Real Estate Glossary and Dictionary

for Tax Lien B Terms

Find the Meaning of Real Estate Terms related to Tax Liens and Tax Deeds

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Bad Title - Title with defects making it unmarketable. 

Balance - see Principal Balance.

Balloon mortgage - Usually a short-term fixed-rate loan that involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract. Many balloon mortgages are refinanced before the large payment comes due.

Balloon payment - The final payment of a mortgage which is larger than the regular payment; it usually extinguishes the debt.

Bankruptcy - A legal declaration of financial inability to pay one’s debts. 11 U.S.C.A. [United States Code Annotated] Federal law for the benefit and relief of creditors and their debtors in cases in which the debtor is unable or unwilling to pay debts. The debtor surrenders it’s assets to the bankruptcy court. An individual typically files for Chapter 7 (all debts wiped out) or Chapter 13 (establishes a payment plan to pay off debts).

Straight bankruptcy - Chapter 7, is a liquidation proceeding and involves the collection and distribution to creditors of all the debtor’s non-exempt property by the trustee in the manner provided by the Code. The debtor rehabilitation provisions of the Code (Chapters 11, 12, and 13) differ, however, from the straight bankruptcy in that the debtor looks to rehabilitation and reorganization, rather than liquidation, and the creditor looks to future earnings of the debtor, rather than the property held by the debtor to satisfy their claims. A bankruptcy remains on an individual’s credit report for seven years, damaging both credit rating and ability to borrow money during that time.

Bankruptcy Discharge - the release of a bankrupt party from the obligation to repay debts that were or might have been proved in a bankruptcy proceeding

Bankruptcy trustee - Person appointed by Bankruptcy Court to take charge of debtor estate, to collect assets, to bring suit on debtor’s claims, to defend actions against it, and otherwise administer debtor’s estate.

Bargain and  Sale Deed - An instrument conveying title which recites a valuable consideration and commonly uses the words "bargain and sale" or words of similar import.

Basis Point - one 100th of 1%.

Bearer - Lender in whose hands the promissory note remains until it is paid in full.

Bench mark - A bronze disk permanently placed and precisely identified by government survey teams.

Beneficial interest - A unit of ownership in a real estate investment trust.

Beneficiary - A person who receives or is to receive the benefits resulting from certain acts. The lender in a deed of trust relationship.

Bid - An offering of money in exchange for the property placed for sale. At an ordinary auction sale, a bid is the offer to purchase.

Bilateral Contract - a contract under which each party promises performance.

Bill of sale - A written agreement by which one person transfers his personal property to another.

Binder - A contract or restraint. Generally a small amount of money from the buyer, accompanying a written offer to buy. (See also “earnest money.”) Also, a report issued by a title insurance company establishing conditions of title and conditions upon which a policy of title insurance will be issued.

Bird Dog - someone who identifies a potential good real estate investment opportunity and passes that deal on to another investor for a fee.

Biweekly mortgage - A mortgage that requires half of the normal monthly payment every two weeks. Over the course of a year, 26 half-payments are made - the equivalent to 13 full mortgage payments. This results in a faster payoff of the loan.

Blanket mortgage - A single mortgage that covers more than one parcel or lot of property. This type of mortgage is usually used to finance subdivision developments (though it can be used to finance the purchase of improved properties as well). These loans usually include a provision, known as a partial release clause. (See “partial release clause”.)

Block A - Means of subdividing large tracts of land into smaller sections, each of which is numbered. For example, Lot 4, Block 8.

Blockbusting - Any activity which attempts to drive prices down for the purpose of causing transition from one ethnic group to another. This is a violation of Federal Fair Housing Laws. Also called "panic selling".

Board Of Equalization - A state board charged with ensuring that local property taxes are assessed in a uniform manner

Board of Realtors - a local group of real estate licensees who are members of the state and national association of Realtors.

Bona fide - To act in good faith, without fraud.

Bona Fide Purchaser for Value (BFPV) - A purchaser of property who pays for it without notice of any suspicious circumstances that there may be something wrong with the title to the property or the sales transaction.

Bond - A certificate issued by a bonding company for a specific amount of money at the beginning of a lawsuit to guarantee that the successful party will be compensated for losses resulting from the lawsuit if the bonding party eventually loses the lawsuit.

