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Real Estate Dictionary P
"package mortgage" - "purchaser"
We try to provide as much information as possible to buyers of Ocala Real Estate. These terms and definitions apply pretty much nation wide, and we try to update with terms specifically relating to Florida Real Estate as soon as we come across something we've missed. We welcome your comments and suggestions!
PACKAGE MORTGAGE:
A loan where the security is both real and personal property.
PAD SITE:
An independent location for a retailer that may be near to but not part
of a mall or shopping center.
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).
PAPER:
Slang term for a loan note given instead of a cash payment.
PAR VALUE:
Market value, nominal value.
PARCEL:
Another word for a piece of land.
PARCEL REGISTER:
The abstract index for a property registered in the Torrens System of
land registration.
PAROL:
Oral, verbal.
PAROL CONTRACT:
An agreement that is not reduced to writing, that is created through
spoken words.
PAROL EVIDENCE RULE:
A legal rule of evidence. A court will not allow evidence of oral
discussions which purport to modify a written contract.
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 RELEASE:
A document signed by the mortgagees holding a blanket mortgage registered
on title to several properties which removes the mortgage from title to just one
of the properties.
PARTIAL RELEASE CLAUSE:
A clause in a blanket mortgage or trust deed allowing for reconveyance of
title or part of the property when part of the loan is paid off.
PARTIAL TAKING:
Where a government body takes only a portion of a landowner's land or
rights to land by condemnation.
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:
In addition to interest on mortgage loans on income properties, a small
percentage of gross income is required, sometimes predicated on certain
conditions being fulfilled, such as minimum occupancy or a percentage of net
income after expenses, debt service and taxes.
PARTITION:
An court ordered division of property owned by two or more owners, may
take the form of a physical division of the property or a forced sale and
division of the proceeds.
PARTITION ACTION:
Court proceedings by which co-owners seek to sever their joint ownership.
PARTNERSHIP:
A contract of two or more persons to unite their property, labor or
skill, or some of them, in prosecution of some joint or lawful business and to
share the profits in certain proportions.
PARTY WALL:
A wall erected on the line between two adjoining properties, which are
under different ownership, for the use of both properties.
PASSIVE SOLAR
HEATING:
The maximization of the sun's heating abilities through careful design of
a building.
PATENT:
Instrument used to convey title to government land.
PAY OUT:
To provide the lender with the total amount then required to retire a
loan obligation.
PAYMENT ADJUSTMENT
INTERVAL:
The period of time between changes in the amount of each periodic payment
on a variable or adjustable rate mortgage.
PAYMENT CAP:
A term of some variable or adjustable rate mortgages in which the level
to which the monthly payment may rise is limited to a certain dollar figure.
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.
PRIME TENANT:
The biggest tenant in a commercial complex. Also known as "key tenant" or
"anchor tenant".
PENALTY:
Fine for breaching a rule, term of a contract or law.
PENTHOUSE:
The dwelling(s) located at the top of a tall building, often luxurious.
PER STIRPES:
Latin term, meaning by representation. A method of dividing an estate
equally among the heirs of the deceased. If an heir has predeceased, her share
is divided equally by her linear descendants.
PERC TEST
(PERCOLATION):
A method of determining the ability of the soil of a property to absorb
liquids, used in construction projects and for septic systems.
PERCENTAGE LEASE:
Lease on property, the rental for which is determined by amount of
business done by the lessee, usually a percentage of gross receipts from the
business with provision for a minimum rental.
PERFORMANCE:
Meeting one's obligations under a contract or agreement.
PERFORMANCE BOND:
A written promise from an insurance company, stating that if a given
person does not complete work required under a contract, the insurer will pay
someone else to complete the work or pay damages.
PERIODIC PAYMENT
CAP:
See PAYMENT CAP.
PERIODIC RATE CAP:
See RATE CAP.
PERIODIC TENANCY:
A leasehold estate continuing from period-to-period until the landlord or
the tenant gives notice.
PERMANENT
LOAN/MORTGAGE:
A long-term mortgage, often registered after construction is complete and
the property is occupied. Also known as "end loan."
