Dictionary of Terms - P

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P

P & L: Profit and Loss statement. See income statement.
Package Loan: A real estate loan used to finance the purchase of both real property and personal property such as in the purchase of a new home that includes carpeting window covering sand major appliances.
Paired Sales Analysis: A method of estimating the amount of adjustment for the presence or absence of any feature by pairing the sales prices of otherwise identical properties with and without the feature in question. A sufficient number of sales must be found to allow the appraiser to isolate the effect on value of the pertinent factor (also calledpaired data set analysis and matched pairs analysis).
Parameter: A single number or attribute of the individual things, persons or other entities in a population.
Parol Evidence: Oral or verbal evidence.
Parole Evidence Rule: A rule of evidence providing that a written agreement is the final expression of the agreement of the parties not to be varied or contradicted by prior or contemporaneous oral or written negotiations.
Parquet Floor: A wood floor patterned in squares.
Partial Interest: Any property interest that is less than full fee simple ownership of the entire property.
Participation Mortgage: A mortgage loan wherein the lender has a partial equity interest in the property or receives a portion of the income from the property.
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.
Party Wall: Wall erected on the property line between adjoining properties for the use of both properties.
Patent: A grant or franchise of land from the United States government.
Payment Cap: A limit on the amount a monthly payment can increase on an adjustable rate mortgage.
Payment Change Date: The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the adjustment date.
Payoff Statement: See reduction certificate.
Percent Good: The percentage of value retained in a property rather than value lost as expressed by depreciation.
Percentage Lease: A lease commonly used for commercial property that provides for a rental based on the tenant's gross sales at the premises. It generally stipulates a base monthiy rental, plus a percentage of any gross sales exceeding a certain amount.
Percolation Test: A test of the soil to determine if it will absorb and drain water adequately to use a septic system for sewage disposal.
Per-diem Interest: Interest charged or accrued daily.
Periodic Estate (tenancy): See estate from period to period.
Periodic Payment Cap: A limit on the amount that payments can increase or decrease during any single adjustment period.
Periodic Rate Cap: A limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.
Personal Property: Generally, all property which is not real estate. Usually it is property which is movable rather than permanently affixed to or part of the real estate. For example, a refrigerator is not typically considered attached to real estate. However, a light fixture, plumbing fixture, carpet or vinyl tile would typically be considered attach to the real estate. (See also Classification of Property).
Physical Curable Deterioration: Physical deterioration which the prudent buyer would anticipate correcting upon purchase of the property. The cost of effecting the correction or cure would be no more than the anticipated addition to utility, and hence ultimately to value, associated with the cure. This is frequently termed "deferred maintenance" or rehabilitation, because these terms reflect the type of activity typically associated with correcting the condition.
Physical Deterioration: Wear and tear to the physical components of an improvement cause by weather and other environmental influences.
Physical Deterioration-curable: Loss of value due to neglected repairs or maintenance that are economically feasible and, if performed, would result in an increase in appraised value equal to or exceeding their cost.
Physical Deterioration-incurable: Loss of value due to neglected repairs or maintenance of short-lived or long-lived building components that would not contribute comparable value to a building if performed.
Physical Life: The length of time a structure can be considered habitable, without regard to its economic use.
Physically Possible: One of four criteria in highest and best use analysis; for a use to be the highest and best use, the size, shape and terrain of the property must be able to accommodate the use.
Piers: The supporting legs of a foundation or floor of a structure. Piers may be above ground if the structure has a crawl space, or placed under a footing for support if the soil will not support a typical footing.
PIN: Parcel Identification Number. This number is what is used to identify a property on a tax map, tax rolls and a tax bill. It is also found on the assessor's property record card.
PITI: Principal, interest, taxes, and insurance
Planned Unit Development (PUD): A subdivision consisting of individually owned residential and/or commercial parcels or lots as well as areas owned in common.
Plat Map: A map of a town section or subdivision indicating the location and boundaries of individual properties.
Plat: A map representing a parcel of land subdivided into lots, showing streets and other details or a single site.
