REAL ESTATE GLOSSARY # -  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 -  Z Panic Peddling: The illegal practice of inducing panic selling in a neighborhood by making representations of the entry, or prospective entry, of members of a minority group; blockbusting. See Fair Housing. Party Wall: Wall erected on line between adjoining properties for the use of both properties. Patio Home: A single-family home that sits on a small lot, often with one outside wall of the structure sitting on the property line.  Patio homes have no common structural walls with adjoining properties, but their zero lot line wall may form part of their neighbors backyard fence/wall.  These properties often have a small back or side yard large enough for a patio or garden area.  Also known as a garden home. Payment Cap: Consumer safeguards which limit the amount monthly payments on an adjustable-rate mortgage may change. Since they do not limit the amount of interest the lender is earning, they may cause negative amortization. Per Diem Interest: Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first day of the following month.) Percentage Lease: Lease in which all or part of rental is a specified percentage of gross income from total sales made upon the premises. Personal Property: Property which is tangible, movable, and not fixed to the land. Also called chattel. Contrast with real property. Physical Deterioration: The loss of value to real property from all causes due to the action of the elements and old age. Physical deterioration can be either curable or incurable. PITI: Abbreviation for Principal, Interest, Taxes and Insurance, the components of a monthly mortgage payment. Planned Unit Development: Also known as PUD.  In a PUD, the planned unit development association owns and maintains property in a real property development project for the benefit of its members, who are owners of individual parcels of real property in the development and are members of the association because of that ownership.  The level of services and fees are similar to a condominium complex, but since each owner has title to a specific parcel of land, lenders may treat units as non-condominiums.  This allows higher LTV loans and eliminates owner occupancy percentage requirements. Plat Book: A record of recorded subdivisions of land. PMI: See  private mortgage insurance. Points (or Discount Points): Points are an up-front fee paid to the lender at the time that you get your loan.  Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000). Power of Attorney: Also known as POA.  Legal document authorizing one person to act on behalf of another. Pre-approval: The process of determining how much money a prospective homebuyer or refinancer will be eligible to borrow prior to application for a loan. A pre-approval includes a preliminary screening of a borrower's credit history. Information submitted during pre-approval is subject to verification at application. Prepaid Expenses: Taxes, insurance and assessments paid in advance of their due dates. These expenses are included at closing. Prepaid Interest: Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date. Prepayment Clause: Statement of the terms upon which the mortgagor (borrower) may pay the entire or stated amount on the mortgage principal at some time prior to the due date. Prepayment: Full or partial repayment of the principal before the contractual due date. Prepayment Penalty: Fee charged by a lender for a loan paid off in advance of the contractual due date. Pre-qualification: The process of determining how much money a prospective homebuyer will be eligible to borrow prior to application for a loan. Information submitted during pre-qualification is subject to verification at application. Primary Mortgage Market: Lenders who originate loans and makes funds available directly to the borrowers. Contrast with secondary mortgage market. Prime Rate: The interest, or discount rate charged by a commercial bank to its largest and strongest customers. Principal: The amount of debt, not counting interest, left on a loan. Principle of Conformity: An appraisal principle which holds that the maximum value is realized when a reasonable degree of homogeneity (sameness) exists in a neighborhood. Private Mortgage Insurance: Also known as PMI.  Insurance to protect the lender in case you default on your loan when the LTV is greater than 80% LTV. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home's purchase price. (Note, however, that FHA and VA loans have different insurance guidelines.) Property Taxes: Taxes that are paid yearly on real property. Pro-rate: To divide or distribute proportionally. At closing, various expenses such as taxes, insurance, interest, rents, etc. are prorated between the seller and buyer. Public Utility District: Also known as PUD.  A water district, created by a city or county, promoting development of a designated area by providing water and sewer services.  The PUD operates in the same manner as a Municipal Utility District, but is created by a local government, not a private developer. PUD: See  Planned Unit Development or  Public Utility District. Puffing: Non-factual or extravagant statements and opinions made to enhance the perceived desirability of a property. The is a fine line between legal puffing and illegal misrepresentation, and puffing is best avoided. An example of puffing would be, "This home has the best view in the city". Also known as puffery. Purchase Agreement: Contract signed by buyer and seller stating the terms and conditions under which a property will be sold. Purchase Offer: A document that lists the price, terms and conditions under which a buyer is willing to purchase a property. # -  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 -  Z