PERMIT:
The government body's written permission to do something which is
regulated by that body.
PERPETUITY:
Endlessness. Forever. Many jurisdictions have laws against tying up a
title to a property in perpetuity.
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 FINANCE SITES:
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PERSONAL PROPERTY:
Any property which is not real property.
PERSONAL RESIDENCE:
A person's home, used to establish their place for voting, taxation and
other civic issues.
PERSONALTY:
See Personal Property.
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PHYSICAL DETERIORATION:
Impairment of condition. Loss in value brought about by wear and tear,
disintegration, use and actions of the elements.
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 LOT. A piece of land connected to a
street by a long, narrow strip of land.
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 who brings a court suit.
PLANNED DEVELOPMENT PROJECT:
A type of subdivision similar to a standard subdivision except there is
an area owned in common by all owners of the subdivision.
PLANNED UNIT
DEVELOPMENT (PUD):
A housing development where a homeowner's association administers common
property owned and shared by all dwelling owners in the project. Dwellings are
often clustered to allow for more common space and special zoning is required
for this kind of development.
PLANNING COMMISSION:
An agency of the city or county appointed to study and recommend steps
for orderly growth of the community.
PLAT:
A map or plan of parcels of land.
PLAT BOOK:
A public record of plans, street maps, etc.
PLEDGE:
The depositing of personal property by a debtor with a creditor as
security for a debt or obligation.
PLEDGED ACCOUNT
MORTGAGE (PAM):
The payment of funds into a pledged account to be used to reduce mortgage
payments at a later date.
PLOT PLAN:
A survey-like diagram of a property showing current or planned
improvements and uses of the land.
PLOTTAGE:
The act of acquiring a number of smaller, adjacent parcels to create one
larger, more useful plot of land.
PLOTTAGE INCREMENT:
The appreciation in unit value created by joining similar ownerships into
one large single ownership.
POCKET CARD:
Identification required by most state's licensing commissions for real
estate salespersons and brokers.
POINTS:
Prepaid interest demanded by lender when loan is negotiated. A premium
for the privilege of borrowing at the stated interest rate.
POLICE POWER:
The right of the state to enact laws and enforce them for the order,
safety, health, morals and general welfare of the public.
POOL:
1. Gather into a group for greater effectiveness.
2. An artificial body of water for recreational swimming.
POSSESSION:
The state of occupying, controlling, using property to the exclusion of
all others, exhibiting one's right or title to property.
POTENTIAL GROSS
INCOME:
The amount of money that a property will generate if it is fully utilized
with no gaps, vacancies or other interruptions in income.
POWER OF ATTORNEY:
An instrument authorizing a person to act as the agent of the person
granting it.
POWER OF SALE:
A right given to the trustee to sell the property under a deed of trust
if the borrower defaults. A mortgage can also contain a power of sale clause.
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.
PREFABRICATED:
Descriptive term for a building that is put together on site from
components (walls, floors, roof, etc.) built off-site (in a factory, for
example).
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.
PREMISES:
A descriptive term for the land, building or parts thereof involved in a
particular transaction.
PREMIUM:
1. The periodic payment on a policy of insurance.
2. The value of a debt instrument in excess of it face value.
3. Of highest quality.
PREPAID EXPENSES:
Payments made on account of costs and disbursements that are not yet
incurred, may be placed in an escrow account.
PREPAID INTEREST:
Charges for interest that are paid in advance of their accrual (i.e.
point charges, etc.).
PREPAYMENT:
Provision can be made for the loan payments to be larger than those
specified in the note. The controlling language is usually "$X a month or more".
If the payments state a definite amount, then one must look to the prepayment
privilege in the trust deed.
PREPAYMENT CLAUSE:
A term in a mortgage that establishes the rules regarding extra payments
toward principal.
PREPAYMENT PENALTY:
Penalty for the payment of a mortgage or trust deed note before it
actually becomes due.
PREPAYMENT
PRIVILEGE:
The right of the borrower to pay out all or part of the outstanding
principal before it comes due.
