Real Estate Glossary


Terms and concepts to improve your real estate understanding.
Browse the glossary using this index

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P

package loan

loans that include both real and personal property.

Example: a model home is sold and mortgaged with all furnishing included.

paired sales analysis

is the process of identifying two properties which differ only in a specific feature being measured.

To illustrate, the value of a basement can be estimated by finding two identical properties except that one has a basement and the other does not. The difference in their sales prices will be the value of the basement. It is not necessary that the sales used for paired sales analysis also appear as comparables in the appraisal.

partition

is the division of cotenant's interests in real party that takes place through court proceedings when the parties cannot voluntarily agree.

party wall

A wall that is located on or at a boundary line between two adjoining parcels of land and is used or is intended to be used by the owners of both properties.

percentage adjustment

Appraisers adjust for property differences using lump-sum dollar amounts, percentage, or unit adjustments. Percentage adjustments are based on a percentage of the sales price of the comparable property. They are helpful in residential appraising when attempting to apply uniform adjustments for broad market preferences, market changes (date of sale adjustments), and for differences in the actual ages of improvements. Typically, percentage adjustments are more common in non-residential appraising.

For example: a neighborhood has a superior amenity package and similar houses in a nearby subdivision sell for 10% less. Since the market values one location over another by 10%, then the appraiser should use the percentage adjustment and adjust any comparables accordingly.

It should be noted that there is an order for making percentage adjustments. Since the percentages are applied to the sales price of the comparable, it is necessary to first adjust the comparable’s sales price for the term and conditions of the sale, then the date of sale, and finally the locational and physical factors.

perfect market

all products or services being bought or sold are homogeneous or identical within a perfect market.

periodic estate

is a recurring estate for some period – usually month to month. However, the period could be from quarter to quarter, year to year, etc. This estate automatically renews for a new period. Notice is required to terminate a periodic estate.

personal property

items, called chattels, that do not fit into the definition of real property; movable objects.

physical depreciation

is the loss in value associated with the gradual wearing and tearing away of a structure or its components as a result of the affects of time, weather, use, lack of maintenance, etc. It is the most common type of depreciation and the kind normally envisioned when depreciation is considered.

physical factors

one of the four broad categories of factors affecting the value of real estate, which are - physical, social, economic and governmental.

Physical factors may contribute to, or detract from, the value of real estate and include topography, views, proximity to neighborhood shopping and neighborhood services, access to transportation, ingress and egress, climate, seasonal factors, etc. Physical factors may be naturally occurring such as rivers, mountain ranges, lakes, oceans, or the eye-catching red rock formations in Sedona, Arizona. Constructed or man-made factors include the interstate highway system, sports stadiums, and attractions such as the Statue of Liberty, Disney World, etc.

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