PACKAGE MORTGAGE

Mortgage covering both real and personal property.

PACKAGE TRUST DEED

See: Package Mortgage.

PAD

The foundation of slab construction. Specifically used to describe where a mobile home is placed or a condominium is built, but can be generally used for any slab or land under a building.

PAD SITE

An independent location for a retailer that may be near to but not part of a mall or shopping center.

PAIRED DATA ANALYSIS

See: Paired Sale.

PAIRED SALE

An appraisal procedure comparing only 2 properties, usually with only one major difference.

PANE

The glass portion of a door or window.

PANEL

(1) A section, raised, lowered, or level, of a wall, ceiling, fence, etc., self contained, and usually in a border or frame. (2) Sheets of gypsum, plywood, or other materials in similar form.

PANEL HEATING

Space heating by electric coils, hot air, hot water, or steam pipes, which are built into walls, ceilings, or floor panels. Also called radiant heating.

PANEL WALL

See: Curtain Wall.

PAPER

A mortgage, deed of trust, or land contract, which is given instead of cash. A seller would take back "paper" if he or she received a mortgage, deed of trust, or land contract as part of the purchase price.

PAPER PROFIT

A description of the increase in the value of an asset that has not been realized (i.e. the asset has not been sold so that owner does not enjoy the profit).

PAR

(1) Average, equal, normal, etc. (2) Face value, as in negotiable instruments.

PAR VALUE

(1) Concerning stock. The face value of a share of stock. (2) With reference to mortgages or trust deeds, the value of the mortgage based on the balance owing, without discount.

PARAPET

A short wall along the edge of a platform, such as a roof, terrace, etc., to protect the edge and divert rainwater.

PARCEL

A general term meaning any part or portion of land.

PARCEL 2 EASEMENT

A colloquial term used to describe an appurtenant easement of the dominant tenement, because the easement is described in the legal description. Usually, the property is described as parcel 1 and the easement as parcel 2.

PARCEL MAP

A map allowed in some states as a substitute for a subdivision map for 1 to 4 parcels (lots) with no common area. The procedure is much simpler and less costly than creating a subdivision map.

PARCEL REGISTER

The abstract index for a property registered in the Torrens System of land registration.

PARGING

Coating cement on a masonry wall, usually for water proofing.

PARISH

A political division in Louisiana, comparable to a county.

PARKING RATIO

The ratio of parking spaces to building (usually rentable) area. Examples: Office use, 4 parking spaces per 1000 square feet; apartment use, 2 parking spaces per unit.

PARKWAY

(1) A highway through a park, usually restricting vehicles over a certain weight. (2) A freeway or expressway.

PAROL

Verbal. Usually refers to evidence in a court of law. The "Parol Evidence Rule" governs when such evidence is admissible.

PAROL CONTRACT

An agreement that is not reduced to writing, that is created through spoken words.

PAROL EVIDENCE RULE

A rule of evidence which does not admit prior writings or prior or contemporaneous verbal agreements as evidence to contradict a written contract. There are several exceptions.

PARQUET FLOOR

Patterned, hardwood flooring, especially parquetry (a geometric design).

PARTIAL INTEREST

Ownership of property that is less than 100% or on a lower level than fee simple.

PARTIAL PAYMENT

Any payment which is insufficient to meet the full amount required.

PARTIAL RECONVEYANCE

See: Partial Release.

PARTIAL RELEASE

A release of a portion of property covered by a mortgage. A subdivider will obtain a partial release as each lot is sold, upon payment of an agreed upon amount. In areas where the subdivider is not usually the builder, it may be necessary to sell groups of lots to obtain a partial release. In areas where deeds of trust are used instead of mortgages, a "partial reconveyance" is the document used.

PARTIAL TAKING

The taking of part of an owner's property under the laws of eminent domain. Compensation must be based on damages or benefits to the remaining property, as well as the part taken.

PARTIALLY AMORTIZED MORTGAGE

A very common form of mortgage in which the term is less than the amortization period such that, at the maturity date, the mortgage is not fully paid out and either refinancing or a large balloon payment is required.

PARTICIPATION (OR PARTICIPATING) MORTGAGE

Lender involvement in property whereby the lender receives a portion of profits or income from the property as well as interest. Usually occurs when money is tight or the risk is unusually high.

PARTICIPATION CERTIFICATES

Mortgage securities, rather than mortgages. The advantage of the certificate is that it is readily marketable or pledgeable.

PARTICIPATION LOAN

See: Participation.

