14 post-recession real estate terms, translated
Dec 27
By Tara-Nicholle Nelson
By now, you’ve probably heard the age-old rules of thumb about translating home listings from real estate lingo to plain English: “cozy” = tiny, “needs TLC” = needs massive repairs, and “all original details” could mean beautiful moldings or moldy linoleum, depending on the home.
Almost everything about the real estate market has changed over the last few years, though, so we thought it was time to provide you with an updated real estate lingo decoder that accounts for those changes in the market. Here are 14 line items of real estate jargon, divided into two buckets and decoded for the post-recession house hunter.
Bucket No. 1: 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 flow, timelines and challenges compared with “regular” equity sales. So, it only makes sense that listing 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:
1. 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.
2. S/S, 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 six months or longer to close. Talk to your agent for more details about short sales, and to determine how you can tell the success-prone short sales from those that are less likely to close.
3. Pre-approved short sale: Many knowledgeable agents say 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.
4. Motivated seller: This is a perennial term in listing parlance, but against the backdrop of the current market, translates to something like, “Have mercy on me.” I kid; this phrase often signals a seller’s flexibility in pricing and/or urgency in timing.
5. Coveted: In a word, “expensive.” No, seriously, even on today’s market, many locales have a neighborhood (or a few) which have been relatively recession-proof, have been fairly immune to the foreclosure epidemic and have seen home values continue to rise. If you see the word “coveted” in a listing, chances are you’re house hunting in that sort of neighborhood, or there’s something about the individual property the home’s seller is trying to position as unique and desirable, as compared to competing listings (i.e., the view, location of the lot, or floor plan).
6. BOM, often accompanied by “No fault of the house:” Homes go in and fall out of escrows 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.” “No fault of the house” may describe a situation in which the buyer lost interest in the home after a long short sale process or failed to get final loan approval, as contrasted to a situation in which the home’s inspection turned up deal-killing problems or the property failed to appraise at the purchase price.
