Housing starts refer to the number of new residential construction projects that have begun within a specific period, typically measured on a monthly basis. It is a leading economic indicator that provides insights into the real estate market and the economy at large.
The principle of substitution posits that the value of a property is directly influenced by the availability and prices of comparable properties, assuming that a typical buyer finds similar properties interchangeable.
The S&P/Case-Shiller Index, also known as the Case-Shiller/S&P Home Price Index, is a collection of indices that tracks changes in the value of residential real estate in the United States. It is one of the most trusted measures for house price fluctuations across various metropolitan regions.
Safe harbor refers to regulations or provisions designed to shield companies or individuals from legal repercussions, provided they adhere to specified guidelines or practices. These rules offer clarity and a guarantee of compliance, thus minimizing legal risk and ambiguity.
The safe rate is an interest rate offered by relatively low-risk investments such as high-grade bonds or well-secured first mortgages. It is often used as a benchmark for other rates of return to compare the risk and safety of various investment options.
Sale pending is a term used in real estate to describe a property for which a contract has been signed but the transaction has not yet closed. These transactions are not officially counted as sales until the closing process is completed.
A sale-leaseback allows the owner of a property to sell it and simultaneously lease it back from the buyer, converting from owner to tenant while freeing up capital for other uses.
A sales agreement, also known as a sales contract, is a legally binding document that outlines the terms and conditions of a transaction between a buyer and a seller.
A licensed real estate agent employed by a designated or employing broker who conducts daily sales activities and facilitates property transactions.
The Sales Comparison Approach is one of the three primary appraisal approaches used to estimate the market value of a property by comparing it to similar properties that have recently sold in the same area.
A Sales Contract is a legally binding agreement between a buyer and seller that outlines the terms and conditions of the sale of property, including the price, closing date, type of deed, and other necessary details to complete the transaction.
The sales price is the amount of money required to be paid for real estate according to a contract, or previously paid. It can include cash payments and assumptions of existing mortgages.
A real estate salesperson is a licensed individual who performs real estate-related activities under the supervision of a licensed broker, as stipulated by state real estate laws.
Saltbox Colonial, also known as Catslide in the Southern United States, is an early-American-style architectural home characterized by a two or two-and-a-half story structure with a steeply sloped gable roof extending down to the first floor in the rear.
Salvage value is the estimated value an asset will have at the end of its useful life. It is an important concept in accounting and real estate for calculating depreciation.
A sandwich lease is a real estate arrangement in which a lessee becomes a lessor by subletting the property. This intermediate leaseholder holds a secondary lease between the property owner and the end user, typically without owning or primarily using the property.
Satellite tenants in a shopping center or mall are those tenants other than the anchor tenants, typically smaller retailers that benefit from the foot traffic generated by the anchor stores.
A Satisfaction of Mortgage, also known as a Satisfaction Piece, is a document provided by a lender to confirm that a mortgage has been fully repaid by the borrower, thereby releasing the property from the lien of the mortgage.
A satisfaction piece is an essential legal document that indicates the final payment of a mortgage loan, effectively releasing the lien on the property. By recording a satisfaction piece, borrowers officially demonstrate that their loan obligation has been fulfilled.
A Savings and Loan Association (S&L) or thrift is a financial institution that focuses on accepting deposits from members and providing home mortgage loans.
Savings and Loan Associations (S&Ls) are depository institutions that specialize in originating, servicing, and holding mortgage loans, primarily on owner-occupied residential property.
Scale refers to the proportional relationship between the dimensions of a drawing, plan, or model and the dimensions of the physical object it represents. It is crucial in real estate and construction for accurate representation and implementation of designs.
A scavenger tenant is a tenant who constantly seeks the lowest possible rent and relocates frequently whenever an opportunity to reduce rent arises. Often characterized by their transient nature, scavenger tenants are commonly found in industries such as karate schools, fortune tellers, and bingo parlors.
A scenic easement is an encumbrance on the title to a property intended to preserve its natural or undeveloped state, often to protect the aesthetic or environmental values of the area.
Schedule K-1 is a tax form used to report a partner or beneficiary's share of income, losses, capital gains, and other tax information passed through from a partnership or trust.
