Real Estate Glossary "B"

back-end qualifying ratio - A ratio used by a lender to qualify a loan applicant. It compares the applicant's gross income with the proposed PITI and long-term debt.

balloon loan - A loan in which the payments do not fully amortize the loan balance. The remaining loan balance is included in the last payment, called a balloon payment.

bargain and sale deed - A deed that may come with or without guarantees. The only guarantee usually associated with this deed is a guarantee against encumbrances for the period the grantor held title.

base lines - East-west lines that intersect with principal meridians. Used in the rectangular survey system.

basis - The original cost of the property plus capital improvements less accrued depreciation. Used for accounting and income tax purposes.

bench mark - Reference point used in metes-and-bounds descriptions.

beneficiary - The party in a trust who benefits from the assets of the trust. Also, the party receiving per­sonal property under a will.

bequest - The disposition of personal property under a will.

bilateral contract - A type of contract in which both parties promise to act.

bill of sale - Transfers title to personal property in a transaction.

binder - A short version of a contract that includes all of the essential contract terms.

biweekly loan - A loan in which a payment is made every two weeks. Under this arrangement a bor­rower pays less interest and pays the loan off sooner than under a standard loan arrangement with monthly payments.

blanket loan - A loan that covers more than one prop­erty and contains a partial release clause that releases the lien on individual properties as the loan is paid.

blind ad - Advertising that does not include the broker's name or the name of the real estate company. State licensing laws usually prohibit blind ads.

blockbusting - Inducing owners to sell or rent based on representations that persons of a particular race, religion, national origin, etc., are moving into the area.

blue-sky laws - Laws passed to protect the public from fraudulent investment schemes.

boot - Additional cash or nonqualifying property received as part of a like-kind exchange. Boot is taxable to the recipient.

borrower - A person who receives a loan (also known as the mortgagor).

boundary lines - Used in metes-and-bounds descrip­tions. They define the boundaries of a property.

broker - One who acts as an intermediary on behalf of others for a fee.

brokerage - Bringing parties together for the purchase, rent or exchange of real estate.

broker license - A type of real estate license category that allows the licensee to operate a real estate office.

broker/sales associate agreement - A written agreement between a broker and his or her sales agents.

budget loan - A loan arrangement in which a portion of the property's real estate taxes and insurance is collected by the lender as part of the loan payment.

building codes - Enacted by local governments under their police powers to protect the public from infe­rior construction practices.

Building Owners and Managers Association (BOMA) - An association of owners and managers of prima­rily office buildings.

building permit - Issued by local governments' building inspectors to allow construction of new buildings or alteration of existing structures.

bundle of legal rights - A concept of land ownership under which an owner holds all legal rights (i.e., possession, enjoyment, disposition, etc.) to the land.

buydown - A loan arrangement in which the lender is paid an interest subsidy in exchange for a reduced loan rate in the first years of the loan.

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