Real Estate & Investing Dictionary
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Natural Finish
A finish applied to wood that provides protection without masking the natural grain and color.

Natural Gas
A naturally occurring gas used as a fuel in furnaces and power plants. Natural gas is commonly found in oil-producing areas.

Needs-based Pricing
Asking price based on the amount of funds required to pay off the seller's mortgage, the cost of remodeling or the purchase of another house.

Negative Amortization
When the outstanding balance of a loan grows larger because each monthly payment is too small to cover both the principal and interest of that loan. This sometimes happens with adjustable rate mortgages.

Negative Amortization
Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rate. In essence, the borrower is deferring the interest payment, which is why this is called "deferred interest." The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.

Negative Cash Flow
When operating expenses exceed income and an owner must make a financial contribution.

Negative Cash Flow
Properties that cost you money instead of making you monthly income.

Negative Equity
A position in which a borrower owes more on property than the property is worth.

A district or locality characterized by similar or compatible land uses, often with a major street for shopping or restaurants.

Neighborhood association
any group of persons organized for the sole purpose of improvement of a particular geographic area having specific boundaries within a municipality, provided that such association is recognized by the municipality as the sole association for such purpose within such geographic area;

Net Cash Flow
Income from investment property after expenses (principal, interest, taxes and insurance) are deducted.

Net Floor Area
Usable floor area after deducting stairs, walls, and similar features.

Net Income
The amount remaining when expenses are deducted from gross income.

Net Income Approach
A technique used to evaluate larger properties and determine their value by calculating the net income they produce.

Net Lease
A commercial real estate lease in which the tenant regularly pays not only for the space (as he does with a gross lease) but for a portion of the landlord’s operating costs as well. When all three of the usual costs--taxes, maintenance and insurance--are passed on, the arrangement is known as a "triple net lease." Because these costs are variable and almost never decrease, a net lease favors the landlord. Accordingly, it may be possible for a tenant to bargain for a net lease with caps or ceilings, which limits the amount of rent the tenant must pay. For example, a net lease with caps may specify that an increase in taxes beyond a certain point (or any new taxes) will be paid by the landlord. The same kind of protection can be designed to cover increased insurance premiums and maintenance expenses.

Net Lease
Also referred to as a triple net lease, the lessee pays not only a fixed rental charge but also expenses on the rented property, including maintenance.

Net Listing
Listing agreement where the broker's commission is an amount above a net price set by the owner. If that price is not met, a commission is not earned.

Net Listing
A price under which an owner will not sell the property. The broker is entitled to the excess over the net listing as his commission.

Net Net Net
An agreement which specifies that the tenant pays real estate taxes, insurance, and all maintenance costs of the property.

Net Operating Income
Gross income minus any operating expenses. Debt service is not deducted as an expense.

Net Spendable Income
Amount remaining after expenses and debt service and any taxes due have been deducted from the gross income.

New Town
A large mixed-use development designed to provide residences, general shopping, services, recreation and employment.

No Cash-Out Refinance
A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is caculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a "rate and term refinance."

No Doc Loan
A loan where the borrower is not required to present any documentation to secure a loan.

No Money Down
General term referring to real estate acquisition strategies based on seller-provided financing and/or existing loan assumption and minimal use of cash down payments. Using a maximum amount of leverage to achieve maximum profits from real estate investments.

No-Cost Loan
Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

No-Cost Loan
Almost all lenders offer loans at "no points." You will find the interest rate on a "no points" loan is approximately a quarter percent higher than on a loan where you pay one point.

Nominal Interest Rate
The interest rate usually below market stated on the note.

Nominal Loan Rate
The loan rate stated on the face of the loan note, which is different from the effective interest rate. If points are charged, the effective rate will be higher.

Non-judicial Foreclosure
Foreclosure on a mortgage without filing a lawsuit or obtaining a court order. Generally such sales occur because the borrower has signed a document, such as a deed of trust, giving a trustee pre-authorization to sell the real estate to pay off the debt.

To have a document signed by a notary public.

A person authorized to take acknowledgment to certain classes of documents, such as deeds, contracts, mortgages, and before whom affidavits may be sworn.

Notary Public
A person authorized to take acknowledgment to certain classes of documents, such as deeds, contracts, mortgages, and before whom affidavits may be sworn.

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

The legal document that specifies the terms of the borrower's loan, such as the length of time to repay it, the interest rate, the monthly payment amounts and provisions to deal with the provisions to deal with the borrower's failure to pay on a timely basis.

Note Rate
The interest rate stated on a mortgage note.

Notice of Default - NOD
A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Notice of deficiency
a notice or other order issued by the code enforcement agency and requiring the elimination or removal of deficiencies found to exist under the housing code;

Notice Of Rescission
A document that is used to cancel a notice of default and declare that the default has been corrected.

Something that interferes with the use of property by being irritating, offensive, obstructive or dangerous. Nuisances include a wide range of conditions, everything from a chemical plant's noxious odors to a neighbor's dog barking. The former would be a "public nuisance," one affecting many people, while the other would be a "private nuisance," limited to making your life difficult, unless the dog was bothering others. Lawsuits may be brought to abate (remove or reduce) a nuisance.

", a violation of provisions of the housing code applying to the maintenance of the buildings or dwellings which the code official in the exercise of reasonable discretion believes constitutes a threat to the public health, safety or welfare

Number of Bathrooms
Number of bathrooms located on a property.

Number of Bedrooms
The number of bedrooms located on a property.

Number of Units
The number of components on a property, typically used with apartments or condos.
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