United Country Guardian Real Estate - Dillon, Beaverhead Madison County Southwest Montana Real Estate for sale

Dictionary / Glossary / Directory
of Real Estate Terminology
Definitions & Commonly Used
Real Estate Terms

Confused & overwhelmed by the overwhelming number of real estate terms and words? Every person working in real estate or planning to buy or sell real estate can benefit by using this dictionary directory glossary of real estate terminology, definitions and commonly used terms.

Real Estate Terminology Definitions & Commonly Used Terms
In Alphabetical Order

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

    Back to Back Escrows:

  • 2 separate transactions of different parcels of real property where the seller of one is the purchaser of the other. The close of the 2 transactions is concurrent so that the proceeds from the "sale" escrow can be used instantly as payment in the "buy" escrow. Neither the licensee nor the escrow agent has a duty to disclose that one escrow is intertwined with another. Thus, an unqualified or under-financed buyer can use this technique to buy and sell real estate simultaneously. Sometimes back-to-back escrows are used when one property is being purchased, using one escrow, and simultaneously being resold using a second escrow. The “buyer” simultaneously resells to raise the money necessary to make the initial purchase--credits from the "sale" escrow are simply applied by the escrow company to the "purchase".
    • Backup Loan Commitment:

    • A loan commitment that is effective only if an earlier, and usually very favorable, loan commitment fails to materialize.
      • Backup Offer:

      • An offer to purchase that is contingent upon failure of a pending sale to close escrow.
        • Bad Faith:

        • The deliberate failure to fulfill some duty or contractual obligation owed to another (i.e. the purposeful failure by an insurance company to pay a lawful claim). Bad faith is more than mere breach of contract which may occur because of uncontrollable reasons, such as market conditions. Bad faith is a tort based upon wrongfulness.
          • Bailout:

          • To rescue a failing business by, for example, investing new capital.
            • Bail Out:

            • To leave, as when many tenants decline to renew at the end of their leases, or when limited partners abandon a failed syndication.
              • Balloon Payment:

              • The final payment on an installment note which is greater than each of the preceding periodic payments, and which ordinarily pays the note in full. If an unpaid balance remains following a balloon payment, the payment is more likely called a “pay down” or “principal payment.” Balloon payments are commonly found in creative financing arrangements where the seller has accepted a second deed of trust or a wraparound mortgage as security for an unpaid portion of the purchase price. A borrower who agrees to a balloon payment, in, say, five years, is gambling that interest rates will decline and that the balloon can be paid through more desirable refinancing.
                • Bankruptcy:

                • Proceedings under federal law whereby all assets of a debtor (excluding certain exempt property) are distributed to his or her creditors. The debtor is then "discharged", or excused from the legal obligation to pay most of the debts.
                  • Bar Association:

                  • A professional organization of attorneys who are licensed to practice law.
                    • Bare Title:

                      Synonym: naked legal title
                    • The title that is held by a trustee under a deed of trust. Bare title is a type of non-possessory ownership.
                      • Bar Examination:

                      • Test given to otherwise qualified lawyer candidates (generally law school graduates), the purpose of which is to assure possession of minimum standards of knowledge of the law before engaging in its practice.
                        • Baselines:

                        • The imaginary east to west lines that intersect meridians to form a starting point for the measurement of land and creation of a legal description.
                          • Base Rent:

                          • The minimum monthly rent in a percentage lease. Regardless of the volume of the tenant’s business, the landlord is assured of the base rent.
                            • Basing Index:

                            • The measure of interest rates on which changes in adjustable rate mortgages are based. U.S. Treasury note yields are one example of a basing index. There are many basing index as indexes in use.
                              • Basis Point:

                              • One percent equals one hundred basis points. Basis points are used to describe changes in interest rates, as "The rate should be reduced by forty basis points."
                                • Bedroom Community:

                                • A community of commuters that generally lacks industry of its own.
                                  • Beneficiary:

                                  • Someone entitled to the benefits of a trust. In a trust deed, the lender is the beneficiary and the borrower is the trustor. A trustee is a "disinterested third party" whose duty is to hold legal title to the real estate, which is the security for the loan, until the loan is paid. There is no beneficiary in a mortgage as the creditor is called "mortgagee."
                                    • Beneficiary's Statement:

