Oscar Castillo
"Residential" Real Estate







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

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.

Safe Harbor (lending requirement) - Lenders will have to verify a potential borrower's income, the amount of debt they have and their job status before issuing a “qualified mortgage”….The Consumer Financial Protection Bureau (CFPB) has imposed obligations and restrictions on lenders to lend only on "qualified mortgages". Lenders will be required to verify and inspect the borrows’ financial records, income, employment, and debt to income levels (DTI).  In short, the CPFB has placed a ban on loans that have risky loan features - such as interest only loans/payments, No income documentation or balloon payment/loans - and with fees that add up to no more than 3 percent of the loan amount.  In addition, (according to the Consumer Protection Bureau) these loans must go to qualified borrowers whose debt does not exceed 43 percent of their debt-to-income ratio (DTI) as long as they met the underwriting standards required by Fannie Mae, Freddie Mac or other U.S. government housing agencies.  - A "qualified mortgage" , is a mortgage loan that upon full verification by the Lending institution,  the verification and the borrower  would automatically be considered compliant with the ability-to-repay requirement by the CFPB.

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.

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 and/or a residential purchase agreement.

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.

Second mortgage (Second Lien) the traditional term for a home equity loan or line of credit (HELOC) because it is generally a subordinate lien and is not the first 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.

Secondary financing   a loan taken out in addition to a first loan, usually obtained from an individual lender.

Second Mortgage   a second loan on real estate that a l ready has a mortgage. It is subordinate to the first mortgage. Usually of shorter term and often at a higher interest rate.

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.

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 earners and the elderly. (see section 8)

Section 8   Federally subsidized housing administered by HUD where the tenant pays up to 30% 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)

Securitization   the pooling of real estate mortgages and trust deeds to act as collateral for the sale of securities to public and private investors.

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

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.

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. Also referred to 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."

Seller's agent   an agent who represents the seller of real property.

Seller's Market   more buyers than homes available for sale.  Low housing inventory.

Seller's Real Property Disclosure Form    a statement from the transferor (seller) which provides information regarding the physical condition of the property. Must be made by the seller before residential property is conveyed to a buyer.

Selling Office Commission (SOC)   brokerage commission, paid by the seller to a real estate broker to compensate the broker(s) involved in the sale for their services in marketing the property, finding a buyer and assisting in the negotiations. Brokerage commissions are usually computed as a percentage of the sale price and are established in a listing agreement between the seller and the listing broker.

Senior loan   a real estate loan in the first priority position.

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.

Septic Leach Lines - also known as leach fields drain fields, or leach drains. They are used to remove "contaminants and impurities" from the liquid that emerges from the septic tank. A (1) septic tank, the (2) septic drain fields, and the (3) associated piping -  together are the make-up of a complete septic system.

Septic Leach "Reserve" Lines - every new home or building served by a septic system is required to have a designated "replacement or reserve" area. This is a designated area suitable for a new drain field if necessary. (A "reserve" area should have been designated as part of the permit process for any sewage system installed since 1980.)  Once a septic system has failed, it is too late to solve the problem by pumping your tank. A new drainfield will have to be installed at a different location which will be installed and/or connected at the designated RESERVE area. This is why it is important to know where the replacement area is located.

Septic System   a system for collecting, treating and eliminating waste from a home waste drainage system.  A private sewerage system consisting of a tank, distribution box and leaching field. The sewerage flows into the tank, the wastewater rises and goes out a pipe to the distribution box. From this point the waste water is diverted into the leaching field consisting of three perforated pipes which allow the waste water to leach into the ground. The sludge remains in the tank and must be pumped regularly.

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.

Servicer   an organization that collects principal and interest payments from borrowers and manages borrowers' tax and insurance escrow accounts.

Servicing   the collection of mortgage payments from borrowers and related responsibilities of a loan server.

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.

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.

Shadow Inventory  is a term used to describe homes that have not hit the market yet.  This inventory is “lurking around out there”.  Just know that these homes will eventually go into the market and the following are some reasons as to why  (1) Homeowners facing a “hardship” such as loss of job, divorce, medical issues etc. and can no longer afford the payments (2) People who have failed to sell their homes recently and in the past but for one reason or another have not placed them back in the market again (3) homeowners waiting for the market to improve (4) People facing foreclosure (5) Banks and lenders who have foreclosed and they the banks are holding back  (6) Homeowners going through and/or will seek loan modifications but may not qualify and will eventually need to Short Sell their home or be Foreclosed on.

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 which is the public Auction of assets seized in a Foreclosure order obtained from a court

Shingles   roofing material characterized by short, rectangular sections, nailed to the roof decking in an overlapping pattern. Asphalt shingles are the most common type. (also known as composite tiles)

Short Sale is defined as a real estate sale in which the seller owes more than what the home is worth and requires their lien holder (the bank or mortgage institution/investor) to forgive a portion of the debt/mortgage as well as pay for other expenses and fees associated with the sale of the home. The term “Short Sale” is probably a misnomer since the actual process of purchasing and closing escrow on a Short Sale is anything but short. This type of sale is twofold in that it first requires the seller to accept the offer and then the lien holder to approve the loss. There are a number of hoops to go through for the seller and even a few for the buyer so patience is needed with these types of sales.

Short Sale Lease-Back Program - In theory,  this program provides a more attractive solution for homeowners who cannot afford their homes but have valid economic hardships and steady incomes to afford a lease payment.  In recent years, banks and servicers have required that a short sale be an “arm’s-length” transaction, meaning the buyer and seller could not be related and could not have a prior agreement for the homeowner to stay in the property.  In 2011 changes to the federal Home Affordable Foreclosure Alternatives (HAFA) short sale program opened the door for a short sale without the arm’s-length requirement. The U.S. Treasury Department in March 2011 issued a supplement to its HAFA guidelines to allow “servicers the discretion to approve sales to non-profit organizations with the stated purpose that the property will be rented or resold to the borrower, so long as all other HAFA program requirements are met.”  Keep in mind,  this program was created to allow a qualified homeowner to sell their property, rent it back for three years and then buy it back at a pre-determined price.

Overview of the Short Sale Lease-Back Program:  A qualified non-profit organization will be the party to purchase the home in a short sale...  Sellers that are interested in a short sale lease back need to be 100% certain that the buyer is a non-profit organization, look to see if it is a legitimate organization and that they will not benefit financially at any time in the future from the resale of the subject property.  The seller will then rent the home back for a minimum of three years, allowing their damaged credit (due to the short sale) to cure so that they can re-qualify for a mortgage.  In addition, homeowners must attend ongoing HUD and financial-literacy counseling, seek legal advice and work with a tax expert to ensure the program is the right fit for them.  If approved, the former owner can repurchase the home, more than likely for a much lower amount from what they once owed on that very same house.  - Not all homeowners qualify for the program. Borrowers must have sufficient income to afford the monthly rent payments in addition to their other debt payments.  Important note:  Homeowners need to be very careful if you are to go with this option.... First of all - not all lenders will agree to this "Short Sale Leaseback program",  the probability of fraud being perpetrated against short sale sellers seems to be one major reason that many lenders might avoid the short sale lease back.

Short Sale Processing System   technology that is used to process, track and communicate details of a short sale transaction.

Short Sale Specialist or Negotiator   a lender/bank associate who works in the Short Sale Department. This specialist is also known as a Negotiator and/or Closing Negotiator. The Short Sale Specialist is responsible for mitigating loss for the investor by negotiating the short sale purchase offer submitted by the seller’s agent. The Negotiator is the mediator between the distressed homeowner and the investor, working to arrive at a selling price that will be acceptable to all parties. This specialist will communicate the investor’s decision to the agent. In addition, the Short Sale Specialist negotiates closing costs, determining which items will be paid by whom.

Short Sale (Traditional)   Reactive approach in which the short sale process is begun after an offer is received.  This is in contrast to a cooperative short sale or the  HAFA pro-active (to a short sale) approach in which the short sale is initiated before an offer is made on the property.)

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 instead of  floor tiles. Usually set on a concrete base/slab of a shower area. Purpose is to prevent 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.

Siding (Hardie Board) - is a non combustible alternative to wood and vinyl sidings. The cement-board siding is more durable and rot-resistant than wood. Increased impact resistance over wood and vinyl makes it a popular alternative to Wood siding. Hardie board is a siding made of fiber cement. Cement is combined with sand, water and cellulose wood fibers to make a solid building material well suited for protecting the exterior of a building.

