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Real Estate Dictionary/Glossary A,
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N.B. This glossary is provided with the understanding that the author is not
providing any legal, or other professional services. If legal or real estate
advice is required, the services of a competent professional person should be
sought.
Safe Drinking Water Act
Enacted by Congress in 1974, this federal law administered by the EPA and
equivalent state regulators to establish and enforce drinking water standards.
Safety clause
A safety clause may be contained in a listing. It provides that a broker is
still entitled to a commission for a set period of time after the listing has
expired if the property is sold to a prospect, who was introduced to the
property by the broker, during the period of the listing.
Sale-leaseback
A transaction in which an owner sells his or her improved property and, as part
of the same transaction, signs a long term lease to remain in possession of the
premises.
Sales comparison approach
The process of estimating the value of a property by examining and comparing
actual sales of comparable properties. (See appraisal)
Sales Contract
A real estate sales contract contains the complete agreement between a buyer of
a parcel of real estate and the seller. Depending on the area, this agreement
may be known as an offer to purchase, a contract of purchase and sale, a
purchase agreement, an earnest money agreement or a deposit receipt.
Salesperson
A person employed directly or indirectly by a licensed real estate broker to
perform various tasks and responsibilities. These may include selling and/or
buying real estate; negotiating purchase, sale or exchange of real estate;
negotiating leases, rents and/or improvements.
Sandwich Lease
Another term used is "sublease." This is when a tenant has a current lease with
the owner of a property and then "sublets" the property to a third party. The
tenant is then "sandwiched" between the owner and the end user, acting as lessee
and lessor at the same time.
Satisfaction of Mortgage
When all mortgage loan payments have been made and the note has been paid in
full, a satisfaction of mortgage (also known as a release of mortgage or
mortgage discharge) returns to the mortgagor all interest in the real estate,
which was conveyed to the mortgagee by the original recorded mortgage document.
Savings and Loan Association (S&L)
A financial institution whose principal function is to promote thrift and home
ownership. Depositors earn interest on their deposits, often at a higher rate
than is offered at commercial banks. The S&L invests some of these deposits in
residential mortgage loans, enabling more people to purchase and/or repair their
homes. Savings and loan associations are active participants in the home loan
mortgage market. (See thrift)
Second Mortgage
A mortgage (or trust deed) that is junior or subordinate to a first mortgage;
typically, an additional loan imposed on top of the first mortgage, taken out
when the borrower needs more money. Because the risk involved to the lender is
greater with the second mortgage, the lender's conditions are usually more
stringent, the term is shorter and the interest rate is higher than for the
first mortgage. (See mortgage)
Secondary Financing
A loan taken out in addition to a first loan, usually obtained from an
individual lender.
Secondary mortgage market
A market for the purchase and sale of existing mortgages, designed to provide
greater liquidity for selling mortgages; also called secondary money market, not
to be confused with secondary financing. (See primary mortgage market)
Secret Profit
Refers to a broker making an undisclosed profit at the seller's expense; for
example, when the broker has an undisclosed relative buy the listed property and
then resell it to a buyer whose earlier offer was never presented to the seller.
Section 202
Government program that provides capital for the construction, rehabilitation or
acquisition of nonprofit housing for low income elderly. (See section 8)
Section 8
Federally subsidized housing administered by HUD where the tenant pays up to
thirty percent of his or her adjusted monthly income and HUD pays the difference
between that amount and the market rent. Property owners are not required to
participate. (See section 202)
Section(s)
As used in the government survey method, a land area of one square mile, or 640
acres. A section is 1/36 of a township, or each township contains 36 sections.
Sections are numbered 1 through 36. Section 1 is always in the northeast, or
upper right-hand, corner. The numbering proceeds right to left to the upper
left-hand corner. From there, the numbers drop down to the next tier and
continue from left to right, then back from right to left. (See government
survey system)
Securitization
The pooling of real estate mortgages and trust deeds to act as collateral for
the sale of securities to public and private investors. (See secondary mortgage
market)
Security
Evidence of obligations to pay money or of rights to participate in earnings and
distribution of corporate, trust or other property. A security is usually found
where an investor subjects his or her money to the risks of an enterprise over
which he or she exercises no managerial control.
