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.

OFFER

A proposal to enter into an agreement with another person. An offer must express the intent of the person making the offer to form a contract, must contain some essential terms--including the price and subject matter of the contract--and must be communicated by the person making the offer. A legally valid acceptance of the offer will create a binding contract.

OPEN HOUSE

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

ORIGINAL PRINCIPAL BALANCE

The total amount of principal owed on a mortgage before any payments are made.

ORIGINATION FEE

A fee paid to a lender for processing a loan application, making a home loan, and recording a mortgage against the borrower's real property as security for repayment of the loan. The origination fee is stated in the form of points. One point is 1% of the mortgage amount (e.g., 1,000 on a $100,000 loan).

OSTENSIBLE AUTHORITY

The suggestion that one person has the right to act on behalf of another person created by the actions of the "agent" and the inactivity or lack of protest of the "principal".

OWNER FINANCING

A property purchase transaction in which the property seller provides all or part of the financing and takes back a security instrument.