Real Estate Terms

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• Parcel   An officially described piece of land.
• Partition   An interior wall.
• Partnership   There are several partnership options for unmarried individuals to buy a piece of property, such as live-in partnerships (in which both buyers share the residence) or a shared-equity partnership (in which one buyer lives in the home and the other is an investor in the property).
• Passive loss   A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate.
• Passive solar system   A system that supplies solar heat without the use of electric fans or pumps.
• Patent defect   A visible deficiency in a piece of property, such as a cracked basement slab or a sagging porch.
• Payment cap   A legal limit on the amount a monthly payment can increase on an adjustable-rate mortgage.
• Percolation test   A test used to determine the ability of soil to accommodate a septic system.
• Per-diem interest   Interest charged or accrued daily.
• Panel   A section or division of a wall, ceiling or a flat piece of building material that forms the part of the surface of a wall, door or cabinet.
• Paneling   Strips of wood or wood material applied as a finish to a wall.
• Parking strip   The strip of grass between the sidewalk and the street in front of a house.
• Partition   Any kind of structure dividing one room or space from another.
• Patio   An interior courtyard or a paved backyard area.
• Perennial   Any plant that produces leaves, flowers and seeds from year to year, such as irises or peonies.
• Punch list   Buyers compile a punch list during the final walk-through detailing items to be fixed before closing.
• Purchase agreement   A document which details the purchase price and conditions of the transaction.
• Purchase-money mortgage   A mortgage that a borrower obtains to acquire a property.
• Pergola   An arbor with an open roof of rafters supported by posts or columns.
• Personal property   Any moveable property in a house such as furniture or appliances.
• Pest-control inspection   A common pest-control inspection is a termite inspection, which is required in some states, such as California.
• Pier   A rectangular masonry support column.
• PITI (Principal, Interest, Taxes, Insurance)   When a buyer applies for a loan, the lender will calculate the principal, interest, taxes and insurance. The figure is designed to represent the borrower’s actual monthly mortgage-related expenses.
• Planned communities   The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals.
• Planned-unit development   Residents own the home and the land, and share the use and financial responsibility for common areas.
• Plaster   A labor-intensive and more costly wall finish.
• Pocket door   A sliding door that retreats into the wall when opened.
• Point   Fees charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount.
• Porch   The structure can be a simple covered entrance to a home or a fully enclosed room on the outside of a residence.
• Porte cochere   A porch-like roof extending over a driveway.
• Portfolio lender   A lender who makes loans with its own funds and keeps the loans on the company’s books–in other words, inside the institution’s “portfolio”–rather than selling the loan on the secondary market.
• Portico   A porch supported by a row of columns.
• Possession   When a buyer signs the papers and receives the keys to the house, the buyer officially takes possession.
• Power of attorney   A document that authorizes an individual to act on behalf of someone else.
• Pre-approval letter   A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain.
• Prepaid expenses   The costs for taxes, insurance and assessments paid before the due date.
• Prepaid interest   Interest paid before it is due. For example, at the close of a real estate transaction borrowers usually pay for the interest on their loan that falls between the closing period and the first monthly payment.
• Prepayment penalty   Lenders can impose a penalty on a borrower who pays a loan off before its expected end date.
• Prequalification   Many lenders will prequalify a borrower who is shopping for a loan by completing a preliminary assessment of the buyer’s ability to pay for a home.
• Pre-sold home   Homes that are sold before they are built.
• Pressure relief valve   A safety vent that relieves excess pressure in a water heater.
• Price range   The range of how much a buyer is willing to pay for a home.
• Primer   The initial coat of paint that is applied before the final topcoat.
• Principal   The amount of money that the borrower owes on a mortgage.
• Principle of conformity   The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.
• Principle of progression   An appraisal term which states that real estate of lower value is enhanced by the proximity of higher-end properties.
• Principle of regression   An appraisal term which states that the value of higher-end real estate can be brought down by the proximity of too many lower-end properties.
• Privacy fence   A structure erected between two pieces of property.
• Private mortgage insurance (PMI)   A special type of loan insurance that many lenders require borrowers to purchase if the borrower’s down payment is less than 20 percent of the home’s purchase price.
• Probate sale   A real estate sale triggered by the death of the owner, with proceeds to be divided among heirs or creditors.
• Production home   Homes that are mass-produced by one builder in a project.
• Programming   A written summation by an architect of a project’s design objectives, constraints and criteria.
• Project budget   A fiscal outline that includes the construction budget and all costs for land, furniture, equipment, financing, professional services, contingencies and owner-furnished goods and services.
• Property line   The official dividing line between properties.
• Property report   A disclosure issued by the state when a time-share project is located or sold.
• Property tax   Property taxes are calculated at about 1.5 percent of the current market value.
• Property tax deduction   The U.S. tax code allows homeowners to deduct the amount they have paid in property taxes.
• Property value   The value of a piece of property is based on the price a buyer will pay at a certain time.
• Proration   Agreed-upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing.