Kathy Louis Real Estate - All - Glossary

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Term	Definition
In-file credit report	Computer-generated reports drawn from credit repositories that are generally regarded as objective histories.

Income property	Property that is not occupied by the owner but is used to generate income.

Incurable defect	A defect in a property that cannot be fixed, such as an adjacent hazardous waste site, or that would cost too much to repair relative to the value of the property.

Index	Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills.

Individual Retirement Account	Tax-deferred savings accounts that allow people to accrue retirement funds.

Infill development	Any significant new construction in an established area.

Infill housing	Home construction in established areas.

Inflation	This event occurs when there is more money available than there are goods and services to be purchased. Mortgage rates, which are determined by the marketplace and the actions of the Federal Reserve Board and Wall Street, are sensitive to inflation fears.

Infrastructure	The roads, schools, parks, utilities, bridges and communications systems in a community.

Initial interest rate	The original interest rate on an adjustable mortgage.

Inspection report	An examination of a homes exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roofing and interior.

Installment contract	A purchase agreement in which the buyer does not receive title to the property until all installments are paid.

Insulation	Materials including cellulose, glass fiber, rock wool, polystyrene, urethane foam and vermiculite that slow heat loss.

Insurable title	Title to property that a company agrees to insure against defects and disputes.

Insurance	Owners and buyers can purchase various types of insurance: hazard, private mortgage and earthquake. The policies guarantee compensation for specific losses.

Insurance binder	A temporary insurance arrangement usually put in force until a permanent policy can be obtained.

Interest	The fee borrowers pay to obtain a loan. It is calculated based on a percentage of the total loan.

Interest accrual rate	The rate at which interest accrues on a mortgage.

Interest rate	The sum, expressed as a percentage, charged for a loan. Interest payments on most home loans are tax- deductible.

Interest rate buy-down plans	For cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyers monthly obligation.

Interest rate caps	A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.

Interest rate ceiling	The highest interest a lender can charge for an adjustable-rate mortgage.

Interest-only loan	The pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.

Investment property	Real estate that generates income, such as an apartment building or a rental house.

Jalousie window	A window that consists of vertical rows of horizontal glass slats that operate together by a crank mechanism that connects all the slats.

Joint liability	The responsibility of two or more people to fulfill the terms of a home loan or debt.

Joint tenancy	Ownership by two or more people that gives equal shares of a piece of property. Rights pass to the surviving owner or owners.

Joist	A floor or ceiling support member supported by foundation walls, piers or beams. Subflooring is connected to floor joists.

Judgment	The decision of a court or law. If a court decides that a person must repay a debt, a lien may be placed against that persons property.

Judicial foreclosure	A procedure to handle foreclosure proceedings as civil matters.

Jumbo mortgage	Loans that exceed limits set by Fannie Mae and Freddie Mac. The current limit is $300,700.

Junior mortgage	A loan that subordinate to the primary loan.

Kit home	A structure that contains prefabricated components and is put together by a contractor.

Knee wall	A wall-like structure that supports roof rafters.

Knob-and-tube wiring	An old-fashioned wiring system that has been replaced by fuses and circuit breakers.

Landscape	A homes surroundings can range from a shrub-studded emerald lawn to a native-plant xeriscape. It is a major component of curb appeal.

Landscape architect	A professional who holds a degree in landscape architecture, which involves training in horticulture, landscape design and planning.

Landscape contractor	A professional who carries out the plans of a landscape architect or a landscape designer.

Landscape designer	A landscape designer has training in horticulture and landscape planning, but does not necessarily hold a degree.

Late charge	A fee a lender imposes on a borrower when the borrower does not make a payment on time.

Late payment	A payment a lender receives after the due date has passed.

Latent defect	An invisible problem in a piece of property such as bad wiring, termite damage or lead paint.

Lead	A metallic chemical element present in older dwellings, primarily in the form of lead-based paint and lead plumbing. Exposure to lead has been found to be a health risk.

Lease	A binding agreement that contains the terms and conditions of a renters occupancy.

Lease option	A lease that contains the right to purchase the property for a specific price within a certain time frame.

Leasehold estate	An arrangement in which the borrower does not own a specific piece of property but possesses a long-term lease.

Legal blemish	Blemishes on a piece of property, such as a zoning violation or fraudulent title claim.

Legal description	A specific way of identifying and locating a piece of real estate that is acceptable to a court.

Lender	A bank, savings institution or mortgage company that offers home loans.

Letter of intent	A formal statement that the buyer intends to purchase the property for a certain price on a certain date.

