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Real Estate Glossary of Terms
Looking for the definition of a real estate
term? Click on a letter of the alphabet below to go to that letter's
corresponding page of terms.
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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.
PARCEL - A specific portion of a
larger tract; a lot.
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.
PARTITION - The dividing of common
interests in real property owned jointly by two or more persons.
PARTNERSHIP - "An association of
two or more persons to carry on as co-owners a business for profit," as
defined in the Uniform Partnership Act, which is in force in a majority of
the states.
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.
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.
PERCOLATION TEST - A hydraulic engineer's test of soil to determine the ability of the
ground to absorb and drain water.
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.
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.
PERSONAL PROPERTY - Things which are tangible and moveable; property which is not
classified as real property; chattels.
PIGGYBACK LOAN - A joint loan with
two lenders sharing a single mortgage.
PLANNED UNIT DEVELOPMENT (PUD) - A
modern concept in housing designed to produce a high density of dwellings
and maximum utilization of open spaces.
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.
POCKET LISTING - A listing which
is retained by the listing broker or salesperson, who does not make it
available to other brokers in the office or to other Multiple Listing
Service members.
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.
PORTE
COCHERE - A roofed structure
extending from the entrance of a building over an adjacent driveway to
shelter those getting into or out of vehicles.
POSSESSION - The act of either
actually or constructively possessing or occupying property.
POWER
OF ATTORNEY - A written instrument authorizing a person (the attorney-in-fact) to
act as the agent on behalf of another to the extent indicated in the
instrument.
POWER
OF SALE - A clause written into a
mortgage authorizing the mortgagee to sell the property in the event of
default.
PREMISES - The subject property,
such as the property which is deeded or the unit that is leased.
PREPAID INTEREST - The paying of interest before it is due.
PREPAYMENT PENALTY - The amount set by the creditor as a penalty to the debtor for paying
off the debt prior to its maturity. The prepayment penalty is charged by the
lender to recoup a portion of interest that he had planned to earn when he
made the loan.
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.
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.
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).
PRINCIPAL - The capital sum;
interest is paid on the principal. NOT spelled principle.
PRINCIPAL BROKER - The licensed broker directly in charge of and responsible for the
real estate operations conducted by a brokerage company.
PRIVATE MORTGAGE INSURANCE - A
special form of insurance designed to permit lenders to increase their
loan-to-market-value ratio, often up to 95 percent of the market value of
the property.
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.
PROCURING CAUSE - That effort
which brings about the desired result, as in producing a buyer for the
listed property.
PRO
FORMA STATEMENT - A projection of future income and expenses.
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 MANAGEMENT - That aspect of real estate devoted to the leasing, managing,
marketing and overall maintenance of the property of others.
PROPERTY REPORT - A disclosure
document required under the federal interstate land sales act where
applicable to the interstate sale of subdivided lots.
PROPRIETARY LEASE - A written lease in a cooperative apartment building, between the
owner-corporation and the tenant-stockholder, in which the tenant is given
the right to occupy a particular unit.
PRORATE - To divide or distribute
proportionately.
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 a 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.
PUNCH
LIST - A discrepancy list showing
defects in construction which need some corrective work to bring the
building up to standards set by the plans and specifications.
PURCHASE MONEY
MORTGAGE
- A mortgage given to the seller as part of the buyer's consideration for
the purchase of real property, and delivered at the same time that the real
property is transferred as a simultaneous part of the transaction
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