Package Loan

A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings and major appliances.

Parity Wall

A wall erected on the line between two adjoining properties that are under different ownership for the use of both owners.

Parol

Oral or verbal.

Parol Evidence Rule

A rule of courtroom evidence that once the parties make a written contract, they may not then introduce oral agreements or statements to modify the terms of that written agreement. An exception exists for fraud or mistake, which will permit the parties to offer evidence to vary the terms of the writing.

Parol Evidence Rule

A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contradicted by prior or contemporaneous oral or written negotiations.

Parquet Floor

Hardwood flooring laid in squares or patterns.

Part Time Status

Many real estate agewnts have other full-time jobs. . A part time agent cannot devote a full time effort to represent a client, therefore the failure to disclose a part time status is considered unethical real estate practice.

Partial Payment

A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment, but in times of hardship you can make this request of the loan servicing collection department.

Partial Reconveyance

In a deed of trust or mortgage, a clause that permits release of a parcel or part of a parcel from the effects and lien of that security instrument. The release usually occurs upon the payment of a specified sum of money.

Participation Mortgage

A mortgage loan wherein the lender has a partial equity interest in the property or receives a portion of the income from the property.

Partition

The division of covenants' interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures.

Partition Action

A legal action by which co-owners seek to sever their joint ownership. The physical division of property between co-owners, usually through court action.

Partnership

An association of two or more persons to unite their property, labor or skill, or any one or combination thereof, in prosecution of some joint business, and to share the profits in certain proportions. An agreement of two or more individuals jointly to undertake a business enterprise. If it is a general?partnership, all partners have unlimited liability and, absent other agreements, share equally in the management and profits of the business. An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law a partnership is regarded as a group of individuals rather than as a single entity. A genera/ partnership is a typical form of joint venture in which each general partner shares in the administration, profits and losses of the operation. A limited partnership is a business arrangement whereby the operation is administered by one or more general partners and funded, by and large, by limited or silent partners, who are by law responsible for losses only to the extent of their investments.

Party Wall

A wall that is located on or at a boundary line between two adjoining parcels of land and is used or is intended to be used by the owners of both properties.

Patent

Conveyance of title to government land. A grant or franchise of land from the United States government.

Payment Cap

The limit on the amount the monthly payment can be increased on an adjustable-rate mortgage when the interest rate is adjusted.

Payment Change Date

The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.

Payment Clause

A provision in a promissory note, deed of trust, or mortgage, permitting the debtor to pay off the obligation before maturity.

Payoff Statement

See reduction certificate

Penny

The term, as applied to nails, that serves as a measure of nail length and is abbreviated by the letter d.

Percentage Lease

A lease on property, the rental for which is determined by the amount of business done by the tenant, usually a percentage of gross receipts from the business, with provision for a minimum rental.

Percentage Lease

A lease, commonly used for commercial property, whose rental is based on the tenant's gross sales at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.

Percolation Test

A test of the soil to determine if it will absorb and drain water adequately to use aseptic system for sewage disposal.

Perimeter Heating

Baseboard heating or any system in which the heat registers are located along the outside walls of a room, especially under the windows.

Periodic Estate (Tenancy)

See estate from period to period

Periodic Payment Cap

For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.

Periodic Rate Cap

For an adjustable-rate mortgage, a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.

Periodic Tenancy

A leasehold estate that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month lease.

Personal Injury

A term commonly used in tort (e.g. negligence cases) indicating an injury to one's being or body (for example, cuts or broken bones) as opposed to injury to his property.

Personal Property

Any property that is not real property. Any property that is not real property. (See Real Property.) Property that is movable, as opposed to real property, which is immovable; also includes intangible property and leasehold estates. Items, called chattels, that do not fit into the definition of real property; movable objects.

Petitioner

A person who petitions the court on a special proceeding or a motion.

Physical Deterioration

A reduction in a property's value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear.

Pier

A column of masonry used to support other structural members.

Pitch

The incline or rise of a roof.

PITI

This stands for principal, interest, taxes and insurance. If you have an "impounded" loan, then your monthly payment to the lender includes all of these and probably includes mortgage insurance as well. If you do not have an impounded account, then the lender still calculates this amount and uses it as part of determining your debt-to-income ratio.

PITI Reserves

A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

Plaintiff

The party who initiates a lawsuit; the person who sues another.