Security Agreement
Security interests in chattels (personal property) are created by an instrument
known as a security agreement. To give notice of a security interest, a
financing statement must be recorded. (See personal property, Uniform Commercial
Code)
Security Deposit
Money deposited by or for the tenant with the landlord, to be held by the
landlord for the following purposes 1. to remedy tenant defaults for damage to
the premises (be it accidental or intentional), for failure to pay rent due or
for failure to return keys at the end of the tenancy; 2. to clean the dwelling
so as to place it in as fit a condition as when the tenant commenced possession,
considering normal wear and tear; and 3. to compensate for damages caused by a
tenant who wrongfully quits the dwelling unit. (See landlord, tenant)
Seller carryback financing
A sale of real property where the seller receives a portion of the sales price
in the form of a promissory note secured by the real property purchased. An
extension of credit by the seller.
Seller financing disclosure statement
There are specific additional duties imposed upon the licensee who negotiates a
sale of real property when the seller receives a portion of the sales price in
the form of a promissory note secured by the real property purchased. This
seller financing disclosure statement is required in a transaction for the
purchase of a dwelling for not more than four families where the purchase
includes an extension of credit by the seller and where the licensee is acting
as an "arranger of credit." (See arranger of credit, promissory note)
Seller's Agent
An agent who represents the seller of real property. (See buyer's agent)
Seller's Real Property Disclosure Form
As required by Nevada Real Estate Division Code NRS 113. 100-113.150, a
transferee (buyer) of residential real property is entitled to a statement from
the transferor (seller) which provides information regarding the physical
condition of the property. Must be made by the seller at least 10 days before
residential property is conveyed to a buyer.
Senior Loan
A real estate loan in the first priority position. (See junior mortgage)
Separate Property
Under community property law, property owned solely by either spouse before the
marriage, acquired by gift or inheritance after the marriage or purchased with
separate funds after the marriage. (See community property)
Septic System
A system for collecting, treating and eliminating waste from a home waste
drainage system.
Setback
The amount of space local zoning regulations require between a lot line and a
building line.
Set-up sheet
Also know as an "Annual Property Cash Flow Statement." Includes cash flow
information about a listed rental property that is passed out to other real
estate companies and/or given to prospective buyers.
Servicing agreement
Signed documentation as to who will service the loan.
Servient tenement
Land on which an easement exists in favor of an adjacent property (called a
dominant tenement or estate); also called a servient estate. If property A has a
right-of-way across property B, property B is the servient tenement. The
servient owner may not use the property in such a way as to interfere with the
reasonable use of the dominant owner. (See dominant tenement, easement)
Severalty
Sole ownership of real property.
Severance
Changing an item of real estate to personal property by detaching it from the
land; for example, cutting down a tree.
Sharecropping
In an agricultural lease, the agreement between the landowner and the tenant
farmer to split the crop or the profit from its sale, actually sharing the crop.
(See agricultural lease)
Shared-appreciation mortgage (SAM)
A mortgage loan in which the lender, in exchange for a loan with a favorable
interest rate, participates in the profits (if any) the borrower receives when
the property is eventually sold.
Sheriff's deed
The deed given after a sheriff's sale. (See deed)
Shingles
Roofing material characterized by short, rectangular sections, nailed to the
roof decking in an overlapping pattern. Asphalt shingles are the most common
type. (See roof decking)
Short term rate
A reduced rate for title insurance applicable in cases where the owner of a
property has been insured previously or where any lender has been insured
somewhat recently on the property.
Shower pan
A waterproof "pan" placed beneath the floor tiles or concrete base of a shower
that prevents leaking.
"Sick building" syndrome
The term "sick building syndrome" (SBS) is used to describe situations in which
building occupants experience discomforting health conditions that appear to be
linked to time spent in a building, but no specific illness or cause can be
identified.