Leverage	The use of a small amount of cash--a 5 percent or 10 percent down payment--to buy a piece of property.

Liabilities	A borrowers debts and financial obligations.

Liability insurance	A policy that protects owners against any claims of negligence, personal injury or property damage.

Lien	A claim laid by one person or company on the property of another as security for money owed.

Life cap	A limit on the amount that a loan rate can move during the term of the mortgage. For example, the rate on an adjustable-rate mortgage that begins at 5 percent and has a lifetime cap of 6 percentage points cannot rise above 11 percent, even if rates on fixed-rate mortgages soar to 20 percent.

Life-cycle cost analysis	An analysis of a building projects expected operating, maintenance and replacement costs, calculated by an architect.

Limited partnership	Real estate syndicates and other investment groups use this type of ownership.. A general partner makes the groups investment decisions, oversees the investment and is principally liable for any losses.

Lintel	A horizontal piece over a door or window that carries the weight of the structure above it.

Liquid assets	Cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and checking accounts, money-market accounts, and most certificates of deposit.

Liquidated damages	When a real estate deal goes awry, one party often is entitled to liquidated damages, a sum of money set out in the purchase contract in that event.

Listing	A piece of property placed on the market by a listing agent.

Listing inventories	The known number of houses for sale within a given market.

Live-in partnership	An arrangement in which two unrelated people purchase a home.

Live-work space	An officially designated dwelling in which the occupant conducts a home-based business or enterprise.

Load-bearing wall	A wall that supports not only its own weight, but the weight of other parts of a home. Also called a bearing wall.

Loan -to-value ratio	A technical measure used by lenders to assess the relationship of the loan amount to the value of the property

Loan application	The first step toward submitting a home loan requires the borrower to itemize basic financial information.

Loan application fee	A fee charged by lenders to for making a loan application.

Loan commitment	A promise by a lender or other financial institution to make or insure a loan for a specified amount and on specific terms.

Loan officer	An official representative of a lending institution who is empowered to act on behalf of the lender within certain limits.

Loan origination fee	Most lenders charge borrowers an origination fee--or points--for processing a loan. A point is 1 percent of the total loan amount.

Loan processing fee	A fee charged by some lenders for gathering information to enable the lender to process the loan.

Loan term	The amount of a time set by the lender for a buyer to pay a mortgage. Most conventional loans have 30-year or 15-year terms.

Lock-in	When interest rates are volatile, many borrowers want to "lock in" an interest rate and many lenders will oblige, setting a limit on the amount of time the lock-in is in effect.

Loft	A living space not partitioned into rooms or a small space built above a larger room.

Log cabin	Homes constructed of rough-hewn timbers and a standard housing form in the early European settlement of the U.S.

Low density	A low concentration of housing units in a specific area.

Low-ball offer	An offer made to a seller that is substantially below market value. The longer a property stays on the market, the more likely there are to be such offers.

Low-documentation loan	A mortgage that requires only minimal verification of income and assets.

Low-down-payment loan	A home loan that requires the borrower to make only a small down payment before obtaining the financing needed to purchase a house.

Main water shut-off valve	The primary valve that halts the flow of water from the water meter into a home.

Maintenance fee	The monthly assessment members of a homeowners association pay for the repair and maintenance of common areas.

Managed-competition lots	Lots in which buyers choose between one of several builders.

Mansard roof	A roof with four sides that slope upward from the roof edge to the square peak.

Mantel	The facing of stone, marble or other material around a fireplace.

Manufactured housing	Prefabricated homes that can range from simple trailers to larger dwellings.

Margin	The lenders "retail markup" on the mortgage. For example, if the index rate for an adjustable-rate mortgage is 5 percent but the lender has a 2.5 percentage-point margin, the rate the borrower will pay is 7.5 percent.

Market conditions	Factors affecting the sale and purchase of homes at a particular point in time.

Market value	The price that a piece of property sells for at a particular point in time.

Masonry	The brick or stone work on a building.

Master-planned community	A suburban plan that includes homes and commercial, work, educational and community facilities.

Maximum financing	A loan amount within 5 percent of the highest loan-to-value ratio allowed for a property.

Mechanical systems	A homes plumbing, wiring, heating and cooling systems.

Mechanics lien	Subcontractors or suppliers sometimes will file an encumbrance, or mechanics lien, against a property to seek payment.

Median price	The price of the house that falls in the middle of the total number of homes for sale in that area.

Mediation	A dispute-resolution process in which a neutral party works to resolve contract differences.

Merged credit report	A report that draws information from the Big Three credit-reporting companies: Equifax, Experian and TransUnion Corp.