Planned Unit Development (PUD)

A type of ownership where individuals actually own the building or unit they live in, but common areas are owned jointly with the other members of the development or association. Contrast with condominium, where an individual actually owns the airspace of his unit, but the buildings and common areas are owned jointly with the others in the development or association.

Planned Unit Development (Pud)

A planned combination of diverse land uses, such as housing, recreation and shopping, in one contained development or subdivision.

Plat Map

A map of a town, section or subdivision indicating the location and boundaries of individual properties.

Plate

A horizontal board placed on a wall or supported on posts or studs to carry the trusses of a roof or rafters directly; a shoe or base member, as of a partition or other frame; a small flat board placed on or in a wall to support girders and rafters, for example.

Pledge

Deposition of personal property by a debtor with a creditor as security for a debt or engagement.

Pledgee

One who is given a pledge as security. (See Security Party)

Pledgor

One who gives a pledge as security. (See Debtor)

Plottage

The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one larger lot.

Plottage Increment

The appreciation in unit value created by joining smaller ownerships into one large single ownership.

Plywood

Laminated wood made up in panels. Several thicknesses of wood glued together with grains at different angles for strength.

Pocket Listing

When a real estate licensee convinces a seller that he can procure a buyer for the property and wants to withhold the information from the multiple listing service. This is considered unethical.

Point

A point is 1 percent of the amount of the mortgage.

Point Of Beginning (Pob)

In a metes-and-bounds legal description, the starting point of the survey, situated in one corner of the parcel; all metes-and- bounds descriptions must follow the boundaries of the parcel back to the point of beginning.

Points

Points paid for refinancing must be spread out over the life of the loan tobe deductible on a person's income tax.

Police Power

The right of the state to enact laws and regulations and its right to enforce them for the order, safety, health, morals, and general welfare of the public. The power of the state to prohibit acts that adversely affect the public health, welfare, safety, or morals. (Zoning and building codes are examples of exercise of the police power.)

Police Power

The government's right to impose laws, statutes and ordinances, including zoning ordinances and building codes, to protect the public health, safety and welfare.

Power Of Attorney

A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Power Of Attorney

An instrument authorizing a person to act as the agent of the person granting it. A special power of attorney limits the agent to a particular or specific act, as a landowner may grant an agent special power of attorney to convey a single and specific parcel of property. Under a general power of attorney, the agent may do almost anything for the principal that the principal could do himself or herself. A document authorizing a person (an attorney-in-fact) to act as an agent. A written instrument authorizing a person, the attorney-in-fact, to act as agent for another person to the extent indicated in the instrument.

Power Of Termination

The future interest created whenever there is a grant of a fee simple subject to a condition subsequent estate. The future interest matures into a present interest estate only if the holder timely and properly exercises his right upon a breach by the current holder of the fee estate.

Pre-Approval

A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender. Contrast with pre-qualification

Prefabricated House

A house manufactured, and sometimes partly assembled, before delivery to the building site.

Prejudgement Attachment

An attachment of property made before the trial, with the intent of holding that property as security, to have an asset to sell if the court judgment is favorable to the attaching party.

Prepaid Items

On a closing statement, items that have been paid in advance by the seller, such as insurance premiums and some real estate taxes, for which he or she must be reimbursed by the buyer.

Prepayment

Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner's decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.

Prepayment Penalty

A fee that may be charged to a borrower who pays off a loan before it is due. Penalty for the payment of a note before it actually becomes due. A fee or charge imposed upon a debtor who desires to pay off his loan before its maturity. Not all prepayment clauses provide for a penalty, and in many real estate transactions the law regulates the amount of penalty that may be changed. A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for interest and other charges that would otherwise be lost.

Pre-Qualification

This usually refers to the loan officer’s written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

Prescription

Securing of an easement by open, notorious, and uninterrupted use, adverse to the owner of the land for the period required by statute, which, in California, is five years. A method of obtaining an easement by adverse use over a prescribed period of time.

Present Interest

An estate in land that gives the owner the right to occupy his property immediately; as opposed to a future interest, which grants only the right to occupy the premises at some future date.

Presumption

That which may be assumed without proof. A conclusion or assumption that is binding in the absence of sufficient proof to the contrary.

