Continued from…
Real Estate Glossary S [Part 1]
Secondary mortgage market
Existing mortgage notes are exchanged in this market.
Mortgage originators can sell their shares in this market, and existing mortgages are resold.
A market for the purchase and sale of existing mortgages, with the goal of increasing liquidity for mortgage sales; also known as the secondary money market; not to be confused with secondary financing. Mortgages are purchased as long-term investments by secondary (or resale) mortgage market lenders or investors, as opposed to other types of securities.
Many existing mortgages are purchased by Fannie Mae and Freddie Mac, freeing up funds for mortgagees to lend. Ginnie Mae is also active in the secondary mortgage market, particularly in federally subsidized projects.
When lenders package mortgages and sell securities representing shares in these pooled mortgages, mortgage pools are formed. The pooled mortgages are actually removed from the originators’ balance sheets, and the buyers of the securities become joint owners. The regular mortgage payment and any prepayments are collected and distributed to the holders of the securities by the originators (who usually continue to service the mortgages).
Secondary source data
Data collected from third parties or public archives.
Secret profit
Refers to a broker making an undisclosed profit at the expense of the seller. For example, a broker might have a relative buy the listed property and then resell it to a buyer whose earlier offer was never shown to the seller. The seller can sue the broker to get the profit back. This is called “disgorgement.” Also called being too old.
Section
The ability to pay off a mortgage before it matures. The right to prepay is determined by the law of the state in which the property is located as well as the specific mortgage contract.
One square mile, or 640 acres, is the official government survey unit. A township is divided into 12 sections, each of which is known as a section.
It is a “cut through” portrayal of a building’s or structure’s internal makeup. Typically depicting the building’s construction from foundation to roof.
Section 1231 property
Trade or company property held for longer than a year, as defined in Internal Revenue Code Section 1231.
Section 1244 corporation
Section 1244 of the Internal Revenue Code says that a company met the requirements. For a corporation to qualify, it must be a “small business corporation,” which means that its paid-in capital must be less than $1 million. Shareholders in a Section 1244 corporation can treat any loss on their capital stock investments as an ordinary loss instead of a capital loss. This is important when the corporate form of ownership is used in a risky venture where there is a high chance of loss.
Section 203 loan
A square mile that has been specifically surveyed and identified within the framework of the rectangular survey system.
Section 203(B)
The most important part of the Federal Housing Administration’s mortgage insurance. First-time homebuyers and other borrowers who wouldn’t qualify for a conventional mortgage on affordable terms have more chances to own their own home. People who live in underserved areas, where it may be harder to get a mortgage, can also use Section 203(b). Lenders are protected by the FHA’s Mutual Mortgage Insurance Fund, which is paid for entirely by borrower premiums.
Section 8 program
A federal programme that helps people with low and moderate incomes pay their rent is split into two parts: the tenant-based programme and the project-based programme. Families can choose to rent from a private owner with Section 8. Most of the time, the public housing authority pays the landlord the difference between a payment standard set by HUD and the fair market rent, which must be fair. The Section 8 Housing Choice Voucher Program is another name for it.
Section of land
A square mile is one square mile.
Sector model
Homer Hoyt advocated an urban layout with radial corridors or wedges, particularly for higher income residential land usage.
Sector theory
Homer Hoyt’s idea, based on the fact that successive waves of residential construction within a particular socioeconomic class tend to spread outward from the urban centre in a wedge-shaped manner.
Secured party
The holder of the security interest, including the mortgagee, the purchaser, and the pledgee.
Securities
Instruments that represent a share of a company or a limited partnership’s ownership.
Securities and exchange commission (SEC)
An independent government agency that is part of the federal executive branch and is in charge of making sure that federal securities laws are followed (i.e., stocks and bonds). The Securities and Exchange Commission (SEC) works to protect investors and make sure that the securities markets are fair and honest. It can punish people who break securities laws, and the United States Court of Appeals can look over its decisions.
The Securities Exchange Statute of 1934 established a federal agency to oversee the act. Misrepresentations in securities offers are prohibited under the statute.
Securitization
The long-term trend that has had a significant impact on real estate values is the practice of investing in real estate markets through less risky means (such as through investment pools or funds) as opposed to investing directly in real estate by purchasing property or taking out mortgages.
Securitized investments
Investment instruments that aggregate investment assets and allow investors to purchase a piece of the pool of assets.
Security
A loan secured by an asset, generally a house
Lenders use this security over the money they loan to make sure their debt can be paid back.
Proof that you have to pay money or that you have the right to share in the profits and distributions of a business, a trust, or other property. Usually, when investors buy a security, they put their money at risk in a business over which they have no control.
Securities are ruled by both state and federal laws. Monitors keep an eye on transactions in which promoters go to the public for risk capital. This is to stop fraud and protect the public from schemes that people don’t know about.