Bonus income - An extra consideration given for what is received, or something given in addition to what is ordinarily received, or strictly due, the recipient.

Borrower (mortgagor) - One who applies for a loan secured by real estate and is responsible for repaying the loan mortgage.

Bounds - Refers to boundaries; used with the word "metes" in the metes and bounds method of land description.

Breach letter - Documentation sent to a mortgagor informing them of a default or ‘breach’ of the mortgage contract.

Breach of contract - The failure to perform provisions of a contract without a legal excuse. Example - A contract would be deemed null and void if a buyer lost his job and could no longer qualify for the loan to purchase the house, but this would not be considered a breach of contract. If, however, a borrower was no longer qualified because he ran up excessive credit-card debt, that could be determined to be a breach of contract.

Bridge loan - A short-term loan for borrowers needing more time to acquire permanent financing. This usually is used when borrowers must carry two mortgages between transactions. A loan is held on both properties until the old property is sold.

Broker - A person licensed to represent home buyers or sellers for a fee. Most real estate offices are managed by a broker who employs licensed sales agents to sell the properties.  An individual who acts as an intermediary between two or more parties for the purpose of negotiating a transaction agreeable to all of the parties. In lending, the broker arranges and negotiates loan amounts, interest rates and loan terms between borrowers and lenders. Depending on the type of loan, the state wherein the transaction is occurring and contractual arrangements, the broker may represent the borrower, the lender or not have a fiduciary responsibility to either. (See definition of "fiduciary responsibility" below).  Brokers usually charge a fee or receive a commission for their services.

Brokerage - Broker’s commission, usually a percentage of the sales price, paid by the seller.

Broker-agent - One licensed to act both as broker and agent.

Broker Price Opinion (BPO) - A written estimate of the most probable sales price of a property provided by a licensed real estate broker with experience in the specific locality of the subject property. Value of the subject property is estimated by comparing like properties that recently sold and adjusting for differences. Often provided as a means to establish a listing price for a property. (See “comparable market analysis - CMA”.)

Buffer Zone - A means by which planners use space to separate two adjoining districts which have incompatible uses. A buffer zone consists of uses which are compatible with uses in each adjoining district.

Building Code - Ordinances passed by local governments with special minimum standards of construction for new buildings. They also apply to major additions to old construction.

Building Permit - permission granted by a local government or agency to build a specific structure at a specific site.

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.

Buy-down - Obtaining a lower interest rate (literally, “buying down” the interest rate) by paying additional points to the lender. The lower rate may apply for the full duration of the loan or for just the first few years. A buy-down may be used to qualify a borrower who otherwise would not qualify, because a buy-down results in lower payments. One popular temporary buy-down is the “2-1.” If the interest rate on the note is 9 percent, the buy-down results in a rate of 7 percent for the first year, 8 percent for the second year and 9 percent thereafter.

A payment of discounts points in exchange for a lower rate of interest. It has the effect of providing the lender with a greater yield today in exchange for a lower yield in the future. (See definition of "discount points" below.). An arrangement in which the seller of real estate pay some or all of the buyer's loan costs, usually measured by increments of 1 percent of the loan called points. The seller pays enough points to the lender to permit it to offer the buyer's loan at a reduced interest rate, which reduces the monthly payment. The cost to the seller is small, but the reduction in payments to the buyer is often quite substantial. Buy down arrangements are often structured to focus the entire reduction in interest rate, and therefore monthly payments, in the early years of the loan. In a 3- 2-1 buy down, a seller will pay enough points to reduce the buyer's interest rate by 3 percent, such as from 10 percent to 7 percent, the first year, then by 2 percent the second year and by 1 percent the third year. In the fourth year the loan interest rate and the monthly payments would return to the normal market rate of interest as set when the loan was first obtained.

Buyer’s agent or buyer’s broker - An agent hired by a buyer to locate a property for purchase. The agent represents the buyer and negotiates with the seller’s agent (or “listing agent”) for the best possible deal for the buyer.

Buyer’s market - Market conditions that favor buyers. As a result, buyers have ample choice of properties and may negotiate lower prices. Buyer’s markets may be caused by an economic slump or overbuilding.

Bylaws - Legal documentation in a condominium regime which provides the establishment of the home-owner's association; provides the powers and authority given to the board of directors; and indicates various rights and responsibilities of the unit owners.

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