The Scope of Work is a detailed explanation of the work program undertaken to conduct an appraisal assignment, outlining the research and methods used. It is required by the Uniform Standards of Professional Appraisal Practice (USPAP).
A seasoned loan refers to a loan that has a history of timely payments made over a period of time, making it more attractive to investors.
A second home is a residence that serves as a non-primary residence for a taxpayer, often used for leisure or vacation purposes. Tax laws allow interest deductions for up to two personal residences, including second homes.
A second mortgage is a subordinated lien created by a mortgage loan that enhances financing options by reducing the cash down payment requirement during a property purchase or refinancing.
Secondary financing refers to an additional loan that is secured by a property that already has a primary loan (first mortgage) attached to it. This type of financing is often used to bridge financial gaps when purchasing or refinancing property.
The secondary mortgage market involves mechanisms for buying and selling residential first mortgages. It enables lenders to sell mortgages and transfer the associated debt, thereby improving liquidity and fostering a more stable housing finance market.
A secondary suite, also known as an accessory apartment, is a self-contained dwelling unit within or attached to a primary residential building, designed to house tenants or relatives while providing rental income to the homeowner.
A Section (of Land) is a unit of area measurement in the U.S. Public Land Survey System (PLSS) often used in real estate and land development. It is defined as one square mile and is part of a larger 6-mile by 6-mile Township.
Section 1031 of the Internal Revenue Code allows for tax-deferred exchanges of certain types of property, enabling the deferral of capital gains taxes under specific conditions.
Section 121 of the Internal Revenue Code pertains to the exclusion of gain from the sale of a principal residence. It provides guidelines on the criteria and limitations for income exclusion, ensuring taxpayers benefit from tax relief on qualifying property sales.
Section 1221 of the Internal Revenue Code specifies what does not constitute a capital asset, crucial for determining tax treatment of different assets.
Section 1231 of the Internal Revenue Code pertains to assets used in a trade or business. Gains on Section 1231 assets are generally taxed at capital gains rates, except for depreciation recapture, while losses are tax-deductible as ordinary income.
Section 1245 of the Internal Revenue Code (IRC) pertains to gains from the sale of depreciable personal property and mandates that depreciation recapture occurs, treating a portion of the capital gains as ordinary income.
Section 1250 is a part of the Internal Revenue Code that deals with gains from real estate where accelerated depreciation has been claimed. Although its significance has been reduced after 1986, it remains relevant for dealing with gains involved in real estate transactions.
Section 167 is the part of the Internal Revenue Code (IRC) that deals with depreciation for property, including real estate. This section provides guidelines for the allowance of depreciation deductions for tax purposes.
Section 168 of the Internal Revenue Code outlines the Accelerated Cost Recovery System (ACRS) and the Modified Accelerated Cost Recovery System (MACRS), which are methods of calculating depreciation for tax purposes.
Section 179 of the Internal Revenue Code allows businesses to immediately deduct the cost of qualifying equipment, rather than capitalizing and depreciating the asset over a long period. This is particularly beneficial for small businesses, enabling them to reduce their tax liability quickly.
Section 8 Housing refers to privately-owned rental dwelling units participating in a low-income rental assistance program established through amendments to Section 8 of the 1937 Housing Act in 1974.
A Secured Loan is a loan that is backed by an asset or collateral, reducing the risk for the lender and often resulting in lower interest rates for the borrower. Examples include mortgages and auto loans.
The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees securities transactions, activities of financial professionals and mutual fund trading to prevent fraud and intentional deception.
The Securities and Exchange Commission (SEC) is a federal agency created in 1934 to enforce securities laws and regulate the securities industry, protect investors, maintain fair and efficient markets, and facilitate capital formation.
Securitization is the process of pooling various types of debt—including mortgages, car loans, or credit card debt—into packaged securities that can be sold to investors.
A Securitized Investment Vehicle (SIV) is a type of structured investment, typically in the form of an entity established to purchase and manage a pool of assets using various types of funding, including short-term commercial paper and medium-term notes.
A Securitized Investment Vehicle (SIV) is a pool of investment assets that are combined and then split into smaller units to be sold to investors as securities.
