backup offerballoon payment
An offer to buy, submitted to a seller, with the
understanding that the seller has already accepted a
prior offer; a secondary offer. Sometimes the seller
accepts the backup offer contingent on the failure of
the sales transaction on the part of the first purchaser
within a specified period of time. The seller must be
careful how he or she proceeds, however, when the time
for the buyer's performance, under the first contract,
The appraisal principle that states that the greatest
value in a property will occur when the type and size of
the improvements are proportional to each other as well
as the land.
Under an installment loan agreement, a final payment
that is substantially larger than the previous
installment payments and repays the debt in full; the
remaining balance that is due at maturity (stop date) of
a note or obligation.
Offers from multiple buyers for a piece of property.
A mortgage covering at least two pieces of real estate
as security for the same mortgage.
bargain and sale deed
A deed that carries with it no warranties against liens
or other encumbrances but that does imply that the
grantor has the right to convey title. The grantor may
add warranties to the deed at his or her discretion.
basic form homeowner's policy
One of a set of imaginary lines running east and west
used by surveyors for reference in locating and
describing land under the government survey method of
The most common homeowner's policy is called a basic
form. It provides property coverage against fire and
lightning; glass breakage; windstorm and hail;
explosion; riot and civil commotion; damage by aircraft;
damage from vehicles; damage from smoke; vandalism and
malicious mischief; theft; and loss of property removed
from the premises when it is endangered by fire or other
The dollar amount that the Internal Revenue Service
attributes to an asset for purposes of determining
annual depreciation or cost recovery, and gain or loss
in the sale of the asset. The determination of basis is
of fundamental importance in tax aspects of real estate
investment. All property has a basis. If property was
acquired by purchase, the owner's basis is the cost of
the property plus the value of any capital expenditures
for improvements to the property, reduced by any cost
recovery depreciation actually taken or allowable. The
basis is also reduced by any untaxed gain "carried over"
to the new property in cases where the new property is a
replacement of a former residence or is acquired through
a like-kind exchange or through an involuntary
conversion. This new basis is called the property's
A permanent reference mark or point established for use
by surveyors in measuring differences in elevation.
bill of sale
A written agreement by which one person sells, assigns
or transfers to another his or her right to, or interest
in, personal property. A bill of sale is sometimes used
by a seller of real estate to evidence the transfer of
personal property, such as when the owner of a store
sells the building and includes the store equipment and
An agreement that may accompany an earnest money deposit
for the purchase of real property as evidence of the
purchaser's good faith and intent to complete the
An interest rate for a newly financed loan that is
higher than the existing rate but lower than the current
An advertisement that does not include the name and
address of the person placing the ad, only a phone
number or post office box address. Licensed brokers are
generally prohibited by state license laws from using
An illegal and discriminatory practice whereby one
person induces another to enter into a real estate
transaction from which the first person may benefit
financially by representing that a change may occur in
the neighborhood with respect to race, sex, religion,
color, handicap famial status or ancestry of the
occupants. A change possibly resulting in the lowering
of the property values, a decline in the quality of
schools or an increase in the crime rate. Also called
panic selling or panic peddling.
In good faith, honestly, openly, and sincerely and
without deceit or fraud. In an attitude of trust and
confidence, without notice of fraud.
breach of contract
Violation of any of the terms or conditions of a
contract without legal excuse; default; nonperformance.
The non-breaching party can usually seek one of three
alternative remedies upon a material breach of the
contract: rescission of the contract, action for money
damages or an action for specific performance.
In income property, the figure at which rental
income is equal to expenses and debt service.
A short-term loan made to cover the period between
the termination of one loan, such as an interim
construction loan, and the beginning of another loan,
such as a permanent takeout loan.
Working with outside licensed real estate brokers who
have prospective tenants in exchange for a finder's fee
or commission split.
broad-form homeowner's policy
Covers falling objects; damage due to the weight of ice,
snow or sleet; collapse of all or part of the building;
bursting, cracking, burning or bulging of a steam or hot
water heating system or of appliances used to heat
water; accidental discharge, leakage or overflow of
water or steam from within a plumbing, a heating or an
air-conditioning system; freezing of plumbing, heating
and air-conditioning systems and domestic appliances;
and injury to electrical appliances, devices, fixtures
and wiring from short circuits or other accidentally
A loan with payments set up to cover taxes and insurance
in addition to interest and principal reductions.
An ordinance that specifies minimum standards of
construction for buildings to protect public safety and
Written governmental permission for the
construction, alteration or demolition of an
improvement, showing compliance with building codes and
Appliances, bookshelves, cabinets or other items that
are framed into a home or permanently attached.
burden of proof
The obligation to prove the truth or falsity of a fact.
bundle of legal rights
The concept of land ownership that includes ownership of
all legal rights to the land. For example, possession,
control within the law and enjoyment.
Buy & Sell
The written purchase contract used by Realtors
belonging to the Greater Lansing Association of
A financing technique used to reduce the monthly
payments for the first few years of a loan. Funds in the
form of discount points are given to the lender by the
builder or seller to buy down or lower the effective
interest rate paid by the buyer, thus reducing the
monthly payments for a set time.
A real estate agent who exclusively represents the
buyer's interests in a transaction.
A slow real estate
market in which buyers have the advantage.
Buyers of expensive items, like a home or automobile,
sometimes regret their decision. They wonder if they
paid too much or made the wrong selection. This fear of
having made a serious mistake is referred to as "buyer's