Have you ever met with a real estate agent or gone through the entire buying or selling process and heard terms or acronyms that you did not understand? We try to be as clear as possible in our communication throughout the buying and selling process. However, we may use some terms that we use all the time and don’t realize may not be as clear to others as we think. Here is a list of common real estate terms and acronyms that you might hear:
“FSBO” - For Sale By Owner. When a seller is selling but has not hired a real estate brokerage and is doing it themselves.
“CMA” - Comparative Market Analysis. A report a real estate broker provides to a seller that shows the broker’s opinion of value, using comparable properties that have recently sold to help form that opinion.
“Inspection” - Buyers are advised to hire a home inspector to conduct a home inspection. This involves a thorough look at a home so the buyer has a more complete understanding of the condition of the home. This should not be confused with an appraisal.
“Appraisal” - If there will be a loan on the property, the lender will hire an appraiser to inspect the property and determine its value and condition to ensure that it will be sufficient collateral for the loan.
“MLS” - Multiple Listing Service. Agents who belong to a real estate association or MLS have agreed to cooperate and upload their listings to this database.
“Contingency” - In a contract to purchase real estate, a contingency is something that must happen or be satisfied for the sale to continue. For example, a home inspection, financing, or well and septic tests may be contingencies.
“Feasibility” - This is a contingency in a contract that allows the prospective buyer to conduct due diligence on the property and verify its usability for the buyer’s intended use.
“CC&R” - Covenants, Conditions, and Restrictions are legally binding rules found in planned communities and subdivisions. They govern how homeowners may use and maintain their homes and properties and often work in conjunction with homeowners associations.
“REALTOR®” - A trademarked name used by real estate professionals who are members of the National Association of REALTORS®.
“REO” - Real Estate Owned. Property that is owned by a lender, such as a bank or government agency, typically after a foreclosure when the property has not been sold at auction.
If you don’t understand something your agent says, ask them to explain what they mean!