Real Estate Glossary

Letter O

OakumA fiber used as a caulking, made by pulling apart hemp or rope.

OathAn 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.

Objective IntentWhat the offeror in a transactionsays and does. Compare: Subjective Intent.

Obligation BondA bond secured by a mortgage but over the mortgage amount. It creates a personal obligation on the part of the mortgagor.

ObligeeOne to whom an obligation (promise) is owed. See also: Obligor.

ObligorOne who legally binds (obligates) oneself, such as the maker of a promissory note.

Observable DepreciationAny loss of value anappraiser attributes to physical deterioration,functional obsolescence, or economicobsolescence

ObsolescenceAn appraisal term meaning that the age of a structure may cause it to become undesirable in use or appearance (old fashioned) and consequently lose income and value.

OccupancyWith reference to land, the word has become synonymous with possession.

Occupancy RateThe percentage of space or units rented. Opposite of Vacancy Rate.

OfferA presentation or proposal for acceptance, in order to form a contract. To be legally binding, an offer must be definite as to price and terms.

Offer And AcceptanceNecessary elements of a contract to sell real estate. See also: Offer; Acceptance.

Offer And Notification Of AcceptanceThe two components of a valid contract; a “meeting of the minds.”

OffereeOne to whom an offer is made.

Offering PlanA document provided by the sponsor(of a condominium or co-op) that offers detailed information regarding the property. Also called:Offering Statement.

Offer Of CompensationThe commission that will be paid on the sale of property.

Offer Of CooperationAn open invitation to otherbrokers to sell property listed by another broker.

OfferorOne making an offer.

Offer To PurchaseSee: Purchase Agreement.

OfficeA zoning designation allowing businesses to carry on their paperwork rather than manufacturing or selling 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.

Office ManagerA licensed associate real estate broker who elects to work as an office manager under the name and supervision of an individual broker or another broker who is licensed under a partnership, trade name, limited liability company, or corporation.

Office Of Fair Housing and Equal Opportunity (FHEO)A division of HUD, which is responsible for the administration and enforcement offederal laws.

Office Of Thrift SupervisionA federal bureau formed in 1989 as a branch of the Treasury Department as part of a major reorganization of the thrift (savings and loan) industry. OTS regulates, examines, and supervises both thrifts and their holding companies. The office director coordinates with other federal bureaus which regulate the nation's financial institutions by serving on the boards of the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, and others. The purpose of this office is to ensure a sound operation of savings institutions and compliance with federal laws.

Officer’s DeedA deed by sheriffs, trustees, guardians, etc.

Official MapA final and conclusive map with respect to the location and width of a municipality's streets, highways, drainage systems, and parks.

Offset(1) A ledge across a wall (usually brick or masonry) formed by reducing the thickness of the wall above the ledge. (2) To balance, as claims in a law suit. Commonly called set-off (when a counter- claim is made to offset damages, the counterclaim being made concerning different subject matter).

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 lienholder to a buyer, setting forth the balance due on existing liens against the property being purchased.

Off-SiteNot on the property to be sold. For example: The developer of a housing tract sells only the house and lot, but must build the streets, sewers, etc., not on the lot.

Off-Site CostsThe cost of off-site improvements.

Off-Site ImprovementsDevelopment of land to make adjacent property suitable for construction. Includes sidewalks, curbs, streets, sewers, streetlights, etc.

OhmAn electrical measure of resistance of the dissipating of one watt when one ampere passes through it.

Oil And Gas LeaseA lease giving the lessee the right to extract oil and gas from land. More like a mining lease than a land lease, in that the lessee has ownership interest in a portion of the property (the oil and gas) rather than just the use of the property. The lessor is generally paid based on the oil and gas taken. See also: Slant Drilling; Profit a Prendre.

Omnibus ClauseClause in a will or decree of distribution passing all property not specifically mentioned.

On CenterA construction term referring to a measurement of distance from the center of one structural member to another, such as a stud, joist, etc. Abbreviated on construction drawings as O.C.

