Real Estate Glossary

Sale Agreement - See earnest money agreement.

Sale and Leaseback - The sale of real property, followed by an immediate leasing of the property from the buyer back to the seller. Although the lease technically follows the sale, agreements for both events are executed simultaneously.

Savings and Loan Association - Private or cooperative financial institution originally established to accept money from depositors and to use depositors' money to make home loans. The federal government began regulating "savings and loans" in the 1930s when it began insuring depositors' money through the Federal Savings and Loan Insurance Corporation (FSLIC). After a failure of federal regulation to keep up with changes in the economic environment led to numerous S&L failures and the bankruptcy of the FSLIC in the 1980s, deregulation has occurred that has blurred the distinction between S&Ls and banks. Although some S&Ls still exist, many former S&Ls that did not fail became chartered as federal savings banks. Insurance for S&Ls is now provided through the Federal Deposit Insurance Corporation (FDIC).

Savings Bank - Formerly a term to describe a state-chartered financial institution that only accepted deposits, and operated for the mutual benefit of its depositors; the term now is used by both federal- and state-chartered institutions, and savings banks are no longer limited to only accepting deposits. Today, many operate the same as commercial banks.

Second Mortgage - Home loan that has a lien position subordinate to a first mortgage, but superior to any other mortgage. Interest rates on second mortgages tend to be slightly higher than those for first mortgages, primarily because of increased risk associated with being in a secondary lien position. The application process for a second mortgage is the same as for a first, but closing costs are often lower.

Secondary Market - In real estate, a term to describe the business created by the buying and selling of mortgage notes, or the servicing of them—often at a discount—in order to raise money for making more loans. Not related to the term "second mortgage."

Secondary Mortgage Market - See secondary market.

Section - Division of land, established by the federal government for surveying, that is one mile square and contains 640 acres, comprising 1/36th of a "township." Each section is numbered 1 to 36, beginning in a westerly direction from the northeast corner of the township and proceeding horizontally in a zigzag pattern from top to bottom. See also, rectangular survey system.

Secured Loan - Loan that is backed by collateral.

Security - (1) Property pledged as collateral for a loan. (2) Document used as evidence of an investment other than an insurance policy, fixed annuity or a certificate of deposit with a term less than nine months.

Seller Carryback - Method of owner financing where a seller provides, or "carries back," a mortgage or deed of trust for the buyer. A seller carryback results in financial risk to the seller, but makes it possible for a larger pool of buyers to qualify to purchase the seller's property, which may be important in the event the property has some characteristic that makes it difficult to sell. See also, owner financing.

Seller Financing - See owner financing.

Septic Permit - Written authorization from a government agency to permanently install and use an in-ground holding system for the disposal of sewage waste. The type of septic system allowed depends on the results of a soil feasibility study, or "perc test," which is part of the permitting process. Fees for septic permits vary widely by municipality and depend on the type of system allowed. See also, permit.

Servicer - Business that collects principal and interest payments from borrowers and manages borrowers' impound accounts. Mortgage servicers often handle mortgages that have been purchased by an investor in the secondary market.

Servicing - Collection of mortgage payments and impounds, or reserves, from borrowers, as well as the related responsibilities.

Setback - Space required by a zoning regulation for the distance between a lot's boundary line and a given type and/or size of improvement constructed on the lot. Setbacks are adopted locally, so they may vary from city to city and county to county.

Settlement - Also called "closing," this is the final step of buying real estate. It involves the settlement agent (usually an escrow company or attorney) arranging for all parties to sign final documents and for disbursement of funds and recording of the deed in the name of the buyer. This is also the time when the settlement agent collects required transaction closing costs from the buyer and, if needed, the seller.

Settlement Statement - Written statement itemizing amounts paid by each of the parties in a real estate sale. Also called a "closing statement" or "HUD-1," federal law requires that a specific format be used in most instances and that certain information be disclosed. Items on the statement include loan fees, points, impounds, real estate commissions, etc. The form must be provided to the parties at the time of signing final documents and again after the deed has been recorded and all funds distributed.

Severalty - Condition or character of being separate or distinct; alone. See also, estate in severalty.

Single-Family Home - Residential dwelling with one unit on its own lot. Also referred to as a "single-family dwelling," It can be an independent (detached) structure, or can be connected to other dwellings, as in a rowhouse or townhouse.

Sheriff's Sale - See public auction.

Soil Feasibility Study - Commonly referred to as a "perc test," this is an evaluation performed by a government inspector, usually from a county agency, to verify the type of soil present at a given location and the rate of water percolation through the soil. This is used to determine the type of septic sewage disposal system that will be allowed for the location.

Special Deposit Account - Fund established for rehabilitation mortgages in order to hold the money needed for construction so that it can be disbursed from time to time as particular portions of the work are done.

Special Warranty Deed - Written document transferring title to real property along with the warranty, or promise, from the grantor of the deed that the property is free of any encumbrance created while the grantor owned the property. Makes no promises as to condition of the title for any period when the grantor did not own the property.

Standard Payment Calculation - Calculation to determine the regular installment amount needed to repay the balance of a mortgage in equal payments over the remaining term of the mortgage at the current interest rate.

Starter Rate - See teaser rate.

Statute of Limitations - Time period fixed by law to file a legal action. Statutes of limitations exist for many types of actions, including injury claims, real estate claims, criminal complaints, and so on. Once the time specified by law has passed, the action will not be allowed to proceed to court.

Statutory Warranty Deed - General warranty deed that follows a prescribed form and language that is specifically written down in Oregon law. Most commonly used deed for real property transfers in Oregon. See also, general warranty deed.

Step-Rate Mortgage - Real estate loan providing for increases in the interest rate (and payments) according to a specified schedule, then fixing the rate at a constant amount after the scheduled increases have occurred.

Straight-Line Depreciation - Calculation of the decline in value of an asset that assumes the asset will decline in value by a set, equal amount each year. Often used in tax returns of the owners of income-producing property.

Subdivision - Division of a parcel of land into four or more lots within a single calendar year.

Subordinate Financing - Mortgage or other lien that has a priority lower than that of the first mortgage.

Subsidized Financing - Some home buyers may qualify to receive assistance with a down payment and closing costs from community agencies in their area. Loans from these agencies are known as "community seconds" and provide secondary mortgage financing in addition to the first mortgage. In some cases, money available through these programs can reduce the amount that a buyer is required to borrow. Some lending agencies may not require repayment if certain conditions are met. To find out if a "community seconds" program is available in a specific area, contact the Oregon Housing and Community Services Department at: P.O. Box 14508; Salem, OR 97309-0409; phone 503-986-2000.

Suburb - Mostly residential area at or near the outskirts of a city or town; usually unincorporated or separately incorporated. For example, Milwaukie is a suburb of Portland.

Suburban - Of or pertaining to a suburb. For example, Oregon City has several suburban neighborhoods.

Survey - Mapping and locating of precise characteristics of a property; may include the location of boundaries, improvements, easements, rights-of-way, encroachments, other physical features, or any combination of these. Occasionally, though infrequently, a lender may require a survey of a property being financed. In obtaining a survey, the party paying for the survey may realize some cost savings by having a previous survey updated by the company that performed the survey.

Survey Map - Map produced by a licensed surveyor as part of a property survey and recorded with the office of the county surveyor.

Survivorship - See right of survivorship.

Sweat Equity - Contribution to the value of a property, especially one needing renovation or rehabilitation, in the form of labor or materials from the purchaser rather than cash.