Metes and bounds	A time-honored land surveying method of describing land in terms of shape and boundary dimensions.

Mint condition	Mint condition, or blue-ribbon condition, refers to a house that looks as close to new as possible.

Mixed-income housing	A neighborhood that contains houses of widely varying prices.

Mixed-use development	A project that combines several different functions, such as residential space above a commercial establishment or an entire development combining commercial, residential and public accommodations.

Modification	A change in any of the terms of the loan agreement.

Molding	Decorative trim elements applied to walls, ceilings, and window and door openings.

Money market account	Accounts that work like money market funds and allow individual investors to participate in certain managed investments and withdraw funds under most conditions.

Money market funds	A mutual fund that pools the resources of individuals to invest in certain managed investments.

Mortgage	A legal document specifying a certain amount of money to purchase a home at a certain interest rate, and using the property as collateral.

Mortgage acceleration clause	A clause which allows a lender to demand that the entire balance of the loan be repaid in a lump sum under certain circumstances. The acceleration clause is usually triggered if the home is sold, title to the property is changed, the loan is refinanced or the borrower defaults on a scheduled payment.

Mortgage banker	A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae.

Mortgage broker	A company that matches lenders with prospective borrowers who meet the lenders criteria. The mortgage broker does not make the loan, but receives payment from the lender for services.

Mortgage insurance	Required by lenders in some loans to protect them from a possible default . All conventional loans with less than a 20 percent down payments require private mortgage insurance, or PMI.

Mortgage life insurance	A special type of insurance that will pay off a mortgage if the borrower dies before the debt is retired.

Mortgage-interest deduction	The tax write-off that the Internal Revenue Service allows most owners to claim for the annual interest payments they make on their real estate loans.

Mortgagee	A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor.

Mortgagor	The person who borrows money to purchase a house. The lender is called the mortgagee.

Motivated buyer	Any buyer with a strong incentive to make a purchase.

Motivated seller	Any seller with a strong incentive to make a deal.

Move-in condition	A house that is ready for a new occupant.

Move-up buyer	A buyer who has purchased a home before and is looking for a bigger or more expensive home.

Mullion	A vertical dividing bar between window lights or panels.

Multidwelling property	A property that contains individual units for several households but carries only one mortgage.

Multifamily mortgage	A mortgage on a multifamily dwelling with more than four families, typically an apartment building.

Multiple listing service (MLS)	The service combines the listings for all available homes in an area, except For-Sale-By-Owner (FSBO) properties, in one directory or database.

Multiple offers	Multiple purchase offers occur in hot markets or hot neighborhoods.

Municipal housing inspector	Inspectors employed by cities or counties to check all construction sites and verify that contractors are meeting building codes.

Nail pops	Nails in load-bearing parts of new homes that pop out slightly because of settling of the structure.

Needs-based pricing	A sellers asking price that is based on factors such as the required funds to pay off the mortgage, the cost of remodeling or the purchase of another house.

Negative amortization	The situation occurs when a borrowers monthly payment is not large enough to cover both the principal and interest of a loan. As a result, the outstanding balance of the loan actually grows larger with each payment rather than smaller. Most fixed-rate loans are not subject to negative amortization, but many adjustable-rate mortgages are susceptible.

Negative-slope driveway	A driveway that drops from street level to the garage.

Neo-traditional planning	Planning of a community that favors the return of new-home development with such traditional features as grid-street patterns, prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas.

Net cash flow	Investment property that generates income after expenses such as principal, interest, taxes and insurance are subtracted.

Net worth	The worth of a person or company based on the difference between total assets and liabilities.

New Urbanism	A community design philosophy that favors the return of new-home development with such traditional features as prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas.

Niche	A small recessed area in a wall, traditionally arched at the top.

NIMBY (Not In My Back Yard)	The response sometimes given by neighborhoods and communities to proposed changes or development.

No cash-out refinance	The amount of the new mortgage covers the remaining balance of the first loan, closing costs, any liens and cash no more than 1 percent of the principal on the new loan.

No-competition lots	A lot in which the buyers home will be constructed by a particular builder.

No-documentation loan	A loan application that does not require verification of income but typically is granted in cases of large down payments.

Non-assumption clause	A loan provision that prohibits the transfer of a mortgage to another borrower without lender approval.

Non-liquid asset	An asset such as a house that is not easily turned into cash.

Non-recurring closing costs	Costs that are one-time only fees for such items as an appraisal, loan points, credit report, title insurance and a home inspection.

Note	The legal document that requires a borrower to repay a mortgage at a certain interest rate over a specified period of time.

Note rate	The interest rate specified in a mortgage note.

Notice of default	A lenders initial action when a mortgage payment is late and attempts to reconcile the issue out of court have failed.

Online real estate listings	Properties listed for sale on the Internet.

Open house	A marketing tool in which a listing agent opens a house for view.

Open listing	A property given to a number of brokers to market at the same time.

Open space	Undeveloped land or common areas in a planned community reserved for parks, walking paths or other natural uses.

Option	A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.

Oral agreement	Contractual arrangements that are not in writing and are usually not legally binding.

Original principal balance	The amount of principal owed on a loan before a borrower makes any payments.

Origination fee	A fee charged by most lenders--also called points--for processing a loan. A point is 1 percent of the total loan amount.

Overhang	A protruding structural feature.

Owner financing	A transaction in which the seller of a property agrees to finance all or part of the purchase.

Panel	A section or division of a wall, ceiling or a flat piece of building material that forms the part of the surface of a wall, door or cabinet.

Paneling	Strips of wood or wood material applied as a finish to a wall.

Parcel	An officially described piece of land.

Parking strip	The strip of grass between the sidewalk and the street in front of a house.

Partition	An interior wall.

Partnership	There are several partnership options for unmarried individuals to buy a piece of property, such as live-in partnerships (in which both buyers share the residence) or a shared-equity partnership (in which one buyer lives in the home and the other is an investor in the property).

Passive loss	A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate.

Passive solar system	A system that supplies solar heat without the use of electric fans or pumps.

Patent defect	A visible deficiency in a piece of property, such as a cracked basement slab or a sagging porch.

Patio	An interior courtyard or a paved backyard area.

Payment cap	A legal limit on the amount a monthly payment can increase on an adjustable-rate mortgage.

Per-diem interest	Interest charged or accrued daily.

Percolation test	A test used to determine the ability of soil to accommodate a septic system.

Perennial	Any plant that produces leaves, flowers and seeds from year to year, such as irises or peonies.

Pergola	An arbor with an open roof of rafters supported by posts or columns.

Personal property	Any moveable property in a house such as furniture or appliances.

Pest-control inspection	A common pest-control inspection is a termite inspection, which is required in some states, such as California.

Pier	A rectangular masonry support column.

PITI (Principal, Interest, Taxes, Insura	When a buyer applies for a loan, the lender will calculate the principal, interest, taxes and insurance. The figure is designed to represent the borrowers actual monthly mortgage-related expenses.

Planned communities	The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals.

Planned-unit development	Residents own the home and the land, and share the use and financial responsibility for common areas.

Plaster	A labor-intensive and more costly wall finish.

Pocket door	A sliding door that retreats into the wall when opened.

Point	Fees charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount.

Porch	The structure can be a simple covered entrance to a home or a fully enclosed room on the outside of a residence.

Porte cochere	A porch-like roof extending over a driveway.

Portfolio lender	A lender who makes loans with its own funds and keeps the loans on the companys books--in other words, inside the institutions "portfolio"--rather than selling the loan on the secondary market.

Portico	A porch supported by a row of columns.

Possession	When a buyer signs the papers and receives the keys to the house, the buyer officially takes possession.

Power of attorney	A document that authorizes an individual to act on behalf of someone else.

Pre-approval letter	A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain.

Pre-sold home	Homes that are sold before they are built.

Prepaid expenses	The costs for taxes, insurance and assessments paid before the due date.

Prepaid interest	Interest paid before it is due. For example, at the close of a real estate transaction borrowers usually pay for the interest on their loan that falls between the closing period and the first monthly payment.

Prepayment penalty	Lenders can impose a penalty on a borrower who pays a loan off before its expected end date.

Prequalification	Many lenders will prequalify a borrower who is shopping for a loan by completing a preliminary assessment of the buyers ability to pay for a home.

Pressure relief valve	A safety vent that relieves excess pressure in a water heater.

Price range	The range of how much a buyer is willing to pay for a home.

Primer	The initial coat of paint that is applied before the final topcoat.

Principal	The amount of money that the borrower owes on a mortgage.

Principle of conformity	The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.

Principle of progression	An appraisal term which states that real estate of lower value is enhanced by the proximity of higher-end properties.

Principle of regression	An appraisal term which states that the value of higher-end real estate can be brought down by the proximity of too many lower-end properties.

Privacy fence	A structure erected between two pieces of property.

Private mortgage insurance (PMI)	A special type of loan insurance that many lenders require borrowers to purchase if the borrowers down payment is less than 20 percent of the homes purchase price.

Probate sale	A real estate sale triggered by the death of the owner, with proceeds to be divided among heirs or creditors.

