Valley Real Estate
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- A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.
- sales price
- The sales price is the amount of money you as a buyer would pay for a property. Contrast with list price and appraiser's value, and market value.
- second mortgage
- A secured loan (or mortgage) that is subordinate to another loan against the same property. More specifically, the second loan in sequence.
In real estate, a property can have multiple loans against it. The loan which is registered with county or city registry first is called the first mortgage . The loan registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer.
Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage gets any money. Thus, second mortgages are riskier for the lender, who generally charges a higher interest rate.
Note: you should only buy what you can afford. If you are taking a second mortgage, it means you are running a risk of putting yourself into deeper debt, which could create more risk than return.
- secondary mortgage market
- The buying and selling of existing mortgages.
- See ► Fannie Mae and Freddie Mac.
- section 8
- The "Housing Choice Voucher Program" is a type of Federal assistance provided by the United States Department of Housing and Urban Development (HUD) dedicated to sponsoring subsidized housing for low-income families and individuals. It is commonly known as Section 8, the portion of the U.S. Housing Act that authorized the program.
- section 1031 exchange
- allows investors to defer capital gains taxes on the exchange of like-kind properties. Taxpayers should never have to pay income taxes on the sale of property if they intend to reinvest the proceeds in similar or like-kind property. For an alternative to a section 1031 exchange see structured sale.
- secured loan
- A loan backed by collateral, (e.g. some asset such as real property) The loan then becomes a secured debt owed to the creditor who gives the loan. Should the borrower default, the creditor takes possession of the collateral and may sell it to satisfy the debt.
- The property that will be pledged as collateral for a loan.
- self-regulatory organization (SRO)
- An organization that exercises some degree of regulatory authority over an industry or profession. The National Association of REALTORS is an SRO for .
- seller financing (owner financing)
- A property purchase transaction in which the property seller provides all or part of the financing.
Read more ►
- seller take-back
- An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.
- See ► Owner Financing.
- sellers agent (a.k.a. seller's representative and listing agent)
- A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
- Contrast with ► Buyer's Agent, Dual Agent, Subagent, and Designated Agent.
- sellers' market
- Simply put, a market in which the number of buyers looking to buy homes exceeds the number homes listed to sell. Since buyers are in competition with each other for the limited amount of homes available, the result is an overall adjustment to higher prices for homes.
- See ► Law of Supply and Demand.
- Contrast with ► Buyers Market
- 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.
- The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.
- See ► closing.
- settlement sheet
- See ► HUD-1 statement.
- short sale
- Occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.
See also ►
- shadow inventory
- Shadow inventory is a total of houses that are in some stage of foreclosure, but have not yet reached the market. CoreLogic defines it as the number of distressed properties not currently listed that are delinquent by 90 days or more, in foreclosure or owned by lenders. It does not include homes that may be behind on payments but not yet in the process of foreclosure. Shadow inventory is somewhere in the foreclosure process (foreclosure filing, default notice, scheduled auction or bank repossession) and will eventually become REO marketed homes, therefore should be accounted for as unsold homes for sale. .
- 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
- The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate.
- 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.
- stated income loan
To qualify for a stated income loan (sometimes call ed a liar's loan) the mortgage broker use the income the borrower states on the application form – as opposed to the income the borrower can document. No attempt by the lender is made to verify the stated income.
Stated income loans are designed for creditworthy home buyers who are able to afford a mortgage, but cannot meet traditional documentation standards of loan underwriters.
- statute of frauds
- Refers to the requirement that certain kinds of contracts be made in writing and signed.
Traditionally, the statute of frauds requires a writing signed by the party against whom enforcement is sought in the following circumstances:
- Contracts in consideration of marriage.
- Contracts which cannot be performed within one year.
- Contracts for the sale of an interest in land.
- Contracts by the executor of a will to pay a debt of the estate with his own money.
- Contracts for the sale of goods above a certain value.
- Contracts in which one party becomes a surety (acts as guarantor) for another party's debt or other obligation.
Law students often remember these circumstances by the mnemonic "MYLEGS" (marriage, year, land, executor, goods, surety).
- Furniture and décor that is strategically placed to better define the function of rooms in a home listed to sell.
- See ► "."
- stigmatized property
- A term used in real estate to describe possible psychological deterrents to the sale of a home as a result of unfortunate events in the home's history. Such occurrences may include murder, suicide, AIDS, and ghosts. Even famous homes used in television or movies to which fans flock daily, might be considered stigmatized. Even though a particular buyer may not care about any stigma attached to the property, the stigma may make it very difficult to resell in the future.
The laws concerning full disclosure vary from state to state. In Ohio there are no clear cut guidelines; and sellers and real estate agents are urged to err on the side of caution and disclose the fact of a murder or suicide to a serious buyer.
Note: Persons with AIDS or who are HIV positive are protected under federal fair housing laws. The U.S. Department of Housing and Urban Development has declared it illegal to disclose that the current or former occupant of a property had AIDS or was HIV positive.
- structured sale
- A structured sale is a special type of installment sale pursuant to Internal Revenue Code Section 453. Installment sales permit sellers to defer gains on the sale of a business or real estate to the tax year in which the related sale proceeds are received. Structured sales allow the seller of an asset to pay taxes over time while having the payments guaranteed by a high credit quality alternate obligor, who accepts assignment of the buyers periodic payment obligation. Transactions can currently be done as small as $100,000.
- Contrast with ► Section 1031 Exchange.
- A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
- A housing development that is created by dividing a tract of land into individual lots for sale or lease.
- subject to transfer clause
- The phrase "subject to transfer" in a mortgage loan refers to the fact that the deed transfer is subject to the current financing on the house. The new owner assumes the original mortgage on the property as well as the title to the property.
- subordinate financing
- Any mortgage or other lien that has a priority that is lower than that of the first mortgage.
- subprime lending
- Also called "alternative financing," "B-Paper," "near-prime," or "second chance" lending, is a general term that refers to the practice of making loans to borrowers who do not qualify for market interest rates because of problems with their credit history. A subprime loan is one that is offered at a rate higher than A-paper loans due to the increased risk. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others.
- 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.
- summary possession
- See ► eviction.
- supply and demand
- See ► Law of Supply and Demand.
- 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.