Real Estate Glossary
This glossary was created by a team of real estate professionals. It contains terms regarding real estate buying and selling, home finance, home improvement, as well as legal terms. For your convenience, the glossary is searchable alphabetically.
Acronym - Salesperson Annual Education
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)
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.
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.
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
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
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
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).
Interest computed only on the principal balance. Contrast with compound interest.
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
A claim that only applies to or affects a certain property or group of properties.
Contrast with general lien
Carrying out of the precise terms agreed upon in a contract. Also see suit for
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
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
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
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
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.
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