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Sale and 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.
Salesperson
A person who performs real estate activities while employed
by or associated with a licensed real estate broker.
Satisfaction of mortgage
A document acknowledging the payment of a mortgage debt.
Section
A portion of township under the rectangular (government)
survey system. A township is divided into 36 sections,
numbered one through 36. A section is a square with
mile-long sides and an area of one square mile, or 640
acres.
Security agreement
See Uniform Commercial Code
Security deposit
A payment by a tenant, held by the landlord during the
lease term and kept (wholly or partially) on default
or destruction of the premises by the tenant.
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.
Servient tenement
Land on which an easement exists in favor of an adjacent
property (called a dominant estate); also called a servient
estate.
Severalty
Ownership of real property by one person only, also
called sole ownership.
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.
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.
Situs
The personal preference of people for one area over
another, not necessarily based on objective facts and
knowledge.
Special agent
One who is authorized by a principal to perform a single
act or transaction; a real estate broker is usually
a special agent authorized to find a ready, willing
and able buyer for a particular property.
Special assessment
A tax or levy customarily imposed against only those
specific parcels of real estate that will benefit from
a proposed public improvement like a street or sewer.
Special warranty deed
A deed in which the grantor warrants, or guarantees,
the title only against defects arising during the period
of his or her tenure and ownership of the property and
not against defects existing before that time, generally
using the language, "by, through or under the grantor
but not otherwise".
Specific performance
A legal action to compel a party to carry out the terms
of a contract.
Square-foot method
The appraisal method of estimating building costs by
multiplying the number of square feet in the improvements
being appraised by the cost per square foot for recently
constructed similar improvements.
Statute of limitations
That law pertaining to the period of time within which
certain actions must be brought to court.
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.
Statutory redemption
The right of a defaulted property owner to recover the
property after its sale by paying the appropriate fees
and charges.
Steering
The illegal practice of channeling home seekers to particular
areas, either to maintain the homogeneity of an area
or to change the character of an area, which limits
their choices of where they can live.
Straight-line method
A method of calculating depreciation for tax purposes,
computed by dividing the adjusted basis of a property
by the estimated number of years of remaining useful
life.
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.
Subagent
One who is employed by a person already acting as an
agent. Typically a reference to a salesperson licensed
under a broker (agent) who is employed under the terms
of a listing agreement.
Subdivider
One who buys undeveloped land, divides it into smaller,
usable lots and sells the lots to potential users.
Subdivision
A tract of land divided by the owner, known as the subdivider,
into blocks, building lots and streets according to
a recorded subdivision plat, which must comply with
local ordinances and regulations.
Subdivision and development ordinances
Municipal ordinances that establish requirements for
sub- divisions and development.
Subdivision plat
See plat map.
Subletting
The leasing of premises by a lessee to a third party
for part of the lessee's remaining term. See also assignment.
Subordination
Relegation to a lesser position, usually in respect
to a right or security.
Subordination agreement
A written agreement between holders of liens on a property
that changes the priority of mortgage, judgment and
other liens under certain circumstances.
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 re- cover any claims they
have paid.
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.
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.
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 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.
Surety bond
A legal document issued to assure the completion of
an act by another person.
Surface rights
A legal interest in the use or occupation of the top
of land as opposed to subsurface or mineral rights.
Selling agent
The agent who obtains a buyer. A selling agent may represent
the buyer, or may be a subagent of the seller.
sales contract
A written agreement stating the terms of the sale agreed
to by both buyer and seller. TREC promulgated standard
contracts must be used by all licensees, with certain
limited exceptions. See earnest money contract.
Salesperson annual education (SAE)
A real estate salesperson is required to complete a
total of 18 semester (270 classroom) hours of education
by the end of their third year of licensure. All active
and inactive salespersons, who are under the SAE requirement,
must show evidence of having completed a minimum of
30 hours in core or related real estate education each
year or until a total of 270 classroom hours have been
completed. At least 180 hours of the 270 must be in
core real estate. Therefore the other 90 hours may be
in related. Evidence of successful completion must be
received on or before the renewal filing deadline. If
this documentation is not received on time, the license
will expire.
SAE
Acronym - Salesperson Annual Education
Secondary mortgage market
Buying and selling of existing mortgage loans, designed
to provide additional liquidity for lenders. Contrast
with primary mortgage market. Also see Fannie Mae, Freddie
Mac and Ginnie Mae.
Security interest
An interest that a lender takes in the borrower's property
to assure repayment of a debt.
Self amortized loan
A loan which will retire the debt by systematic payments
of principal and interest, so that at the end of the
loan period, the balance will be zero.
Servicing a loan
The ongoing process of collecting your monthly mortgage
payment, including accounting for and payment of your
yearly tax and/or homeowners insurance bills.
Setback
The distance a building must be set back from the property
lines in accordance with local zoning ordinances or
deed restrictions.
Shared equity mortgage
A home loan in which the lender gets a share of the
equity of the home in exchange for providing a portion
of the down payment. When the home is later sold, the
lender is entitled to a portion of the proceeds.
