naked legal title syn bare title Ownership by one person (e.g., a trustee) when equitable ownership (possession) is owned by another (e.g., trustor).
NAR syn National Association of Realtors See National Association of Realtors.
National Association of Realtors, (NAR) An association of real estate professionals which is subdivided into state associations and local boards throughout the United States. The organization is primarily concerned with ethics and education in the industry and lobbying efforts pertaining to legislation that could have an impact on members and their businesses.
National Institute of Real Estate Brokers, (NIREB) An organization affiliated with the National Association of Realtors. It conducts continuing education programs for realtors.
negative amortization A gradual increase in mortgage debt. Negative amortization describes any situation where interest accrues on a mortgage at a faster rate than it is paid. The unpaid interest is added to the unpaid balance of the loan, so that the debt increases accordingly. This can happen, for example, with a bow-tie loan where the contract rate, which is tied to a floating index, is higher that the pay rate. Some homeowners face negative amortization when interest rates rise and their adjustable mortgage has a payment cap but no interest cap.
negative declaration A determination that a project will not produce a significantly adverse impact on the environment. When a negative declaration is authorized, no environmental impact report is required.
neighborhood (shopping) center A retail center, open air, characterized by a supermarket or drug store as anchor tenant. Satellite service stores will occupy 50 to 60 percent of total space. Site may be from 3 to 15 acres. These centers serve a smaller geographical area than a community retail center.
neighbor law The body of laws and rules found in state statutes, county and city ordinances, covenants, conditions and restrictions (CC&Rs), and court decisions that govern the legal issues that arise between residential neighbors.
NEPA National Environmental Protection Agency
nest egg Savings. A source of down payment for home buyers.
net lease syn triple net lease A lease where all expenses of occupancy are paid by the tenant in addition to rent, which is accordingly "net income" for the landlord. Some net leases provide that specified expenses are to be paid by the landlord (for example, roof and exterior wall repair). Because the term "net lease" is somewhat ambiguous, most leases elaborate on each tenant's pro rata share of specified expenses.
net listing See listing agreement. A listing that allows the agent to retain as commission all sums received over and above a net price to be received by the owner. The purpose is to guarantee a minimum net amount to the owner. The pitfall is that the misunderstandings, and even charges of unfair advantage, may develop between the owner and agent if the agent should realize a windfall.
net rentable That space within a building for which the tenant pays rent. Net rentable square footage typically excludes rest rooms, hallways, and lobbies. Useable square footage, on the other hand, includes rest rooms, hallways, and lobbies, but excludes vertical shafts such as stairwells and elevators. In a lease for usable square footage, each tenant pays a pro rata share of costs applicable to occupancy and maintenance of the bathrooms, hallways, and lobbies; in a lease for net rentable square footage, they pay only for occupancy.
neutral expert fact-finding A nonbinding alternative dispute resolution (ADR) process in which an appointed third-party expert investigates and/or hears facts on selected issues and makes advisory findings of fact.
NIREB National Institute of Real Estate Brokers See National Institute of Real Estate Brokers.
no-equity or negative-equity home mortgage. Under a no-equity mortgage, the owner has no stake in the home. These loans may be based on “drive by” appraisals that basically confirm little more than the existence of the home.. These loans may carry interest from 10 to 14 percent, which appeals to borrowers who refinance their credit card debt (which carries 19+ percent interest). Furthermore, payment terms often are extended sufficiently that the monthly payment amount is decreased. Interest paid on these mortgages is deductible up to the value of the home-but not on the excess part of the mortgage. Although the creditor’s loan in reality may be secured by thin air, that is little different than the unsecured position of the credit card lender. Homeowners traditionally are more reluctant to declare personal bankruptcy than others, and these no-equity loans may, therefore, enjoy better repayment histories.
NOD Notice of default. See notice of default.
nominee A party designated to act in place of the actual buyer in a real estate transaction. A nominee may be designated to achieve business privacy. A nominee is not an assignee, and if a buyer intends to assign the purchase contract to another person, the contract should specify "buyer or assignee."
nonconforming mortgage lenders Mortgage lenders whose loans are not held for sale in the secondary mortgage market. Most mortgage lenders are conforming lenders, that is, they sell their loans to the Federal National Mortgage Association (Fannie Mae), the Government National Mortgage Association (Ginnie Mae), or the Federal Home Loan Mortgage Corporation (Freddie Mac). Nonconforming lenders need not conform to the rules and regulations of these secondary market purchasers because their mortgage loans are retained.
nonexclusive listing See open listing.
nonjudicial foreclosure See foreclosure.
nonrecourse debt Any debt that cannot be collected by resorting to the debtor’s personal assets. For example, the mortgage debt of a partnership in which limited partners have no personal liability, is nonrecourse debt as to them. In most real estate loans, the creditor can foreclose but may not resort to the personal assets of the mortgagor debtor. However, there are exceptions, and some real estate loans are full-recourse indebtedness.
no-points conventional loan A home loan that features no up-front charges for points in exchange for a slightly higher than standard interest rate. The advantage is the avoidance of paying up-front money for points. The disadvantage is the slightly higher interest rate over the life of the loan.
notarized Signed in the presence of a person licensed by the state to perform identification services as a Notary Public. Most real estate documents, such as deeds, deeds of trust, mortgages, and written easements, must be notarized before they can be recorded in the official records of the county in which the property is located.