PARTITION

(1) Any division of real or personal property between co-owners, resulting in individual ownership of the interest of each. (2) A wall, sometimes moveable, and not load-bearing, used to divide a room or building.

PARTNERSHIP

As defined by the Uniform Partnership Act, "An association of two or more persons to carry on as co-owners, a business for profit". The business must be lawful and the partners must agree to share in the profit or loss (but not necessarily equally).

PARTY WALL

A wall erected on a property boundary as a common support to structures on both sides, which are under different ownerships.

PASSIVE SOLAR HEATING

The maximization of the sun's heating abilities through careful design of a building.

PASS THROUGH

(1) A method of escalation found in modern leases whereby the tenant directly pays increases in operating expenses of the property. (2) A method of paying interest directly to certificate holders of a mortgage pool.

PASS THROUGH CERTIFICATE

A mortgage backed certificate under which interest from the mortgage pool is paid directly to the certificate holder.

PATENT

Instrument of conveyance of title to public (government) land.

PATENT DEFECT

A defect plainly visible or as would be discovered by the exercise of ordinary care. A patent defect in a legal description is one which cannot be corrected on its face, and a new description must be used. See also: Latent Defect.

PATIO

Originally, a courtyard, enclosed by columns, or an open courtyard. Modernly, a paved area adjoining a house, used for relaxation, outdoor cooking, eating, etc.

PAYMENT CAP

A maximum amount for a payment under an Adjustable Mortgage Loan, regardless of the increase in the interest rate. If the payment is less than the interest alone, negative amortization is created.

PAYMENT CHANGE DATE

The date when the amount of each payment under an adjustable, variable or graduated payment mortgage changes.

PAYMENT DECREASE CAP:

A contractual limit on the amount of each periodic payment may drop at any one payment change date. Expressed as a percentage.

PAYMENT INCREASE CAP:

A contractual limit on the amount of each periodic payment may rise at any one payment change date. Expressed as a percentage.

PAYMENT PENALTY:

Also known as "prepayment penalty" or "early payment penalty", the fee paid by a borrower when she pays out some or all of the principal of a loan at a time when such a payment is not allowed under the terms of the loan.

PAYOFF

The payment in full of an existing loan or other lien.

PAYOFF ESCROW

An escrow, specifically for the purpose of paying off an existing lien. Usually part of an existing escrow, and called a sub escrow.

PAY OUT

To provide the lender with the total amount then required to retire a loan obligation.

PEDESTRIAN OVERPASS

A bridge over a highway, railway, etc., for pedestrian traffic.

PEDESTRIAN TRAFFIC COUNT

See: Traffic Count.

PEDESTRIAN UNDERPASS

A tunnel, under a highway, used for pedestrian traffic.

PENALTY

A punishment. In a real estate contract containing a liquidated damage clause, the clause is not valid if construed as a penalty. See: Liquidated Damages.

PENNY

Most popularly applied to nails. A measure of length, symbolized by the letter "d".

PENSTOCK

(1) A valve to regulate or direct the flow of water. (2) A conduit for a similar purpose.

PENTHOUSE

(1) A condominium or apartment on the roof of a building, used as a residence. (2) A small building on a roof, which houses elevator machinery, ventilating equipment, etc.

PER ANNUM

Yearly, annually.

PER CAPITA

Literally, by heads. Commonly, as individuals. In the right to receive a portion of the estate of a deceased person, one claiming a per capita right would claim an equal share as an individual and not a divided share as part of a family (per stirpes).

PER DIEM

Daily.

PER SE

By itself; of itself; inherently.

PER STIRPES

As a representative, and not as an individual. In the laws of descent and distribution, one who takes because of the deceased ancestor. For example: A leaves equally to B and C per stirpes. C dies, leaving three children. The estate goes one half to B, one half to be divided among the three children of C. See also: Per Capita.

PERCENTAGE LEASE

A lease, generally on a retail business property, using a percentage of the gross or net sales to determine the rent. There is usually a minimum or "base" rental, in the event of poor sales.

PERCENTAGE RENT

See: Percentage Lease.

PERCH

A seldom used unit of measurement equal to 16 1/2 feet.

PERCOLATION

The absorption of liquid into soil by seepage.

PERCOLATION (PERC) TEST

The test to determine the capability of the soil to absorb liquid, both for construction and septic systems.

PERFECT ESCROW

A complete escrow. When the escrow agent has all instruments and instructions necessary to carry out the transaction (purpose of the escrow).

