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Real Estate Glossary

sales contract
A written agreement stating the terms of the sale agreed to by both buyer and seller. TREC promulgated standard contracts must be used by all licensees, with certain limited exceptions. See earnest money contract.
Salesperson Annual Education (SAE)
A real estate salesperson is required to complete a total of 18 semester (270 classroom) hours of education by the end of their third year of licensure.  All active and inactive salespersons, who are under the SAE requirement, must show evidence of having completed a minimum of 30 hours in core or related real estate education each year or until a total of 270 classroom hours have been completed. At least 180 hours of the 270 must be in core real estate.  Therefore the other 90 hours may be in related. Evidence of successful completion must be received on or before the renewal filing deadline. If this documentation is not received on time, the license will expire.
SAE
Acronym -  Salesperson Annual Education
secondary mortgage market
Buying and selling of existing mortgage loans, designed to provide additional liquidity for lenders. Contrast with primary mortgage market.  Also see Fannie Mae, Freddie Mac and Ginnie Mae.
security deposit
A payment required by a landlord to ensure that a tenant pays rent on time and keeps the rental unit in good condition. If the tenant damages the property or leaves owing rent, the landlord can use the security deposit to cover what the tenant owes.
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.
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.
servient tenement
Property that is subject to use by another for a specific purpose. For example, a beachfront house that has a public walkway to the beach on its premises would be a servient tenement.
setback
The distance a building must be set back from the property lines in accordance with local zoning ordinances or deed restrictions.
shared equity mortgage
A home loan in which the lender gets a share of the equity of the home in exchange for providing a portion of the down payment. When the home is later sold, the lender is entitled to a portion of the proceeds.
short sale (of house)
A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage.  Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (or foreclosure).
simple interest
Interest computed only on the principal balance. Contrast with compound interest.
single-family home
A free-standing, residential structure, designed to accomodate one family.  Single-family homes include traditional houses, as well as patio homes.
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 every person whomsoever lawfully claiming or to claim the same, or any part thereof, by, through or under the grantor.
specific lien
A claim that only applies to or affects a certain property or group of properties. Contrast with general lien.
specific performance
Carrying out of the precise terms agreed upon in a contract. Also see suit for specific performance.
spite fence
An unsightly fence erected for no other purpose than to irritate a neighbor. Such a fence may be illegal under local fence height and appearance regulations or state laws that specifically bar spite fences. Even if it doesn't violate regulation or laws, the fence may still be illegal if it was built with malicious intent.
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 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. Contrast with calendar year.
steering
The illegal practice of directing members of minority groups to, or away from, certain areas or neighborhoods; channeling. See Fair Housing.
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. Contrast with assumption of mortgage.
sublease
A rental agreement or lease between a tenant and a new tenant (called a sublessee) who will either share the rental or take over from the first tenant. The sublessee pays rent directly to the tenant.  The tenant is still completely responsible to the landlord for the rent and for any damage, including that caused by the sublessee. Most landlords prohibit subleases unless they have given prior written consent. Compare with assignment.
subpoena
A legal process ordering a witness to appear and give testimony or to present documents under penalty of law. TREC has subpoena powers.
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.
succession
The passing of property or legal rights after death. The word commonly refers to the distribution of property under a state’s intestate succession laws, which determine who inherits property when someone dies without a valid will. When used in connection with real estate, the word refers to the passing of property by will or inheritance, as opposed to gift, grant, or purchase.
suit for specific performance
A legal action brought by either a buyer or a seller to enforce performance of the terms of a contract.
TALCB
Acronym - Texas Appraiser Licensing and Certification Board
taking
See eminent domain.
tenancy by the entirety
A special kind of property ownership that's only for married couples. Both spouses have the right to enjoy the entire property, and when one spouse dies, the surviving spouse gets title to the property (called a right of survivorship). It is similar to joint tenancy, but it is available in only about half the states.
tenancy in common
A type of ownership in which two or more people have an undivided interest in property, without the right of survivorship. Upon death of one of the owners, his/her interest passes to his/her heirs or devises. Contrast with joint tenancy.
tenant
Anyone, including a corporation, who rents real property, with or without a house or structure, from the owner (called the landlord). The tenant may also be called the "lessee."
tenants in common
See tenancy in common.
tenement
Everything that may be occupied under a lease by a tenant.
term
The actual life of a mortgage, at the end of which the mortgage becomes due and payable unless the lender renews the mortgage.
Texas Appraiser Licensing and Certification Board (TALCB)
A regulatory agency of the State of Texas, the TALCB was created in 1991 to license, certify and regulate real estate appraisers in Texas under state and federal laws. It superseded the Texas Real Estate Appraiser Certification Committee of the Texas Real Estate Commission.
Texas Deceptive Trade Practices - Consumer Protection Act
Makes it illegal for false, misleading, or deceptive acts or practices in the advertising, offering for sale, selling, or leasing of any real or personal property. The Act provides for civil penalties and in some cases, for mandatory triple damages and attorney fees for the aggrieved party. Also see Deceptive Trade Practices Act.
Texas Housing Agency (THA)
Created in 1979, the THA issues tax exempt mortgage revenue bonds. The funds may be used to purchase existing mortgages from lending institutions, to purchase new mortgage loans, or to make direct loans to qualified housing sponsors who are recommended by a lending institution. The agency does not actually originate mortgages, but issues commitments to lenders to purchase mortgages that meet all the agency's requirements. This is known as a forward commitment program.