Security agreement
A security document that puts a lien on personal property (chattels), including chattels that are meant to be attached to land as fixtures. Before the Uniform Commercial Code, this was called a “chattel mortgage” (UCC). Instead of recording the security agreement, the UCC lets you file a short form called a “financing statement” with a notice (Form UCCI). The financing statement needs to be filed in order for a security interest to be complete. So, it shows up as a lien on the real property under search on a title report. In the sale of business opportunities, brokers often have to deal with security agreements.
Security deposit
Money deposited by or on behalf of the tenant with the landlord, to be held by the landlord for the following reasons:
to make up for tenant defaults for damage to the premises (accidental or intentional), for failure to pay rent due, or for failure to return keys at the end of the tenancy;
to clean the dwelling so that it is in as good a condition as when the tenant took possession, taking into account normal wear and tear; and
to make up for damages caused by a tenant. The security deposit is not considered to be liquidated damages. Instead, it is a fund held in trust for the tenant that the landlord can use to pay for damages caused by the tenant. It is not taxable to the landlord until it is used to fix any problems caused by the tenant. The renter can’t use the deposit as a tax break either. In some states, the security deposit money has to be put into an account that pays interest for the lessee.
The tenant has a better right to the money from the security deposit than any of the landlord’s creditors. The claims of a trustee in bankruptcy are an exception.
The Uniform Residential Landlord and Tenant Act, which many states have signed on to, keeps the security deposit, but it limits it to one month’s rent and makes it illegal to misuse it. Depending on state law, the landlord must return security deposits to tenants within a certain amount of time and explain all claims to any part of the deposits. Disputes about security deposits can be quickly settled in small claims court, and the law has penalties for a landlord who doesn’t follow the rules. The act doesn’t put any limits on paying rent ahead of time, which is different from putting down a security deposit. It also doesn’t say that the landlord has to pay interest on security deposits.
The lease should make it clear whether a payment is a security deposit or a rental payment in advance. If it is a security deposit, the renter cannot use it to pay for the last month’s rent. If the rent is paid ahead of time, the landlord must pay taxes on it when he or she gets it. Many state laws say that the security deposit should not be seen as the tenant’s payment for the last month’s rent. When the owner sells the property, the sales contract should say how the security deposit money should be handled (i.e., debit seller and credit buyer).
In a sales situation, the security deposit is not the same thing as the earnest money deposit.
Amount due at the start of the lease term by a renter to cover any damage to the property that is not covered by regular wear and tear.
A sum of money given to a lender, seller, or landlord as a sign of good faith. Depending on the terms of the deal, security deposits can either be returned or not returned. As the name suggests, the deposit is meant to protect the person who gets it.
Security interest
A security interest in real estate that is used as collateral.
Seed money
Money required to start a real estate deal.
Segmentation
The segmentation of a demographic group for the aim of identifying marketing subgroups.
Segmentation of formal regions
Separation or subdivision of larger administrative regions into smaller ones for the purpose of conducting granular research on local markets.
Seisin | Seizin
A person who claims to own a freehold interest in a piece of property must be in actual possession of that property. A person is in possession of property when they have the right to do so and want to claim a freehold estate. Seisin, which is pronounced “seize-in,” is now usually used as a synonym for “ownership.” The idea comes from feudal times, when no one could own their own property. In the Middle Ages, a landowner in England was said to be “seized” of his land, because the king was thought to own all land in England. Also spelled seizen.
In the covenant of seisin, which is part of a general warranty deed, the grantor promises that she has the estate or interest she claims to be giving away. For the covenant to be met, the grantee must have both title and possession at the time of the grant. In case of a breach, the buyer can get back costs up to the amount they paid for the property.
A warranty deed covenant in which the grantor promises that he or she actually owns the rights or interests being transferred.
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Seizure
When the government takes someone’s property because it is being used to do something illegal, like selling drugs. Under the federal rule, the government takes the property and then files a lawsuit to get the title taken away. The property is then sold. To stop the property from being taken away, the owner must show that he or she did not know that the tenant was doing illegal things on the property.
Self-amortizing mortgage
A mortgage loan that will pay off itself over time by making periodic principle and interest payments.
Self-contained appraisal report
Includes all of the details and information relevant to determining market value or other findings in the report. The “narrative” reporting option is used in the majority of self-contained appraisal reports. The narrative appraisal report is the most formal and longest format for presenting and explaining appraisal conclusions, and it includes a step-by-step exposition of the facts and procedures utilized to determine value. In evaluations of big income-producing properties, self-contained narrative reports are common.
Self-help
Nonjudicial remedies used by a property owner to reclaim possession of their property. For example, a landlord whose tenant has not paid the rent may attempt to cut off the utilities, force entry, or change the locks in order to force the tenant to pay the rent or move out. Most courts oppose self-help remedies and require landlords to follow statutory eviction procedures.
Selfsealing shingles
Shingles with factory-applied self-sealing adhesive strips or patches.
Seller Contribution
The seller contribution is when the person selling a house pays some or all of the closing costs for the person buying it.
Seller financing
The owner or seller of the property gives the money and takes back a secured note.
Seller’s market
A situation in which there are more people who want to buy something than there are people who want to sell it.
When there are more buyers than sellers in a real estate market, the seller might achieve a higher sales price.
Seller’s agent
A listing agent who works for the seller is called a seller’s agent.
Selling broker
The middleman who finds the buyer. Most of the time, this is the cooperating broker. However, in an in-house sale, the listing broker and selling broker are sometimes the same person. Don’t mix up this person with the seller’s broker (the listing broker).
Selling expenses
Expenses linked with the sale of a property.
Those expenditures incurred by the seller during the money raising or sales phase on a specific piece of property.
Selling group
The syndicate manager appoints a group of dealers to underwrite the offering.
Semiannual
Taking place twice a year, as in tax payments that are made every other year.
Semidetached dwelling
A home that shares a wall with a building next door.
Semigloss paint or enamel
When dried, the covering of a paint or enamel has some sheen but is not highly glossy. Semi-gloss paint is commonly used in bathrooms and kitchens.
Senior mortgage
A mortgage that takes precedence over all others.
Senior real estate analyst (SREA)
The Society of Real Estate Appraisers confers this professional qualification.
Senior real property appraiser (SRPA)
The Society of Real Estate Appraisers bestows this professional qualification. Commercial and industrial appraisers are given the SRPA certification.
Senior residential appraiser (SRA)
The Society of Real Estate Appraisers bestows this professional qualification. Commercial and industrial appraisers are given the SRPA certification.
Sensitivity analysis
Financial analysis in which all variables except one are maintained constant and the impact of changing the remaining variable on the outcome is examined.
Multiple evaluations of future cash flow, resale, and rates of return on an investment, each with a different set of assumptions.
An approach to analysing the effect of a variable by recalculating results under different assumptions.
Separate accounts
To allow for personalized investments for each customer, an investment manager acting on behalf of numerous clients manages each client’s assets in a separate account rather than as part of a commingled fund.
Separate property
Property purchased previous to the marriage by the husband or wife, as well as gifts or inheritance received during the marriage, are considered community property in community property states.
Property that is owned by one person, as opposed to property that is owned by two or more people.
Septic permit
A permit from the health department to build or change a septic system.
Septic System
A sewage system that stores and/or treats wastewater in a septic tank; usually, an on-site (small-scale) sewage disposal system that relies on the soil for wastewater treatment.
A system for treating waste water on-site. It usually has a septic tank and a drain field. The septic tank helps the waste break down biologically, and the drain field lets the liquid drain into the ground.
Septic tank
A sewage settling tank where some of the sewage is turned into gas and liquid before the rest of the waste flows by gravity into an underground leaching bed. Many local planning commissions won’t let a developer use septic tanks because they worry about pollution. Instead, they want the developer to provide a sewage disposal system. But unlike cesspools, septic tanks are usually a good way to get rid of waste in low-density developments.
Sequestration order
A writ enabling the seizure of land, rents, and/or profits owed by a defendant in a current or concluded lawsuit in order to compel the defendant’s compliance with a court order. An example would be a court order to hold rental payments pending the result of litigation.
Serial bonds
Secured debt instruments that are retired in the order in which their serial numbers were assigned.
Serial correlation
A measure of how long it takes for causative factors to have an effect on outcomes spanning two or more time periods.
Service area
The area defined by the location of the bulk of the tenants’ customers (a concept that becomes less applicable as the service area of the customer base increases).
Service drop
A service drop is the electrical wires that run above ground from the nearest power pole to the house’s electrical service.
Service entrance panel
The main power cabinet is the location where electricity enters a home wiring system.
Service equipment
Circuit breakers, switches, and fuses are examples of main control equipment found near the service door.
Service lateral
Underground power distribution line
Service of process
The legal process of telling the defendant that a lawsuit is coming and giving the defendant the summons and complaint in the case. Most of the time, the sheriff delivers a certified copy of the summons and the plaintiff’s complaint to the person who is being sued. If the defendant can’t be found in the state, the court may allow service by certified mail or by publication, usually in a local newspaper, at least once a week for four weeks or longer.
Under the rules of many state license laws, out-of-state brokers who want to get registered must name the public official in charge of real estate registration as their agent to receive any legal process in any noncriminal real estate-related case. Some states require out-of-state sub-dividers or foreign corporations to follow a similar rule in order to be able to do business in that state.
Serviceability
In this case, the applicant’s ability to pay back (or “service”) the loan.
Servicing
As loan correspondent, a mortgage banker’s duties are laid out in a servicing agreement and are done for a fee. Most of the time, this means getting payments from the borrower for the note’s interest, principal, insurance, and taxes, according to the terms of the note. It can also include things like accounting, bookkeeping, making insurance and tax records, following up on loan payments, following up on loans that haven’t been paid, and analyzing loans. An investor and a mortgage loan correspondent usually have a written agreement that spells out each party’s rights and responsibilities. The servicing fee is between 0.5% and 5% of the amount of the loan.
Servicing refers to actions performed by the lender, such as collecting payments and/or paying taxes and insurance from an escrow account.
Servient estate
A servient tenement is a piece of land that has an easement or other right that benefits a property next to it. This property is called the dominant estate. If property A has a right-of-way across property B, then property B is the “servient estate.”
The servient owner can’t use the property in a way that makes it hard for the dominant owner to use it.
Servient parcel
An easement appurtenant to a piece that restricts or reduces its size.
Servient tenement
An easement appurtenant to land that bears the burden of the easement.
Servitude
A charge or debt against an estate. A personal servitude, like a license, benefits the person to whom it was given and ends when that person dies. A real servitude, like an easement, helps the owner of one property, who gets to use a part of another property. A real servitude lasts as long as the land does.
Set-aside letter
A letter from a lender to a project’s contractor saying that the lender will put money aside for the contractor. This is meant to encourage the contractor to finish a troubled project.
Setback
The shortest distance between a structure or facility and an edge, such as a property boundary.
Zoning laws say how much land needs to be around improvements and how much space needs to be between the lot line and the building line. These rules, which are called setbacks and side yard restrictions, can be written into local zoning laws or written into restrictive covenants in deeds and subdivision general plans, which are usually written on the recorded subdivision plat.
Setback rules are meant to keep buildings away from streets and give people more light, air, and less noise, smoke, dust, and risk of fire spreading. In some cases, they also give people a better view at street corners. It is important to define what is meant by “building,” such as whether the rule applies to eaves, steps, bay windows, porches, awnings, walls, or fences.
Distance from front or interior property line to point where structure is situated is known as setback.
Setback thermostat
A thermostat with a clock that can be set to turn on or off at different temperatures and different times of the day/week.
Setoff
A claim that a debtor can make against a creditor to reduce or cancel the amount owed.
Settlement
The end of the sale transaction. Finally, all the money is paid at settlement in exchange for the right documents. In the end, the buyer can own the house.
The procedure of a broker accounting to the principle for the earnest money and deducting his real estate commission using a kind of closing or settlement statement during the closing of a real estate deal.
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Adjusting and dividing up the different credits, charges, and settlement costs in order to close a real estate deal. Many brokers call this part of the process “closing” instead of “settlement.”
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The act of making a deal in a dispute or court case. Usually, doing something like this is not an admission of liability.
Shifts in a building, mainly produced by subsurface freeze-thaw cycles.
Severalty
Only one person owns a piece of land.
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Severance
Getting rid of something that is attached to land or ending a relationship. When a fence is taken down, the fence is cut off from the property. So, the fence goes from being a part of the land (a fixture) to being something you own.
When one joint tenant gives up her share of the property, the joint tenancy ends. The other person who owned the property with the new transferee is then a “tenant in common” with that person. A tenancy by the entirety can only be broken if the husband and wife get a divorce or sell the house together.
Severance damages
A payment for the loss of value in the remaining property caused by the state, federal, or local government’s use of its power of eminent domain to take some real property. The property owner is entitled to severance damages if the partial taking lowers the property’s highest and best use or limits how the rest of the property can be used.
In some states, the value of any special benefit given to the part that wasn’t taken is taken out of severance damages or offset against them. But if the benefit is more than the severance damages, it is not taken out of the value of the part that was taken. When the federal government takes something, the amount taken can be made up for by special benefits.
Sewage ejector
A pump that moves waste water uphill to a gravity-fed sewer line. Most of the time, they are used in basements and other places that are below the level of the side sewer.
Sewer lateral
The sanitary sewer section that connects the inside waste water lines to the main sewer lines. The side sewer normally goes from the home to the sewage line and is buried in several feet of earth. It is typically “owned” by the sewer utility, must be maintained by the owner, and can only be serviced by utility-approved contractors.
Sewer stub
The municipal sewer system junction to which the home’s sewer line is linked.
Sewer tap
The point at which the home’s sewer pipe connects to the main municipal sewer system.
Shake
A type of wood roofing material, typically cedar or redwood.
Shake shingle
Split wood shingles, commonly used for roofing or siding, are made from this type of wood.
Shall
In legal terms, this means what the law says must be done.
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