A sharing of an interest in an income property by a lender in addition to the base interest collected on a mortgage loan, a percentage of gross income is required, sometimes predicated on certain conditions being fulfilled such as a minimum occupancy rate or a percentage of net income after expenses of debt service and taxes. Also called Equity participation.

The period of time necessary for the cash flow from a project to equal the amount of money invested.

The date the borrower's monthly principal and interest payment may change in an adjustable rate mortgage.

The maximum amount of increase that is at the borrower's option that can be made to the interest in an adjustable rate mortgage on the payment adjustment date, if the increase called for, exceeds the payment cap amount and which may result in negative amortization.

The rate at which the borrower repays an adjustable rate loan that reflects any buy downs or payment caps.

The document signed by a lender indicating the amount required to pay a loan balance in full and satisfy the debt; used in the settlement process to protect both the seller's and the buyer's interests. Also called a reduction certificate.

The responsibility that an individual has for a debt. Most mortgage loans on real estate are recourse (i.e., the lender can look to the property and the borrower for repayment). Contrast Nonrecourse, Exculpatory clause.

Any property which is not real property.

An executor, guardian or administrator who represents another party under contract or judicial appointment.

(PUD) An area which is designed and provides for intensive use of land often through a combination of private and common areas with arrangements for sharing responsibilities for the common areas. Typically, zoning boards consider the entire development as a residential cluster and allow its design to be substituted for a traditional subdivision.

The depositing of personal property by a debtor with a creditor as security for a debt or engagement.

A party who is given a pledge or a security. See Secured party.

A party who is given a pledge or a security. See Secured party.

A party who offers a pledge or gives security. See Debtor.

A loan payment plan that calls for straight (or equal) principal reduction payments plus the accrued interest.

A charge assessed by a lending institution to increase the yield of a mortgage loan above the contract rate to the market rate so that it is competitive with other investments and is equal to the difference between the stated principal amount on the note and the lesser amount loaned. One point equals 1 percent of the loan amount. See Discount points.

A right that an owner or another person holding a right, such as a tenant, has to control, take custody of and use property.

A written instrument whereby a principal authorizes an agent who is sometimes called an attorney in fact to perform specified acts on his or her behalf.

The power that an instrument such as a trust deed grants to a trustee or mortgagee to sell the secured property without judicial proceedings if a borrower defaults in payment of the promissory note or otherwise breaches the terms of the mortgage or trust deed.

A lending practice whereby a borrower can demonstrate to a seller and broker that they can qualify for an identified loan amount which permits a prospective buyers to shop with condidence that a loan will be approved.

A rehearsal of the closing whereby instruments are prepared and signed by some or all parties to the contract which is used when a closing is expected to be complicated.

A report used as a basis for title insurance on the quality of the title which searches the public land records to determine the extent to which someone has legal interest in a parcel and also for encumbrances and liens or any other items of record that might affect ownership.

An estate of land and its improvement often the subject matter of a conveyance.

The interest paid before it has accrued or due, or paid before the funds are available to the borrower.

A loan payment that is greater than the amount due or in advance of the due date.

A clause in a loan contract that gives a borrower the right to make loan payments that are greater than the amount due or in advance of the due date.

The charge payable under the terms of a loan agreement to a lender by a borrower if the outstanding principal balance of the loan is paid off prior to its maturity.

The sum that may be saved by a borrower by paying off a debt prior to the date due.

The amount of value in terms of money at which property is offered for sale or is exchanged for at a sale.

Most state statutes provide that fixing the price of a product or service in agreement with another individual or business is illegal. The general rule provides that a vendor may not in combination with another vendor agree to set a certain price thereby creating a fixed price within a certain market. A business acting on its own and not in concert with another may use legitimate efforts to obtain the best price they can, including their ability to raise prices to the detriment of the general public. Also, conformity of prices within a given product is not illegal unless such conformity was created by a combination of vendors agreeing on a set price. For example, where competitors agree to sell their goods or services at a specified price, minimum price or maximum price and they receive profits from such an agreement, they are in violation of price fixing. Additionally, setting a price to be charged only within a certain area in order to get rid of competition or to create a monopoly is generally illegal under most state laws. A majority of states have also enacted a “Below-Sales-Cost” law wherein businesses may not sell goods below cost if they do so with anti-competitive intent or effect. See Antitrust laws.

A relative position on the scale of prices as determined by a comparison of prices of labor, materials, capital, etc. found at one time with prices at other times.

A loan whose payment is adjusted according to the rate of inflation. The payments are generally quite low, typically 3 to 5% annually of the debt. This type of mortgage is not commonly used in the U.S.

In Latin meaning “at first sight” and refers to a fact which is presumed to be true or legally sufficient to establish that fact unless it is rebutted or disproved by evidence to the contrary.

An identification of a mortgage or trust deed and a note that has the earliest recording date for a specific property or a loan of first priority.

A lease, between the owner and a tenant, whose interest all or in part has been sublet.