 
Texas Natural Resource Conservation Commission (TNRCC)
The TNRCC is the lead environmental agency for The State of Texas.  Its mission is to protect the state's human and natural resources consistent with sustainable economic development. Goals include clean air, clean water, and the safe management of waste.  The TNRCC is responsible for the general supervision and oversight of water districts and utilities, including the processing of petitions to create a district and applications to approve a utility service area. In addition, the agency maintains approval authority over many utility matters including the review of most district bond issues to assure the engineering and economic feasibility of projects, as well as standby fees, impact fees, fire plans, and other district matters plus the rates charged by privately-owned and member-owned utilities.
Texas Real Estate License Act (TRELA)
The law which established the Texas Real Estate Commission and governs the licensure and lawful behavior of Real Estate Brokers and Salespersons.  The Texas Real Estate License Act may be amended by the State Legislature, as it deems necessary.
Texas Real Estate Commission (TREC)
The state regulatory agency responsible for the education and licensing of Real Estate Brokers, Inspectors and Salespersons.  TREC also provides enforcement of the Texas Real Estate License Act, the Rules of the of the Real Estate Commission, the Texas Timeshare Act and the Residential Service Company Act.  The mission of the Texas Real Estate Commission is to assist and protect consumers of real estate services, and foster economic growth in Texas. Through its programs of education, licensing and industry regulation, the Commission ensures the availability of capable and honest real estate service providers.
Texas Veterans Home Improvement Program
This program assists Texas veterans in the repair and improvement of their principle residence by providing low interest home improvement loans up to $15,000.
Texas Veterans Housing Assistance Program (VHAP)
Established by a constitutional amendment in 1984, the VHAP assists Texas veterans in the purchase of a principal residence.
Texas Veterans Land Program
Established by state in 1949 to assist Texas veterans to buy land with a small down payment and with long term mortgages with low interest rates.
time is of the essence
A clause, which if included in a contract, makes failure to perform by a specified date a material breach or violation of the contract.
timeshare
An arrangement under which a purchaser receives an interest in real property and the right to use an accommodation or amenities, or both, for a specified period and on a recurring basis. Used primarily for selling vacation properties.
title
The right of ownership of a property.
title company
A company that provides title insurance policies. In Texas title companies also act as escrow agents, conduct title searches and hold closings.
title insurance
Protection for lenders or homeowners against financial loss resulting from legal defects in the title.
title search
Checks all the records relating to the property to determine whether the seller can sell the property, and can do so free of liens.
title theory state
The system in which the lender has legal title to the mortgaged property and the borrower has equitable title. Texas is not a title theory state. Contrast with lien theory state.