                                    • The statement of a lender about the remaining unpaid principal due on a note and other information concerning the loan. It is usually obtained in connection with the sale or refinancing of real property. Naturally, lenders charge a fee for the preparation of these statements.
                                      • Bias:

                                      • A preconceived belief about some person or fact that makes it difficult to be neutral, dispassionate, or fair in evaluating that person’s rights and duties, guilt or innocence.
                                        • Bill of Sale:

                                        • A written document used to transfer title to personal property. It is to personal property what a deed it to real property. Many transactions involve the conveyance of both real and personal property. The sale of an apartment building involving furniture and equipment is an example and involves the execution of both a deed and a bill of sale.
                                          • Bill of Sale:

                                          • A temporary agreement by an insurance company to cover a specified risk pending final approval of an application for insurance. A binder may also be issued to extend existing coverage to an added risk.
                                            • Bird Dog:

                                            • A person, usually not a real estate licensee, who hunts for available real estate suitable for development, who then attempts to tie it up with a disguised option, and who then tries either to sell it to a developer at a higher price in a double escrow transaction or to submit it to a developer in exchange for a finder's fee. Also known as a middleman.
                                              • Bi-Weekly Mortgage:

                                              • A mortgage with an amortization schedule calling for payments every other week rather than every month. The advantage to a more frequent payment schedule is that total interest charges are substantially less than with an ordinary monthly mortgage. The amount paid every two weeks is exactly one half of what would be paid every month. But since money is borrowed for a shorter period, less interest is accrued. Bi-Weekly mortgages may be at a fixed or adjustable interest rate.
                                                • Blanket Deed of Trust or Mortgage:

                                                  Synonym: Overriding Deed of Trust
                                                • A single mortgage or deed of trust that covers, or "blankets," more than one parcel of real estate as security for the repayment of a debt. A blanket mortgage often covers an entire subdivision. As individual lots are sold, partial releases from the blanket mortgage are made. This allows the subdivider to pay for the ground under each house with the proceeds from the sale of each house.
                                                  • Blanket Policy:

                                                • An insurance policy where all the units in a condominium, co-op, or planned unit development are insured for fire under one blanket or master fire insurance policy. This approach generally is less expensive than if all the owners insured their individual units separately. Personal property, however, must be insured separately.
                                                  • Blended Mortgage:

                                                  • A mortgage with an interest rate that is the average, or a "blend," of two different interest rates, such as the current market rate and the rate of the old, refinanced mortgage. A blended mortgage makes refinancing with the existing lender more attractive than refinancing with a new lender who might insist on market rates of interest for the new loan.
                                                    • Blended Space:

                                                    • An interior design featuring the minimization of hallway spaces with rooms opening directly onto, or blending into, the living room.
                                                      • Blended Vacancy Rate:

                                                    • A general rate of vacancy that applies to all buildings in all locations. Blended vacancy rates are not location specific.
                                                      • Blighted Area or Neighborhood:

                                                    • A neighborhood or area in which real property values are affected seriously by adverse economic forces, such as encroaching inharmonious property uses, over-crowding, infiltration of lower social and economic classes of people and/or rapidly deteriorating buildings. Physical examples of blight are broken windows, unkept yards, grass growing in rain gutters or on roofs, motorcycles and junk vehicles, and foil in windows.
                                                      • Blighted Area or Neighborhood:

                                                    • A neighborhood or area in which real property values are affected seriously by adverse economic forces, such as encroaching inharmonious property uses, over-crowding, infiltration of lower social and economic classes of people and/or rapidly deteriorating buildings. Physical examples of blight are broken windows, unkept yards, grass growing in rain gutters or on roofs, motorcycles and junk vehicles, and foil in windows.
                                                      • Blockbusting:

                                                    • An unethical marketing technique designed to capitalize on homeowners' racial or ethnic prejudices. Blockbusting may cause panic selling and affect sales prices.
                                                      • Blue Sky:

                                                    • Hype. Any statement of sweeping import without much factual underpinning.
                                                      In the sale of businesses, "Blue Sky" is the value of intangible assets such as business reputation, repeat clientele, positive cash flow etc.
                                                      • Board of Directors:

