal term referring to actions, situations or persons that are honest or without fraud or deceit; acting in good faith.

Bond - (1) Insurance agreement by which one party is insured against loss by the acts of a third party; in construction, a performance bond insures the party hiring a contractor against default or failure of the contractor to finish a project. (2) Instrument of financing debt for private corporations and governments, bonds accumulate interest and are considered more secure than stock.

Boundary - Property line; officially recognized edge of a parcel of land.

Breach - Violation of a legal obligation; failure to perform.

Bridge Loan - Form of short-term, interim financing that allows a buyer to borrow money against his present home in order to purchase another home while the sale of his first home is being conducted.

Broker - Person who, for a fee or other compensation, brings parties together and assists in negotiating transactional contracts between them. In Oregon, any person licensed to represent parties in the purchase and sale of real estate is called a real estate broker. A person licensed to supervise real estate brokers is also referred to as a principal broker. Any broker representing a client may also be referred to as acting as an agent for the client.

Budget - Detailed listing of income and expenses expected over a certain period of time. Budgets provide a tool for managing future income and expenses.

Budget Category - Grouping of similar income or expense data in a budget, as in a grouping of all expenses for rent, for groceries, for utilities, etc.

Building Code - Law providing for specific standards and specifications in the construction of buildings or dwellings. Many building code provisions are based on concerns for general safety, health and welfare.

Building Contract - Contract setting forth terms under which a builder or contractor is to complete the construction of a building; may contain a final price or may be based on the builder's cost plus a certain percentage for profit. (Contractors often refer to the latter as "cost-plus.") If a loan is involved in the project, the building project will require lender approval.

Building Permit - Written authorization from a city or county to construct or alter a building. All municipalities in Oregon require a building permit for new construction and most alterations. The fee for a building permit generally is based on the value of the proposed project. See also, permit.

Buydown - Payment to the lender from a buyer, seller, third party, or some combination of these, causing the lender to reduce the interest rate of a loan. A buydown may be for the life of the loan, but is usually temporary, often for the first one to five years. See also, discount.