 
TNRCC
See Texas Natural Resource Conservation Commission.
torrens system
A system of land registration (not used in Texas) in which clear title is established with a governmental authority, which issues title certificates to owners.
townhouse
A dwelling unit usually with two,three or four floors, and shared structural walls. It can be individually owned, a condominium, a cooperative, a planned unit development or a rental property.
transaction fee
A fee which may be charged each time you draw on a home equity credit line.
TREC
Acronym - Texas Real Estate Commission.
TRELA
Acronym - Texas Real Estate License Act.
TRERC
Acronym - Texas Real Estate Research Center, now renamed Real Estate Center.
triple net lease
See net lease.
trust deed
The most common method of financing real estate purchases in California (most other states use mortgages). The trust deed transfers the title to the property to a trustee--often a title company--who holds it as security for a loan. When the loan is paid off, the title is transferred to the borrower. The trustee will not become involved in the arrangement unless the borrower defaults on the loan. At that point, the trustee can sell the property and pay the lender from the proceeds.  In Texas it is more commonly refered to as a deed of trust.
trustee
One who as agent for others handles money or holds title to their land.
underwriting
The process of verifying data and approving a loan.
unlawful detainer
An eviction lawsuit.
usufruct
The right to use property--or income from property--that is owned by another.
usury
Charging more than the rate of interest allowed by law.
VA
The Veterans Administration, a federal agency which guarantees loans made to qualified veterans on approved property.
vara
A measurement of length of 33 1/3 inches in Texas.
variable rate
An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.
variance
An exception to a zoning ordinance, usually granted by a local government. For example, if you own an oddly shaped lot that could not accommodate a home in accordance with your city's setback requirement, you could apply at the appropriate office for a variance allowing you to build closer to a boundary line.
vendee
Purchaser.
vendor
Seller.
view ordinance
A law adopted by some cities or towns with desirable vistas--such as those in the mountains or overlooking the ocean--that protects a property owner from having his or her view obstructed by growing trees. View ordinances don't cover buildings or other structures that may block views.

 
village acre
A lot size used in the Houston area to denote a 40,000 square foot parcel.  In the Memorial Villages of Bunker Hill, Hedwig, Hillshire, Hunter's Creek, Piney Point and Spring Valley, lot sizes are often expressed in village acres or a fractions of village acres.  The term was coined by developers who successfully lobbied for slighty smaller, minimum lot size requirements, in the cities' zoning regulations.

 
virtual home tour
Any method used to provide internet users with a graphical presentation of a home, or homes.  Presentations may include web pages, java applets, streaming video, panoramic images and bubble views.
void
Having no legal force or effect; legally invalid.
voidable
A contract which appears valid and enforceable on the surface, but may be declared invalid by one of the parties, such as a contract entered into by a minor.
waiver
The intentional or voluntary relinquishment of a known claim or right.

 
walk through
(1) A Buyer's on-site inspection of the property being purchased,  just prior to closing.
(2) A detailed inspection of a new construction home, in which punch list and cosmetic items are addressed, prior to final acceptance.
warranty deed
A  type of deed that contains express assurances about the legal validity of the title being transferred.  See general warranty deed andspecial warranty deed.
writ of execution
A court order which authorizes and directs the proper officer of the court (usually the sheriff) to carry into effect the judgment or decree of the court.
zero lot line
A term generally used to describe the positioning of a structure on a lot so that one side rests directly on the lot's boundary line (no set back).  Where allowed by zoning and/or deed restrictions, it is used for "patio homes".
zoning
Exercise of police power of city in regulating and controlling the character or use of property. Zoning laws divide cities into different areas according to use, from single-family residences to industrial plants. Zoning ordinances control the size, location, and use of buildings within these different areas.  Houston is the largest city in the U.S. without zoning. Most of the other cities and villages within the Houston Metropolitan Area do have zoning regulations.


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