Simple Interest
Interest computed on the principal balance, and disregards previously
accumulated (upaid) interest.
Signatory
1. having signed or joined in signing a document.
2. a signer, or one of the signers, of a document.
Single Agency
The practice of representing either the buyer or the seller but never both in
the same transaction. The single-agency broker may be compensated indirectly
through an authorized commission split or directly by the principal who employed
the agent to represent him or her. (See dual agency)
Single-family, owner-occupied dwellings
A dwelling which will be owned and occupied by a signatory to the mortgage or
deed of trust secured by such dwelling within 90 days of the execution of the
mortgage or deed of trust.
Situs
The personal preference of people for one area over another, not necessarily
based on objective facts and knowledge.
Slab
A flat piece of concrete, typically used as a walking surface, but may also
serve as a load bearing device as in slab homes.
Soft money loan
A loan where credit not cash is extended, usually by the seller carrying all or
part of the financing.
Soldiers and Sailors Civil Relief Act
A law prohibiting foreclosures while a person is serving in the military and
within three months thereafter except by court order.
Sole proprietorship
A method of owning a business in which one person owns the entire business and
reports all profits and losses directly on his or her personal income tax
return, as contrasted with corporate, joint or partnership ownership.
A sole or individual proprietorship is easy to organize and flexible to operate.
It is frequently used in real estate brokerage. An individual proprietor may run
a brokerage company if he or she has a valid broker's license.
The proprietor may use his or her own name or a fictitious name previously
registered as required by state law. There is a growing tendency for sole
proprietors to incorporate and thus take advantage of certain tax and fringe
benefits, such as those provided by pension and profit-sharing plans.
Sole tenancy
See tenancy in severalty.
Solid core door
A door where the inner material (core) is made of solid wood. This type door is
usually used for doors to the outside or garage.
Solid waste
As defined under Resource Conservation and Recovery Act, any solid, semi-solid,
liquid, or contained gaseous materials discarded from industrial, commercial,
mining, or agricultural operations, and from community activities. Solid waste
includes garbage, construction debris, commercial refuse, sludge from water
supply or waste treatment plants or air pollution control facilities, and other
discarded materials.
Source reduction
The design, manufacture, purchase, or use of materials (such as packaging) that
reduce the amount or toxicity of garbage. Source reduction can reduce waste
disposal and handling costs because the expense of recycling, composting,
combustion and landfill are avoided. Source reduction conserves resources and
reduces pollution.
Special agent
One authorized by a principal to perform a particular act or transaction without
contemplation of continuity of service as with a general agent. The real estate
broker is ordinarily a special agent appointed by the seller to find a ready,
willing and able buyer for a particular property. An attorney-in-fact under a
limited power of attorney is a special agent. (See agency, agent, general agent)
Special assessment
A tax or levy customarily imposed against only those specific parcels of realty
that will benefit from a proposed public improvement, as opposed to a general
tax on the entire community. Because the proposed improvement will enhance the
value of the affected homes, only those affected owners must pay this special
lien. Common examples of special assessments are water, sidewalk and sewer
assessments, or other special improvements such as parks and recreational
facilities.
Specific lien
A lien affecting or attaching only to a certain, specific parcel of land or
piece of property. (See lien)
Specific performance
An action brought in a court of equity in special cases to compel a party to
carry out the terms of a contract. The basis for an equity court's jurisdiction
in breach of a real estate contract is the fact that land is unique and mere
legal damages would not adequately compensate the buyer for the seller's breach.
Splash block
A small, specially designed portable concrete pad. Oriented downhill, splash
blocks direct water from rain gutter down drains or under outside hose faucets
to flow away from the house.