PERFORMANCE

In contracts, the carrying out of the promises given as consideration to form the contract.

PERFORMANCE BOND

A bond posted by a builder to insure completion of a project.

PERIMETER

(1) The boundary lines of a parcel of land. (2) The length of said boundary lines.

PERIMETER HEATING

See: Baseboard Heating.

PERIODIC PAYMENT CAP

See "payment cap".

PERIODIC RATE CAP

See "rate cap".

PERIODIC TENANCY

An agreement to rent from period to period. The period is determined by the rental payment (weekly, monthly, yearly, etc.).

PERISTYLE

A colonnade around a building or courtyard.

PERMANENT MORTGAGE

A mortgage on completed construction for a long period of time, usually over ten years. (See also: Take Out Loan).

PERMIT

The government body's written permission to do something which is regulated by a corresponding department.

PERPETUITY

Continuing forever. Legally, pertaining to real property, any condition extending the inalienability of property beyond the time of a life or lives in being plus twenty-one years.

PERSON

A legal term referring to any entity which is capable of entering a contract or suing and being sued. Generally, an adult, mentally capable human being, an incorporated company, a partnership or a government body.

PERSONAL PROPERTY

Any property which is not designated by law as real property.

PERSONAL PROPERTY BROKER

A loan broker operating under a special license to broker personal property loans. The loan broker may be paid in a lump sum or from the monthly interest payment.

PERSONAL PROPERTY LOAN

A loan which is secured by both real and personal property. The minimum ratio of personal to real property is set by law. The credit of the borrower is a major consideration in making the loan. See also: Equity Loan.

PERSONAL RESIDENCE

A person's home, used to establish their place for voting, taxation and other civic issues.

PERSONALTY

See "personal property".

PHA

See: Public Housing Agency.

PHASE I ENVIRONMENTAL SITE ASSESSMENT

An assessment of the environmental condition of a site (both land and improvements), often performed by an engineering consulting company. It would include: (1) A review of historical documents showing past ownership and use of the site. (2) Interviews with those who may have knowledge of past use. (3) A physical inspection of the site and adjoining properties. (4) A report which summarizes the findings and recommends any necessary action or recommends further investigation. Phase I may, but usually does not, involve sampling.

PHASE II ENVIRONMENTAL SITE ASSESSMENT

A further assessment after "Phase I" to verify the presence (or absence) of contaminants in the water or soil at the site. Samples are taken.

PHASE III ENVIRONMENTAL SITE ASSESSMENT

An assessment after "phase I" and "phase II" to determine the extent of contaminants in the water and/or soil at the site, both as to the depth and breath of the contamination. Samples are taken.

PHYSICAL AGE-LIFE METHOD OF DEPRECIATION

See: Age-Life Method of Depreciation.

PHYSICAL DEPRECIATION

See: Physical Deterioration.

PHYSICAL DETERIORATION

A type of depreciation (loss in value) to improvements caused by wear and tear or lack of maintenance. When economically feasible to correct, it is called "curable"; when not "incurable".

PHYSICAL LIFE

The normal life of an improvement, if properly maintained.

PI (PRINCIPAL AND INTEREST)

Used to indicate what is included in a monthly payment on real property. If the payment includes only principal and interest, property taxes and hazard insurance would make the total payment higher. (See: PITI).

PICTURE WINDOW

A large window used to let in light and a view, but not air.

PIER

(1) A structure extending from the solid land out into the water of a river, lake, harbor, etc., to afford convenient passage for persons and property to and from vessels along its sides. (2) A heavy, vertical support member, of masonry, wood, or metal.

PIER AND BEAM FOUNDATION

A foundation using columns (piers) which extend from footings below ground to the slab above ground. The area between the ground and the slab is called the crawl space and may contain plumbing, heating ducts, and electrical wiring.

PIGGYBACK LOAN

A loan made jointly by two or more lenders on the same property under one mortgage or trust deed. A 90% loan, for example, may have one lender loaning 80% and another (subordinate) lender loaning the top 10% (high risk portion).

PILASTER

A pier or column, which partly protrudes from a wall, or is attached to a wall as a decoration. If not strictly decorative, it may be a support member.

PILE

A vertical support member, driven into the ground (or bottom, if in water). May be of concrete, metal, or wood.

PILLAR

A vertical support member, usually the main support. Is not attached at its sides.

PIPELINE

An extended connection of pipes for transporting liquids or gases, such as oil or natural gas.

PIPELINE RISK

Slang term describing the possibility that a lender will lose money as a result of committing to a loan at a given interest rate only to see interest rates rise in the interim before the loan transaction is closed.