One Hour DoorA fire resistant door; one which will hold back a fire for a minimum of one hour.

One Hour WallA fire resistant wall; one which will hold back a fire for a minimum of one hour.

One Hundred Percent Commission PlanA salesperson compensation plan by which the salesperson pays his or her broker a monthly service charge to cover the costs of office expenses and receives 100% of the commissions from the sales that he or she negotiates.

One-Hundred Percent LocationThe best location in the area. The term is most commonly used to describe a location in a city ideal for retail sales.

One, Two, Three FinancingA 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.

On RailRefers to property (usually industrial) which is served by a railroad.

On-Site CostsThe cost of on-site improvements.

On-Site ImprovementsStructures erected permanently for use on a site, such as buildings, fences, etc.

On-Site ManagerA property manager who lives on the property being managed. The law in most areas requires an on-site manager for apartments over a specified number of units.

On-Site OfficeA real estate branch office specifically for a particular development, and located at said development. May be a sales or leasing office.

Open And NotoriousWhen possession or useof land is obvious and unconcealed; one ofthe conditions necessary for easement byprescription.

Open And Notorious Possession(See: Notorious Possession).

Open Beam ConstructionA design using heavy roof beams as interior finish, exposed to give a roomy, heavy, rugged appearance to a room.

Open End MortgageA mortgage loan allowing the borrower to increase the amount borrowed during the term of the loan.

Open-End MortgageA mortgage loan expandable by increments up to maximum dollar amount, all of which is secured by the same original mortgage.

Open HouseA house which is open without an appointment to prospective buyers (or tenants) for inspection, during certain hours and days of the week.

Open HousingHousing made available to persons without regard to race, religion, sex, color, or national origin.

Open ListingA listing contract under which the broker's commission is contingent on the broker producing a “ready, willing, and able” buyer before the property is sold by the seller or another broker; the principal (owner) reserves the right to list the property with other brokers.

Open MortgageA mortgage that can be prepaid without penalty. See: Or More Clause.

Open Space LandLand used for agriculture, recreation, scenic beauty, natural resources, water shed, or wild life, and so designed on a map.

Open Space RatioRatio of land area to floor area of an apartment building. Used in zoning requirements.

Operating BudgetA budget created to project the income and expenses for a property over a one-year period.

Operating Expense Ratio (OER)The ratio of operating expenses to effective gross income. The percentage derived from the ratio can be used by an appraiser to determine if the operating expenses are appropriate for the property.

Operating ExpensesThe cost of operating an income producing property, such as management, utilities, and similar day to day expenses, as well as taxes, insurance, and a reserve for replacement of items which periodically wear out.

Operating StatementDocument that illustrates total revenues generated for a given period based on rent rolls and management style.

Operation Of LawThe fixing of rights and duties by law rather than by agreement of the parties involved. Examples would include Intestate Succession, certain types of Warranties, and Quasi Contract.

Opinion Of TitleSee: Abstract of Title.

OptionThe right to purchase property within a definite time at a specified price. No obligation to purchase exists, but the seller is obligated to sell if the option holder exercises the right to purchase.

Option ContractSee: Option.

OptioneeThe party that receives and holds an option.

Option For Additional SpaceAn option given to a tenant to rent additional space at a specified rental amount and terms.

OptionorThe party that grants or gives an option.

Option TermThe time during which an option may be exercised.

Option To PurchaseA contract giving an optionee the right, but not the obligation, to buy property owned by the optionor during a specified period.

Option To RenewRenewal methods and the terms by which a renewed lease will exist.

Oral AppraisalA verbal appraisal report. The conclusions must be based on the same methods as would be used in a written appraisal.

Oral ContractA contract, partly written and partly spoken, or not at all reduced to writing.

Oral ReportA type of appraisal report given in person or over the phone often without supporting documentation.

Order Confirming SaleCourt order confirming the terms of a sale of property out of an estate.

