Real Estate Glossary

This list is provided for reference only. Each state has it's own real estate laws, terms and regulations for Realtors. In Arizona, your Realtor and Title Company handle most real estate transaction activities that involve attorneys in many other states. However, you have the right to seek the advice of an attorney or other professional counsel in any real estate transaction.

Sales Contract - A written agreement stating the terms of the sale agreed to by both buyer and seller. See Earnest Money Contract - .

Secondary Financing - A loan secured by a mortgage or trust deed, which lien is subordinate to another mortgage or trust deed.

Secondary Mortgage Market - Buying and selling of existing mortgage loans, designed to provide additional liquidity for lenders. Also see Primary Mortgage Market - . The largest secondary mortgage market is the Federal National Mortgage Association (FNMA).

Security - Real or personal property pledged by a borrower, as additional protection for the lender's interest.

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.

Selling Agent - A real estate agent who sells a property. The selling agent may be (1) the subagent or listing agent of the seller; (2) a buyer's agent; or (3) a dual agent. Also called a cooperating agent - or participating agent - .

Septic System - A sewage system, whereby waste is drained through pipes and a tile field into a septic tank.

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.

Set Back Ordinance - Regulates the distance from the lot line to the point where improvements may be constructed.

Settlement Statement - A statement prepared by broker, escrow, closing agent, title company, or lender, giving a complete breakdown of costs involved in a real estate sale.

Sheriff's Deed - Deed given at sheriff's sale in foreclosure of mortgage.

Simple Interest - Interest computed only on the principal balance. Also see Compound Interest - .

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 title defects or claims asserted by the grantor and those persons whose right to assert a claim against the title arose during the period the grantor held title to the property. In a special warranty deed the grantor guarantees to the grantee that he has done nothing during the time he held title to the property which has, or which might in the future, impair the grantee's title.

Specific Lien - A claim that only applies to or affects a certain property or group of properties. Also see General Lien - .

Specific Performance - Carrying out of the precise terms agreed upon in a contract. Also see Suit for SpecificPerformance.

Split Agency - Also known as Appointed Agency - , Designated Agency - . Agency relationship where the Broker appoints one agent in the office to represent the seller and another agent in the same office to represent the Buyer. Caution: This is a relatively new concept and has not been tested in the Courts yet. Prior relationships or conversatins between the 2 agents appointed could possibly create a conflict of interest. Example: Agent A (representing the buyer) tells Agent B (not involved at this point) that he has a Client that has financially qualified for up to $150,000. Later, the Buyer decides to make a $125,000 offer on a property listed by the same agency. The Broker appoints Agent B to represent the Seller. Since Agent B already knows the Buyer can qualify for $150,000 must he tell the Seller? Remember, he is obligated to reveal any information that he knows that would help the Seller.

Square Foot - Area of measure, 1 foot on each side.

Square Footage - The number of square feet in a tract of land or building. CAUTION: The square footage of a house is normally calculated by using the outside dimensions. The 'usable' square footage (the space available for usage) will be less. Depending on local custom, the square footage of a dwelling stated may or may not include space that is not considered living space i.e.: garages, porches, storage rooms.

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 Lien - An involuntary lien, includes tax liens, judgment liens, mechanic liens, etc.

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. Also see Calendar Year - .

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

Subagent - An agent employed to act for another agent - in performing functions undertaken for a principal - . The subagent owes the same duties and responsibilities to the principal as the principal's agent. Correspondingly, the subagent can create the same liabilities for the agent and principal that the agent can create for the principal herself.

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. Also see Assumption of Mortgage - .

Subpoena - A legal process ordering a witness to appear and give testimony or to present documents under penalty of law.

Substitute of Trustee - A document which is recorded to change the trustee under the Deed_of_Trust.

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.

Suit for Specific Performance - A legal action brought by either a buyer or a seller to enforce performance of the terms of a contract.