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HUD
Home Buying Glossary - O
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Obligatory
Advances - Loan advances required by a lender under an
agreement as construction progress.
Observed
Condition Depreciation - A method of computing
depreciation in which the appraiser estimates the loss in
value for all items of depreciation.
Observed
Condition Method - The method of determining effective age
of a property by its condition.
Obsolescence
- Lessening of value from out-of-date features (such as
property design, construction materials, etc) that no longer
are desired by property buyers.
Occupancy
Rate - The percentage of total rental units occupied and
producing income.
Offer
to Purchase
- A document completed by
home buyer specifying the terms and conditions under
which real estate will be purchased.
Offset
Statement - An owner statement, deposited into escrow,
showing the status of rents, security deposits, and other
balances and obligations connected with the investment
property.
Open-End
Mortgage - A mortgage with a provision that the outstanding loan amount
may be increased upon mutual agreement of the lender and the
borrower.
Open
Listing - A nonexclusive agency whereby the owner agrees
to a fee only if the broker is the first to procure a buyer
under the exact terms of the listing or any other terms to
which the owner agrees.
Open
Mortgage - 1) A loan that can be prepaid without penalty.
2) a mortgage in default prior to foreclosure sale.
Operating
Expenses - The cost of all goods and services used or
consumed in the process of obtaining and maintaining
income.
Option
- A right given for a valuable consideration to purchase or
lease property at a future date for a specified price and
terms. The right may or may not be exercised at the
option holder's discretion.
Orientation
- Positioning a structure on its lot considering its exposure
to the sun and prevailing winds, and the need for privacy and
protection from noise
Origination
Fee - The fee that the lender charges the borrower to cover the
cost of issuing a loan commitment.
It pays for processing the loan which includes
collecting information about the borrower’s creditworthiness
and the property. The
fee is usually computed as a percentage (for example, 1%) of
the mortgage loan. It
usually does not include fees for appraisals, credit report,
inspections and loan document preparation.
Ostensible
Agency - An agency that is implied by actions of the
parties.
Overall
Rate - The direct ratio between a property's annual net
income and its sales price.
Overimprovement
- An improvement to property that is not likely to contribute
its cost to the total market value of the property.
Owner
Occupancy Rate - The percentage of properties in a
condominium subdivision or a PUD that are owned by owner
occupants (versus rental properties).
Owner-Occupied
Property - The borrower or a member of the immediate family lives in the
property as a primary residence.
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