Production home	Homes that are mass-produced by one builder in a project.

Programming	A written summation by an architect of a projects design objectives, constraints and criteria.

Project budget	A fiscal outline that includes the construction budget and all costs for land, furniture, equipment, financing, professional services, contingencies and owner-furnished goods and services.

Property line	The official dividing line between properties.

Property report	A disclosure issued by the state when a time-share project is located or sold.

Property tax	Property taxes are calculated at about 1.5 percent of the current market value.

Property tax deduction	The U.S. tax code allows homeowners to deduct the amount they have paid in property taxes.

Property value	The value of a piece of property is based on the price a buyer will pay at a certain time.

Proration	Agreed-upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing.

Punch list	Buyers compile a punch list during the final walk-through detailing items to be fixed before closing.

Purchase agreement	A document which details the purchase price and conditions of the transaction.

Purchase-money mortgage	A mortgage that a borrower obtains to acquire a property.

Qualifying ratios	Lenders compute qualifying ratios to determine how much a potential buyer can borrow.

Queen Anne style	A Victorian-era style that originated in San Francisco.

Quit-claim deed	A document that releases a party from any interest in a piece of real estate.

R-value	A construction term that refers to the resistance of to heat loss. The higher the R-value, the slower the rate of heat loss.

Radon	A ground-generated radioactive gas that seeps into some homes through sump pumps, cracks in the foundation and other inlets. A leading cause of lung cancer , radon is found in mostly the northern half of the country.

Rafter	Rafters form the slope of a pitched roof and are analogous to floor joists.

Rammed-earth construction	An alternative building process in which dirt is compacted into large structural frames to create walls.

Ranch style	Modern ranch-style homes, popularized in the 1950s, were championed by such architectural giants as Frank Lloyd Wright.

Rate lock	When interest rates are volatile, many borrowers want to "lock in" an interest rate and many lenders will oblige, setting a limit on the amount of time the guaranteed interest rate is in effect.

Rate-improvement mortgage	A loan with a clause that entitles a borrower to a one-time cut in the interest rate without going through refinancing.

Real estate	Land and anything permanently affixed to it, including buildings, fences and other items attached to the structure.

Real estate agent	A real estate agent has a state license to represent a buyer or a seller in a real estate transaction in exchange for a commission. Most agents work for real estate brokers.

Real estate attorney	A lawyers who specializes in real estate transactions.

Real estate broker	A real estate agent who is licensed by the state to represent a buyer or seller in a real estate transaction in exchange for a commission. Most brokers also have agents working for them, and are entitled to a portion of their commissions.

Real estate investment trusts (REITs)	The trusts are publicly traded companies that own, develop and operate commercial properties.

Real Estate Settlement Procedures Act (R	A federal law designed to make sellers and buyers aware of settlement fees and other transaction-related costs. RESPA also outlaws kickbacks in the real estate business.

Real property	Land and any permanent fixtures on it, including buildings, trees and minerals.

Realtist	A designation for an agent or broker who is a member of the National Association of Real Estate Brokers.

Realtor	A designation for an agent or broker who is a member of the National Association of Realtors.

Recission	The cancellation of a contract by law or consent by the parties involved.

Reconveyance	When a borrower completely pays off the mortgage, the property is reconveyed to them from the lender.

Recorder	A public official responsible for keeping the records of all real estate transactions.

Recording	The filing of a specific document to the appropriate government entity.

Recording fee	A fee charged by real estate agents for conveying the sale of a piece of property into the public record.

Redlining	The practice by a bank or insurance company to deny credit or insurance to people based on ethnic background or neighborhood.

Refinancing	The process of replacing an older loan with a new mortgage that has better terms.

Regulation Z	The federal code issued under the Truth-in-Lending Act which requires that a borrower be advised in writing of all costs associated with the credit portion of a financial transaction.

Rehabilitation mortgage	A mortgage that provides for the costs of repairing and improving a resale home or building.

Relocation benefits	Benefits provided by employers for new workers and can include moving costs, reimbursement for temporary housing and transportation, real estate agent assistance and discounted loans.

Relocation company	A firm that administers all aspects of moving in new employees to the community.

Remaining balance	The amount of unpaid principal on a home loan.

Remaining term	The original loan term minus the number of payments made.

Rent loss insurance	A policy that covers any loss of rent or rental value in the event of fire or other damage that renders the property uninhabitable.

Renters insurance	A policy that covers the replacement value of possessions.

Repayment plan	When a borrower falls behind in mortgage payments, many lenders will negotiate a repayment plan rather than go to court.