Security in real estate is an important concept that can refer to collateral for a debt or a financial instrument that represents ownership rights. Proper understanding of security mechanisms protects investments and aids in ensuring lawful exchanges.
A security deposit is a cash payment required by a landlord, to be held during the term of a lease to offset damages incurred due to actions of the tenant.
A security instrument is an interest in real estate that allows the property to be sold upon a default on the obligation for which the security interest was created.
Security interest refers to a legal claim on collateral that has been pledged, usually to obtain a loan or other obligation.
A see-through building refers to a vacant or largely unoccupied building, typically characterized by its clear visibility from one side to the other due to the absence of tenants or furnishings.
Seed money is the initial capital needed to start a real estate development project, covering costs such as feasibility studies, loan application and commitment fees, and initial legal and accounting services.
SEER (Seasonal Energy Efficiency Ratio) Rating is a measure of the energy efficiency of air-conditioning equipment. It compares the amount of cooling provided (in BTUs) to the amount of energy consumed (in watt-hours).
Seisin refers to the legal possession of a freehold estate in real property. It indicates ownership rights to realty by an individual holding a fee simple estate, life estate, or other sellable interests.
A self-amortizing mortgage, also known as a fully amortizing mortgage, is one that retires itself through regular principal and interest payments over the life of the loan. At the end of the term, the loan balance reaches zero, meaning it is completely paid off.
Self-help refers to the efforts of a landlord to cure a default on the lease without aid of legal proceedings, which is generally not permitted as a legitimate substitute for a legal eviction.
Seller financing, also known as owner financing, involves the seller providing a loan to the buyer to help facilitate the purchase of a property when traditional third-party financing may be expensive or unavailable. This method can be used to bridge the gap between the purchase price and what the buyer can immediately finance through other means.
A Seller’s Market refers to economic conditions where demand exceeds supply, allowing sellers to have more negotiating power and often leading to increasing prices and market activity.
The Selling Broker (Agent) is a licensed real estate professional who introduces and represents the buyer in a real estate transaction, playing a critical role alongside the Listing Broker (Agent).
Semiannual refers to an event or occurrence that happens twice a year, in other words, once every six months. In real estate and finance, semiannual terms often apply to payments, interest, and reporting periods.
A senior mortgage, also known as a first mortgage, is the primary loan taken out on a property that holds the highest claim on the borrower's assets in case of foreclosure. It holds precedence over all other loans or claims on a property in the event of the borrower's default.
A Senior Residential Appraiser (SRA) is a highly skilled professional credential granted by the Appraisal Institute, certifying an appraiser’s advanced ability to value residential properties accurately and ethically.
Sensitivity analysis is a method used in investment analysis to determine how different values of key variables impact the outcomes of an investment. This technique helps in assessing the riskiness of an investment by testing how changes in assumptions affect investment results.
In community property states, separate property refers to property acquired by either spouse prior to marriage or by gift or devise after marriage, as distinct from community property.
Servicing in real estate refers to the administration of a mortgage loan, encompassing activities such as billing, payment collection, and filing reports. This can also extend to loan analysis, default followup, and managing tax and insurance escrow accounts. Typically, mortgage bankers perform these tasks for a fee after the loans are sold to investors.
In real estate law, a servient tenement refers to a property that bears the burden of an easement. Essentially, it is the land over which an easement exists and through which another property, known as the dominant tenement, benefits.
A setback line is a defined distance from a curb, property line, or other demarcated boundary within which no permanent structures may be constructed. Setback lines are crucial for urban planning, promoting safety, aesthetics, and privacy within a community.
Setoff refers to special benefits arising from a condemnation that offset any damages that may have occurred to the property owner, balancing the advantages gained against the losses suffered.
In real estate, settlement, also known as closing, is the final step in executing a real estate transaction, where the buyer finalizes their mortgage, pays closing costs, and the title is transferred from the seller to the buyer.
The settlement date, often referred to as the closing date, is the date when the sale of a property is officially finalized, and ownership is transferred from the seller to the buyer.
A settlement statement is a critical document in a real estate transaction that itemizes all the financial details and allocations for both buying and selling parties. It ensures transparency, allows for error checking, and provides documentation of the financial exchanges in the sale.
Settling refers to the movement, generally a sinking or shifting, of a building due to its weight and/or soil shrinkage. It's normal and expected to some degree, varying based on construction and soil characteristics.
Explaining the term 'severally' in the context of real estate transactions, which refers to individual or separate ownership or responsibility.
Severalty refers to the ownership of real property by an individual as an individual, granting exclusive property rights without partners or co-owners.
Severance damages compensate for the reduction in value suffered by a property owner when part of their property is taken through condemnation, often ensuring that they are fairly compensated for the resultant loss and inconvenience.
A sewer system consists of a network of pipes, manholes, cleanouts, traps, siphons, lifts, and pumps that facilitate the collection and transportation of waste water and storm water for treatment and disposal.
A shadow anchor tenant is a large, well-known retail store near or adjacent to a shopping center's inline stores but is not a tenant of the shopping center itself. This store generates significant foot traffic to the neighboring retail spaces within the shopping center, resembling an anchor tenant in function without contributing rental income to the shopping center.
The Shadow Banking System refers to the network of financial intermediaries that operate outside the traditional banking system and its regulatory framework.
Shadow inventory refers to the potential supply of homes that are kept off the market by their owners or banks, waiting for more favorable market conditions such as improved demand and higher prices.
Shakes are rough shingles split from a piece of log, usually cedar, used for roofing and siding.
A Shared Appreciation Mortgage (SAM) is a type of mortgage where the lender offers a reduced interest rate in exchange for a share of any increase in the value of the property.
A Shared Appreciation Mortgage (SAM) is a type of residential loan that combines a lower-than-market fixed interest rate with the lender's entitlement to a specified share of the property's appreciation in value over a certain period.
A shared equity mortgage is a home loan where the lender is granted a share of the equity, allowing the lender to participate in the proceeds from the resale of the property. After satisfying the unpaid balance of the loan, the borrower splits the remainder of the proceeds with the lender.
Shares of Beneficial Interest represent a fractional ownership interest in the assets of a trust or other fiduciary arrangement, entitling the shareholder to a proportionate share of the earnings and profits.
A shed roof, also known as a skillion or lean-to roof, features a single sloped plane, offering a minimalist aesthetic and efficient drainage.
A 'Shell' refers to the structural frame of a building that has been completed to a point where it is ready for tenant improvements. This typically includes the main structure, basic utilities, and HVAC installations, but lacks interior finishings.
A Sheriff's Deed is an evidence of ownership provided by a court or law enforcement agency following the auction or sale of a property due to the owner's unpaid taxes or a foreclosure. While it transfers ownership, it does not come with a personal guarantee of a clear title.
A shopping center is a collection of retail stores with a common parking area and generally one or more large department, discount, or food stores; often including an enclosed mall or walkway.
A short form is a concise document, often no more than two pages, that references another, more detailed document. It is usually recorded at the county courthouse to avoid handling a longer, more cumbersome document.
A short sale is a financial arrangement where a mortgagor settles their outstanding mortgage debt with a payment that is less than the principal balance owed. This process helps avoid foreclosure and can be used as an alternative solution for struggling homeowners.
A short-term capital gain refers to the profit from the sale of a capital asset that was held for less than 12 months. Unlike long-term capital gains, these gains are typically taxed at higher rates corresponding to ordinary income.
Siding refers to materials used to protect and insulate the exterior walls of a building, typically made from wood, vinyl, aluminum, fiber cement, and other materials designed to mimic clapboards or shakes.
A silent second mortgage is a secondary loan placed on an asset without the knowledge of the primary lender. This practice is common in charitable organizations for down payment assistance or fraudulently to procure higher loan values.
Simple interest is a method of calculating the future value of an amount of money assuming that interest paid is not compounded. Interest is paid only on the principal.
Simulation in real estate involves artificially replicating the behavior of a system for future analysis, enabling informed decision-making and planning based on various scenario testing.
Single-family housing is a type of residential structure designed to include one dwelling unit. These homes may stand alone or share walls with adjacent units, but they maintain separate access to the outside and do not share essential systems like plumbing and heating.
A sinking fund is a reserved account used for saving up for a specific future expense. Over time, through continuous contributions and compound interest, the fund grows to the desired amount.
