Real Estate Glossary P

Package mortgage - A method of financing in which the loan that finances the purchase of a home also finances the purchase of personal items such as a washer and dryer, refrigerator, stove and other specified appliances.

Parking strip - The strip of grass between the sidewalk and the street in front of a house.

Partial release - A clause found in a mortgage, which directs the mortgagee to release certain parcels from the lien of the blanket mortgage upon the payment of a certain sum of money.

Participation mortgage - A mortgage in which the lender participates in the income of the mortgaged venture beyond a fixed return, or receives a yield on the loan in addition to the straight interest rate.

Party wall - A wall, which is located on or at a boundary line between two adjoining parcels and is used or is intended to be used by the owners of both properties in the construction or maintenance of improvements on their respective lots.

Passive loss - A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate.

Passive solar system - A system that supplies solar heat without the use of electric fans or pumps.

Patent defect - A visible deficiency in a piece of property, such as a cracked basement slab or a sagging porch.

Patio  - An interior courtyard or a paved backyard area.

Payment cap - A legal limit on the amount a monthly payment can increase on an adjustable rate mortgage. rate mortgage.

Penthouse - An apartment located on the roof of a building, or more commonly, an apartment on the top floor of a building.

Percentage lease - A lease whose rental is based on a percentage of the monthly or annual gross sales made on the premises.

Per-diem interest - Interest charged or accrued daily.  Interest charged or accrued daily.

Perennial - Any plant that produces leaves, flowers and seeds from year to year, such as irises or peonies.

Performance bond - A bond, usually posted by one who is to perform work for another, which assures that a project or undertaking will be completed as per agreement or contract.

Pergola - An arbor with an open roof of rafters supported by posts or columns.

Periodic tenancy - A leasehold estate, which continues from period to period, such as month-to-month, year-to-year. All conditions and terms of the tenancy are carried over from period to period, and continue for an uncertain time until proper notice of termination is given.

Permanent financing - A long-term loan, as opposed to an interim loan. term loan, as opposed to an interim loan.

Pest-control inspection - A common pest control inspection is a termite inspection, which is required in some states, such as California.

Pier - A rectangular masonry support column.

Piggyback loan - A joint loan with two lenders sharing a single mortgage.

Piti (principal, interest, taxes, insurance) - When a buyer applies for a loan, the lender will calculate the principal, interest, taxes and insurance. The figure is designed to represent the borrower's actual monthly mortgage related expenses. related expenses.

Planned communities - The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals.

Planned unit development (pud) - A modern concept in housing designed to produce a high density of dwellings and maximum utilization of open spaces.

Planned-unit development - Residents own the home and the land, and share the use and financial responsibility for common areas. 

Plaster - A labor-intensive and more costly wall finish. intensive and more costly wall finish.

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

Plottage - The merging or consolidating of adjacent lots into one larger lot, with the consequent result of improved usability and increased value; also called assemblage.

Point - Fees charged by lenders at the time a loan are originated. A point is equal to 1 percent of the total loan amount.

Point of beginning - The starting point in a metes and bounds description of property, which is usually a street intersection or a specific monument.

Points - A generic term for a percentage of the principal loan amount which the lender charges for making the loan; each point is equal to one percent of the loan amount.

Police power - The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare.

Porch - The structure can be a simple covered entrance to a home or a fully enclosed room on the outside of a residence.

Portfolio lender - A lender who makes loans with its own funds and keeps the loans on the company's books in other words, inside the institution's "portfolio" rather than selling the loan on the secondary market.

Portico - A porch supported by a row of columns.

Power of sale - A clause written into a mortgage authorizing the mortgagee to sell the property in the event of default.

Pre-approval letter - A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain. 

Premises - The subject property, such as the property, which is deeded, or the unit that is leased.

Prepaid expenses - The costs for taxes, insurance and assessments paid before the due date.

Prepayment privilege - The right of the debtor to pay off part or all of the debt without penalty prior to maturity, such as in a mortgage or agreement of sale.

Prequalification - Many lenders will prequalify a borrower who is shopping for a loan by completing a preliminary assessment of the buyer's ability to pay for a home.

Pre-sale - A pre-construction sale program by a condominium developer who is required to sell a certain percentage of units before a lender will commit to finance construction of the project.

Prescription - The acquiring of a right in property, usually in the form of an intangible property right such as an easement or right of way, by means of adverse use of property that is continuous and uninterrupted for the prescriptive period.

Present value of one dollar - A doctrine, which is based on the fact that money has a time value. The present worth of a payment to be received at some time in the future is the amount of the payment less the loss of interest.

Pre-sold home - Homes that are sold before they are built.   Homes that are sold before they are built.

Pressure relief valve - A safety vent that relieves excess pressure in a water heater.

Price range - The range of how much a buyer is willing to pay for a home.

Prime rate - The minimum interest rate charged by a commercial bank on short-term loans to its largest and strongest clients(those with the highest credit standings).

Primer - The initial coat of paint that is applied before the final topcoat.

Principal broker - The licensed broker directly in charge of and responsible for the real estate operations conducted by a brokerage company.

Principle of conformity - The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.

Principle of progression - An appraisal term, which states that real estate of lower value, is enhanced by the proximity of higher end properties. end properties.

Principle of regression - An appraisal term, which states that the value of higher end real estate can be brought down by the proximity of too many lower end real estate, can be brought down by the proximity of too many lower end properties.

Privacy fence - A structure erected between two pieces of property.

Pro forma statement - A projection of future income and expenses.

Probate - The formal judicial proceeding to prove or confirm the validity of a will. The will is presented to the probate court, and creditors and interested parties are notified to present their claims or to show cause why the provisions of the will should not be enforced by the court.

Probate sale - A real estate sale triggered by the death of the owner, with proceeds to be divided among heirs or creditors.

Procuring cause - That effort which brings about the desired result, as in producing the buyer for the listed property.

Production home  - Homes that are mass-produced by one builder in a project. produced by one builder in a project.

Programming - A written summation by an architect of a project's design objectives, constraints and criteria.

Project budget - A fiscal outline that includes the construction budget and all costs for land, furniture, equipment, financing, professional services, contingencies and owner furnished goods and services. furnished goods and services.

Promissory note - An unconditional written promise of one person to pay a certain sum of money to another, or order, or bearer, at a future specified time.

Property - The rights or interests a person has in the thing owned; not, in the technical sense, the thing itself. These rights include the right to possess, to use, to encumber, to transfer and to exclude, commonly called the "bundle of rights."

Property line - The official dividing line between properties.

Property management - That aspect of real estate devoted to the leasing, managing, marketing and overall maintenance of the property of others.

Property value - The value of a piece of property is based on the price a buyer will pay at a certain time.

Proprietary lease - A written lease in a cooperative apartment building, between the owner corporation and the tenant corporation and the tenant stockholder, in which the tenant is given the right to occupy a particular unit.

Prorate - To divide or distribute proportionately.

Proration  - Agreed upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing.

Prospect - A person or corporation who may be interested in buying or selling real property. The prospect does not become a client until the parties establish a fiduciary relationship, such as upon signing a listing contract or upon executing a DROA.

Prospectus - A printed statement distributed to describe, advertise and give advance information on a business, venture, project or stock issue.

Puffing - Exaggerated or superlative comments or opinions not made as representations of fact and thus not grounds for misrepresentation. A statement such as "the apartment has a fantastic view," is puffing because the prospective buyer can clearly assess the view in each case.

Purchase agreement - A document, which details the purchase price and conditions of the transaction.