MISSOURI RE General Glossary Definitions P-S
Terms
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- Package Mortgage
- A mortgage, used in the purchase of new residential property which, in addition to real property, covers certain personal property items and equipment. (Washer, dryer, drapes, refrigerator, stove)
- Parol Evidence Rule
- A rule of evidence designed to achieve a degree of certainty in a transaction and to prevent fraudulent and perjured claims. Although the word parol means oral, in this context, it refers to evidence that is extrinsic to, or outside and separate from, the writing. (Must be in writing to be enforceable in court)
- Partial Release Clause
- A part of a mortgage, which provides for the release of part of the property (used as security in the loan) upon payment of a certain amount of the mortgage. Blanket mortgage.
- Partially Amortized Mortgage
- A method of loan repayment in which the balance of the outstanding loan is not zero at maturity, and thus a balloon payment is due at that time.
- Participation Mortgage
- An agreement between a mortgagee and a mortgagor which provides the lender with a certain percentage of ownership in the project once the lender makes the loan.
- Partition suit
- The dividing of real estate held by two or more people which results in each of the parties holding individual or severalty ownership. (Tenants in common and joint tenants)
- Percentage Lease
- The lessor receives a percentage of the gross sales or net profits as the rental payment for the lease of the property.
- Percolation
- Ability of soil to absorb water; used for septic systems.
- Periodic Tenancy
- A lease, which has the original terms automatically renewed for successive periods, until proper notice to terminate is given by either the landlord or tenant. Month to month rental.
- Personal Property
- Movables, which are not annexed to or part of, the land; also referred to as chattels.
- Physical Deterioration
- The loss in value due to wear and tear of the structure.
- PITI
- An abbreviation which means "Principal, Interest, Taxes and Insurance." In residential financing, it is common for the monthly mortgage to include these four payments.
- Planned Unit Development (PUD)
- A type of exception, or special use, permitted under many modern zoning ordinances, allowing a mixture of different land uses or densities.
- Planning Commission
- A local government agency which determines plans for the physical growth of a community.
- Plat
- A map showing the division of land into lots and blocks.
- Plottage
- Occurs when two or more sites are combined, with the result that the value of the assembled site is worth more than the value of the sum of each of the individual sites.
- PMI
- Private Mortgage Insurance.
- Points
- 1% of loan.
- Police Power
- The inherent power of the state to regulate in order to promote public health, safety, morality or welfare. For example, zoning and building codes.
- Possession
- The physical control of real property.
- Possibility of Reverter
- The right retained when a fee simple determinable is granted.
- Prepayment Penalty
- The charge levied by the lender for paying off a mortgage prior to its maturity date.
- Prescription
- A means of acquiring title to property through open and continuous use.
- Prescriptive Easement
- An easement obtained by the open, notorious, hostile and continuous use of the property belonging to someone else for a statutory period of time.(POACH)
- Price
- An amount usually expressed in terms of money paid for property.
- Prime Rate
- The interest rate charged to a lender's AAA customer. This is normally the base from which other interest rates are derived.
- Principal
- (1) one who employs an agent, (2) money or capital.
- Private Mortgage Insurance
- A private insurance program which insures the lender for loan amounts in excess of 80% of value.
- Pro-rata
- To divide or distribute proportionately.
- Probate
- The process of proving a will before a duly authorized court or person.
- Procuring Cause
- The actions by a broker which result in the owner being able to make a sale.
- Promissory Note
- The primary legal financing obligation in which the borrower promises to pay back a sum of money borrowed. (A contract)
- Proration
- Dividing property taxes, hazard insurance and other expenses or income between the buyer and seller, as of date of settlement.
- Puffing
- To exaggerate - for example, to refer to a house as having "the most gorgeous view in the city."
- Purchase and Leaseback
- The simultaneous buying of property and leasing it back to the seller.
- Purchase Money Mortgage
- A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
- Quiet Enjoyment
- The right of an owner or lessee legally in possession of property, to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.
- Quiet Title
- A court action to remove a cloud on the title.
- Quitclaim Deed
- Only conveys what present interest a person may have in a particular property but makes no representations or warranties of title.
- Rate of Return
- A percentage relationship between the investment price or equity invested and the composite returns.
- Re-entry
- The right of the landlord to repossess leased property following the violation of the terms in the lease.
- Ready, Willing and Able
- Someone fully qualified to enter into a transaction.
- Real Estate
- Land and all man-made improvements both on and to the land, plus all tangible interest in the real property. Surface, subsurface and air rights.
- Real Estate Commission
- The state regulatory body whose duty it is to carry out the real estate license laws in a particular state.
- Real Estate Investment Trust (REIT)
- A method of pooling investment money using the trust form of ownership if certain tax requirements are met. One advantage of the REIT is the avoidance of corporate tax (thus no double taxation) + many more.
- Real Estate Market
- The mechanism by which rights and interests in real estate are sold, prices set, supply adjusted to demand, space allocated among competing alternate uses, and land-use patterns set.
- Real Estate Settlement Procedures Act (RESPA)
- A law which covers most mortgage loans made for one to four-unit residential property. It requires the lender to provide the loan applicant with pertinent information so that the borrower can make informed decisions as to which lender will be used to finance the purchase.
- Real Property
- Refers to land and improvements both on and to the land, and also to the physical aspects of real estate, including surface, air and subsurface rights plus, bundle of rights.
- REALTOR®
- A registered trademark of the NATIONAL ASSOCIATION OF REALTORS. It is used by brokers and salespersons who hold active membership in the association.
