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 in which all or part of the rental is a specified percentage of gross income from total sales made upon the premises.  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.

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".

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 POLE 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 record or recorded subdivisions of land.  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 or PRELEASED:
Refers to space in a proposed building that has been leased before the start of construction or in advance of the issuance of a Certificate of Occupancy.  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 interest or discount rate charged by a commercial bank to its largest and strongest customers.  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:
Taxes that are paid yearly on real property. Property taxes are ad valorem, based on the assessed value of the real property.  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 divide or distribute proportionally. At closing, various expenses such as taxes insurance, interest, rents etc are prorated between the seller and the buyer.  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:
The person who buys a property.