office park A planned development for office buildings.
off-site improvements Physical changes made for a site that are located off-site, which connect the site to the local infrastructure thereby improving its usefulness. Examples are sewer truck lines connecting to on-site laterals, or traffic lights regulating traffic that has been increased by the development, storm drainage extensions to the site, and entrance roads to subdivided lots.
on-site improvements Physical changes made to a site which improve its usefulness. A site may be leveled and graded, have storm and sanitary sewer extensions installed, have curb and gutters formed.
on-the-street Public information, or information that is available to and know by other real estate agents.
open listing syn nonexclusive listing An employment contract between an owner of real estate and a licensed real estate broker. The owner agrees to pay a specified commission to the broker, if the agent is the procuring cause in producing a buyer of the property. Open listings are not ordinarily used in home sales because an agent might spent considerable time working on properties which ultimately were sold through the efforts other agents. In commercial transactions, however, the size of the commissions involved often make open listings acceptable to specialists in that field. See also listing.
open-end mortgage A mortgage loan that authorizes periodic future advances of money. It is used when the borrower anticipates the need for additional funds from the outset. The loan includes a provision that the mortgage secures the repayment of all future advances. Future advances retain the same priority as the open-end mortgage to which they pertain. See expandable second mortgage.
open house “Opening” a house that is offered for sale for public inspection. It is a two-pronged strategy used in residential real estate sales. One "prong" occurs when a real estate salesperson seeks listings or other business leads from members of the public while using the principal's home, that is, the open house, as bait. The other "prong" is directed toward the sale of the owner's house, by showing it to “drive-bys” who may be prospective buyers. Contrary to what most home sellers think, their open houses conducted in their homes, by their sales agents, are not primarily for the purpose of selling their homes.
OPM other people's money Control of OPM is the underlying concept of a highly leveraged transaction. A syndicator relies on OPM, that is, capital from investors, to make a deal work. Control of OPM creates extreme ethical responsibilities. In general there is no liability imposed by law simply because the handler of OPM “loses” money that has been placed at risk.
option An agreement between the owner of real estate, called the optionor, and a potential purchaser, called the optionee. Within the option period, the optionee has the right to purchase on the agreed on terms. A buyer will use an option when he is not yet ready to purchase, is speculating on a rise in prices, needs time to determine the feasibility of a project, or needs time for promotional work (perhaps in regard to zoning or syndication). A seller will use an option to set a price based on future appreciation, to postpone a sale to a future tax period, to obtain long term capital gains treatment, or to induce a promoter to work on development and purchase of the property. An option is not restricted to a purchase transaction. For example, a lease may include an option to renew the lease at its expiration, for another period on specified terms.
option money Money consideration paid by an optionee to an optionor in exchange for the option. Option money is non-taxable to the optionor until the option is either exercised or expires. If the option is exercised, the option money is capitalized by the optionee as part of the purchase price (tax basis); if not exercised, option money may be deductible depending on whether or not the subject property was for business or for personal use.
oral contract Any verbalized agreement, such as “marine to marine” or “eye to eye” or “there, a deal’s a deal” while handclasping. In general, oral contracts are theoretically enforceable in many real estate related deals. For example, an oral agreement between licensees to divide or “split” a real estate commission is valid. The Statute of Frauds and other statutes render oral deals unenforceable in some real estate related transactions, e.g., agreements to convey interests in real property (subject to the overriding doctrine of partial performance under certain circumstances).
ordinances Written laws enacted by local governments such as cities and counties.
ordinary wear and tear Deterioration attributable to the passage
of time and reasonable use by the tenant and not to any damage or abuse.
original lease syn master lease, main lease,
head lease, principal lease, and underwriting lease See
master lease.
overfinance syn buyer cash out and buyer walkaway See buyer cash out.
origination fee A loan fee. It is the fee paid by the borrower of a mortgage loan to cover the expense of initiating the loan. The fee is usually paid to an agent who is in the business of making, or originating, loans. Origination fees are included in escrow closing costs.
overriding deed of trust syn blanket deed of trust or mortgage A deed of trust covering two or more parcels.
overriding interest The interest received by the beneficiary of an all-inclusive note and deed of trust that exceeds the interest he is paying on the underlying obligation. For example, a landowner may be paying nine percent interest on an existing mortgage. On the sale, of the property, the seller may accept a wraparound mortgage that carries eleven percent interest. The seller will thus receive overriding interest of two percent on the nine percent debt.
owner occupancy agreement An agreement between the borrower and lender of a purchase money mortgage that after the loan is made, the premises will be “owner-occupied.” Such loans command a lower interest rate, lower origination fees, and lower LTVs than investment (non-owner occupied) loans. Thus lenders require that borrowers agree to adhere to the terms that were included in the loan application. Lying to a federally chartered lender is a federal crime that is frequently prosecuted by the U.S. Attorney’s offices.
owner-occupant A homeowner who lives in his/her residence. A single family home occupied by a renter is an investment property.