Archives: Glossary Terms

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.

(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.