Notary Public A person authorized by state law to acknowledge the identity of persons who sign documents. A notary verifies the identity of the person whose signature is notarized. In real estate, documents must be notarized before they are accepted for recording in the official records of the county.
note A shorthand expression for a promissory note, i.e., a written promise to pay a debt, with certain terms, signed by the debtor. A note is unsecured when there is no collateral pledged by the debtor to guarantee its repayment. Most real estate notes are secured by a deed of trust. Notes contain all the terms of the loans they evidence.
note brokerage The business of arranging the purchase and sale of existing real estate loans, (usually second mortgages) to investors. A seller who accept a carryback mortgage, for example, may have it rated as to salability based on the property's value, the equity supporting the loan, the maker’s credit history, if it’s occupied and its seasoning (called PECOS). The note broker will rate the note and present it to interested investors who may buy at a discount to receive the desired investment return. Note brokers charge commissions for their services.
notice syn constructive knowledge See constructive knowledge.
notice of cancellation of escrow A written notice from a principal to an escrow holder that authorization to proceed to close of escrow is cancelled. Such a notice will freeze an escrow. A wrongful cancellation may create a cause of action in favor of the other principal to the transaction for breach of contract, or possibly for a business tort.
notice of default, (NOD) A document that is recorded, at the option of the beneficiary, following a default in the payment of a note secured by a deed of trust. The purpose is to begin the statutory reinstatement period during which the default may be cured by the debtor. Recordation of a notice of default is the first step in the non-judicial foreclosure of a deed of trust. Before a lender records a notice of default, the borrower ordinarily will be contacted about the pending delinquency. Fannie Mae has guidelines for lenders that call for a reminder notice between the seventh and tenth day following nonpayment, and a late-payment notice following the seventeenth of the month. Telephone contact must also be made after seventeen days, and a personal interview must occur after fifty days. Thereafter, a NOD can be recorded and foreclosure commenced.
notice of delinquency A notice distributed by a senior mortgage lender that a delinquency in monthly mortgage payments has occurred, though a notice of default has not yet been recorded. The purpose is to give junior lienholders early notice of delinquency and notice of the possibility of a forthcoming foreclosure.
notice of nonresponsibility A written notice that, with additional procedures, serves to relieve the owner of real estate from liability for work done on the property that was not specifically ordered by the owner. It will, for example, defeat a mechanic’s lien filed by a supplier hired by a tenant. The owner of a commercial property often will record and post a notice of nonresponsibility before a new tenant begins a work of improvement. This forces the contractor and subcontractors to rely on the credit of the new tenant for payment of their contracts.
notice of trustee's sale, (NTS) A document recorded by the trustee under a deed of trust stating the time and place of a foreclosure sale. The NTS is also published in a newspaper and posted on the subject property and in a public place, such as the county courthouse bulletin board.
novation A substitution of debtors, with the former debtor being completely released from his or her former obligation. An assumption of an existing mortgage by a buyer of real estate may be followed by a release of liability of the former debtor who is the seller. Such an assumption and release constitutes a novation. Sellers ought to obtain a release from his or her lender whenever a sale is made utilizing an assumption. If a lender refuses to release a seller, it probably is because of the credit worthiness of the assuming grantee.
NTS syn notice of trustee’s sale See notice of trustee’s sale.
nuisance Anything injurious to health (for example, toxic wastes), offensive to normal senses (for example, odors), or an obstruction to the use and enjoyment of property (for example, loud sounds) is a nuisance. Property owners subjected to a nuisance may obtain a injunction to abate the nuisance as well as damages.
null and void Without legal effect. A contract is null and void under certain circumstances. For example, a contract with an incompetent person is null and void, with or without court action. Other contracts are merely voidable, meaning that some action must be taken by the innocent party to rescind the agreement or it will continue in force and effect. For example, a contract that was entered because one party lied about something important in the deal, is voidable, but the victim must go to court to have the agreement rescinded. But if the victim does not understand the voidability of the agreement, or doesn’t care, the agreement effectively will stand.
nut A recurring constant financial obligation, such as monthly fixed costs of a commercial real estate agent. “My monthly nut is $3,500.”