Like many industries, real estate has its own unique terms and phrases. Turn those terms into acronyms, and what you have is little more than alphabet soup to those new to real estate. Here are some common RE (there’s your first one) acronyms as defined by NAR (National Association of Realtors):
ARM (Adjustable Rate Mortgage) is a type of mortgage loan whose rate is tied to an economic index, which fluctuates with the market. APR (Annual Percentage Rate) represents the total costs (interest rate, closing costs, fees, and so on) that are part of a borrower’s loan, expressed as a percentage rate of interest. BOM (Back On Market) denotes when a property or listing is placed back on the market after a contract is canceled. BPO (Broker’s Price Opinion) is the real estate broker’s opinion of the expected final net sales price, determined prior to the acquisition of the property.
CMA (Comparative Market Analysis) is the analysis used to provide market information to the seller and assist the real estate broker in securing the listing. DOM (Days On the Market) stands for a measurement of how long a listing has been on the market. FHA (Federal Housing Administration) is a branch of HUD, but is also a U.S. Federal Housing Administration loan provided by an FHA-approved lender. FSBO (For Sale By Owner) connotes a property that is for sale by the owner of the property.
PITI (Principal Interest Taxes and Insurance) combines the four costs that make up a borrower’s monthly mortgage payment. PMI (Private Mortgage Insurance) is an insurance sometimes paid by a borrower in monthly installments, typically of loans more than 80% of the value of the property. RI (Repair and Improvement) is the estimated and/or actual repair and improvement costs to a property. ROI (Return on Investment) is the profit on a real estate transaction after all costs (including purchase price) are deducted from a sales price.
Although it’s good for buyers and sellers to know how to speak Real Estate, all you really have to do is hire us to act as your agent, advocate, and translator.