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Real Estate Dictionary/Glossary A,
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N.B. This glossary is provided with the understanding that the author is not
providing any legal, or other professional services. If legal or real estate
advice is required, the services of a competent professional person should be
sought.
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 title as is needed to carry out the terms
of the lien document. (See deed of trust)
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 Association of REALTORS® (NAR)
Formerly known as the National Association of Real Estate Boards (NAREB), NAR is
the largest and most prestigious real estate organization in the world. Its
members include REALTORS® and REALTOR-ASSOCIATES® representing all branches of
the real estate industry. The national organization functions through local
boards and state associations. Active brokers who have been admitted to
membership in state and local NAR boards are allowed to use the trademark
REALTOR®. Salespeople are admitted on a REALTOR-ASSOCIATE® active status. NAR
members subscribe to a strict Code of Ethics.
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 national currency to be issued by new "national"
banks. The banks were required to purchase U.S. government securities as backing
for their National Bank notes. In 1865, a 10-percent tax levied against State
Bank notes essentially taxed those notes out of existence. From 1863 to 1877,
National Bank notes were printed privately by the issuing banks. After 1877, the
Bureau of Engraving and Printing, a division of the U.S. Department of the
Treasury, assumed responsibility for printing all notes.
National Environmental Policy Act
The Act requires an environmental impact statement for federal actions that
significantly affect the quality of the environment. (See environmental impact
statement)
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 shortage that is added to unpaid principal.
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. (See easement)
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 no excuse.
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
payee's right to payment.
Neighbourhood 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 information that will aid in the sale of the
property. The questionnaire should include questions about neighborhood schools,
recreational facilities, churches, shopping centers, medical facilities, and
other features that may be important to prospective buyers.
Net Income Approach
A method of pricing multiple unit rental properties where the desire to buy is
driven by the property's ability to generate cash flow and profit. Most often
used to price rental properties of 2 or more units. When pricing single-family
rental homes and condos, the market approach is preferable. (See market
approach, net operating income)
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 practices in such a listing, its use is
discouraged in most states. (See listing agreement)
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.
Networking
Generating prospects through a real estate professional's communications with
friends and professional associates. (See prospecting)
Net Worth
Assets less liabilities (See asset, liability)
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 the gain or loss. (See exchange)
No Loan, No Commission
A listing agreement requiring that escrow be closed and title transferred before
an agent is entitled to a commission. (See listing agreement)
No-Loss Rule
If a real estate transaction qualifies as an exchange, "no loss" can be
recognized. (See exchange)
Nominal Damages
Monetary damages of a token amount awarded for a wrongful act where no loss
occurred. (See compensatory damages, exemplary damages)
Nominal Interest Rate
The stated interest rate in a note or contract, which may differ from the true
or effective interest rate, especially if the lender discounts the loan and
advances less than the full amount. (See effective interest rate)
Non-Agent
An intermediary between a buyer and seller, or landlord and tenant, who assists
both parties with a transaction without representing either. Also known as a
facilitator, transaction broker, transaction coordinator and contract broker.
Non-conforming loan
A mortgage loan that does not meet Fannie Mae and Freddie Mac underwriting
guidelines. Non-conforming loans are available as both fixed and adjustable rate
mortgages. (See Fannie Mae, Freddie Mac)
Nonconforming Use
A use of property, legally permitted to continue as such, in spite of the
orignial zoning ordinance which prohibited such use for the area.
Non-Cumulative Zoning
Zoning that allows only the stated use and not more restrictive uses. (See
zoning)
Non-Disturbance Clause
An agreement where the mortgagee agrees to honor a tenant's lease in the event
that the mortgage is foreclosed.
Non-Geographic Farming
Farming/prospecting a particular segment of the market such as an ethinic group
or nationality, as opposed to a geographic area. (See farming, geographic
farming)
Non-Homogeneity
A lack of uniformity; dissimilarity. Because no two parcels of land are exactly
alike, real estate is said to be non-homogeneous. (See homogeneous).
Notary Public
A person who acknowledges oaths, such as the signing of a grant deed or deed of
trust; must be duly appointed by the proper authorities.
Note (original note)
A document signed by the borrower of a loan and stating the loan amount, the
interest rate, the time and method of repayment and the obligation to repay. The
note serves as evidence of the debt. When secured by a mortgage, it is called a
mortgage note, and the mortgagee is named as the payee. In a trust deed, the
note is usually made payable to the bearer or holder. The note may also contain
some of the same provisions as in the mortgage or trust deed document, such as
prepayment or acceleration.
Notice of Cessation
A notice that gives subcontractors 30 days and gives prime contractors 60 days
to file liens from the date of cessation of work. (See cessation of work)
Notice of Completion
A document recorded to give constructive notice that a building job has been
completed. (See constructive notice)
Novation
Substituting a new obligation for an old one or substituting new parties to an
existing obligation.
Nuisance
That which annoys and disturbs one in possession of his or her property,
rendering its ordinary use physically uncomfortable.
Nuncupative Will
An oral will declared by the testator in his or her final illness, made before
witnesses and then created in legal written form.
O
Real Estate Dictionary/Glossary A,
B,
C,
D,
E,
F,
G,
H,
I,
J,
K,
L,
M,
N,
O,
P,
Q,
R,
S,
T,
U,
V,
W,
X,
Y,
Z
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