NAR

National Association of Realtors.

NAREB

National Association of Real Estate Boards. This trade organization is now known as the National Association of Realtors

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. Occurs when normal payments on a loan are insufficient to cover all interest then due, so that unpaid interest is added or principal. Thus, even though payments are timely made, the principal grows with each payment.

Negative Amortization B

Occurs when the debt service is not sufficent to cover the interest amount of the loan. This note should only be used in area that is appreciating in value.

Negative Amortization C

Occurs when the debt service is not sufficent to cover the interest amount of the loan.

Negligence

Either the failure to act as a reasonable, prudent person, or the performance of an act that would not be done by a reasonable, prudent person.

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. A check or promissory note that meets specified statutory requirements and is therefore easily transferable in somewhat the same manner as money. The negotiable instrument can be passed by endorsement and delivery (or in some cases by mere delivery), and the transferee takes?title free of certain real defenses (such as failure of consideration, fraud in the inducement) that might exist against the original maker of the negotiable instrument.

NEPA

Abbreviation for the National Environmental Protection Act, a federal statute requiring all federal agencies to prepare an Environmental Impact Statement and meet other requirements whenever a major federal action is anticipated that could significantly affect the environment.

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

A listing that provides that the agent may retain as compesation for his or her services all sums received over and above a stated net price to the owner. An employment agreement that entitles the broker to a commission only in the amount, if any, that the sales price of the property exceeds the listing price. A listing based on the net price the seller will receive if the property is sold. Under a net listing the broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states.

Net Operating Income (NOI)

The income projected for an income-producing property after deducting losses for vacancy and collection and operating expenses.

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-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. 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.

Nonconforming Use

A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area.

Non-Freehold Estate

A lease tenancy. (See under Estates for the four types of leasehold estates.)

Non-Homogeneity

A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be non-homogeneous.

Non-Judicial Foreclosure

Foreclosure and sale of property without resort to court action, by private sale. For deeds of trust the foreclosure provisions are outlined by the statutes and the requirements in the security instrument, which include a notice of default, right to reinstate, publication of sale, and trustee's sale.

Notary Public

An individual licensed by the state to charge a fee for acknowledging signatures on instruments.

Note

A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time. A signed written instrument promising payment of a stated sum of money . Shortened name for a promissory note. See Promissory Note.

Note Rate

The interest rate stated on a mortgage note.

Notice Of Completion

A notice recorded after termination of work on improvements, limiting the time in which mechanic's liens can be filed against the property.

Notice of Default

A formal written notice to a borrower that a default has occurred and that legal action may be taken. A notice that is recorded in the county recorder's office stating that a trust deed is in default and that the holder has chosen to have the property sold. The trustor (property owner) has three months after the date of recording to reinstate the loan . Recorded notice that a trustor has defaulted on his secured debt.

Notice Of Non-Responsibility

A notice provided by law designed to relieve a property owner from responsibility for the cost of work done on the property or materials furnished for it when the work or materials were ordered by a person in possession. Notice relieving an owner from possession. Notice relieving an owner from mechanic's liens for work on property not ordered by that owner.

Notice To Quit

A notice to a tenant to vacate rented property. Also called a three-day notice. Notice given to a tenant in default of his lease terms or on his rent, which directs him either to cure the default or to vacate the premises.

Novation

The acceptance of a new contract in substitution for the old contract, with the intent that the new contract will extinguish the original contract. Sometimes encountered in transfers of deeds of trust, where the new owner assumes the debt and the lender, through novation, releases the former owner from any liability under the original promissory note and deed of trust. Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Nuisance

Anything that is injurious to health or indecent or offensive to the senses, or any obstruction to the free use of property so as to interfere with the comfortable enjoyment of life or property or?unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake or river, bay, stream, canal, or basin, or any public park, square, street, or highway. A legal wrong arising from acts or use of one's property in a way that unreasonably interferes with another's use of hid property.

Nuncupative Will

An oral will declared by the testator in his or her final illness, made before witnesses and afterward reduced to writing.

Real Estate Dictionary Terms - N