Replacement reserve fund	Money that is set aside from homeowners assessments to replace common property, such as furniture in a planned developments community room.

Repossession	When a house is repossessed, it is taken back by the lender holding the mortgage.

Resale value	The future value of a piece of property that can be affected by many factors, including the surrounding neighborhood, school scores, and economic and housing market conditions.

Reserve fund	All homeowners associations set aside a certain amount of money for major repairs or improvements.

Restructured loan	A mortgage in which new terms are negotiated.

Return on investment	The amount of profit a property generates.

Reverse mortgage	A special type of loan available to equity-rich, older owners. Repayment is not necessary until the borrower sells the property or moves into a retirement community.

Ridge board	A horizontal board that serves as the apex of the roof structure.

Ridge vent	A vent located along the ridge board of the roof that allows moisture to escape.

Right of first refusal	An agreement by a property owner to give another person the right to buy or rent the property before it goes on the open market.

Right to recission	A provision in the federal Truth-in-Lending Act that allows borrowers to cancel certain kinds of loans within three days of signing.

Rough-in	The installation of plumbing, electrical and other mechanical systems.

Rural Housing Service	A U.S. Department of Agriculture program that provides financing to farmers and certain borrowers to purchase rural property when other funds are not available.

Sale-leaseback	A transaction in which the buyer leases back the property to the seller for a specified period of time.

Sales contract	A contract signed by the buyer and seller that details the terms of a home purchase.

Saltbox style	A design that dates to colonial times and takes its name from the shape of saltboxes.

Sanitary sewer	The drain line in a house that carries away food and human wastewater to a municipal sewer system or a septic system.

Sash	One of two windows in a double-hung window.

Schematic designs	Renderings of floor plans and the exterior of a house.

Second mortgage	Another loan placed upon a piece of property.

Secondary mortgage market	A market of packaged home loans that are resold as securities to investors. Major players are Fannie Mae and Freddie Mac.

Secured loan	Any loan backed by collateral.

Security	Apiece of property designated as collateral.

Seller broker	A seller broker represents the interest of the seller.

Seller carry-back	An agreement in which the seller provides financing for a home purchase.

Seller take-back	An agreement in which the seller provides financing for a home purchase.

Sellers market	A hot real estate market in which sellers have the advantage and multiple offers are common.

Semi-custom home	The buyer of a semi-custom home is free to make some design changes but not to the homes structural plan.

Septic system	A self-contained sewage treatment system that distributes wastewater to an underground storage area and relies on bacterial action to decompose solid waste matter.

Servicer	A firm that collects mortgage payments and manages borrowers escrow accounts.

Setback	The minimum distance a house or buildings must be from the lot line.

Settlement statement	A document that details who has paid what to whom.

Shared-appreciation mortgage	A loan that allows a lender or other party to share in the borrowers profits when the home is sold.

Shared-equity transaction	A transaction in which two buyers purchase a property, one as a resident co-owner and the other as an investor co-owner.

Shed ceiling	A shed ceiling pitches upward at one end.

Shed roof	A shed roof pitches up longer on one side than the other.

Shingle style	An alternative style of Victorian homes that evolved in the late 19th century to simplify the complexity of the traditional Victorian house.

Shingles	Thin, wedge-shaped pieces of wood or flat rectangular pieces of slate, mineral fiber, glass fiber or composition asphalt installed on a roof to prevent water seepage.

Shoe molding	An unobtrusive finish trim between the floor and the baseboard designed to hide any irregularities in the seam between the floor and wall or baseboard.

Sill cock	An exterior threaded faucet connection for garden hoses that provides water outside a home.

Sill plate	A horizontal piece of wood placed on top of the foundation.

Skylight	A window in a roof that allows natural light to illuminate a room.

Slab foundation	A foundation built directly on soil with no basement or crawl space.

Slider window	A window that is composed of two windows, or sashes, that glide open and closed on a metal track.

Soffit	An external area under the overhang of a roof.

Soils test	A test of the subsoil to ensure that foundations can be safely constructed.

Spanish Mission style	A design that is derived from the original missions established by the Spanish in the Southwest.

Special assessment	When a homeowners association needs or wants extra funds, it levies a special assessment upon the owners.

Special deposit account	Rehabilitation mortgages require a special deposit account from which restoration and remodeling funds included in the loan are disbursed to the appropriate contractors as work is completed.

Specifications	The written requirements for materials, equipment, construction systems and standards.

Speculation home	A home that has been built without a buyer.

Splash block	A slanted block used to divert runoff water from a downspout away from the foundation.