PIPESTEM LOT

See "flag pole lot". A piece of land connected to a street by a long, narrow strip of land.

PITCH

(1) A mixture of resins; a black tar substance. (2) To incline, such as a sloping roof. The rate of incline is the pitch.

PITI (PRINCIPAL, INTEREST, TAXES AND INSURANCE)

Used to indicate what is included in a monthly payment on real property. Principal, interest, taxes and insurance are the four major portions of a usual monthly payment.

PITI RESERVES

The amount of extra money a borrower must have to cover the cost of principal, interest and taxes on a mortgage for a set number of months.

PLAINTIFF

The party bringing a civil action against a defendant.

PLANK

Lumber 2" to 4" in thickness, 8" or more in width.

PLANNED (UNIT) DEVELOPMENT

A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels. The lots are generally small, being the exact size of the improvements, or slightly larger.

PLANNING COMMISSION

A board of a city, county, or similar local government, which must approve proposed building projects. Often must be confirmed by a higher board, such as a council.

PLANS

All drawings necessary to a construction project, including the subcontractors' drawings. See also: Specifications.

PLASTER OF PARIS

Gypsum heated to form a fine white powder which, when wet, will dry hard.

PLAT (PLAT MAP)

A map dividing a parcel of land into lots, as in a subdivision.

PLAT BOOK

A book which contains the plat maps for a given area.

PLATE

See: Wall Plates.

PLATFORM FRAME CONSTRUCTION

A common type of wood frame construction whereby each floor is built separately and supports (is a platform for) the next floor above. (See: Balloon Frame Construction; Post and Beam Frame Construction).

PLEDGE

The depositing (bailment) of goods (personal property) with a creditor as security for a debt.

PLEDGED ACCOUNT LOAN

A loan partially secured by the buyer or third party depositing funds into a savings account as collateral security for the loan. A portion of the monthly payment is drawn from the account over the first years of the loan.

PLEDGED ASSET MORTGAGE

A method of substituting a pledged asset, such as a CD, for a cash down payment. A buyer can then borrow one hundred percent of the purchase price. In the event of default the lender may convert the pledged asset to cash, which would reduce the loan to value ratio.

PLEDGEE

The party to whom goods are pledged.

PLEDGOR

The party delivering goods in pledge (pledging).

PLOT

(1) An area of ground for a specific use, such as a cemetery plot. (2) Ground on which an improvement is to be built.

PLOT PLAN

A plan of the location of improvements on a parcel of land. Also called a plot map. Don't confuse with plat.

PLOTTAGE

The act of acquiring a number of smaller, adjacent parcels to create one larger, more useful plot of land.

PLOTTAGE INCREMENT

The increase in value created by joining smaller adjacent properties into one large parcel, under a single ownership.

PLUMB

(1) To provide plumbing. (2) A weight used on a line (plumb line) to determine the exact right angle to the ground or a floor.

PLUMBING

The pipes, fixtures, etc., necessary for the flow of water to a building, and flow of sanitary waste from a building.

PLY

A layer or fold. Commonly used to describe the thickness of any built-up surface, such as plywood, veneers, tires, etc.

PLYWOOD

A wood sheet made of layers (plies) of thin sheets, glued to a center sheet of thicker wood, the grain running at right angles.

PMI

See: Private Mortgage Insurance.

PMI PASS-THROUGH CERTIFICATES

Mortgage-backed securities of conventional mortgages insured by private mortgage insurance (PMI) companies. See: Mortgage Backed Securities.

POB

See: Point of Beginning.

POCKET CARD

A card issued by a state showing that an individual is licensed as a real estate broker or salesperson.

POINT

(1) One percent of the amount of the loan. (2) A commission paid for arranging a loan.

POINT LETTER

A letter from a lender which guarantees the number of points on a loan for a given time.

POINT OF BEGINNING (POB)

A term used in metes and bounds descriptions. The description will start with the words "Beginning at a point" and end with "to the point of beginning".

POLICE POWER

The power of the state which abridges individual rights for the safety, health, and general welfare of society.

POLICY

A general term used to describe all contracts of insurance.

POOL

1. Gather into a group for greater effectiveness. See: Mortgage Pool. 2. An artificial body of water for recreational swimming.

PORCH

An extension from a structure, usually serving as part of the entrance. May be large enough for relaxation, and most often has its own roof, rather than a part of the structure roof.

PORTICO

A colonnade at the front of a building.

