All the Acronyms
Much like in any sort of field, there are tons of acronyms, abbreviations, and initialisms that go along with the work. So it’s no surprise that when you start looking for homes, you’re going to face a number of these that may seem confusing and it’s easy for your agent (including me!) to forget to explain these abbreviations. Below is a list of some common examples you may come across (and if you forget, never be afraid to ask your agent to clarify!) I’ve even alphabetized these because I’m nice.
ARM – Adjustable Rate Mortgage. This is a mortgage that has a variable interest rate over time, depending on the market.
BPO – Broker’s Price Opinion. This is a broker’s opinion on what the selling price of a house will likely be.
CMA – Comparative Market Analysis. This is a document put together by an agent or broker (see my earlier blog post!) that shows what nearby homes are selling for to give you a close estimate of what your house may sell for.
DOM – Days on Market
FHA – Federal Housing Association
FHA Loan – A loan backed by the Federal Housing Assocation (i.e. a loan backed by the government rather than a private company)
FSBO – For Sale by Owner (sometimes referred to as a ‘fizz-bo’ out loud)
HUD – US Department of Housing and Urban Development
MLS – Multiple Listing Service. This is the major listing site agents use to view all listings in the area (in Connecticut, the MLS is for the entire state so I can view properties in any county)
PMI – Private Mortgage Insurance. If you don’t put 20% down on your loan, you will generally have to pay PMI each month/year until you reach 20%.
REO: Real Estate Owned (generally refers to foreclosed properties where a bank is now the owner)
ROI – Return on Investment. (Generally for people trying to invest in a property, maybe flipping the property, or a homeowner who’s trying to make repairs to sell the house for more).
VA: US Department of Veterans’ Affairs
VA Loan: A loan backed by the VA.
Hopefully this short list will help you understand a few of the terms you may have heard before or were confused about. And again, never fear asking your agent for more information or to clarify any words or abbreviations you don’t understand.