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Real Estate Lexicon

A B C D E F G H I K L M N O P Q R S T U V W Y Z

N

Net cash flow  
Investment property that generates income after expenses such as principal, interest, taxes and insurance are subtracted.

Net Lease
A rental agreement in which the tenant pays certain agreed-upon property expenses such as taxes or maintenance.

Note
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

Notice of default

A formal written notice to a borrower that a default has occurred and that legal action may be taken.

O

Open house  
A marketing tool in which a listing agent opens a house for view. Usually there is an "Open House" sign in front of the property.

Option  
A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.

Oral agreement  
Contractual arrangements that are not in writing and are usually not legally binding.

Owner financing  
A transaction in which the seller of a property agrees to finance all or part of the purchase.

P

Personal property
All property, tangible and intangible, other than real property that may be the subject of ownership. 

PITI
This stands for principal, interest, taxes and insurance. The four components of a monthly mortgage payment.

Planned Unit Development (PUD)

A type of ownership where individuals own the building or unit they live in, but common areas are owned jointly with the other members of the development or association.

Power of attorney
A legal document that authorizes another person to act on one's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Pre-Qualification
Many lenders will pre-qualify a borrower who is shopping for a loan by completing a preliminary assessment of the buyer's ability to pay for a home.

Principal
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

Promissory note
A written promise to repay a specified amount over a specified period of time.

Property value  
The value of a piece of property is based on the price a buyer will pay at a certain time.

Proration
Agreed-upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing.

Purchase agreement
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.



Q

Qualifying ratios
Calculations that are used in determining whether a borrower can qualify for a mortgage.

Quit-claim deed  

A document that releases a party from any interest in a piece of real estate.