PORTFOLIO LENDER

A lender who makes and holds loans rather than making loans and selling them in the secondary market.

POSITIVE CARRY

Borrowing against mortgages at a lower rate than the mortgage yield. See: Warehousing.

POSITIVE CASH FLOW

See: Cash Flow; Negative Cash Flow.

POSITIVE LEVERAGE

Using borrowed money to increase the return on an investment. Example: Property is purchased for $100,000 cash and sold one year later for $150,000. The investment produced a return of 50%, less the cost of sale. Another property is purchased for $100,000 with $10,000 down and a $90,000 mortgage and sold one year later for $150,000. The investment produced a return of 500%, less the cost of sale and cost of the mortgage, still a much higher return than the cash purchase.

POSITIVE SPREAD

See: Positive Carry.

POSSESSION

Being in physical control of land or personal property, whether the owner or not. Possession may be lawful or wrongful.

POSSESSORY LIEN

A lien allowing the creditor to hold the property until paid.

POSSIBILITY OF REVERTER

The term shows no estate (interest) in property, but only the chance that an estate will exist at a future time. If a property were sold on the condition that it be used for a park, and, if not used for a park, would revert back to the seller, the seller would have a possibility of reverter.

POST

(1) To give public notice by attaching to a post or wall or displaying in a public place. (2) After. (3) A vertical support. (4) To enter into ledgers or books, such as posting to an account.

POST AND BEAM FRAME CONSTRUCTION

A type of wood frame construction using beams inside the building as support as well as sidewalls. This allows for larger spans.

POST AND LINTEL

A system of construction based on vertical supports with horizontal cross beams. No arches are used.

POSTDATED

Dating an instrument after the actual date of execution. Most often thought of in connection with checks, but sometimes used in states where certain days (Sundays and holidays) cannot be used to contract. The contract is still not legal if postdated for this reason.

POSTSTRESSED CONCRETE

Placing cables, in metal casing, in wet concrete. When the concrete dries, the cables are stretched, and the casing filled with grout. When the grout dries, the cables are released, transmitting the stress to the concrete.

POTABLE

Drinkable.

POTENTIAL GROSS INCOME

Rental income before deducting for vacancies, non-payment of rent and operating expenses.

POTENTIALLY RESPONSIBLE PARTY

A term used for those who may be responsible for environmental cleanup of a contaminated site. These include present owners, owners at the time of contamination, those persons who actually caused the contamination, whether owners or not, and those who transported the hazardous material to the site. All are "potentially" responsible.

POWER OF ATTORNEY

An authority by which one person (principal) enables another (attorney in fact) to act for him. (1) General power - Authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special power - Specifies property, buyers, price and terms. How specific it must be varies in each state.

POWER OF SALE

Clause in a mortgage or deed of trust giving the mortgagee or trustee the power to sell the property in the event of default. There are laws which govern the sale, which must be at public auction, but there is no court action (judicial foreclosure) necessary.

PR

(1) Slang for the word profit. An expression not typically used. (2) Public relations.

PRACTICING LAW

The domain of a duly licensed attorney. A real estate or escrow agent may not practice law. What constitutes practicing law varies with state statutes.

PRAIRIE HOUSE

A long low house of the early twentieth century style, with a row of windows across the front and a plain exterior.

PRE-APPROVED MORTGAGE

A commitment from a lender to provide a mortgage loan on stated terms to a borrower before the borrower has found a property to buy. The pre-approved mortgage allows the borrower to make a firm, cash offer on the property of choice.

PREARRANGED REFINANCING AGREEMENT

An arrangement between lender and borrower in which the lender agrees to favorable terms for the borrower on a future refinance as an inducement to the borrower to place the original mortgage with the lender.

PRECLOSING

A meeting of the parties to a transaction prior to the scheduled closing date to allow some or all of the documents to be signed and more complicated issues settled prior to closing.

PRE-EMPTION RIGHT

The right given to settlers upon the public lands of the United States, to purchase the lands at a limited price in preference to others. Modernly, equivalent to a first refusal right.

PREDECESSOR

One who goes before. Differs from ancestor in that predecessor may apply to corporations or one holding office. Ancestor applies only to persons.

PREFABRICATED HOUSE

A house constructed of manufactured components, assembled partly at the site, rather than totally on the site. Also called a modular house.

PREFABRICATION

The manufacturing of parts of a structure, such as walls, roofs, etc., which are assembled at the construction site. More recently called modular housing.

