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Real Estate Glossary

This glossary was created by a team of real estate professionals. It contains terms regarding real estate buying and selling, home finance, home improvement, as well as legal terms. For your convenience, the glossary is searchable alphabetically.


Acronym - Salesperson Annual Education

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)

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.

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 deposit
A payment required by a landlord to ensure that a tenant pays rent on time and keeps the rental unit in good condition. If the tenant damages the property or leaves owing rent, the landlord can use the security deposit to cover what the tenant owes

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

servient tenement
Property that is subject to use by another for a specific purpose. For example, a beachfront house that has a public walkway to the beach on its premises would be a servient tenement

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

special warranty deed

A warranty deed which, instead of warranting the title from sovereignty of the soil to the last grantee, merely warrants the title against every person whomsoever lawfully claiming or to claim the same, or any part thereof, by, through or under the grantor

specific lien
A claim that only applies to or affects a certain property or group of properties. Contrast with general lien

specific performance

Carrying out of the precise terms agreed upon in a contract. Also see suit for specific performance

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

The illegal practice of directing members of minority groups to, or away from, certain areas or neighborhoods; channeling. See Fair Housing.

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.

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

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.

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