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14 Post-Recession Real Estate Terms: Decoding the Lingo

CEO Khai Intela
Illustration by Ralphie getting his decoder ring in the mail. If you're in the market for a new home, you've probably come across the cryptic language used in real estate listings. Terms like "cozy" or...

Post-Recession Real Estate Terms Illustration by Ralphie getting his decoder ring in the mail.

If you're in the market for a new home, you've probably come across the cryptic language used in real estate listings. Terms like "cozy" or "needs TLC" can be misleading, revealing a lot more about the property than what meets the eye. The good news is, we've got you covered with a comprehensive guide to decoding these post-recession real estate terms. So, let's dive in and make sure you're fluent in the language of homeownership!

Bucket #1: Transaction Signals

REO: Real estate owned by the bank

REO Image source: Unsplash REO homes are properties that have been foreclosed and repossessed by the bank. Buying an REO property involves dealing with the bank, which could mean a different escrow timeline, offer process, or contract forms. These properties are typically sold in as-is condition, offering potential buyers an opportunity for a great deal.

S/S, Subject to Bank Approval: The reality of short sales

Short Sale Image source: Unsplash Short sales are properties where the seller expects to receive less than what they owe on the home. "Subject to bank approval" means the seller has minimal control over the transaction and the bank's decision. Be prepared for a potentially long and complex process that can stretch for six months or more. Consult your agent for insights on successful short sales.

Pre-approved Short Sale: A partial approval

This term is often used to describe a short sale where a previous application was approved at a specific price but fell through due to other reasons. However, many knowledgeable agents argue that no short sale is truly "pre-approved" until the bank evaluates a specific buyer's offer and the seller's financials simultaneously.

Motivated Seller: A plea for mercy

Motivated Seller Image source: Unsplash Don't be fooled by this seemingly innocuous term. In today's market, "motivated seller" often translates to "Have mercy on me." Sellers using this phrase are indicating their flexible pricing and urgency in timing. Keep an eye out for potential negotiation opportunities!

Coveted: The allure of exclusivity

Coveted Image source: Unsplash When a listing describes a property as "coveted," prepare for the price tag to reflect this exclusivity. In recession-proof neighborhoods or unique properties, the term signifies an expensive and highly desirable home. Whether it's the view, location, or floor plan, there's something about this property that sets it apart from the competition.

BOM, often accompanied by "No fault of the house": A second chance

Back on the Market Image source: Unsplash "BOM" stands for "Back on the Market," indicating a property that was previously under contract but is now available again. The accompanying phrase "No fault of the house" suggests that external factors, rather than property-related issues, led to the previous deal falling through. It could be due to a buyer losing interest during a lengthy short sale process or failing to secure final loan approval.

Not a Short Sale, Not a Foreclosure: The non-distressed alternative

Sellers of "regular" equity transactions tend to be more negotiable on price and repairs. They can also complete the transaction more quickly, allowing buyers to move in sooner. These properties are often better-maintained than distressed homes on the market. Non-distressed homes offer a sense of certainty and swift closure for buyers seeking a hassle-free experience.

Bucket #2: All About the Benjamins

OO/NOO: Owner-Occupied and Non-Owner Occupied

Owner-Occupied Image source: Unsplash The OO/NOO distinction appears in listings in two ways. Firstly, government loan insurance guidelines often require a certain percentage of a condo complex to be owner-occupied. Additionally, some bank-owned property sellers prioritize offers from buyers planning to occupy the property before considering non-owner occupied or investor offers.

FHA: Federal Housing Administration

FHA Image source: Unsplash FHA stands for the Federal Housing Administration, which backs the popular 3.5% down home loan program. Properties listed as ineligible for FHA loans may have condition or other issues that disqualify them from this type of financing. FHA guidelines also include certain condition and homeowners’ association requirements.

Fannie, Freddie: The power behind conventional loans

Fannie and Freddie Image source: Unsplash Fannie Mae and Freddie Mac are federally controlled companies that back most non-FHA (conventional) home loans. They provide the guidelines that most conventional loans must meet. These guidelines also cover seller incentives, such as the amount of closing cost credit a buyer can receive.

DPA/DAP: Down-Payment Assistance Program

Down-Payment Assistance (DPA) or Down-Payment Assistance Programs (DAP) aim to help buyers who need financial assistance to cover their down payment. These programs offer various options, from grants to low-interest loans, making homeownership more accessible for those who qualify.

FTH/FTB: First-time Homebuyer/First-time Buyer

First-time Homebuyer Image source: Unsplash Designed for individuals who haven't owned a home in the relevant city or state within the past three years, first-time homebuyer programs provide mortgage financing or down-payment assistance. These programs are often offered by cities, states, and large employers like universities.

HUD: Housing and Urban Development

HUD Image source: Unsplash HUD stands for the federal Department of Housing and Urban Development. They govern the guidelines for FHA loans, act as sellers for foreclosed homes, and provide essential forms like the Good Faith Estimate and settlement statements for buyers and borrowers.

HFA: Housing Finance Administration

Housing Finance Administration (HFA) refers to various state and regional agencies offering an array of financing and counseling programs. These programs differ from state to state and range from down-payment assistance for first-time buyers to foreclosure relief assistance and loan modifications for underwater homeowners.

Real estate lingo can be confusing, but armed with this guide, you'll be able to navigate the market with confidence. Remember, a knowledgeable agent by your side can provide valuable insights tailored to your specific needs. Happy house hunting!

Agents: Have you come across any unique real estate lingo? Share your experiences in the comments below. Buyers/Sellers: What real estate terms have left you scratching your head or amused? Let us know in the comments.