PRE-FORECLOSURE SALE

The sale of a property by a delinquent borrower under an agreement with the lender. The sale may not produce enough proceeds to pay out the loan but the lender will save the costs of foreclosing and selling.

PRELEASE

To find tenants for a property before construction is completed.

PRELIMINARY TITLE SEARCH

A title search resulting in a Preliminary Title Report, Commitment or Binder.

PREMISES

(1) Buildings and immediately surrounding areas. (2) In conveyancing, the part of a deed giving the names of the grantor and grantee, the consideration, and description of the property conveyed.

PREMIUM

(1) Money paid for an insurance policy. (2) A bonus (3) The opposite of a discount. (4) Item of best quality

PREPAID INTEREST

Interest paid before becoming due.

PREPAID ITEMS

Those expenses of property which are paid in advance and will usually be prorated upon sale, such as taxes, insurance, rent, etc.

PREPAYMENT

See: Or More Clause.

PREPAYMENT CLAUSE

A clause in a mortgage that determines whether the borrower may make additional principal payments without penalty and the limit, if any, of the additional payments. See also: Or More Clause.

PREPAYMENT PENALTY

A penalty under a note, mortgage, or deed of trust, imposed when the loan is paid before it is due.

PREPAYMENT PRIVILEGE

The right to prepay a loan without penalty, either in full or in part. See also: Lock-in; Or More Clause; Prepayment Penalty.

PRE-QUALIFICATION

The act of going through the mortgage application process before the borrower is ready to borrow, to establish how much money the borrower could obtain under a loan.

PRESALE

Marketing of properties under construction or simply in the planning stages.

PRESCRIPTION

A legal term describing the acquisition of rights or obligations through the passage of time (such as adverse possession).

PRESCRIPTIVE EASEMENT

The granting of an easement by a court, based on the presumption that a written easement was given (although none existed), after a period of open and continuous use of land.

PRESENT VALUE

1. The current appraised value of property. 2. The current value of money that will be received at a future date. See also: Present Value Of $1.

PRESENT VALUE OF $1

The value today of $1 to be received at a future date. Example: If you invested $1 today, you would have more than $1 in a year. Therefore, $1 received a year from today is worth less than $1 received today.

PRESERVATIVE

A chemical covering for wood or metal, preventing insect destruction or rot in the former, and rust in the latter.

PRESTRESSED CONCRETE

Stretching wire or other reinforcement in wet concrete, then releasing it after the concrete has dried, causing the tension (stress) toward compaction of the concrete.

PRESUMPTION

An inference reached by probability and reasoning in the absence of absolute fact. A presumption of law is the required drawing of an inference from existing facts. The presumption may be rebuttable or conclusive. If rebuttable, facts may be presented to refute the presumption. If conclusive, no facts may be presented, as in estoppel.

PRETERMITTED CHILD

A child born after his/her parent's will is executed.

PRETERMITTED SPOUSE

A spouse married after the will of his/her spouse is executed.

PRICE

Modernly, the amount of money paid for property which is purchased, although the word is general enough to include anything given (not necessarily money) in exchange for something else.

PRICE-LEVEL-ADJUSTED MORTGAGE

An adjustable or variable payment loan which uses the rate of inflation as an index.

PRICE TAKE-OFF METHOD

See: Quantity Survey Method.

PRIMA FACIE

At first sight; on the face of it. Presumed true unless disproved.

PRIMARY LEASE

The original lease, as distinguished from a sub lease.

PRIME LENDING RATE

The most favorable interest rates charged by a commercial bank on short term loans, (not mortgages).

PRIME MORTGAGE MARKET

The market in which the loan is originated. The loan may then be sold in the Secondary Mortgage Market.

PRIME TENANT

The major tenant in a building, shopping center, etc. It may be necessary to have a prime tenant in order to obtain construction financing. The tenant may be considered "prime" because of its financial strength, rather than by the amount of space it occupies.

PRIMER

A coat of sealant or other preparatory substance, applied to a surface before a finish coat.

PRIME RATE

The best rate charged on loans, usually saved for the best clients of the lenders. May also be set by a national institution as a benchmark or index for other lenders.

PRINCIPAL

(1) The person who gives authority to an agent or attorney (see attorney-in-fact). (2) Amount of debt, not including interest. The face value of a note, mortgage, etc.

PRINCIPAL AND INTEREST PAYMENT (P&I)

A blended, periodic payment that is enough to pay off accumulated interest and a portion of the principal.

PRINCIPAL BALANCE

The outstanding amount owing on a mortgage without including accumulated interest.

