For the REALTOR® these may be words used every day, but for the potential buyer or seller, they can be foreign at first so I wanted to share some of the top words we use that aren’t understood initially.
1) COMP – this is short for “comparable”, which means comparable property. We look at the ‘comps’ to determine fair market value of a home being sold.
2) GOOD FAITH ESTIMATE – this also referred to as the GFE is something provided by the buyer’s lender… it outlines costs associated with the loan and transaction. The buyer then has time to review it and make sure there are no questions before proceeding.
3) HUD – this can actually mean a couple of things… first, there are HUD homes which is a form of lender-owned properties or foreclosures and the prior owner happened to have an FHA loan, which means HUD (Department of Housing and Urban Development) took them over. It also refers to the closing or settlement statement, which breaks the transaction down into figures to show what money goes where.
4) PRE-QUAL – this is the documents the loan officer gives a buyer after initially reviewing their credit and ‘pre-qualifying’ them for financing. Often times, you must have one of these to go look at homes for sale.
5) MLS – almost everyone says the MLS, but do they know what it means? It stands for the Multiple Listing Service and is an online platform where brokerages throughout the area can advertise their homes (or listings) for sale. REALTORS® belong to the local MLS and pay membership dues.
6) AGENT vs REALTOR®– there is a difference between Real Estate Agent and REALTOR® and it has to due with membership in the National Association of REALTORS® and adhering to the REALTOR® Code of Ethics. REALTORS® are held to a higher standard.