Short sale (of house)
A sale of a house in which the proceeds fall short of
what the owner still owes on the mortgage. Many lenders
will agree to accept the proceeds of a short sale and
forgive the rest of what is owed on the mortgage when
the owner cannot make the mortgage payments. By accepting
a short sale, the lender can avoid a lengthy and costly
foreclosure, and the owner is able to pay off the loan
for less than what he owes. See also deed in lieu (or
foreclosure).
Simple interest
Interest computed only on the principal balance. Contrast
with compound interest.
Single-family home
A free-standing, residential structure, designed to
accomodate one family. Single-family homes include traditional
houses, as well as patio homes.
Specific lien
A claim that only applies to or affects a certain property
or group of properties. Contrast with general lien.
Spite fence
An unsightly fence erected for no other purpose than
to irritate a neighbor. Such a fence may be illegal
under local fence height and appearance regulations
or state laws that specifically bar spite fences. Even
if it doesn't violate regulation or laws, the fence
may still be illegal if it was built with malicious
intent.
Statute of Frauds
The law which requires among other things, that all
contracts transferring real estate, or for the leasing
of property for over one year, must be in writing to
be enforceable.
Statutory year
A year composed of twelve months, each with thirty (30)
days, for a total of 360 days in a statutory year. Also
known as a banker's year. Contrast with calendar year.
Subject to mortgage
The buyer of an already mortgaged property makes the
payments, but does not take personal responsibility
for the loan. Should the mortgage be foreclosed and
the property sold for a lesser amount than is owed,
the grantee-buyer is not personally liable for the deficiency,
but the grantor-seller is. Contrast with assumption
of mortgage.
Sublease
A rental agreement or lease between a tenant and a new
tenant (called a sublessee) who will either share the
rental or take over from the first tenant. The sublessee
pays rent directly to the tenant. The tenant is still
completely responsible to the landlord for the rent
and for any damage, including that caused by the sublessee.
Most landlords prohibit subleases unless they have given
prior written consent. Compare with assignment.
Subpoena
A legal process ordering a witness to appear and give
testimony or to present documents under penalty of law.
TREC has subpoena powers.
Substitution, principle of
The principle which states that a buyer will pay no
more for a property than the cost of an equally desirable
alternative property.
Succession
The passing of property or legal rights after death.
The word commonly refers to the distribution of property
under a state’s intestate succession laws, which determine
who inherits property when someone dies without a valid
will. When used in connection with real estate, the
word refers to the passing of property by will or inheritance,
as opposed to gift, grant, or purchase.
Suit for specific performance
A legal action brought by either a buyer or a seller
to enforce performance of the terms of a contract.
Security
The property that will be pledged as collateral for
a loan.
Seller take-back
An agreement in which the owner of a property provides
financing, often in combination with an assumable mortgage.
See owner financing.
Servicer
An organization that collects principal and interest
payments from borrowers and manages borrowers’ escrow
accounts. The servicer often services mortgages that
have been purchased by an investor in the secondary
mortgage market.
Servicing
The collection of mortgage payments from borrowers and
related responsibilities of a loan servicer.
Settlement
See closing.
Settlement sheet
See HUD-1 statement.
Special deposit account
An account that is established for rehabilitation mortgages
to hold the funds needed for the rehabilitation work
so they can be disbursed from time to time as particular
portions of the work are completed.
Standard payment calculation
An account that is established for rehabilitation mortgages
to hold the funds needed for the rehabilitation work
so they can be disbursed from time to time as particular
portions of the work are completed.
Step-rate mortgage
A mortgage that allows for the interest rate to increase
according to a specified schedule (i.e., seven years),
resulting in increased payments as well. At the end
of the specified period, the rate and payments will
remain constant for the remainder of the loan.
Subordinate financing
Any mortgage or other lien that has a priority that
is lower than that of the first mortgage.
Subsidized second mortgage
An alternative financing option known as the Community
Seconds? mortgage for low- and moderate-income households.
An investor purchases a first mortgage that has a subsidized
second mortgage behind it. The second mortgage may be
issued by a state, county, or local housing agency,
foundation, or nonprofit corporation. Payment on the
second mortgage is often deferred and carries a very
low interest rate (or no interest rate). Part of the
debt may be forgiven incrementally for each year the
buyer remains in the home.
Survey
A drawing or map showing the precise legal boundaries
of a property, the location of improvements, easements,
rights of way, encroachments, and other physical features.
Sweat equity
Contribution to the construction or rehabilitation of
a property in the form of labor or services rather than
cash.
Second mortgage
A mortgage that has a lien position subordinate to the
first mortgage.
Secondary market
The buying and selling of existing mortgages, usually
as part of a "pool" of mortgages.
Secured loan
A loan that is backed by collateral.
Seller carry-back
An agreement in which the owner of a property provides
financing, often in combination with an assumable mortgage.
Settlement statement
See HUD1 Settlement Statement.
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