Siding (on a home) -  is the outer covering or coating of a house that is meant to shed water and protect from the effects of weather. On a home or building that uses siding, this may act as a key element in the aesthetic beauty of the structure and can directly influence its property value.  Siding may be formed of horizontal or vertical boards, shingles, or sheet materials. All meant for the purpose avoiding wind and rain infiltration.  Since building materials expand and contract with changing temperature and humidity, it is not practical to make rigid joints (points of interlocking) between the siding elements/boards.  Siding may be made of wood, metal, plastic (vinyl), masonry, or composite materials. It may be attached directly to the building structure (studs in the case of wood construction), or to an intermediate layer of wood (boards, planks, plywood) called sheathing (protective case or covering) or sheeting.

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.

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 a slab for a home to be erected.

Smoke Alarm - is a device that senses the presence of smoke. The smoke alarm is a “self contained” unit that detects and warns occupants in a building or home.  Smoke detectors became widely available and affordable in the early 1970s.  Although most residential models are self-contained units that operate on a 9-volt battery,  newer construction codes in most parts of the country now require installations in new homes to be connected to the house wiring, with a battery backup in case of a power failure.

Smoke Detector – Also is a device that senses the presence of smoke.  The smoke “detector” derives  its operating power (most commonly 120 volt from the building or home) from a centralized fire alarm control panel.  Although these devices usually possess a means of signal processing, it is the fire alarm control panel that provides the notification apparatus with the signal it requires in order to “sound off”.  Smoke detectors have the advantage of a circuit that is constantly supervised by a centralized alarm control panel.

Soft credit inquiry - is a “soft” credit check which accesses only your credit score. Also known as a "soft pull", is a term used to refer to an inquiry into your credit history that does not adversely affect the credit score.  Often, you are not even aware that there has been a soft inquiry on your credit report. For example, if you receive a solicitation in the mail offering you a credit card, the credit card company has most likely conducted a soft pull to see if you qualify. When mortgage lenders pre-approve you for a loan, they initially use a soft pull. Potential employers use it as a part of background checks, and your current credit card companies use soft inquiries to check up on you. Banks use them to verify that you are who you say you are when opening an account. If you check your own credit report, which you can do for free once a year, this is done with a soft pull. Most of the time, you do not even know when they occur, and they do not affect your credit report.

Soft money loan   a loan where credit not cash is extended, usually by the seller carrying all or part of the financing.

Solar panels - electrical current generated by the light flowing from the solar panel into a battery storage in the form of DC electricity. In order for the elecricity produced by the solar panels to be used,  it has to be turned into AC electricity. This is accomplished by running the stored DC electricity through an "inverter" that makes the DC into AC.  The electricity then can be used to power your house and/or swimming pool pump etc.  Any extra electricity produced can be sold back or is deducted by the utility company that you get your electricity from.  In other words, the use of solar panels can offset your electricity bill.  If you generate more than you use, then you can realize a profit. (contact SDG & E to verify the "sell-back"  of your excess produced energy)  The price of solar panels has dropped in the recent years due to the greater ability of manufacturers to create pure silicon wafers that are the starting material of a solar panel, thus making the use, acceptance and affordability of solar panels more widespread throughout the country.

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.

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.

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.

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.

Special Conditions   a section of the offer to purchase designed to exhibit any special circumstances, contingencies or addendums desired by the buyer or seller.

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 re-enter 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 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.

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.

Spot zoning   the zoning of parcels not in conformance with the general zoning of an area.

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.

Staging   preparing your home for sale with furniture wall pictures etc. The purpose is to have home show as appealing as possible to potential buyers.  Studies show that a staged home sells for significantly more than one that has not been staged.

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.

Statement of information   a form completed by the buyer and the seller that is used for title insurance purposes to assure that there is no confusion of identity with those of the same or similar names and to assure that there are no unknown judgments against the person seeking title insurance.  Also known as a "Statement of identity", thus providing to the escrow agent verifiable pertinent and personal data with the intention of specifically identifying the grantor, grantee, or borrower/buyer.

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

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 prospective buyers 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 prospective buyers 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 prospective buyers 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, death 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 the whole truth from the seller when dealing with a stigmatized property.  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.

Stop date   date on a term loan when the balloon payment is due.

Stop notice   a notice given to a lender that a “subcontractor” has not been paid. Unless bond is posted, the lender must withhold moneys that is due to the prime/main contractor on the job.

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. 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.

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 non-amortized note made for a short term, such as three to five years, and is renewable at the end of the term.

