Real Estate Glossary: S

Second Mortgage: An additional mortgage on a property that already has a mortgage.

Seller’s Market: A market condition where there are a higher number of buyers than homes available to purchase. Houses will typically sell faster and at a higher price.

Strata or Condominium Fees: Payments made by owners of condominiums or townhouses to the property management of a complex that is allocated to pay expenses such as maintenance, repairs and management costs.

Survey: A document that shows the property boundaries and measurements, specifies the location of buildings on the property, and indicates any easements or encroachments.

Selling Expenses
Additional expenses to be paid when selling an immovable, including mortgage loan balance, real estate broker compensation, notary, tax adjustments, etc.

Sale-leaseback
A type of real estate transaction where the seller transfers the title to the buyer upon purchase, but then rents the property from the new owner. This practice is not common in Canada.

Sales Contract
A legal written document that details the agreed upon conditions between a seller and a buyer regarding the sale of a specific property. Also called an “Agreement of Sale.”

Sales tax
Provincial and federal taxes applied to the purchase of a property. Residential resale properties are usually exempt from federal GST but newly constructed properties are not.

Second Mortgage
A mortgage loan that takes priority after a first mortgage on a registered land title.

Secured Debt
A debt that is secured by a lien on a debtor’s property (typically a mortgage loan) that may be taken by the creditor if the debtor defaults on his or her payments.

Secured Loan
The borrower must provide collateral in order to borrow the money.

Security
1. Something deposited or given as assurance of the fulfillment of an obligation. For example, property is often used as collateral for a loan.
2. A document which indicates ownership such as a stock certificate or bond.

Self-Employed Person
An individual who owns and operates a trade or business rather than working as an employee for company.
1. You are self-employed if you are a sole proprietor or a partner working in a business.
2. You can be an employee and self-employed at the same time if you have an independent business outside of your regular employee hours. To qualify for many business tax exclusions and deductions, the business must make a profit in three of five years. In most cases, to qualify you must take and average of the last two – three years tax assessments.

Seller Broker
An individual who earns a commission (paid by the seller of a property) in exchange for finding a buyer and assisting in the negotiation for the real estate transaction.

Seller’s Market
When the real estate market favors the seller. This type of market usually means the seller is expected to sell quickly and for market or above market value.

Semi-custom Home
A house in which the layout is predetermined by the builder. This means the buyer cannot alter the layout, but he or she can specify some of the features including the type of cabinets and floor coverings.

Settlement Statement
A document that contains the details and conditions of a settlement. It describes whom must pay, the amount to be paid, and to whom the money is to be paid.

Shared-appreciation Mortgage

A type of mortgage loan where the lender offers a below-market interest rate in exchange for profit sharing when the property is sold. This is typically only done with private funds/lenders.

Shared-equity Partnership
An agreement between multiple buyers where one buyer inhabits the property and the other buyer has an ownership stake as an investment. The partners split the capital gain after the property is sold.

Short-term Liabilities
Money that must be paid in less than a year (12 months), including wages, short-term loans, taxes, credit card balances and long-term loans.

Simple Interest
Interest that is calculated only on the principal balance, without compounding.

Simple Interest Loan
A method of allocating the monthly payment between interest and principal. The interest charged is determined by the unpaid principal balance on the loan, the interest rate, and the number of days since the last payment. The rest of the payment goes to the principal. Making early payments or additional payments reduces the loan’s principal and cuts the total interest paid over the life of the loan.

Step Down Lease
A lease that allows for decreases in a rental payment on specified dates.

Step-rate Mortgage
A fixed-rate mortgage loan where payments are lower at the beginning of the loan, typically for two years, but then increase after the specified time period.

Step Up Lease
A lease that allows for increases to rental payment at certain time periods.

Sub-prime Borrower
A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.

Sub-prime Mortgage
A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
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Subordinate Loan
A mortgage with priority that is below that of another mortgage. This includes second or third mortgages, or home-equity loans.

Sweat Equity
The value of the work, including renovations, maintenance, or repairs, put into a house by its owner. This can be used in place of a full down payment (up to and including 50% of a down payment).

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