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Negative Amortization

A condition created when a loan payment is less than interest alone. Even though payments are made on time, the amount owing increases.

Negotiable Instrument

According to the Uniform Negotiable Instruments Act, an instrument is negotiable when it is in writing and signed, containing an unconditional promise or order to pay a certain amount of money, on demand, or at a definite future date, to the bearer, to order, or to a named or certain drawee.

Net Lease

A lease requiring the tenant to pay, in addition to a fixed rental, the expenses of the property leased, such as taxes, insurance, maintenance, etc. In some states the terms net net, net net net, triple net, and other such repetitions are used.

Net Worth

The difference between total assets and liabilities of an individual, corporations, etc.

No Bonus Clause

A clause under the eminent domain section of a lease, giving the lessee the right to recover only the value of his physical improvements in the event of a taking, and not the value of the leasehold interest (the difference between the fixed rent of the lease and current market rental value). Not applicable in all states.

Nonbearing Wall

A wall used only to separate areas, and which carries only its own weight

Nonexclusive Listing

A listing under which the real estate broker has an exclusive listing as opposed to other agents, but the owner may sell the property without using an agent, and not be liable to pay a commission. Also called an agency agreement.

Non-recourse Loan

A loan not allowing for a deficiency judgment. The lender's only recourse in the event of default is the security (property) and the borrower is not personally liable.


The certification by a Notary Public that a person signing a document has been properly identified. Notarization does not certify the content of a document, only validity of signature.

Notice Of Cessation

A notice stating that work has stopped on a construction project. Done to accelerate the period for filing a mechanic's lien.

Notorious Possession

A requirement for adverse possession. Possession so open (notorious) that the owner is presumed to have notice of it and its extent.

Nuncupative Will

An oral will, usually in a deathbed situation, before witnesses who later testify to its authenticity.



An attestation by a person, which binds him or her legally and morally. Usually attesting to the truth of something, as an affidavit, or the validity of one's signature. A promise to tell the truth. Also, a promise to carry out a duty with high morality (oath of office), An oath has religious connotations and usually involves the word "swear," and may contain the phrase "so help me God," or require the one taking the oath to put his or her hand on a bible. An affirmation (see which) is still legally binding.


A zoning designation allowing businesses to carry on their paperwork rather than manufacturing of sale of inventory to the public on the site. Some businesses may be conducted entirely out of such space, when only paperwork is involved, such as insurance companies, law firms, accounting firms, etc.

Offset Statement

(1) A statement given to a buyer of rental property by a tenant, setting forth the amount of rent and terms of the rental agreement. (2) A statement by an owner or lien-holder to a buyer, setting forth the balance due on existing liens against the property being purchased.

"Once in a Lifetime" Tax Exclusion

A forgiveness of a portion of the tax due on the sale of a residence by a senior citizen. As the term denotes, the exclusion can be taken only once.

"One, Two, Three" Financing

A method of creative financing by which the buyer (1) assumes an existing loan, (2) secures a second loan from a third party lender, (3) takes a third loan from the seller.

Open End Mortgage

A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions, usually as to the assets of the mortgage.

Origination Fee

The fee that the lender charges to originate the loan, this fee is typically 1 point.


A rental amount paid due to sales of the tenant. For example: A lease for a service station may contain a provision for a certain addition to the rent for every gallon of gasoline over a certain amount sold each month. The amount over is called the override; such as two cents per gallon for every gallon over fifty thousand sold each month.


Rights to the use, enjoyment, and alienation of property, to the exclusion of others. Concerning real property, absolute rights are rare, being restricted by zoning laws, restrictions, liens, etc.

Owner Will Carry Mortgage

A term used to indicate that the seller is willing to take back a purchase money mortgage.

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