Split-fee financing
A form of joint venture participation where the lender purchases the fee land
under the proposed development project and leases it to the developer. The
lender also finances the improvements to be constructed on this leasehold. (See
joint venture)
Spot zoning
Zoning of parcels not in conformance with the general zoning of an area. (See
zoning)
Square-foot method
A method of estimating a building's construction, reproduction or replacement
costs; whereby the structure's square-foot floor area is multiplied by an
appropriate construction cost per square foot. (See appraisal)
Standard coverage policy
A standard coverage policy normally insures the title as it is known from the
public records. In addition, the standard policy insures against such hidden
defects as forged documents, conveyances by incompetent grantors, incorrect
marital statements and improperly delivered deeds. (See extended coverage
policy, title insurance)
Standby takeout commitment
An agreement by an interim lender to advance funds to take out a construction
lender. (See interim financing)
Stare decisis
The reliance of courts on previous decisions when judging disputes. (See common
law)
Statement of information
Also called a "Statement of Identity." Statements provided to the escrow agent
verifying pertinent data identifying the grantor, grantee, or borrower.
Statement of reasons
The Federal Equal Credit Opportunity Act (ECOA) (Title VII of the Consumer
Protection Act) requires that a lender/creditor who denies an application for
credit must provide the applicant with a statement of reasons, or written
notification of the applicant's right to obtain a statement of reasons, within
thirty days after receipt of a completed application for credit,. (See Equal
Credit Opportunity Act)
Statute of frauds
State law that requires certain contracts to be in writing and signed by the
party to be charged (or held) to the agreement in order to be legally
enforceable.
Statute of limitations
That law pertaining to the period of time within which certain actions must be
brought to court. The law is intended to protect the vigilant against stale
claims by requiring the prompt assertion of claims; thus an action must be
brought (i.e., the complaint filed) within a specified time of the occurrence of
the cause of action. After the time period expires, the claim is said to be
"outlawed" and may not be enforced in court. The theory behind the statute of
limitations is that there must be some end to the possibility of litigation. It
is said that stale witnesses and stale records produce little truth and result
in accidental justice, if any.
Statutory law
The laws, rules and regulations enacted by legislatures and other governing
bodies. (See civil law, common law, constitutional law)
Statutory lien
A lien imposed on property by statute—a tax lien, for example—in contrast to an
equitable lien, which arises out of common law. (See lien)
Statutory redemption
The right of a defaulted property owner to recover the property after its sale
by paying the appropriate fees and charges. (See equitable redemption)
Steering
The illegal practice of channeling home-seekers interested in equivalent
properties to particular areas, either to maintain the homogeneity of an area or
to change the character of an area to create a speculative situation. This
practice makes certain homes unavailable to home-seekers on the basis of race or
national origin, and on these grounds it is prohibited by the provisions of the
federal fair housing act. Steering is often difficult to detect, however,
because the steering tactics can be so subtle that the home-seeker is unaware
that his or her choice has been limited. Steering could be a licensee's use of a
word, phrase or act that is intended to influence the choice of a prospective
property buyer on a discriminatory basis.
Stigmatized property
A property that has acquired an undesirable reputation due to an event that
occurred on or near it, such as violent crime, gang-related activity, illness or
personal tragedy. Because of the potential liability to a licensee for
inadequately researching and disclosing material facts concerning a property's
condition, licensees should seek competent counsel when dealing with a
stigmatized property. Some states restrict the disclosure of information about
stigmatized properties. In other states, the licensee's responsibility may be
difficult to define because the issue is not a physical defect, but merely a
perception that a property is undesirable.
Stock cooperative
Ownership of real property by a corporation where each stockholder is entitled
to occupancy of a unit under a lease. (See cooperative)
Stop date
Date on a term loan when the balloon payment is due. (See balloon payment)
Stop notice
A notice given to a lender that a subcontractor has not been paid. Unless bond
is posted, the lender must withhold moneys due a prime contractor.
