In real estate appraisal, physical deterioration refers to the loss in value of a property caused by impairment of its physical condition. This decline results from factors such as wear and tear, aging, use, and exposure to the elements. Physical deterioration may be...

In real estate law, personal property refers to any property that is not classified as real property. It generally includes movable items that are not permanently attached to land or buildings. Personal property can include furniture, equipment, appliances, vehicles,...

In real estate finance, a permanent mortgage is a long term loan placed on a property after construction has been completed. It is typically used to replace short term construction financing and generally has a term of ten years or more. Permanent mortgages are often...

In real estate and construction, a performance bond is a bond provided by a builder or contractor to guarantee the completion of a construction project. It serves as financial assurance that the work will be performed in accordance with the contract terms. If the...

In real estate transactions, a perfect escrow refers to an escrow that is complete and fully prepared to close. It exists when the escrow agent has received all required instruments, documents, and instructions necessary to carry out the transaction. With a perfect...

In real estate, a percentage lease is a leasing arrangement most commonly used for retail properties in which rent is based in part on a percentage of the tenant’s gross or net sales. This structure aligns the interests of the landlord and tenant by linking rental...

In real estate finance, a penalty is an extra payment or charge imposed on a borrower for deviating from the terms of the original loan agreement. It is most commonly assessed for being late in making a regularly scheduled payment. Penalties are intended to compensate...

In real estate transactions, a payoff escrow is an escrow arrangement established specifically to pay off an existing loan secured by property. It is commonly created as part of a larger escrow and is often referred to as a sub escrow. The payoff escrow ensures that...

In real estate finance, a payoff refers to the full payment of an outstanding loan balance or other lien secured by property. It satisfies the borrower’s obligation and brings the debt to an end. Upon payoff, the lender is required to release the lien against the...

In real estate finance, a payment cap is a limit placed on the amount that a borrower’s periodic payment can increase under an adjustable mortgage loan. This cap applies regardless of how much the interest rate rises during an adjustment period. When a payment cap...