The mortgage market made up of lenders such as commercial banks, savings and loan associations and mutual savings banks in which loans are originated.

The main or principal home in which a person resides who may have multiple personal residences but for tax purposes may have only one primary residence. See Domicile.

The lowest commercial interest rate charged by banks on short-term loans to their most creditworthy customers.

A person for whom another acts as and agent or representative.

(P&I) A payment in an amortized loan that is typically paid monthly that includes the interest charged for the period plus an amount that is applied to the amortization of the principal balance.

The outstanding amount owed on the original sum borrowed under a mortgage or loan.

The licensed broker responsible for the complete operation of a brokerage firm. Example\: As principal broke, Collins receives a 10% override on all sales commissions earned by the other agents.

(PITI) A mortgage payment made periodically and typically monthly on an amortized loan that includes a Principal and Interest payment plus a contribution into a lender-established escrow account to pay property Taxes and Insurance premiums on the property.

An appraisal principle that holds that the worth of a residence of lesser quality will tend to be increased by being in association with residences of higher quality in the same area. The opposite of the Principle is regression.

An appraisal principle that holds that a property of higher quality in a neighborhood of properties of lower quality seeks the value level of the properties of lower quality. The opposite of the Principle of progression.

An appraisal principle that holds that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution.

An appraisal principle that holds that market value is affected by the intersection of supply or quantity of units available and the demand forces or quantity of units desired in the market as of the appraisal date. 

The appraisal principle that follows the interrelationship of the supply of and demand for real estate. As appraising is based on economic concepts, this principle recognizes that real property is subject to the influences of the marketplace just as is any other commodity.

A concept of water ownership in v which the landowner's right to use available water is based on a government-administered permit system.

A lien which is senior or superior to others.

The order in which liens are given legal precedence or preference.

The granting of private property to another private party.

(PMI) A type of mortgage insurance available to conventional lenders on the first, high risk portion of a loan guarantying payment.

An investment or business offered for sale to a small group of investors, generally under exemptions to registration allowed by the Securities and Exchange Commission and state securities registration laws.

The cause, originating from a series of events that without a break in continuity that results in the prime object of a licensee's employment, that of being the first to procure or produce the buyer who is ready, willing and able to buy the property for the agreed-upon price and terms and is therefore entitled to the commission.

Property includes all those things and rights which are the object of ownership.

Real property consists of land or anything attached to or a part of the land, such as a house.

All other property, such as stocks, insurance, jewelry, are called personal property.

A folder that presents pertinent information about a property.

A recorded boundary of a plot of land.

The day-to-day operation of real property including the marketing and leasing of space, collection of rents, selection of tenants and the maintenance, repair and renovation of the buildings and grounds and the financing of rental properties.

A licensee and agent of the owner of real property or properties handling all matters which are under his or her direction pertaining to its operation and who is paid for his or her services.

An organization established with the purpose of administering private regulations affecting residential land uses.

A government levy on privately owned property based on its market value or other uniformly-applied standard which is sometimes referred to as ad valorem tax or real estate tax.

The degree of relationship or ratio between two things.

To divide or split the taxes usually between seller and buyer in proportion to actual time of ownership or use.

A property owned by the government.

The records which by law give constructive notice to all of matters relating to land.

A government regulation limiting the use of real property.

An recording of items that need to be corrected prior to a sale or acceptance of a completed construction project.

A fine used to punish the wrongdoer is assessed in excess of the damages actually suffered.

See Sales contract.

A purchase of property upon the completion of construction and an immediate sold back on a long-term installment contract.

A transaction method used to free up cash whereby an investor becomes the actual owner of a property by purchasing it from the original owner-occupant who subsequently continues to occupy and use the property under a long-term leaseback with the new owner.

See Sales contract.

A mortgage or trust deed given as all or part of the purchase price for real property.In some states the purchase money mortgage or trust deed loan can be made by a seller who extends credit to the buyer of property or by a third party lender (typically a financial institution) that makes a loan to the buyer of real property for a portion of the purchase price to be paid for the property. In many states there are legal limitations upon mortgagees and trust deed beneficiaries collecting deficiency judgments against the purchase money borrower after the collateral hypothecated under such security instruments has been sold through the foreclosure process. Generally no deficiency judgment is allowed if the collateral property under the mortgage or trust deed is residential property of four units or less with the debtor occupying the property as a place of residence.Purchase money mortgage - A mortgage given concurrently with a conveyance of land on the same land, by the vendee to the vendor, to secure the unpaid balance of the purchase price.Purchase money mortgage - A mortgage that is given in part payment of the purchase price as security for repayment of funds.Purchase Money Mortgage - (PMM) A note secured by a mortgage or trust deed given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate.

An arrangement whereby land is purchased by the lender and leased back to the developer with a mortgage negotiated on the resulting leasehold of the income property constructed. The lender receives an annual ground rent, plus a percentage of income from the property.

One who purchased or is purchasing the property—also referred to as Vendee, Payor, and Buyer. Purchaser may also refer to more than one person in cases of co-purchasers.