Pledged Account Mortgage (PAM): A type of mortgage that is tied to a pledged savings account and this fund (plus earned interest) is gradually used to reduce mortgage payments.
Plottage Value: The subsequent increase in the unit value of a group of adjacent properties when they are combined into one property in a process called assemblage.
Plottage: The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one larger lot.
Point Of Beginning (POB): In a metes-and-bounds legal description the starting point of the survey situated in one corner of the parcel; all metes-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning.
Point Of Beginning: Place at which a legal description of land using the metes and bounds method starts.
Point: Fees charged by a lender to provide a lower interest rate. One point equals one percent (1%) of the loan amount. Also referred to as a discount point.
Police Power: The right of the government to impose laws, statutes and ordinances to protect the public health, safety and welfare. Includes zoning ordinances and building codes.
Population: All data pertaining to an item of a particular physical or mathematical classification. A large number of items with a similar characteristic or group of characteristics.
Possession: The right of the owner to occupy property. When property is occupied by a tenant, the owner has constructive possession by right of title.
Possessory Interest: The right to possession and use of property normally used to distinguish the interest of a lessee in government-owned property from the interest of a lessee in privately-owned land property.
Potential Gross Income: A property's total potential income from all sources during a specified period of time.
Power Of Attorney: A written instrument authorizing a person the attorney-in-fact to act as agent for another person to the extent indicated in the instrument.
Pre-approval Letter: A letter from a lender that states the amount of money a potential buyer can obtain.
Pre-approval: The completion of a loan application, confirmation of the amount to be borrowed and a thorough assessment made by a lender of a potential borrower's ability to pay it..
Pre-Engineered Building: A building constructed of pre-designed, manufactured, and assembled units such as wall, framing, floor and roof panels erected at the construction site.
Prepaid Expenses: Expenses including taxes, insurance, and assessments paid before the due date.
Prepaid Fees: Funds collected by the lender from the borrower to pay certain recurring items in advance, including interest, property taxes, hazard insurance and, if applicable, private mortgage insurance (PMI).
Prepaid Interest: Interest paid before it is due.
Prepaid Items Of Expense: Expense items, such as insurance premiums and tax reserves, that have been paid in advance of the time that the expense is incurred. Prepaid expenses typically are prorated and credited to the seller in the preparation of a closing statement.
Prepaid Items: On a closing statement items that have been paid in advance by the seller such as insurance premiums and some real estate taxes for which he or she must be reimbursed by the buyer.
Prepayment Penalty: A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for interest and other charges that would otherwise be lost.
Prepayment Penalty: A penalty that a lender may impose on a borrower who pays a loan off before its expected end date.
Prequalification: A lender's preliminary assessment of a buyer's ability to pay off a loan and an estimate of how much the buyer may borrow.
Prescriptive Easement: The right to use another's property acquired by long, continuous use, which must have been continuous, open, exclusive and for a period of time set by state statute.
Price: The amount of money paid or asked in exchange for an item. In real estate appraisal, price and value may be different.
Primary Data: Data collected by an appraiser.
Primary Mortgage Market: The mortgage market in which loans are originated and consisting of lenders such as commercial banks savings and loan association sand mutual savings banks.
Principal Meridian: One of 35 north and south survey lines established and defined as part of the U.S. government or rectangular survey system.
Principal Paid Over Life Of Loan: The sum of scheduled principal payments calculated by the lender to equal the face amount of the loan.
Principal: (1) A sum lent or employed as a fund or investment-as distinguished from its income or profits; (2) the original amount (as of a loan) of the total due and payable at a certain date; or (3) a party to a transaction-as distinguished from an agent.
Principle Of Conformity: The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to other houses in the neighborhood.
Principle Of Contribution: A valuation principle which states that the value of an agent of production or of a component part of a property depends upon how much it contributes to the value of the whole. The Principle of Contribution is sometimes known as the Principle of Marginal Productivity.
