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a b c d e f g h i j k l m n o p q r s t u v w x y
Pre-approval letter
Before buying a home a buyer can obtain a pre-approval letter from a bank which provides an estimate on how much the bank will lend that person. This letter will help determine what the buyer can afford.
Principal
The principal is the amount of money borrowed to purchase a home. Paying off the principal allows a buyer to build equity in a home. Principal is combined with interest to determine the monthly mortgage payment.
Private mortgage insurance
Private mortgage insurance (PMI) is an insurance premium that the buyer pays to the lender in order to protect the lender from default on a mortgage. These insurance payments typically end once the buyer builds up 20% equity in a home.
Preliminary report
A preliminary report reveals any issues with a title that need to be dealt with by the seller in order to deliver a clear title. It gives details such as ownership history, liens, and easements. The title company gathers this report by searching existing property records at the county recorder’s office.
This report is required for a title insurance company to issue a title insurance policy. Most lenders require borrowers to purchase title insurance coverage to protect their interest in a property. It’s customary in many areas for a seller to pay for this policy, although it is a negotiable item. Also see our blog post for more details.
Proof of funds
When you make an offer, sellers will require you to submit proof of funds. If you’re buying a house with a mortgage, it shows them that you have the cash available for your down payment and closing costs. If you’re paying all cash, your proof of funds shows you actually have the money.
The following documents qualify as proof of funds:

  • Original or online bank statements with bank letterhead
  • Copy of a money market account balance with bank’s logo or letterhead
  • Certified financial statements, such as an income or cash flow statement that’s been signed off on by an accountant
  • An open equity line of credit
Package mortgage
A method of financing in which the purchase of the land also finances the purchase of certain personal property items.
Parol evidence rule
A law that states that no prior or contemporary oral or extraneously written agreement can change the terms of a contract.
Partial eviction
A case in which the landlord’s negligence deprives the tenant of the use of all or part of the premises.
Participation financing
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 division of cotenants’ interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures.
Partnership
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 general 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 by which the operation is administered by one or more general partners and funded by limited or silent partners, who are by law responsible for losses only to the extent of their investment.
Party wall easement
A wall that is located on or at a boundary line between two adjoining parcels for the use of the owners of both properties.
Payee
The party that receives payment.
Payor
The party that makes payment to another.
Percentage lease
A lease commonly used for retail property in which the rental is based on the tenant’s gross sales at the premises; often stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.
Performance bond
A binding agreement, often accompanied by surety and usually posted by one who is to perform work for another, that assures that project or undertaking will be completed as per the agreement or contract.
Periodic estate
An interest in leased property that continues from period to period – week to week, month to month, or year to year.
Permanent reference marker
Referred to as a PRM, it is a fixed object that leads the surveyor to the point of beginning (POB). In most surveys, two different PRMs are used to locate the POB.
Personal assistant
An individual working for a broker or salesperson who handles non-sales-related aspects of real estate transactions. However, if the personal assistant is licensed, then he or she can also handle the sales-related aspects of the transaction.
Personal property
Items, called chattels, that do not fit into the definition of real property; movable objects.
Physical deterioration
A reduction in utility resulting from an impairment of physical condition. For purposes of appraisal analysis, it is most common and convenient to divide physical deterioration into curable and incurable components.
Plat
A map of a town, section, or subdivision indicating the location and boundaries of individual property.
Plat book
A book containing recorded subdivisions of land.
Point
A unit of measurement used for various loan charges; one point equals one percent of the amount of the loan.
Point of beginning
The starting point of the survey situated in one corner of the parcel in a metes-and-bounds description. All metes-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning.
Police power
The government’s right to impose laws, statutes, and ordinances to protect the public health, safety, and welfare, including zoning ordinances and building codes.
Power of attorney
A written instrument authorizing a person (the attorney-in-fact) to act on behalf of the maker to the extent indicated in the instrument.
Premises
The specific section of a deed that states the names of the parties, recital of consideration, operative words of conveyance, legal property description, and appurtenance provisions.
Prepayment clause
In a mortgage, the statement of the terms on which the mortgagor may pay the entire or stated amount of the mortgage principal at some time prior to the due date.
Prepayment penalty
A charge imposed on a borrower by a lender for early payment of the loan principal to compensate the lender for interest and other charges that would otherwise be lost.
Principal
A sum lent or employed as a fund or investment, as distinguished from its income or profits. 2. The original amount (as in a loan) of the total due and payable at a certain date. 3. A main party to a transaction – the person for whom the agent works.
Principal meridian
One of 35 north and south survey lines established and defined as part of the rectangular survey system (government survey method)
Principle of conformity
The appraisal theory stating that buildings that are similar in design, construction, and age to other buildings in the area have a higher value than they would have in a neighborhood of dissimilar buildings.
Priority
The order of position or time. The priority of liens generally is determined by the chronological order in which the lien documents are recorded; tax liens (like special assessments), however, have priority, even over previously recorded liens.
Probate
The formal judicial proceeding to prove or confirm the validity of a will or proof of heirship and to settle the affairs of the deceased.
Procuring cause
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.
Property disclosure acts
State mandated seller’s property disclosure reports. These reports place the burden of defect disclosure on the seller. Agents are not required to discover property defects but are required to disclose them if they are known.
Property management
The operation of the property of another for compensation. Includes marketing space; advertising and rental activities; collecting, recording, and remitting rents; maintaining the property; tenant relations; hiring employees; keeping proper accounts; and rendering periodic reports to the owner.
Property tax
Taxes levied by the government against either real or personal property. The right to tax real property in the United States rests exclusively with the states, not with the federal government. Proration The proportional division or distribution of expenses of property ownership between two or more parties. Closing statement prorations generally include taxes, rents, insurance, interest charges, and assessments.
Prospectus
A printed advertisement usually in pamphlet form, presenting a new development, subdivision, business venture, or stock issue.
Public utility easement
A right granted by a property owner to a public utility company to erect and maintain poles, wires, and conduits on, across, or under her or his land for telephone, electric power, gas, water, or sewer installation.
Purchase-money mortgage
A note secured by a mortgage or deed of trust given by a buyer, as a mortgagor, to a seller, as a mortgagee, as part of the purchase price of the real estate. Real estate terms that begin with Q
Piti
Principal, interest, taxes, and insurance.
Pre-approval
A statement from a lender that you possess enough means to secure a loan. It is not a commitment to lend you money.