Real Estate Glossary

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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). NAIFA Website
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.NAR Website
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)
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.
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 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.
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 qualifiies 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)
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.
Noncumulative zoning:
Zoning that allows only the stated use and not more restrictive uses. (See zoning)
Nondisturbance clause:
An agreement where the mortgagee agrees to honor a tenant's lease in the event that the mortgage is foreclosed.
Nongeographic 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)
A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogeneous. (See homogeneous).
Noninstitutional lenders:
Credit unions, pension funds, private individuals and real estate investment trusts. (See credit unions, institutional lenders, pension funds, real estate investment trusts).
Nonjudicial foreclosure:
The process of selling real property under a power of sale in a mortgage or deed of trust that is in default. One disadvantage is that the lender cannot obtain a deficiency judgment. Also, some title insurance companies are reluctant to issue a policy unless a court has judicially foreclosed the mortgagor's interest. (See judicial foreclosure, strict foreclosure)
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)
Notice of default:
A notice to a defaulting party announcing that a default has occurred. The defaulting party is usually provided a grace period during which to cure the default. Notices of default are frequently provided for in contracts for deeds and mortgages and are sometimes required by operation of law.
Notice of deliquency:
In junior financing, where the borrower gives the senior lender permission to notify the junior lender in the event of a default. (See default, junior mortgage, senior loan)
Notice of nonresponsibility:
A legal notice designed to relieve a property owner of responsibility for the cost of improvements ordered by another person (such as a tenant). The owner usually gives notice that he or she will not be responsible for the work done by posting notice in some conspicuous place on the property, and by recording a verified copy in the public records.
Substituting a new obligation for an old one or substituting new parties to an existing obligation.
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.

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