Bamboozled by Real Estate Talk?

Bamboozled by Realtor Talk?Ever been to Hungary and not been able to speak Hungarian? Try typing in “real estate” in the Google search bar. Just that alone can bring up so many possible CMAs that may or may not be SFH’s and if you can’t get a FRM on a FSBO you might just be L/O or O/F or simply…up a creek without a paddle!

Real estate terms and phrases can be confusing. Don’t let someone talk over you. The professional Realtors® at Gerken & Associates’ number one priority is to make sure that you as the consumer are highly educated and understand the buying or selling process from beginning to end.

Below is just a start to some common acronyms you might see when searching real estate online and if it’s not below, ASK US! We’re here to help!



APR: Annual Percentage Rate. Annual cost of a mortgage, which includes interest, loan fees. This amount is stated as percentage of loan amount.

ARM: Adjustable Rate Mortgage. A loan that the monthly repayments will increase or decrease based on changes in the ARM interest rate index.



CMA: Comparative Market Analysis. A report displaying the prices of homes recently sold, currently on the market or homes that did not sell within the listing period.



FDIC: Federal Deposit Insurance Corporation. U.S. corporation that insures deposits against bank failure in the U.S. and encourages public confidence in the bank system.

FHA: Federal Housing Administration. Part of the Department of Housing and Urban Development that insures residential mortgage loans made by private lenders.

FRM: Fixed-Rate Mortgage. Loan that the interest rate and monthly payment does not change.

FSBO: For Sale by Owner. Owner sells their home without REALTOR® so they do not have to pay a sales commission.



HOA: Homeowners’ Association. An organization in a community that creates and enforces the rules for the jurisdiction. The association collects dues for the maintenance of common areas, such as parks, elevators, pools, etc.

HUD: U.S. Department of Housing and Urban Development. U.S. The agency works to provide housing and community development, ensuring all have access to “fair and equal” housing.



IDX: Internet Data Exchange. It is the data downloaded from an MLS. It also makes it possible for the public to browse listings in a market by using a real estate broker’s website.



JV: Joint Venture. Business arrangement when two or more parties come together and agree to contribute their economic resources for a specific goal.



L/O: Lease Option. Agreement giving a renter the choice to purchase the property during or at the conclusion of rental period.



MIP: Mortgage Insurance Premium. Lender’s insurance from the FHA to the lender against a loss because the borrower defaulted.

MLS: Multiple Listing Service. This is an organization that collects, combines and distributes homes on the market to its members, who are brokers. Membership opportunities are not available to the public, but the data may be sold to real estate websites. The service is either regional or local.



O/F or OFIN: Owner Finance. The buyer finances the purchase through the seller. This often occurs when the buyer cannot get proper financing through a conventional mortgage lender or does not want to pay the market interest rates.

OBO: Or Best Offer. When the owner has specified a price for an item, but is willing to accept a lower offer, depending on the other bids. The owner accepts the highest offer.



PMI: Private Mortgage Insurance. Private insurance companies issue this insurance that protect lenders from a loss if the borrower defaults on a mortgage with a low down payment.



REO: Real Estate Owned. Properties in the portfolio of a bank or another financial institution (for example, properties they have foreclosed on).

RESPA: Real Estate Settlement Procedures Act. Consumer protection law requiring lenders give borrowers notice of closing costs.

ROI: Return on Investment. Amount of return on an investment in relation to the investment’s cost.

RTO: Rent to Own. The agreement gives the renter the right to purchase the property at a predetermined price and time. However, the renter is not obligated to purchase.



SFH: Single Family Home. A property with only one unit and designated for only one family to live in it.

SIY: Sign In Yard.



VA: Department of Veteran Affairs/ Veterans Administration. Government agency that provides benefits and services to veterans and their families. The administration also assists with home loans and insurance for those who have served.

Real estate industry lingo can be overwhelming for consumers purchasing or selling their first home. Understanding these definitions can make the process less daunting and more enjoyable. What acronyms have you seen or heard that you’d add to this list?

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