Real Estate Glossary - B

Bad Debt/Vacancy Factor - A percentage deducted from a property's potential gross income to determine the effective gross income, estimating the income that will probably be lost because of vacancies and tenants who don't pay.

Balance, Principle of - An appraisal principle which holds that the maximum value of real estate is achieved when the agents in production (labor, coordination, capital, and land) are in proper balance with each other.

Balance Sheet - Financial Statement

Balloon Payment - A payment on a loan (usually the final payment) that is significantly larger than the regular installment payments.

Bankruptcy - 1. When the liabilities of an individual, corporation, or firm exceed the assets. 2. When a court declares an individual, corporation, or firm to be insolvent, so that the assets and debts will be administered under bankruptcy laws.

Base Line - In the rectangular survey system, a main east-west line from which township lines are established. Each principal meridian has one base line associated with it.

Basis - A figure used in calculating a gain or the sale of real estate for federal income tax purposes. Also called cost basis.

Basis, Adjusted - The owner's initial basis in the property, plus capital expenditures for improvements, and minus any allowable depreciation or cost recovery deductions.

Basis, Initial - The amount of the owner's original investment in the property; what it cost to acquire the property, which may include closing costs and certain other expenses, as well as the purchase price.

Bearer - Whoever has possession of a negotiable instrument.

Bench Mark - A surveyor's mark on a stationary object at a known point of elevation used as a reference point in calculation other elevations in a surveyed area; often a metal disk set into cement or rock.

Beneficiary - 1. One for whom a trust is created and on whose behalf the trustee administers the trust. 2. The lender in a deed of trust transaction. 3. One entitled to receive real or personal property under a will; a legatee or devisee.

Bequeath - To transfer personal property to another by will.

Bequest - Personal property (including money) that is transferred by will.

Betterment - An improvement to real property that is more extensive than ordinary repair of replacement and that increases the value of the property.

Bill of Sale - A document used to transfer title to personal property from on person to another.

Binder - 1. An instrument providing immediate insurance coverage until the regular policy is issued. 2. Any payment or preliminary written statement intended to make an agreement legally binding until a formal contract has been drawn up.

Blind Ad - An advertisement placed by a real estate licensee that does not include the broker's name.

Block - In a subdivision a group of lots surrounded by streets or unimproved land.

Blockbusting - Attempting to induce owners to list or sell their homes by predicting that members of another race or ethnic group. Or people suffering from some disability, will be moving into the neighborhood this violates anti-discrimination laws. Also called panic selling.

Blue Laws - Statutes or ordinances restricting the transaction of business or other activities in Sundays and certain holidays.

Board of Directors - The body responsible for governing a corporation ion behalf of the share holders, which oversees the corporate management.

Bona Fide - In good faith; genuine; not fraudulent.

Bond - 1. A written obligation, usually interest-bearing, to pay a certain sum at a specified time. 2. Money put up as a surety, protecting someone against failure to perform, negligent performance, or fraud.

Bond , Completion - A bond posted by a contractor to guarantee that a project will be completed satisfactorily and free of liens. Also called a performance bond.

Bonus - An extra payment, over and above what is strictly due.

Boundary - The perimeter or border of a parcel of land; the dividing line between one piece of property and another.

Bounds - Boundaries or Metes and Bounds.

Branch Manager - An associate broker designated by a firm's primary broker to manage the operations of a branch office.

Breach - Violation of an obligation, duty, or law; especially an unexcused failure to perform a contractual obligation.

Broker - One who is licensed to represent members of the public in real estate transactions for compensation; may be an individual, a corporation, or a partnership.

Broker, Associate - A person who has qualified as a broker, but is affiliated with another broker.

Broker, Designated - A person who has qualified as a broker, but is affiliated with another broker.

Brokerage - A real estate broker's business

Broker, Fee - A real estate broker who allow another person to use his or her license to operate a brokerage, in violation of the license law.

Buffer - An undeveloped area of land that separates two areas zoned for incompatible uses.

Building Codes - Regulations that set minimum standards for construction methods and materials.

Building Restrictions - Rules concerning building size, placement, or type; they may be public restrictions (in a zoning ordinance, for example) or private restrictions (CC&Rs, for example).

Bump Clause - A provision in a purchase and sale agreement that allows the seller to keep the property on the market while waiting for a contingency clause to be fulfilled if the seller receives another good offer in the meantime, he or she can require the buyer to either waive the contingency clause or terminate the contract.

Bundle of Rights - The rights inherent in ownership of property, including the rights to use, lease, enjoy, encumber, will, see, or do nothing with the property.

Business Opportunity - A business that is for sale.

Buydown - When discount points are paid to a lender to reduce (buy down) the interest rate charged to the borrower; especially when a seller pays discount pints to help the buyer/borrower qualify for financing.

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