negative amortization
A financing arrangement in which the monthly payments are less than the true amortized amounts and the loan balance increases over the term of the loan rather than decreases; an interest shortage that is added to unpaid principal.

negative declaration
A declaration by a developer that a project will not have a negative impact on the environment.

negative easement
An easement where the owner of a servient estate is prohibited from doing something on his or her estate that is otherwise lawful, because it will affect the dominant estate.

negligence
The failure to use ordinary or reasonable care under the circumstances.

negligent misrepresentation
A negligent misrepresentation occurs when the broker should have known that a statement about a material fact was false. The fact that the broker may actually be ignorant about the issue is no excuse.

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.

net income approach
A method of pricing multiple unit rental properties where the desire to buy is driven by the property's ability to generate cash flow and profit. Most often used to price rental properties of 2 or more units. When pricing single-family rental homes and condos, the market approach is preferable.

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
An employment contract in which the broker receives as commission all excess monies over and above the minimum sales price agreed on by broker and seller. Because of the danger of unethical practices in such a listing, its use is discouraged in most states.

net operating income (NOI)
The income projected for an income-producing property after deducting losses for vacancy, collection and operating expenses.

net proceeds
The cash received after paying all liens and expenses.

net worth
Assets less liabilities.

no-choice rule
If a real estate transaction qualifies as an exchange, it must be treated as an exchange. An exchanger who qualifies for the 1031 tax-deferred exchange has "no choice," they cannot recognize the gain or loss.

nominal damages
Monetary damages of a token amount awarded for a wrongful act where no loss occurred.

nominal interest rate:
The stated interest rate in a note or contract, which may differ from the true or effective interest rate, especially if the lender discounts the loan and advances less than the full amount.

non-agent
An intermediary between a buyer and seller, or landlord and tenant, who assists both parties with a transaction without representing either. Also known as a facilitator, transaction broker, transaction coordinator and contract broker.

non-conforming loan
A mortgage loan that does not meet Fannie Mae and Freddie Mac underwriting guidelines. Non-conforming loans are available as both fixed and adjustable rate mortgages.

nonconforming use
A use of property, legally permitted to continue as such, in spite of the original zoning ordinance which prohibited such use for the area.

non-cumulative zoning
Zoning that allows only the stated use and not more restrictive uses.

non-disturbance clause
An agreement where the mortgagee agrees to honor a tenant's lease in the event that the mortgage is foreclosed.

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-institutional lenders
Credit unions, pension funds, private individuals and real estate investment trusts.

non-judicial foreclosure
The process of selling real property under a power of sale in a mortgage or deed of trust that is in default. One disadvantage is that the lender cannot obtain a deficiency judgment. Also, some title insurance companies are reluctant to issue a policy unless a court has judicially foreclosed the mortgagor's interest.

notary public
A person who acknowledges oaths, such as the signing of a grant deed or deed of trust; must be duly appointed by the proper authorities.

note (original note)
A document signed by the borrower of a loan and stating the loan amount, the interest rate, the time and method of repayment and the obligation to repay. The note serves as evidence of the debt. When secured by a mortgage, it is called a mortgage note, and the mortgagee is named as the payee. In a trust deed, the note is usually made payable to the bearer or holder. The note may also contain some of the same provisions as in the mortgage or trust deed document, such as prepayment or acceleration.

notice of cessation
A notice that gives subcontractors 30 days and gives prime contractors 60 days to file liens from the date of cessation of work.

notice of completion
A document recorded to give constructive notice that a building job has been completed.

notice of default
A notice to a defaulting party announcing that a default has occurred. The defaulting party is usually provided a grace period during which to cure the default. Notices of default are frequently provided for in contracts for deeds and mortgages and are sometimes required by operation of law.

notice of delinquency
In junior financing, where the borrower gives the senior lender permission to notify the junior lender in the event of a default.

notice of non-responsibility
A legal notice designed to relieve a property owner of responsibility for the cost of improvements ordered by another person (such as a tenant). The owner usually gives notice that he or she will not be responsible for the work done by posting notice in some conspicuous place on the property, and by recording a verified copy in the public records.

notice to quit
A written notice given by the landlord to his tenant requiring that the tenant leave the lease premises.

novation
Substituting a new obligation for an old one or substituting new parties to an existing obligation.

nuisance
That which annoys and disturbs one in possession of his or her property, rendering its ordinary use physically uncomfortable.

null and void
Invalid and unenforceable

nuncupative will
An oral will declared by the testator in his or her final illness, made before witnesses and then created in legal written form.