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:
The securing of an easement on property by using it under certain
conditions for a given period of time.
PRESCRIPTIVE
EASEMENT:
A legally enforceable right to make use of all or part of the property of
another as a result of continuous and uninterrupted use of that property for a
period of time as established by statute.
PRESUMPTION:
A rule of law that courts and judges shall draw a particular inference
from a particular fact, or from particular evidence, unless and until the truth
of such inference is disproved.
PRICE:
What an owner asks for his property or what one pays for the property.
PRICE-LEVEL-ADJUSTED
MORTGAGE:
An adjustable or variable payment loan which uses the rate of inflation
as an index.
PRIMA FACIE:
Presumptive on its face.
PRIMARY LEASE:
The main lease, under which other sub-leases exist.
PRIMARY MORTGAGE MARKET:
Place where the loan is originated.
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 amount of money borrowed or still owed on a loan, without
including interest.
2. The employer of an agent.
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 RESIDENCE:
The dwelling in which a person resides for the majority of the time.
PRINCIPAL, INTEREST,
TAXES AND INSURANCE (PITI):
The four parts of many periodic loan payments.
PRIORITY:
The order in which liens are paid when property is sold to satisfy debts.
PRIVATE MORTGAGE
INSURANCE (PMI):
A policy of insurance issued by a non-governmental entity which protects
a lender against the default of the borrower.
PRIVATE RESTRICTION:
A limitation placed on the use of the property by the seller.
PRIVITY:
Mutual relationship to the same rights of property, contractual
relationship.
PRO-FORMA STATEMENT:
Latin meaning a statement "according to form". Financial projections.
PROBATE:
A court hearing to dispose of the property of the deceased person.
PROCURING CAUSE:
That cause originating from series of events that, without break in
continuity, results in the prime object of an agent's employment producing a
final buyer.
PROFIT AND LOSS STATEMENT:
A financial document showing the profit or loss of a business during a
given period of time.
PROGRESS PAYMENTS:
Loan advances issued to a builder as construction of a building moves
forward.
PROGRESSION, PRINCIPLE OF:
The worth of a lesser valued residence tends to be enhanced by
association with many higher valued residences in the same area.
PROMISSORY NOTE:
Following a loan commitment from the lender, the borrower signs a note
promising to repay the loan under stipulated terms. The promissory note
establishes personal liability for its repayment.
PROPERTY:
Anything of which there may be ownership.
PROPERTY TAX:
Also known as "realty tax", the tax levied on ownership of property.
PROPRIETARY LEASE:
A rental agreement between a cooperative housing corporation and a share
holder allowing use of a certain unit in the premises.
PRORATE:
To apportion a divisible item among parties according to their share.
PRORATION:
To divide or prorate equally or proportionately to time of use.
PROSPECT:
1. To investigate land for valuable mineral deposits.
2. A potential buyer.
PUBLIC AUCTION:
A public meeting at which properties are sold to pay defaulted mortgages.
PUBLIC HOUSING:
Accommodation offered by the government to low income people for nominal
rents.
PUBLIC RESTRICTION:
A limitation placed on the use of property by the government, usually
zoning laws.
PUBLIC SALE:
See Public Auction.
PURCHASE AGREEMENT:
See AGREEMENT OF SALE or
Agreement of purchase and sale.
PURCHASE AND INSTALLMENT SALEBACK:
Involves purchase of the property upon completion of construction and
immediate saleback on a long-term installment contract.
PURCHASE AND LEASEBACK:
Involves the purchase of property and immediate leaseback to the seller.
PURCHASE MONEY
MORTGAGE (PMM) OR TRUST DEED:
A trust deed or mortgage given as part or all of the purchase
consideration for property.
PURCHASE OF LAND, LEASEBACK AND LEASEHOLD MORTGAGES:
An arrangement whereby land is purchased by the lender and leased back to
the developer with a mortgage negotiated on the resulting leasehold of the
income property constructed. The lender receives an annual ground rent, plus a
percentage of income from the property.
PURCHASE PRICE:
The consideration paid for the purchase of a property as set out in the
agreement.
PURCHASER: