• 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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