Real Estate Glossary

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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. Safe Drinking Water Act
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. EPA Sick Building Syndrome Factsheet
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.
Special limitation:
A fee simple estate may also be qualified by a special limitation. The estate ends automatically upon the current owner's failure to comply with the limitation. The former owner retains a possibility of reverter. If the limitation is violated, the former owner (or his or her heirs or successors) reacquires full ownership, with no need to reenter the land or go to court. A fee simple with a special limitation is also called a fee simple determinable because it may end automatically. The language used to distinguish a special limitation-the words "so long as" or "while" or "during"-is the key to creating this estate.
Special-purpose property:
Hotels, resorts, nursing homes, theaters, schools, places of worship and other organizations whose specialized needs dictate the design and operation of the property.
Special studies zone:
A specific area where an investigation is taking place regarding seismic or geologic considerations.
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. Such a deed is usually identified by the language "by, through, or under the grantor, but not otherwise." A special warranty deed is often used when a fiduciary such as an executor or trustee conveys the property of his or her principal, because the fiduciary usually has no authority to warrant against acts of his or her predecessors in title.
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 homeseekers 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 homeseekers 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 homeseeker 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 judgement in strict foreclosure cases. (See foreclosure, judicial foreclosure, nonjudicial 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)
Subdivider:
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. EPA—Superfund Homepage
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 (subsurface rights).
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.


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