PRINCIPAL BROKER

The head of a real estate brokerage, licensed as a broker, who is responsible for all transactions run through the firm.

PRINCIPAL MERIDIAN (PRIME MERIDIAN)

The meridian being used as a reference point in a specific property description. See also: Base Line; Meridian.

PRINCIPAL RESIDENCE

The prime or main living quarters. It may be based on time spent at the location or declared by the resident to be his/her principal residence. It is important, for example, for tax purposes and declarations of homestead.

PRIORITY

That which comes first in time or importance. Regarding liens, the time of recording usually establishes priority.

PRIORITY CLAUSE

A clause in a junior lien, acknowledging the priority of a prior lien.

PRIVATE CONDUIT

See: Conduit.

PRIVATE LAND GRANT

A grant of public land to an individual.

PRIVATE MORTGAGE INSURANCE

Insurance against a loss by a lender in the event of default by a borrower (mortgagor). The insurance is similar to insurance by a governmental agency such as FHA, except that it is issued by a private insurance company. The premium is paid by the borrower and is included in the mortgage payment.

PRIVATE PROPERTY

Property owned by a person, group, corporation, or other entity, not a governmental body.

PRIVITY

Mutual or successive relationship to the same rights of property, such as heir and ancestor, assignee and assignor.

PRO RATE

To divide in proportionate shares, such as taxes, insurance, rent, or other items which buyer and seller share as of the time of closing, or other agreed upon time.

PROBATE

Originally, the proving that a will was valid. Modernly, any action over which probate court has jurisdiction.

PROBATE COURT

A court having jurisdiction of estates, whether of a deceased, a minor, or a incompetent person.

PROBATE SALE

Sale of property from an estate. must be done under supervision and procedures of the probate court.

PROCEEDS

A term commonly used to describe the money that goes to the seller of property after costs of the sale and payoffs. The net cash to the seller.

PROCURING CAUSE

The direct or proximate cause. In an open listing to sell real property, for example, the broker would only receive a commission if she procured the buyer.

PROFIT

The difference of income less expenses. Further broken down into net profit and gross profit, (see which).

PROFIT AND LOSS STATEMENT

A statement showing the income and expenses of a business over a stated time, the difference being the profit or loss for a period.

PROFIT A PRENDRE

A right to take from the soil, such as by logging, mining, drilling, etc. The taking (profit) is the distinguishing characteristic from an easement, although easement is frequently used as a synonym.

PRO-FORMA STATEMENT

Latin meaning a statement "according to form". Financial projections.

PROGRESS BILLING

Billing by a contractor as an agreed to amount of work is completed. This can be based on a percentage of work completed or stages of work completed.

PROGRESS PAYMENTS

Payments based on Progress Billing. See: Progress Billing.

PROGRESSION

The gaining of value from surroundings. Better properties cause lesser properties in the immediate area to be worth more than if the better properties were not as good. The opposite is regression.

PROJECT

Any development built with HUD financial assistance at any phase.

PROMISEE

One to whom a promise has been made, such as the lender under a promissory note.

PROMISOR

One who makes a promise. The borrower under a promissory note.

PROMISSORY NOTE

A promise in writing, and executed by the maker, to pay a specified amount during a limited time, or on demand, or at sight, to a named person, or on order, or to bearer.

PROPERTY

Anything which is owned by someone. (See also: Real Estate).

PROPERTY BRIEF

An expression, not nationally used, meaning a description of a property for sale, which is submitted to a prospective purchaser.

PROPERTY LINE

The boundary line of a parcel of land.

PROPERTY MANAGEMENT

The branch of the real estate business dealing with the management of property. The property may be a rented house or a large office or industrial complex. The duties may range form merely collecting rents to complete management of all maintenance and may also include being leasing agent or sales agent.

PROPERTY MANAGEMENT AGREEMENT

The contract between an owner and property manager (or management company), setting forth the duties of and payment for said manager.

PROPERTY OWNERS' ASSOCIATION

See: Homeowners' Association.

PROPERTY RESIDUAL TECHNIQUE

An appraisal technique whereby land and building are valued as a single unit. The income (net operating income) is capitalized (divided) by an overall capitalization rate to reach estimated value. See: Building Residual Technique: Land Residual Technique.

PROPERTY TAX

Generally, a tax levied on both real and personal property; the amount of the tax is dependent on the value of the property.

PROPRIETARY LEASE

Most commonly used in relation to stock cooperatives, whereby the owners of stock lease units (apartments).

