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Par - (1) Average or normal. (2) In real estate lending, a loan having no discount points. (3) In investing, face value, as with negotiable bonds.

Partial Payment - Payment that is not sufficient to cover the full, scheduled installment payment on a mortgage loan.

Partition - Division of a parcel of land into two or three lots within a calendar year. See also, major partition and minor partition.

Payment Change Date - Date when a new installment payment amount takes effect on an adjustable-rate mortgage (ARM) or graduated-payment mortgage. In an ARM, this date generally occurs in the month following the date of the interest rate adjustment.

Payment-to-Income Ratio - See debt-to-income ratio.

Perc Test - Short for "percolation test." See soil feasibility study.

Percentage Lease - Real estate lease agreement where rent is set as a minimum amount plus a percentage of a business's gross or net sales; typically used for retail outlets in shopping centers or malls.

Performance Bond - See bond.

Periodic Payment Cap - Limit on the amount that payments can increase or decrease during any one adjustment period of an adjustable-rate loan.

Periodic Rate Cap - Limit on the amount that the interest rate of an adjustable-rate mortgage can change during any one adjustment period, regardless of how much the loan's index changes.

Perk Test - Variation of "perc test," short for "percolation test." See soil feasibility study.

Permit - Written authorization from a county, city or state government to construct or install an improvement on real estate. Permitting is used throughout Oregon, but rules regarding types of permits required, how to apply for permits and the cost of permits vary from one municipality to another. Municipalities generally incorporate state and national codes into their local ordinances, but may make local rules more stringent that these other codes. Permits allow county assessor's to be kept up-to-date on the value of individual properties so that the most current data is available for billing property taxes. Permits also create minimum standards to help maintain property values and to help protect the health and safety of homeowners. The most commonly used permits are the "building permit," "electrical permit," "plumbing permit" and "mechanical permit," but other kinds of permits may be required for a specific project depending on the location of the project and the work being done. LOCAL BUILDING OR PLANNING AGENCIES can provide specific information.

Personal Property - Property or belongings that are not affixed to a given location, or are movable; opposite of "real property." Sometimes called "chattel."

Personal Representative - See executor.

Pest & Dry Rot Inspection - Examination of a building, especially a residence, for evidence of vermin, wood-destroying pests and wood rot; not as extensive as a "whole house inspection." Sometimes called a "P and D." This type of inspection is often required for transactions involving government financing, such as FHA and VA loans. Also sometimes required for conventional loans.

PITI - Principal, Interest, Taxes and Insurance; refers to the composition of an installment payment for a real estate loan, with taxes being "property taxes," and insurance being "casualty insurance."

PITI Reserves - See reserves.

Planned Unit Development - Building project where owners hold title to individual buildings, and the land upon which they sit, but a homeowner's association holds title to common elements, such as parks, walkways, parking areas, and so on. Dwellings may be single-family or multi-family, but most commonly consist of a mix of single-family detached homes and plexes. Also referred to as a PUD. Contrast with condominium.

Plat Map - Official, recorded survey map showing the division of a parcel of land into lots, as in a subdivision or partition. Also called a plat. Contrast with tax map.

Plex - Shortened or slang term for any building consisting of two to four attached residential units (i.e., shortened from "duplex," "triplex," "fourplex").

Plot Plan - Diagram showing a parcel of land in relation to its improvements, especially proposed improvements in relation to existing improvements. Not the same as a plat map or plat.

Plumbing Permit - Written authorization from a city or county to permanently install plumbing pipe or fixtures, or to alter or renovate existing installations. All municipalities in Oregon require permits for plumbing work. The fee for a plumbing permit is usually considerably less than that for a building permit, and generally depends on the number of rooms plumbed and/or the number of fixtures or length of pipe installed. See also, permit.

PMI - See private mortgage insurance.

Point - Short for "percentage point"; one point equals one percent of a given loan amount. Points may be charged for reducing, or "buying down" an interest rate, or as a fee for originating a loan. See also, discount point and loan origination fee.

Power-of-Attorney - Legal document authorizing one person to act on another's behalf. Form and content of a power-of-attorney are specified by law. Authority granted under a power-of-attorney can be sweeping or general, or can be limited, such as to certain acts and/or periods of time. See also, attorney-in-fact.

Pre-Approval Letter - Written indication from a real estate lender, prior to selection of a property by the buyer, as to how much money a buyer can borrow and the purchase price allowed for a property. Pre-approval includes a screening of the borrower's credit history, and may include verification of information submitted by the buyer.