Stratified marketplace   the real estate market is a marketplace that is stratified based on price, lot size, neighborhoods, year the house was built, square footage and location.

Strategic default   occurs when a borrower stops making mortgage payments on a property he or she can afford. Typically, strategic defaulters are also underwater.

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 judicial foreclosure and nonjudicial foreclosure)

Strict liability   an owner of a property is responsible to an injured party without excuse.

Stripping a Lien - results when a homeowner files for bankruptcy, and the second lien holder (recognizing that there is not a slight chance that they will get any money) decides to release their lien. The result being sellers may now be finding equity that thought they had lost.  Without lien stripping available, many homeowners who participated in a Chapter 7 bankruptcy will and/or could now be in a situation where they can consider short selling.

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.

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 Map Act   an act providing for local control of subdivisions. Cities and counties are required to adopt an ordinance to regulate subdivisions.

Sub Escrow - is a service provided by the Title company that includes receiving the loan proceeds from the buyer or "borrower's lender" and making the required payoffs of existing liens and encumbrances against the property.... In a property purchase,  the Lender sends the "loan proceeds" to the Title company when the transaction is ready to close escrow.  The sub escrow staff then calculates the amount needed to pay off prior mortgages, property tax liens that may be due, and any other monetary liens and encumbrances against the property.  The remaining funds are then disbursed/sent to the "Escrow holder" for further disbursement.  The Title company charges a "sub escrow fee" for the performance of the above payoff services. All fees should be disclosed in the HUD-1 Settlement statement sheet.

Subject property   a reference to the real property under discussion, or the real property under appraisal.

"subject to"   the recognition by a buyer of conditions

Sublease   a lease given by a lessee (renter) for a portion of the leasehold interest to a third party, 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.

Subordination agreement    a written agreement between lienholders to change the priority of encumbrances, judgments 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. For example: You have a 1st and 2nd mortgage on your home. You want to refinance the 1st but keep the 2nd on it. If the holder of the 2nd does not subordinate its mortgage to the wanted "new refinanced" 1st morgage, then a new lender will not be willing to refinance the 1st mortgage.  A subordination agreement can change the priorty of the 2nd mortgage so that it will be of lower priorty (or become a junior) to the new 1st refinanced mortgage...most likely this would allow the refinance of the original 1st mortgage to take place.

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.

Subprime lenders    lenders who specialize in B, C, or D catagory 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.

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.

Substitution of entitlement   replaces one eligible veteran with another on an existing (assumable) Veterans Administration loan. The entitlement is restored to the original veteran.

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.

Subterranean termites    a type of termite that nests underground.

Successors   those who succeed to or to whom the rights in the property are transferred.

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.

Sump Pit - is a hole dug in the ground beneath the basement or surrounding areas of a house in which rainwater collects. Here, in this pit, you can install a "sump pump" in order to redirect the water (pump out) so that no flooding will occur.

Sump Pump - Its job is to help keep the area under the building dry and to prevent it from flooding. Usually, sump pumps are installed in specially constructed sump pits. The sump pump's job is to pump the water out of the pit and away from the building so the basement or crawlspace stays dry.

Superfund    opular 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.

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.

Supplemental Tax Bill  In addition to annual taxes, you may be responsible for paying supplemental property taxes. State law requires the Assessor to reappraise property upon a "change in ownership" or new construction. The supplemental assessment reflects the difference between the new assessed value and the old or prior assessed value. If the property is reassessed at a higher value than the old assessed value, a supplemental bill will be issued. If the property is reassessed at a lower value than the old assessed value, a refund will be issued.   The taxes are prorated based on the number of months left in the fiscal year from the date of ownership change or the new construction completion date. If for example: the change in ownership or new construction occurs between January 1st and May 31st, two supplemental tax bills will be issued. The first supplemental bill will be for the remainder of the fiscal year, and the second supplemental bill will be for the fiscal year that follows.  Supplemental tax bills are mailed directly to the property owner and are your responsibility. In general, the "Supplemental Taxes" are not paid out of your monthly impound account. Please check with your lender if you need more clarification.

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.

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. (

Swimming Pool - Coping  is the natural stone or precast concrete cap on the edge of a swimming pool or spa.  It is a concrete tile with a rounded edge and has a decorative finish or can be in white.

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.

Synthetic   devised, arranged, or fabricated for special situations to imitate or replace usual realities. For example marble... a fabricated marble is called "cultured marble".


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