Straight-line method
A method of depreciation, also called the age-life method, that is computed by
dividing the adjusted basis of a property by the number of years of estimated
remaining useful life. The cost of the property is thus deducted in equal annual
installments. For example, if the depreciable basis is $ 100,000 and the
estimated useful life is 25 years, the annual depreciation deduction is $4,000
for each year during the useful life of the asset. Prior to 1986, taxpayers
sometimes used a form of accelerated depreciation such as 175 percent of
straight line. The IRS had rules to recapture the amount of depreciation that
was in excess of the straight-line rate. (See depreciation)
Straight (term) loan
A loan in which only interest is paid during the term of the loan, with the
entire principal amount due with the final interest payment.
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 nonamortized note made for
a short term, such as three to five years, and is renewable at the end of the
term. (See promissory note)
Stratified marketplace
The real estate market is a marketplace that is stratified based on price.
Strict foreclosure
In a strict foreclosure procedure, after a delinquent borrower has been notified
and the proper papers have been filed, the court designates a specific period
during which the balance of the default must be paid in full. If the payment is
not made, the borrower's equitable and statutory redemption rights are waived
and the court awards full legal title to the lender. There is no deficiency
judgment in strict foreclosure cases. (See foreclosure, judicial foreclosure,
non-judicial foreclosure)
Strict liability
An owner of a property is responsible to an injured party without excuse. (See
liability)
Subagent
An agent of a person who is already acting as an agent for a principal. The
original agent can delegate authority to a subagent where such delegation is
either expressly authorized or customary in the trade. For example, it is
customary for listing brokers to delegate certain functions of a ministerial
nature to subagents, such as to show property and solicit buyers.
Subdivided Land Law
A disclosure law enacted to protect buyers of subdivided parcels. A public
report is required for subdivisions of five or more parcels. (See public report,
subdivision)
Sub-divider
One who buys undeveloped land, divides it into smaller, usable lots and sells
the lots to potential users.
Subdivision
Any land that is divided or is proposed to be divided for the purpose of
disposition into two or more lots, parcels, units or interests. Subdivision
refers to any land, whether contiguous or not, if two or more lots, parcels,
units or interests are offered as part of a common promotional plan of
advertising and sale.
Subdivision and development ordinances
Municipal ordinances that establish requirements for subdivisions and
development.
Subdivision Map Act
An act providing for local control of subdivisions. Cities and counties are
required to adopt an ordinance to regulate subdivisions. (See subdivision)
Subjacent support
The right of land to be supported by land which lies beneath it. (See lateral
support)
Subject property
A reference to the real property under discussion, or the real property under
appraisal. (See appraisal)
"Subject to"
The recognition by a buyer of conditions (such as a prior loan), which are not
the buyer's legal responsibility.
Sublease
A lease given by a lessee for a portion of the leasehold interest, while the
lessee retains some reversionary interest. The sublease may be for all or part
of the premises, for the whole term or part of it, as long as the lessor retains
some interest in the property. Leases normally contain a clause prohibiting
subletting without prior consent of the lessor. The lessee remains directly
liable to the lessor for the rent, which is usually paid by the sublessee to the
lessee and then from the lessee to the lessor. The sublessee does not have a
contractual obligation to pay rent to the original lessor.
Sublet
The partial transfer of a tenant's right in a rental property to a third party.
(See sublease)
Subordination agreement
A written agreement between lienholders to change the priority of mortgage,
judgment and other liens. Under a subordination agreement, the holder of a
superior or prior lien agrees to permit a junior lienholder's interest to move
ahead of his or her lien. (See junior mortgage, lien)
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. This clause provides
that if a prior mortgage is paid off or renewed, the junior mortgage will
continue in its subordinate position and will not automatically become a higher
or first mortgage. A subordination clause is usually standard in a junior
mortgage, because the junior mortgagee gets a higher interest rate and is often
not concerned about the inferior mortgage position. (See junior mortgage)
Subprime lenders
Lenders who specialize in B, C, or D catagory paper. (See B, C, or D paper)
Subrogation
The substitution of one creditor for another, with the substituted person
succeeding to the legal rights and claims of the original claimant. Subrogation
is used by title insurers to acquire from the injured party rights to sue in
order to recover any claims they have paid.
