Real Estate Glossary - Letter O

Occupancy

The act of residing or occupying a real estate property.

Occupancy level

The total number of occupied units, expressed as percentage, in a neighborhood or city.

Occupancy permit

A written permission usually issued by local building departments to establish that a new property does not pose any threat or hazard to the safety of the future occupants.

Offer

A proposal made with a purpose to enter a particular arrangement and can be accepted or rejected.

Offer to purchase

A formal proposal that contains a specified amount or price offered for the purchase of a particular property; can have certain conditions attached to it.

Open house

The practice of showing properties for sale to the public.

Open listing

A type of listing in which a property can be marketed by several brokers at the same time.

Open space

Pertaining to any undeveloped areas of land that can be enhanced or preserved in a planned community to be used for parks or walking paths.

Open-end loan

A mortgage loan where the principal amount can be expanded without re-negotiating the loan terms such as the interest rate.

Operating expense ratio

The ratio obtained by dividing the operating expenses by the gross revenue.

Operating expenses

The cost of operating a business.

Option listing

A type of listing contract where the listing broker is given a right to buy the listed property.

Option to purchase

A provision in a legal contract where a person has a right but not an obligation to buy a property.

Oral contract

Any agreement entered into without formal documentation; in real estate, it is not legally binding.

Ordinary income

Income derived from business activities that does not include capital gains and are thus subject to full or ordinary rate taxation.

Original cost

The initial amount of money paid by the present for the purchase of a property.

Original equity

The initial down payment made by the present owner for a property.

Outstanding balance

The total amount of money that is owed on a mortgage.

Overall interest rate

Interest rate composed of pure return for the investor, inflation rates and return on equity investment.

Owner

A person or entity that has the legal right to possess a property.

Owner financing

A legal transaction in which the borrower obtains financing from the borrower and not through banks or other lending institutions.

Owner occupant

A property owner who resides on his property.

Owner’s equity

The total amount of investment in terms of money that an owner has in his business.

Owner’s policy

The insurance policy of a property owner that covers losses from liens against or defects in the title.

Ownership

The legal right to possess and transfer a property.