Order Of ExecutionLegal process in which a court orders an official (such as a sheriff) to seize and sell property of a judgment debtor to satisfy a judgment lien.

OrdinanceA law of statute. The term used to designate the enactments of the legislative body of a municipal corporation or a county.

Ordinary IncomeA term having meaning only in relation to income tax. The regular graduated scale of tax is paid on income which is called "ordinary", as opposed to capital gains or any other income taxed differently.

Ordinary RepairsRepairs necessary to keep a property in good condition, against ordinary wear and tear, decay, etc.

OrdinateA point along the vertical axis of a curve. When in conjunction with a point on the horizontal axis (abscissas), the point is called the "co-ordinates".

Oriel WindowA window projecting outward, similar to a bay window. However, an oriel window is supported by brackets or a cantilever, as opposed to a bay window which is supported by the foundation.

OrientationPlanning the most advantageous place on a parcel of land for an improvement to be located.

Original CostThe purchase price of property, paid by the present owner. The present owner may or may not be the first owner.

Original Face ValueThe principal amount of a note or mortgage before any payments or default.

Original PayeeThe person or entity to which a check or promissory note is originally payable.

OriginationThe process of making or initiating a new loan.

Or More ClauseA clause in a note, mortgage, or deed of trust, allowing for additional payments to be made without penalty. The words "or more" come after the specified payment.

Ostensible AgencyAn agency created by law when a principal acts (intentionally or negligently) as if one is an agent who in fact is not. See also: Apparent Authority.

Ostensible AuthoritySee: Apparent Authority.

OTSSee: Office of Thrift Supervision.

OutbuildingA free standing structure that is not the main building on the property. An example would be a barn or storage shed.

Overage IncomeRental which exceed the base rate. May be from a percentage of the tenant's income (see: percentage) or some other formula (e.g. for a gasoline service station, a common overage would be x cents per gallon over x gallons per month, but nothing on repairs and the sale of other products such as oil, tires, etc.).

Overage RentSee: Overage Income.

Overall Capitalization Rate (r0)The rate (expressed as a percentage) which is used to show the relationship between annual net operating income (N.O.I.) and estimated value (v). N.O.I. ÷ R0 = v. The overall capitalization rate includes both the rate of return of investment and rate of return on investment. See: Return of Investment; Return on Investment.

OverbuildingConstruction of an excessive number of similar properties (houses, apartments, etc.) so as to cause a surplus of supply over demands.

OverhangAn extension of a roof beyond the exterior walls, used as a shading or protection from rain, for a walkway.

OverheadThe expenses of a business or property. Commonly referred to as the "nut".

Over ImprovementAn improvement, excessive in cost or size in relation to the land value or the value of surrounding improvements.

OverpassA bridge or road elevated to avoid intersecting with a roadway, railway, or other traffic carrier.

OverrideA 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.

Overriding RoyaltyCommon in oil and gas leases. A retained royalty by a lessee when the property is subleased.

OvertOpen, manifest, public; action as distinguished from mere intention.

Owelty Of ExchangeMoney necessary to equalize the value of the properties being exchanged. See also: Boot.

Owelty Of PartitionMoney paid by one co-tenant to another when property is split, but the result is properties of unequal value.

OwnerOne who has the rights of ownership.See: Ownership.

Owner OccupiedProperty physically occupied by the owner.

Owner Of RecordThe owner of property according to the records of the county recorder.

OwnershipThe exclusive right to hold, possess or control, and dispose of a tangible or intangible thing. Ownerships may be held by a person, corporation, or governmental entity.

Ownership In SeveraltyOwnership by a singleindividual, as opposed to co-ownership. Alsocalled: Severalty.

Owner's PolicyTitle insurance for the owner of property, rather than a lienholder.

Owner Will Carry MortgageA term used to indicate that the seller is willing to take back a purchase money mortgage. See: Purchase Money Mortgage (1).