Real Estate Glossary

This list is provided for reference only. Each state has it's own real estate laws, terms and regulations for Realtors. In Arizona, your Realtor and Title Company handle most real estate transaction activities that involve attorneys in many other states. However, you have the right to seek the advice of an attorney or other professional counsel in any real estate transaction.

Obedience - An agent is obligated to promptly and efficiently obey all lawful instructions of his/her principal that conform to the purpose of the agency relationship. However, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property.

Obsolescence - A loss in value of real property caused by changes either internal or external to the property. See Economic Obsolescence - , Functional Obsolescence - , and Physical Deterioration - .

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.

Open House - An opportunity for prospective buyers to view a house in a low pressure environment.

Open Listing - A listing under which the principal (owner) reserves the right to list his property with other brokers.

Option - The right to purchase property within a definite time at a specified price. There is no obligation to purchase, but the seller is obligated to sell if the option holder exercise the right to purchase. For the option to be valid, it must include consideration.

Origination Fee - A fee or charge for work involved in the evaluation, preparation and submission of a proposed mortgage loan. Usually a percentage of the loan amount.

Owners Title Policy - Title insurance for the owner of property. Insurance to defend the owner against enforcement of any liens or encumberances against the property that were in place prior to the issuance of the policy. CAUTION: Never purchase a property without obtaining an Owners Title Policy. The issuer of the policy will research the legal records for any existing liens or encumbrances prior to issuing the policy. Without this search and the issuance of the title policy you will be liable for the payment of any liens that exist on the property.