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Term Definition
Backup Contract
A real estate contract that takes effect in the event that a previous agreement is not fulfilled.

See Principal Balance.

Balloon Loan
A loan with fixed monthly payments that will amortize it over a stated term (for example, 20 years), but requires an additional lump sum payment of the principal balance, in full, at an earlier date (for example, 10 years).

Balloon Payment
An installment payment that is (often substantially) larger than the loan’s other regular payments. The Balloon Payment is usually the loan’s last payment and may be higher than the regular payment by many thousands of dollars.

A legal procedure through which a debtor seeks relief from outstanding debts because he or she is financially unable to pay them.

Bankruptcy Discharge
After a bankruptcy proceeding is completed, the debtor is released from an obligation to repay his or her debts.

Basis Point
One hundredth of one percent.

The person who will receive or is receiving the benefits from a particular act.

Bilateral Contract
A contract under which both parties are obligated to conduct certain deeds or tasks.

Bill of Sale
A written document used to transfer the title of a property to another owner.

Bird Dog
A person who identifies a beneficial real estate investment opportunity and passes information about the deal on to another investor for a fee.

Biweekly Mortgage
A mortgage in which payment is required every two weeks instead of monthly. This helps the borrower to repay the loan over a shorter term.

Blanket Mortgage
A single mortgage that covers multiple properties.

Board Of Equalization
A committee of persons at the state level who ensure that local property taxes are assessed in a uniform manner.

Board of Realtors
A group of real estate professionals who hold membership in the state and national Associations of Realtors.

(1) A written agreement from a bonding company. The agreement contains a guarantee that a person will properly carry out a specific act (for example, a court appearance, managing funds, or completing construction). If the person who purchased the bond does not complete his or her task, the bonding company will pay the aggrieved party an amount up to the value of the bond.

Breach of Contract
A violation of a legal agreement or contract. Also, a default on a loan or other payment.

Break-Even Ratio
Metric often used by commercial lenders to measure how vulnerable a property is to defaulting on its debt if rental income were to decline.

Bridge Loan
Financing for a mortgage that remains in effect between the end of one loan and the start of another.

An intermediary between two or more parties who is charged with the task of negotiating a transaction agreeable to all of the parties. The broker may arrange and negotiate loan amounts, interest rates, and loan terms between the parties. The broker may represent the borrower, the lender, or be neutral with no fiduciary responsibility to either party.

Building Permit
A statement of permission, in writing, from a local government or agency allowing the recipient to build a particular structure at a particular site.

Bundle of Rights
A group of implied rights in the ownership of any real estate property. These include the owner’s right of occupancy, use and enjoyment, the right to sell in whole or in part, the right to lease any or all of the rights, the right to the benefits derived by occupancy and use of the property, and so on.

Buy Down
A payment of discount points in exchange for a lower rate of interest. A buy down provides the lender with a greater yield immediately, in trade for a lower yield in the future. (See definition of "discount points" below.).

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