Principle Of Increasing: A valuation principle which states that the value of an agent of and Decreasing Returns production or of a component part of a property depends upon how much it contributes to the value of the whole; or how much its absence detracts from the value of the whole. The Principle of Contribution is sometimes known as the Principle of Marginal Productivity.
Principle Of Substitution: A prudent purchaser would pay no more for property than the cost of acquiring an equally desirable substitute on the open market. The principle of Substitution assumes that the purchaser will consider the alternatives, will act rationally or prudently on the basis of the available information and that time is not a significant factor.
Principle Of Supply And Demand: A valuation principle which states that market value is determined by the interaction of the forces of supply and demand in the appropriate market as of the date of the appraisal.
Prior Appropriation: A concept of water ownership in which the landowner's right to use available water is based on a government-administered permit system.
Priority: The order of position or time. The priority of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens however have priority even over previously recorded liens.
Private Mortgage Insurance (PMI): A form of insurance required by a lender when the borrower's down payment or home equity percentage is less than 20 percent of the home value.
Probate: A legal process by which a court determines who will inherit a decedent's property and what the estate's assets are.
Processing Fee: A fee charged by some lenders for gathering information necessary to process the loan.
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.
Profit-and-loss Statement: (See operating st atement.)
Progression: An appraisal principle that states that between dissimilar properties the value of the lesser quality property is favorably affected by the presence of the better quality property.
Promissory Note: A financing instrument that states the terms of the underlying obligation is signed by its maker and is negotiable (transferable to a third party).
Property Manager: Someone who manages real estate for another person for compensation. Duties include collecting rents, maintaining the property and keeping up all accounting.
Property Record Card: A document used by the assessor to record property information. Required by statute or regulation, this is a public record.
Property Reports: The mandatory federal and state documents compiled by sub dividers and developers to provide potential purchasers with facts about a property prior to their purchase.
Property Residual Technique: A method of capitalization using the net income remaining to the property as a whole.
Property Tax Consultant: One who represents property owners in property tax matters, generally regarding market value disputes. Other services performed by tax consultants include renditions of business personal property, exemptions and combining or separating tax accounts.
Property Tax Valuation Date: January 1 is the relevant date for valuing property for property tax purposes in most circumstances. Especially meaningful if a property suffers either physical or economic damage just before or just after the property tax valuation date. For example, a
Property Tax: The tax calculated by multiplying the appraised value times the tax rate for a tax entity. The appraised value may be different from the market value if the item is partially or totally exempt or subject to a homestead cap.
Proprietary Lease: A lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder's right as a tenant to an individual apartment.
Prorations: Expenses either prepaid or paid in arrears that are divided or distributed between buyer and seller at the closing.
Protected Class: Any group of people designated as such by the Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped and others.
Protest Deadline: May 31 is the typical deadline for filing a property tax appeal in Texas. However, the deadline is technically the later of May 31 or 30 days after the appraisal district mails a notice of appraised value. (It is 30 days after the date the appraisal districts mails the notice of appraised value. It is not 30 days after the property owner receives the notice.) If the property tax protest deadline falls upon a holiday or weekend, the deadline is extended until the following workday. Property tax protests are considered timely filed if mailed by first-class mail deposited in the mail on the deadline day.
Protest: Property owner's right to appeal or object to an action of the chief appraiser, appraisal district or appraisal review board that applies to or adversely affects the property owner. Most property tax protests relate to the market value determined by the appraisal district. Other protests are filed regarding unequal appraisal, exemptions, agricultural valuation and a variety of other issues. Property owners can appeal annually on market value and unequal appraisal regardless of whether the appraisal district changes the market value.
Puffing: Exaggerated or superlative comments or opinions.
Pur Autre Vie: "For the life of another." A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee.
Purchase-money Mortgage (PMM): A mortgage obtained by a borrower as partial payment for a property.
Purpose Of The Appraisal: The type of value being sought.
Pyramiding: The process of acquiring additional properties by refinancing properties already owned and investing the loan proceeds in additional properties.





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