Split-level style	A home that is a ranch-style house stacked to fit on a smaller lot and perhaps to accommodate a garage.

Square footage	The number of square feet of livable space in a home or building.

Standard Metropolitan Statistical Area	Areas designated by the U.S. Office of Management and Budget that contain a city of 50,000 or more.

Standard payment calculation	A calculation that is used to determine the monthly payment necessary to repay the balance of a home loan in equal installments.

Starter home	Homes that fall within the lower price range of a typical first-time buyer.

Steel framing	A construction method used by commercial and residential builders.

Step-rate mortgage	A loan that allows a gradual increase in the interest rate during the first few years of the loan.

Storm sewer	A drain line, which is not connected to the sewer line, removes all other wastewater from a home.

Storm windows	Sets of windows and screens that are installed on older double-hung windows.

Straight purchase	A transaction in which the buyer gives a new-home builder a deposit to begin building and the balance when the sale of the house closes.

Strike plate	The metal part of a lock that is anchored to the doorframe and holds the door closed.

Stucco	A mixture of sand and cement used to cover the exterior surface or interior walls of a home or building.

Studs	The upright pieces of lumber or steel in a wall to which panels, siding, drywall or other coverings are attached.

Sub-flooring	The sheathing, usually made of plywood, placed on top of floor joists and covered by flooring.

Subagent	When an agent brings a buyer to a property, they in effect act as a subagent to the listing agent.

Subcontractor	Specialty construction companies hired by the general contractor to perform certain tasks.

Subdivision	The process in which the owner of a large piece of property divides it into smaller parcels.

Subordinate loan	A second or third mortgage.

Sump pump	A pump that moves water from a basement sump pit.

Survey	A precise measurement of a piece of property by a licensed surveyor.

Sweat equity	The non-cash value put into a piece of property by the owner, such as do-it-yourself home improvements.

Tap fees	Most companies charge a tap fee for hooking up utilities.

Tax deduction	A tax break given by the government. Mortgage interest, loan points and property taxes can be deducted.

Tax lien	An impediment placed against a property, such as back taxes.

Tax sale	The public sale of a property by the government for nonpayment of taxes.

Tax shelter	A term often applied to real estate investment and refers to various tax advantages.

Tear-down condition	A house that requires the entire interior to be rebuilt.

Teaser rate	An low, short-term rate offered on a mortgage to entice the borrower.

Tenancy by the entirety	When a married couple owns a home, it is usually considered tenancy by the entirety If the property must be sold to pay the debts of one spouse, both must agree.

Tenants in common	Two or more owners who share interest in a specific property.

Terrace	A terrace can be several things: an unroofed paved area right next to a house; a roofed balcony; a veranda; or a raised bed of earth constructed to enhance a landscape.

The 72-hour clause	When a buyer has a house to sell before they can purchase another home, most sellers insist on a 72-hour clause. In the event of a better offer coming in before the contingency is settled, this clause entitles the seller to give the buyer 72 hours to remove the contingency or lose the house.

Third-party origination	In a third-party origination transaction, the lender has another institution originate all or part of a mortgage.

Timeshare	Ownership that involves the acquisition of a specific period of time, or that percentage of interest, in a vacation home or resort.

Title	The actual legal document conferring ownership of a piece of real estate.

Title company	Firms that ensure that the title to a piece of property is clear and provide title insurance.

Title insurance	A policy issued to lenders and buyers to protect any losses because of a dispute over the ownership of a piece of property.

Title risk	Possible impediments to the transfer of a title from one owner to another.

Title search	A check of public title records to ascertain that the seller is the legal owner and that there are no claims or liens against the property.

Top producer	A real state industry term that refers to agents and brokers who sell a high volume of homes.

Top soil	The top layer of soil that is removed when lots are graded in preparation for construction.

Total expense ratio	The percentage of monthly debt obligations relative to gross monthly income.

Townhouse	An attached home that is not a condominium.

Tract home	Another term for a production home, a mass-produced house constructed by one builder in a project.

Trade equity	Other real estate or assets a buyer gives to a seller as part of the down payment.

Trading down	A reference to buyers who purchase a home that is less expensive than their current house.

Trading up	A reference to buyers who purchase a home that is more expensive home than their current house.

Trans-Union	Trans-Union Corp. is one of the "Big Three" credit-reporting bureaus that operate nationwide. Address: 760 Sproul Road, P.O. Box 390, Springfield, PA 19064-0390. Phone: (312) 408-1400.

Transfer of ownership	Any legal means by which a piece of real estate changes hands.

Transfer tax	An assessment by state or local authorities at the time a piece of property changes hands.

