Real Estate Terms Translated

Almost everything about the Atlanta real estate market has changed over the last few years, so I thought it was time to provide you with an updated real estate lingo map that accounts for those changes in the market.

Transaction signals. Distressed properties – foreclosures and short sales – make up about a third of the homes currently on the market, and these transactions have their own unique schedule, timeframe and challenges compared with “regular” home sales. So, it only makes sense that agents have developed a set of abbreviations to brief prospective buyers on what they can expect and should be prepared for if they make an effort to buy such a home, with just a glance at the listing:

REO: Real estate owned by the bank/mortgage servicer, this acronym refers to homes that were foreclosed and repossessed by the former owner’s bank. It also signals that buying this property will involve doing a deal with the bank; possibly dealing with a different escrow timeline, offer process or contract forms than a non-REO sale; and almost always taking the place in as-is condition, among other things. Oh, yeah – and it might also involve one more thing: a great deal.

S/S or Short Sale – Subject to bank approval: What once stood for stainless steel is now being used to describe a short sale – a property whose seller anticipates will net them less than they owe on the home. Short sales are often described as “subject to bank approval,” which simply points out the obvious truth about these transactions, that the seller has very little control over whether the bank will allow the transaction or what price and terms the bank will approve of, and that the transaction might very well take the better part of your natural life could take 6 months or longer to close.

Pre-approved short sale: No short sale is truly “pre-approved” unless and until the bank looks at a specific buyer’s offer and the seller’s financials at the same time, but some listing agents designate a short sale as “pre-approved” when a previous short sale application was approved at a given price, but fell out of contract for some other reason.

Motivated seller: This is an age old term, but against the backdrop of the current market.  This phrase often signals a seller’s flexibility in pricing and/or urgency in timing.

BOM:  Homes go in and fall out of contract on today’s market constantly, often due to things the seller has no control over. BOM indicates a home that was in contract to be sold, but is now “Back on the Market.”

Not a short sale, not a foreclosure: Sellers on “regular” equity transactions are often more negotiable on items like price and repairs, and are certainly able to close the transaction sooner than sellers of REOs and short sale properties. For buyers that seek quick certainty and closure, non-distressed homes can be especially attractive.

OO/NOO: Owner-Occupied and Non-Owner Occupied: Will see this on listings in two different ways. First, the vast majority of home loans must comply with government loan insurance guidelines, including guidelines around how much of a condo complex must be owner-occupied (75 percent, minimum).  Some bank-owned property sellers will consider offers from owners who plan to occupy the property if they buy it as much as a week or 16 days before they will look at NOO or investor offers.

FHA, Short for the Federal Housing Administration: Backs the popular 3.5 percent down home loan program. FHA guidelines also include somewhat strict condition and homeowners’ association dictates.  So if a home’s seller notes that they are not taking FHA loans, they might be saying that the property has condition or other issues which disqualify it for FHA financing.

Fannie, Freddie: Fannie Mae and Freddie Mac:  Federally controlled company/agency hybrids that now back most non-FHA (conventional) home loans, and provides the guidelines most Conventional loans must meet, including guidelines around seller incentives like how much closing cost credit a buyer can receive.

DPA/DAP: Down-Payment Assistance or Down-Payment Assistance Program

FTH/FTB, First-time homebuyer/First-time buyer: – cities, states and large employers like universities tend to be the last bastion of these programs which offer mortgage financing or down payment assistance, usually to people who have not owned a home in the relevant city or state anytime in the preceding 3 years.

HUD, The federal department of Housing and Urban Development: Governs the guidelines for FHA loans, acts as a seller of homes which were foreclosed on and repossessed for non-payment of FHA-backed loans, and publishes the Good Faith Estimate and settlement statement forms every buyer and borrower will be provided at the time they shop for a loan and close their home purchase, respectively.

For the latest Suwanee, Johns Creek, Alpharetta, Duluth, Cumming, East Cobb, Roswell, Atlanta, and Buford new homes for sale please visit www.jeffbarnwellhomesforsale.com  View the latest forecosures, short sales, fannie mae, hud, new homes for sale.  Listing homes in metro atlanta and surrounding markets.  Working as a buyers agent in Fulton County, Forsyth, Gwinnett, Hall County, Lake Lanier, and surrounding deep water dock markets.