Subscribe
1) to give, pay, or pledge (a sum of money) as a contribution, investment, etc.
2) to append one's signature or mark to (a document), as in approval or
attestation of its contents.
Substitution
An appraisal principle that states that the maximum value of a property tends to
be set by the cost of purchasing an equally desirable and valuable substitute
property, assuming that no costly delay is encountered in making the
substitution. (See appraisal)
Substitution of entitlement
Replaces one eligible veteran with another on an existing Veterans
Administration loan. The entitlement is restored to the original veteran. (See
Veterans Administration loan)
Subsurface rights
Ownership rights in a parcel of real estate to the water, minerals, gas, oil and
so forth that lie beneath the surface of the property. (See surface rights)
Subterranean Termites
A type of termite that nests underground. (See termite inspection)
Subterfuge
A clever trick or strategy used to evade a rule, escape a consequence, hide
something, etc.
Successors
Those who succeed to or to whom the corporation's rights in the property are
transferred. (See heirs)
Suit for Possession
A court suit initiated by a landlord to evict a tenant from leased premises
after the tenant has breached one of the terms of the lease or has held
possession of the property after the lease's expiration.
Suit for specific performance
If a seller breaches a real estate contract, the buyer may sue for specific
performance. The buyer asks the court to force the seller to go through with the
sale and convey the property as previously agreed. The buyer may choose to sue
for damages, in which case the buyer asks that the seller pay for costs and
hardships suffered as a result of the seller's breach.
Suit to quiet title
A court action intended to establish or settle the title to a particular
property, especially when there is a cloud on the title.
Sump
A reservoir that collects and holds water or some other liquid, which is
subsequently disposed of by using a pump.
Superfund
Popular name of the hazardous waste cleanup fund established by the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) as
amended by the Superfund Amendment and Reauthorization Act of 1986 (SARA).
Superfund focuses on the cleanup of releases of hazardous substances on
property. It creates significant legal exposure based on strict liability for
owners, landlords and, sometimes lenders.
Superfund Amendments and Reauthorization Act (SARA)
An amendatory statute that contains stronger cleanup standards for contaminated
sites, increased funding for Superfund and clarifications of lender liability
and innocent landowner immunity. (See Comprehensive Environmental Response,
Compensation and Liability Act)
Supply
The amount of goods available in the market to be sold at a given price. The
term is often coupled with supply and demand 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. (See appraisal, demand)
Surety bond
An agreement by an insurance or bonding company to be responsible for certain
possible defaults, debts or obligations contracted for by an insured party; in
essence, a policy insuring one's personal and/or financial integrity. In the
real estate business a surety bond is generally used to ensure that a particular
project will be completed at a certain date or that a contract will be performed
as stated.
Surface rights
Ownership rights in a parcel of real estate that are limited to the surface of
the property and do not include the air above it (air rights) or the minerals
below the surface
Surrender
Giving up leasehold rights by a tenant in exchange for a release from future
obligations under a lease.
Survey
The process by which boundaries are measured and land areas are determined; the
on-site measurement of lot lines, dimensions and position of a house on a lot,
including the determination of any existing encroachments or easements.
Survivorship
The right of surviving joint tenants to the ownership interest of another joint
tenant upon the latter's death. (See joint tenancy)
SWAP Program
A Freddie Mac program where lower yield mortgages are exchanged for
Participation Certificates. (See participation certificates)
Syndicate
A combination of people or firms formed to accomplish a business venture of
mutual interest by pooling resources. In a real estate investment syndicate the
parties own and/or develop property, with the main profit generally arising from
the sale of the property.
Syndication
A descriptive term for a group of two or more people united for the purpose of
making and operating an investment. A syndication may operate in the form of a
REIT, corporation, general partnership, limited partnership or even as tenancy
in common.
Real Estate Dictionary/Glossary A,
B,
C,
D,
E,
F,
G,
H,
I,
J,
K,
L,
M,
N,
O,
P,
Q,
R,
S,
T,
U,
V,
W,
X,
Y,
Z
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