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Properties listed for sale on the Internet. Open house A marketing tool in which a listing agent opens a house for view. Open listing A property given to a number of brokers to market at the same time. Open space Undeveloped land or common areas in a planned community reserved for parks, walking paths or other natural uses. Option A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy. Oral agreement Contractual arrangements that are not in writing and are usually not legally binding. Original principal balance The amount of principal owed on a loan before a borrower makes any payments Origination fee A fee charged by most lenders--also called points--for processing a loan. A point is 1 percent of the total loan amount. Overhang Protruding structural feature Owner financing A transaction in which the seller of a property agrees to finance all or part of the purchase. 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 Legal limit on the amount a monthly payment can increase on an adjustable-rate mortgage Percolation test Test used to determine the ability of soil to accommodate a septic system. Per-diem interest Interest charged or accrued daily. 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. 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 Most 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. Points 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 (POA) 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 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 The official dividing line between properties. 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. 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. Qualifying ratios Lenders compute qualifying ratios to determine how much a potential buyer can borrow. Queen Anne style A Victorian-era style that originated in San Francisco. Quit-claim deed A document that releases a party from any interest in a piece of real estate. |
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