Transom	A small hinged window directly above a door.

Tray ceiling	A tray ceiling has edges that slant toward the middle from the walls.

Treasury bills	Securities issued by the Treasury Department that have the full backing of the U.S. government.

Treasury index	An index used to determine interest rate changes for adjustable rate mortgages.

Trellis	A decorative landscape structure made of thin strips of wood or plastic.

Trim work	The finishing of doors, doorways, window frames and floors.

Truss	A prefabricated framework of girders, struts and other items used to support a roof or other load-bearing elements.

Trust account	Special accounts used by brokers and escrow agents to safeguard funds for a buyer or seller.

Trustee	A legally empowered person who holds or controls a piece of property for another person.

Truth-in-Lending Act	A federal law that protects consumers in a variety of ways. One of its key provisions allows a consumer to cancel a home-improvement loan, second mortgage or other loan if the home was pledged as security (except for a first mortgage or first trust deed) until midnight of the third business day after the contract was signed.

Tuck-point	The process of removing old mortar from between bricks and replacing it with new mortar.

Two- to four-family property	A piece of property that is owned by one person but provides housing for up to four households.

Two-step mortgage	An adjustable mortgage with two interest rates, one for the first five or seven years of the loan, and the other for the remainder of the loan term.

U.S. Department. of Housing and Urban De	A federal agency that oversees the Federal Housing Administration and a variety of housing and community development programs.

Underlayment	A layer of wood between the subfloor and the floor.

Underwriting	The process that lenders go through to evaluate the risks posed by a particular borrower and to set appropriate conditions for the loan.

Undisclosed heir	A person who claims the right to a piece of property after the death of an owner without a will.

Undisclosed spouse	An unidentified marital partner who can claim the right to a piece of property.

Unrecorded deed	An unrecorded deed transfers ownership from one party to another without being officially recorded.

Unsecured loan	Any loan that is not backed by collateral.

Upgrades	Options than the standard carpeting, lighting, finish carpentry and other amenities offered to all buyers in a new-home project.

Upzoning	The process in which a property is zoned from a lower to a higher use.

Urban sprawl	The unplanned expansion of development over a large area.

Usury	A reference to illegally excessive interest charged on any loan.

VA loans	A program that allows most veterans to purchase a house without a down payment.

Variable interest rate	A loan rate that moves up and down based on factors including changes in the rate paid on bank certificates of deposit or Treasury bills.

Variable rate	An interest rate that changes with fluctuations in such indexes as the U.S. Treasury bill index.

Variable rate mortgage	A loan with an interest rate that hinges on factors such as the rate paid on bank certificates and Treasury bills.

Vaulted ceiling	An elongated half-cylinder that arches above the floor.

Verification of deposit	Part of the loan process, in which a lender will ask a borrowers bank to sign a statement verifying the borrowers account balances and history.

Verification of employment	Part of the loan process, in which a lender asks the borrowers employer for confirmation of the borrowers position and salary.

Vestibule	A small entrance hall or room.

Veterans Administration (VA)	The U.S. Department of Veterans Affairs operates a variety of programs to help veterans. One of the key plans it oversees is the VA loan program, which allows most veterans to purchase a house without a down payment.

Victorian style	An architectural style that dates from the mid-19th century.

Vinyl-clad windows	Wood windows sheathed in vinyl on the outside.

Voluntary lien	A lien that a homeowner willingly gives to a lender.

Wainscoting	Wood paneling, tongue-and-groove boards or similar material installed between a baseboard and a chair rail.

Waiver	A voluntary relinquishing of certain rights or claims.

Walk-out basement	A feature that allows a door to open onto ground level.

Walk-through	A buyers final inspection of the home to determine if conditions in the purchase agreement have been satisfied.

Warranty	A legally binding promise to do something in the future.

Wetlands	Watery areas such as swamps, marshes and floodplains.

Wild deed	An improperly recorded deed.

Will	The most basic legal document outlining the disposition of a persons estate in the event of death.

Window light	An individual pane of glass.

Window seat	A bench built under an interior window.

Window well	A curved, corrugated steel insert used to isolate basement windows from moisture if they are below the soil line.

Window well covers	Curved plastic covers designed to be installed on top of a window well to cover the opening.

Wraparound mortgage	A loan to a buyer for the remaining balance on a sellers first mortgage and an additional amount requested by the seller. Payments on both loans are made to the lender who holds the wraparound loan.

Zero-lot lines	Houses built without space between them and with little or no yard.

Zoning	Regulations that control the use of land within a jurisdiction..

Zoning Variance	A one-time modification of existing zoning law.

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