PROPRIETORSHIP

See: Sole Proprietorship.

PRORATION

To divide (prorate) property taxes, insurance premiums, rental income, etc., between buyer and seller proportionately to time of use, or the date of closing.

PROSCENIUM

Originally the stage of a theater. Modernly, the portion of the stage on the audience side of the curtain.

PROSPECT

A potential buyer, seller, or tenant, rather than one which is actually in the process of buying, selling, or leasing.

PROSPECTUS

A brochure, presenting for a prospective investor the details of an offering.

PROVISIONAL PAYMENTS

Payments to a contractor on a cost reimbursement contract to pay for the contractor's expenses as work progresses.

PROXIMATE CAUSE

The direct cause, the result of which is foreseeable. Example: A cow kicks over a lantern and a major city burns to the ground. The act of the cow would be the actual cause but not the proximate (foreseeable) cause.

PROXY

Although the term legally encompasses any agent, it is most frequently used in connection with representation at a meeting, especially when voting is concerned. The written authority to act is called a proxy, as well as the person acting.

PRP

See: Potentially Responsible Party.

PUBLIC AUCTION

A public meeting at which properties are sold to pay defaulted mortgages.

PUBLIC DOMAIN LAND

See: Public Land.

PUBLIC HOUSING

A governmental housing project, usually to accommodate low income families.

PUBLIC HOUSING AGENCY

Any government agency authorized by law to develop or manage low-income housing.

PUBLIC LAND

Lands belonging to the federal government, not reserved for government use but subject to sale or other disposal.

PUBLIC LAND SYSTEM

Legal descriptions of land by reference to the public land survey. Often called sectional property descriptions.

PUBLIC OFFERING STATEMENT

See: Public Report.

PUBLIC RECORDS

Usually at a county level, the records of all documents which are necessary to give notice. The records are available to the public. All transactions for real estate sales should be recorded.

PUBLIC REPORT

A report given to prospective purchasers in a new subdivision, stating the conditions of the area (costs of common facilities, availability of schools, noise factor if near an airport, etc.), issued by the real estate commission.

PUBLIC SALE

Sale at auction, open to the public. May be a foreclosure sale, tax sale, excess state land sale, or other type. A "public" sale generally requires notice (advertising) and must be held in a place accessible to the general public.

PUBLIC UTILITY

A company such as the telephone company, electric company, or gas company, which supplies a necessity in our modern life.

PUD

See: Planned Unit Development.

PUFFER

One hired to make false bids at an auction in order to raise the price of the property being sold.

PUFFING

An opinion not made as a representation of fact, but intended to enhance the value of the property.

PUNITIVE DAMAGES

See Exemplary Damages.

PUR AUTRE VIE

For (during) the life of another. A life estate measured not by the life of the grantee, but by the life of another person. The life of a famous person is commonly used, such as a young member of a royal family known for its longevity.

PURCHASE AGREEMENT

An agreement between a buyer and seller of real property, setting forth the price and terms of the sale.

PURCHASE AND LEASEBACK

See: Sale-Leaseback.

PURCHASE MONEY BOND

A bond having a purchase money mortgage as security.

PURCHASE MONEY MORTGAGE

(1) A mortgage given from buyer to seller to secure all or a portion of the purchase price. (2) Any mortgage from which the funds are used to purchase the property.

PURCHASE MONEY TRUST DEED

See: Purchase Money Mortgage.

PURCHASE OFFER

See: Purchase Agreement.

PURCHASE PRICE

The consideration paid for the purchase of a property as set out in the agreement.

PURCHASER

The person who buys a property.

PURCHASER'S POLICY

See: Owner's Policy.

PURLIN

A horizontal supporting beam of a roof frame, parallel to the ridge line and placed under the rafters.

PUTTY

A soft clay-like mixture used as a filler for cracks, joints, and to install window panes.

PYLON

(1)A monumental mass which flanks an entrance, such as pillars at a gateway. (2) A tower, such as the steel towers which support high tension wires.

PYRAMID ROOF

A roof resembling a pyramid; having four sloping sides, either forming a point, as a church steeple, or running at a lesser angle to a horizontal ridge, as is common on free standing garages.

PYRAMID ZONING

Including more restrictive uses in less restrictive uses. Examples: Residential use (more restrictive) would be allowed in an area zoned commercial (less restrictive); commercial (more restrictive) would be allowed in an area zoned industrial (less restrictive).

A B CI CII D E F G H I J K L M N O P Q R S T U V W X Y Z