Price-Fixing

See antitrust laws

Prima Facie

Presumptive on its face. Assumed correct until overcome by further proof. Facts, evidence, or documents that are taken at face value and presumed to be as they appear (unless proven otherwise).

Primary Mortgage Market

The mortgage market in which loans are originated and consisting of lenders such as commercial banks, savings and loan associations and mutual savings banks.

Prime Rate

The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.

Principal

The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage. The (client) employer of an agent. Someone who hires an agent to act on his behalf. The term also refers to the amount of an outstanding loan (exclusive of interest). A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. The original amount (as in a loan) of the total due and payable at a certain date. A main party to a transaction--the person for whom the agent works.

Principal Balance

The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

Principal Meridian

The main imaginary line running north and south and crossing a base line at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.

Principal, Interest, Taxes, And Insurance (PITI)

The four components of a monthly mortgage payment on impounded loans. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.

Prior Appropriation

A concept of water ownership in which the landowner's right to use available water is based on a government-administered permit system.

Priority

That which comes first in point of time or right. superior, higher, or?preferred rank or position. The order of position or time. The priority of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have priority even over previously recorded liens.

Private Mortgage Insurance (PMI)

Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.

Private Mortgage Insurance (Pmi)

Insurance provided by private carrier that protects a lender against a loss in the event of a foreclosure and deficiency.

Privity

Closeness or mutuality of a contractual relationship.

Probate

Court supervision of the collection and distribution of a deceased person's estate. This takes place in Superior Court within the county where the property is located. A legal process by which a court determines who will inherit a decedent's property and what the estate's assets are.

Procedural Law

The law of how to present and proceed with legal rights (for example, laws of evidence, enforcement of judgments). It is the opposite of substantative law.

Procuring Cause

That event originating from another series of events that, without a break in continuity, results in an agent's producing a final buyer. Proximate cause. A broker is the procuring cause of a sale if his or her efforts set in motion an unbroken chain of events that resulted in the sale. The effort that brings about the desired result. Under an open listing the broker who is the procuring cause of the sale receives the commission.

Profit A Prendre

An easement coupled with a power to consume resources on the burdened property.

Progression

An appraisal principle that states that, between dissimilar properties. the value of the lesser-quality property is favorably affected by the presence of the better-quality property.

Promissory Note

A written promise to repay a specified amount over a specified period of time. A written promise to pay a designated sum of money at a future date. A financing instrument that states the terms of the underlying obligation, is signed by its maker and is negotiable (transferable to a third party).

Property

Anything that may be owned. Anything of value in which the law permits ownership.

Property Manager

Someone who manages real estate for another person for compensation. Duties include collecting rents, maintaining the property and keeping up all accounting.

Property Reports

The mandatory federal and state documents compiled by subdividers and developers to provide potential purchasers with facts about a property prior to their purchase.

Proprietary Lease

A lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder's right as a tenant to an individual apartment.

Proration Of Taxes

Division of the taxes equally or proportionately between buyer and seller on the basis of time of ownership. PUFFING Putting things in their best perspective is not subject to disciplinary action.

Prorations

Expenses, either prepaid or paid in arrears, that are divided or distributed between buyer and seller at the closing.

Protected Class

Any group of people designated as such by the Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped and others.

Public Auction

A meeting in an announced public location to sell property to repay a mortgage that is in default.

PUD (Planned Unit Development)

A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.

Puffing

Exaggerated or superlative comments or opinions .

Punitive Damages

Money awarded by the court for the sole purpose of punishing the wrongdoer, and not designed to compensate the injured party for his damages.

Pur Autre Vie "For The Life Of Another."

A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee

Purchase Agreement

A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Purchase Money Instrument

A mortgage or deed of trust that does not permit a deficiency judgment in the event of foreclosure and sale of the secured property for less than the amount due on the promissory note. It is called purchase money since the deed of trust and mortgage was used to buy all or part of the property.

Purchase Money Transaction

The acquisition of property through the payment of money or its equivalent.

Purchase-Money Mortgage (PMM) or Purchase-Money Deed Of Trust

A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate. A mortgage or deed of trust given as part or all of the consideration for the purchase of property or given as security for a loan to obtain money for all or part of the purchase price.

Pyramiding

The process of acquiring additional properties by refinancing properties already owned and investing the loan proceeds in additional properties.

Real Estate Dictionary Terms - P