Pre-Arranged Refinancing Agreement - Formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms (such as a reduction in costs) for a future refinancing of a mortgage as an inducement for the borrower to enter into the original mortgage transaction

Pre-Foreclosure Sale - Procedure in which a lender or noteholder allows a borrower to avoid foreclosure by selling the property covered by the loan at an amount less than the amount owed. Also called a "short sale."

Pre-Payment - (1) Any amount paid before the due date in order to reduce the principal balance of a loan. (2) Full payment of a mortgage resulting from a sale of the property, from foreclosure or from an owner's decision to retire the debt before the loan is fully amortized.

Pre-Payment Penalty - Fee charged, or allowed to be charged, to a borrower who pays off a loan early, including paying only a portion of the loan early. (Prepayment penalties were once common, but are rare today. However, some loans still carry prepayment penalties, so borrowers are cautioned to fully review their loan expectations with their loan officer or broker and to carefully read all loan documents before signing.)

Pre-Qualification Letter - Similar to a pre-approval letter, but usually does not include a screening of the borrower's credit history, nor verification of any information submitted by the borrower. A pre-qualification letter is a statement of how much money a borrower is expected to be eligible to borrow, based on information submitted by the borrower and, sometimes, an abbreviated credit history from a single credit reporting agency.

Pre-Tax Income - Income before taxes are deducted.

Preliminary Title Report - Report from a title company showing the condition of title to real property, based on a search of public records, prior to completion of a sale of the property. May disclose a variety of defects or potential defects, such as mechanic's liens, tax liens, child support liens, adverse judgments against a buyer or seller, etc.

Prepaids - Slang for "prepaid expenses," which are expenses of a sale transaction that are required to be collected before they come due. Prepaids often include insurance reserves, tax reserves and interest that is scheduled to accrue from the closing date till the time of the first loan payment.

Prescriptive Easement - An easement granted by a court according to specific steps that are spelled out, or prescribed, in statute. Similar to ownership created by adverse possession, an easement created by prescription must involve open and apparent use of land without permission for a continuous period prescribed by law.

Prime Rate - Interest rate banks charge their best customers. An amalgamation of "prime rates" is compiled and published by certain news organizations, and a variety of lenders use a published prime rate as an index to which rates for other credit, such as revolving credit cards and adjustable rate mortgages, are tied. The Wall Street Journal's prime rate is probably the most commonly used prime rate index. The Journal surveys the nation's 30 largest banks and changes its published prime rate whenever about three-quarters of them have changed their prime rates. Published prime rates are very sensitive to changes in fiscal policy, and move quickly following interest rate changes by the Federal Reserve System.

Principal - (1) Amount borrowed or remaining unpaid; the part of a regular installment payment that reduces the balance of a loan. The principal amount of a mortgage does not include interest or any other charges. (2) Party who gives authority to an agent or attorney to act on the party's behalf. The principals in a real estate transaction are the buyer and the seller.

Principal Balance - See principal (definition 1).

Principal Broker - In states like Oregon, where all real estate salespeople are licensed in a single category (broker), "principal broker" is often the term used to refer to brokers who have completed specialized training to be allowed to supervise other brokers, such as all of the brokers in a single firm or a broker who works as a licensed assistant.

Private Mortgage Insurance - Mortgage insurance that is not issued by a government agency. See mortgage insurance.

Probate - Court procedure to prove the validity of a will and confirm or appoint a personal representative to dispose of the assets, or estate, of a deceased person.

Probate Court - Legal court having authority over estates.

Processing Fee - Amount charged by a lender or mortgage broker to pay costs associated with processing of paperwork involved in originating a real estate loan; sometimes called a "document preparation fee." See also, loan origination fee.

Promissory Note - See note.

Property Management - Branch of real estate business relating to the representation of owners of income-producing real estate—including single-family homes, plexes and apartment buildings—in leasing and maintenance of the property.

Property Tax - Fee or charge imposed by government based on the value of property. The property may be real or personal.

Prorate - (1) To divide or assess in proportion to something. (2) A dividing of an expense of real estate in proportion to the time of closing of a sale or to a party's time of use. The parties in a real estate transaction often may be assessed prorated amounts for real property taxes, homeowners insurance or certain utilities.

Public Auction - Part of the real estate foreclosure process, a public auction is a meeting in an announced public location, usually a county courthouse, to sell real property belonging to a debtor who has defaulted on his mortgage. Sometimes called a "sheriff's sale."

Public Land - Land belonging to the federal government and not reserved for government use, but subject to sale, lease or other disposition.

Public Property - Generic term for property owned by a government agency, especially where access for the general public is not restricted. Not the same as public land.

Purchase Agreement - Sometimes called a "purchase and sale agreement." See earnest money agreement.

Purchase Money Mortgage - Any note or mortgage for the purchase of real estate where the credit is extended by the seller of the property.