Business / Real Estate Glossary

Must-Buy Buyers: Buyers looking for properties that meet specific needs.

Must-Sell Sellers: A highly motivated or desperate seller.

Mutual Consent: A meeting of the minds, a mutual assent of the parties to the formation of the contract.

Mutual Mortgage Insurance: Insurance premiums and other specified FHA revenues are paid into one of four FHA funds. Losses due to foreclosure are met from these funds.

Naked Title: Bare title to the property, lacking the usual rights and privileges of ownership. A trustee in a deed of trust securing instrument may hold the title to a secured property, but only such tit . . . View Full Definition

National Association Of Independent Fee Appraisers (NAIFA): A professional association of appraisers with more than 2,000 members nationally. NAIFA offers the specialty designations IFA (member), IFAS (senior member) and IFAC (appraiser-counselor).

National Bank Act Of 1863: In 1863, President Abraham Lincoln, at the urging of Salmon Chase, the Secretary of the Treasury, signed the National Bank Act. The Act established a national banking system and a uniform na . . . View Full Definition

National Environmental Policy Act: The Act requires an environmental impact statement for federal actions that significantly affect the quality of the environment.

Negative Amortization: A financing arrangement in which the monthly payments are less than the true amortized amounts and the loan balance increases over the term of the loan rather than decreases, an interest sho . . . View Full Definition

Negative Declaration: A declaration by a developer that a project will not have a negative impact on the environment.

Negative Easement: An easement where the owner of a servient estate is prohibited from doing something on his or her estate that is otherwise lawful, because it will affect the dominant estate.

Negligence: The failure to use ordinary or reasonable care under the circumstances.

Negligent Misrepresentation: A negligent misrepresentation occurs when the broker should have known that a statement about a material fact was false. The fact that the broker may actually be ignorant about the issue is . . . View Full Definition

Negotiable Instrument: A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The transferee then has the original payees right to payment.

Neighborhood Information Request: A questionnaire used by brokers to obtain information about the neighborhood where a listed property is located. The questionnaire is completed by the homeowner and can provide valuable info . . . View Full Definition

Net Income Approach: A method of pricing multiple unit rental properties where the desire to buy is driven by the propertys ability to generate cash flow and profit. Most often used to price rental properties of . . . View Full Definition

Net Lease: A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities and repairs.

Net Listing: An employment contract in which the broker receives as commission all excess monies over and above the minimum sales price agreed on by broker and seller. Because of the danger of unethical . . . View Full Definition

Net Operating Income (NOI): The income projected for an income-producing property after deducting losses for vacancy, collection and operating expenses.

Net Proceeds: The cash received after paying all liens and expenses.

Net Worth: Assets less liabilities

Networking: Generating prospects through a real estate professionals communications with friends and professional associates.

No Capacity To Contract: The inability of a person to enter into a valid contract under any circumstances. Such inability can arise when a person has been adjudicated insane or is an officer of a corporation who is . . . View Full Definition

No Loan, No Commission: A listing agreement requiring that escrow be closed and title transferred before an agent is entitled to a commission.

No-Choice Rule: If a real estate transaction qualifies as an exchange, it must be treated as an exchange. An exchanger who qualifies for the 1031 tax-deferred exchange has no choice, they cannot recognize t . . . View Full Definition

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