                                                    • A group of persons elected by the stockholders to set basic company policies and to appoint the top executives who actively manage a business corporation.
                                                      • Board of Realtors ®:

                                                    • A local association of members of the state and National Association of Realtors.
                                                      • Boilerplate:

                                                    • The standardized preprinted language in a contract. Much of it appears to be useless to the uninformed, but boilerplate actually can and often does affect important legal rights. Unfortunately, boilerplate often is lengthy, complicated, and replete with difficult terminology.
                                                      • Boilerplate:

                                                    • The standardized preprinted language in a contract. Much of it appears to be useless to the uninformed, but boilerplate actually can and often does affect important legal rights. Unfortunately, boilerplate often is lengthy, complicated, and replete with difficult terminology.
                                                      • Boot:

                                                    • The money that compensates for differences in value in an exchange. Boot is taxable even though the exchange may be tax free.
                                                      • Bottom Line:

                                                    • The ultimate result. An income tax return may contain exemptions, exclusions, deductions, credits and tricky formulas for tax computation, but the amount of tax ultimately paid is the taxpayer's "bottom line." For example, "Forget the details, what's the bottom line?"
                                                      • Bracketing:

                                                    • Selecting a sales price somewhere between the prices of comparable sales.
                                                      • Breach of Contract:

                                                    • The failure to perform the terms of a contract is a breach. When one party to a contract breaches, the other party has a cause of action in contract, and may either recover damages or obtain a judgment of specific performance to compel performance.
                                                      • Break Even Point:

                                                    • That point beyond which rent will produce net spendable income. In investment analysis, it measures the percentage of gross possible income that must be obtained to generate enough cash to pay all operating expenses and debt service. It is calculated as follows:
                                                      operating expenses + debt service divided by gross possible income = Break Even Point
                                                      • Broker:

                                                      • A licensed person that acts as an agent for another in the purchase or sale of a product or asset.
                                                        • Bullet Loan:

                                                      • An intermediate term, fixed rate loan with a balloon payment due at the end of three to ten years. A bullet loan may follow a mini-perm loan, which in turn follows the original construction loan. Bullet loans are often made by insurance companies that borrow from pension funds, issuing them guaranteed income contracts, called GICs. The insurance companies expect to make profits on their bullet loans through loan fees and spreads in the rates. Bullet loans are typically locked-in to assure an adequate return to the lender. That is, a large prepayment penalty will assure the lender of the bullet loan that enough proceeds will be realized to justify the deal.
                                                        • Bundle of Rights Theory:

                                                        • The theory that ownership of real estate includes a group, or bundle of rights, such as the right to possession, the right to exclude others, and the right to sell - among others.
                                                          • Buy Down:

                                                        • A procedure by which a subdivider pays cash to a lender in return for a loan commitment to a home purchaser at below-market interest rates. Often the interest rates will be bought down for only the first years of the mortgage, after which the homeowner must pay the market interest rate. A subdivider who buys down interest rates as a sales inducement may be expected to increase the price of the home accordingly. Any seller can buy-down the buyer’s interest rate as a sales inducement.
                                                          • Buy Out Option:

                                                        • An option between partners that gives each the option to purchase the interest of the other. Partners are co-owners of a business with equal rights, unless otherwise provided in their agreement. A buy-out option is one way for partners to solve a problem that might otherwise require court action.
                                                          • By Laws:

                                                        • A written set of rules and regulations governing the operation of an organization, such as a condominium association. By-laws are secondary only to the article of incorporation that create a corporation. By-laws govern existing condo owners as well as future purchasers who take subject to all existing rules and regulations of their homeowner’s associations.

                                                        • Real Estate Terminology Definitions & Commonly Used Terms
                                                          In Alphabetical Order

                                                          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


                                                          While great care has been undertaken to provide accurate explanations and definitions for real estate terms and words in our real estate terms dictionary glossary dirctory, no real estate vocabulary dictionary cannot be completely accurate in all jurisdictions. Any / all definitions are for general purposes only and should not be used for any legal purpose. By use of this dictionary glossary directory of real estate terms, you agree to hold United Country - Guardian Real Estate harmless for any responsibility for any liability, loss or risk that may be claimed or incurred as a consequence of using this information.