- Receiver
- A court-appointed person who is charged with preserving a property, collecting rents and doing anything necessary to maintain the property's condition.
- Reciprocity
- The recognition that states give whereby a licensee of one state can be involved in real estate transactions in other states.
- Rectangular Survey
- method of land description used in about 30 states based on imaginary lines of longitude (meridians) and latitude (base lines); also referred to as the US government survey system.
- Redemption Period
- The right of a mortgagor (borrower) to make good on the default within a specified time and receive the property back.
- Redlining
- The practice of some lending institutions that restricts the number of loans or the loan-to-value ratio in certain areas of a community, i.e., it is illegal for a lending institution to require a higher down payment because the home the borrower is buying is located in a racially mixed area.
- Refinancing
- A description of an extension of the existing financing either through the same lender or through a new financial arrangement.
- Regulation Z
- Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates.
- Regulation Z Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates.
- Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates.
- Remainder-man
- The person who has a future interest in a life estate once the present estate terminates.
- Renegotiable Rate Mortgage
- A renegotiated loan where the maturity is fixed (for example, 30 years) but the interest rate, and hence the monthly payment, is renegotiated periodically (for example, every 3 or 5 years.)
- Rent
- The payment made for the use of land.
- Replacement Cost
- The cost of substituting a similar structure with utility equivalent to the subject property but constructed with modern materials.
- Reproduction Cost
- The cost of exactly duplicating a structure using the same material and design.
- Rescission
- Repealing a contract either by mutual consent of the parties to the contract or by one party when the other party is in breach of the contract.
- Resident Manager
- An employee of the property management firm and its representative on the premises.
- Restrictive Covenant
- A clause in a deed which restricts use of property for a specified time.
- Reversion
- A future interest in the grantor, which occurs whenever the owner of real estate conveys an estate of lesser duration than the owner has.
- Reversionary Interest
- A future interest a person has in property after present possession is terminated.
- Revocation
- The nullification of an offer to contract by the original offeror.
- Right of Re-entry
- The right retained when a fee simple on condition subsequent exists; also referred to as the power of termination. Back to court.
- Right of Survivorship
- Upon the death of a joint tenant or tenant by the entirety the interest does not pass to the tenant's heirs but to the other join tenant(s).
- Riparian Rights
- A legal right of a landowner who owns land next to a natural watercourse to reasonable use of whatever water flows past the property.
- Run with the land
- Certain restrictions, easements and covenants are part of the ownership of land and thus are not terminated when title is transferred but remain in effect from owner to owner.
- Sale-leaseback
- A technique used by owners of property as a means of raising capital. The process involves the simultaneous selling and leasing back of the property usually through a net lease.
- Sales Contract
- An agreement in which the buyer and seller agree to the terms and conditions of the sale of property. (Bilateral Contract)
- Salesperson
- A natural person licensed to perform on behalf of any licensed real estate broker any act or acts authorized to be performed by the broker.
- Satisfaction of Mortgage
- An instrument issued by the mortgagee (Lender) when the mortgage has been paid in full.
- Satisfaction Piece
- An instrument issued by a person holding a lien to indicate lien is discharged.
- Scarcity
- The scarcity of real estate refers to the limited supply of certain types of real estate at particular locations.
- Second Mortgage
- A mortgage subordinate to a first mortgage; also referred to as a junior mortgage. (Recorded Second)
- Seisin
- The actual possession of land by one who claims rightful ownership of a freehold estate therein.
- Servient Estate
- The tract of land burdened by an easement.
- Setback Lines
- A requirement in zoning ordinances in which all structures are to be a minimum distance from property lines.
- Severalty Ownership
- Ownership by one person.
- Site
- A lot ready for development.
- Situs
- Refers to the economic location of real estate.
- Special Agent
- One limited in authority to transact a single business affair or a specific series of business affairs or to perform restricted acts for the principal. (Listing one property for sale)
- Special Assessment
- From time to time jurisdictions levy a charge on certain pieces of property for the purpose of paying for the cost of a public a improvement such as sewers or sidewalks, which particularly benefit properties being assessed as opposed to those improvements benefiting the public at large. Considered a tax.
- Special Warranty Deed
- The grantor warrants against defects that have occurred after the grantor acquired title. (No warrantee forever-only for the time the grantor owns the property)
- Specific Lien
- One that attaches to a particular property.
- Specific Performance
- An equitable remedy in which the court orders the contract to be performed as agreed to by the parties.
- Statute
- A law passed by a state legislature.
- Statute of Frauds
- Every state has some form of laws which require that certain contracts must be in writing in order to be enforceable in a court.
- Statutory Period of Redemption
- The time within which property may be redeemed after a foreclosure sale.
- Steering
- The channeling of prospective home purchasers or renters, by real estate brokers or salespersons, into racially homogeneous neighborhoods, and actively discouraging them away from neighborhoods of different racial or ethnic composition.
- Straight Note
- A promissory note evidencing a loan in which payments of interest only are made periodically during the term of the note, with the principal payment due in one lump sum upon maturity. A straight note is usually a nonamoritized note made for a short term, such as two to 4 years, and is renewable at the end of the term. A mortgage that secures a straight note is a term mortgage or straight-term mortgage.
- Sublease
- The transfer when the original lessee retains a reversion. Primary liable. Remains with the original lessee.
- Subordination Clause
- A clause in which the holder of a mortgage permits a subsequent mortgage to take priority. Subordination is the act of yielding priority.
- Subrogation
- The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt. (Title company)
- Suit
- A court action to enforce a legal claim or right.
- Syndicate
- An arrangement to raise equity capital for real estate purchases or for other types of investments.