- Ask your agent if you see a term you don’t understand!
The General Information and Notice to a Buyer is a Texas Association of Realtors (TAR) document that explains some of the general terminologies and what to look out for as a real estate buyer, and is definitely worth reading if you are new to real estate or embarking on your home purchase to better understand the contract and process.
Below are some acronyms you may run across as an agent, buyer or seller in Central Texas.
ABOR – Austin Board of Realtors
The Realtor association for the Austin area.
ACTRIS – Austin/Central Texas Realty Information Service
The MLS for the Austin area.
ARM – Adjustable Rate Mortgage
Unlike a fixed rate mortgage, the interest rates for ARMs can change during the life of the loan, meaning your mortgage payment can go up or down (likely up) during the loan
ARV – After Repair Value
Often used by investors, and essentially the same as the FMV, this is the estimated value of a home once the owner has completed any necessary repairs or upgrades
BPO – Broker’s Price Opinion
Similar to a CMA that a Realtor performs, the BPO is a price assessment that brokers often perform for commercial organizations like banks.
CAD – Central Appraisal District
CD – Closing Disclosure
This form, mandated after the housing crisis in 2008, discloses all the terms that the buyer and seller are signing to in a financed deal. This is one of the most important forms at closing, usually just three pages, showing all the closing costs and who is paying what. It looks nearly identical to the LE, or Loan Estimate, that the buyer reviews at the beginning of the process.
CDOM – Cumulative Days on Market
Similar to DOM except “cumulative”, which includes the time that the house was on the market with another agent prior to the current listing. It depends on MLS rules, but a house often has to be off the market at least 90 days for the CDOM to reset to 0.
CFPB – Consumer Financial Protection Bureau
The CFPB was created after the 2008 housing crash to provide additional oversight and regulation of lenders and mandates certain consumer disclosures like the CD.
CMA – Comparative Market Analysis
The CMA is your agent’s analysis of the price of your home. They are done for sellers when listing the property to pick a reasonable price, and for buyers when they prepare an offer to ensure they are not overpaying.
CTCOG – Central Texas Council of Governments
CTCOG is the entity responsible for a variety of government functions, including housing assistance like Section 8 in thr Fort Hood area.
CTXMLS – Central Texas Multiple Listing Service
The local MLS for the Fort Hood, Temple/Belton, New Braunfels, Williamson County, and Victoria, TX areas. Sellers in these market areas should be sure their home is listed in the CTXMLS, where most agents will be viewing homes for their buyers.
DOM – Days on Market
The length of time the home has been on the market in the current listing. Sometimes, the home may have been listed without selling immediately prior the current listing, in which case you want to look at the CDOM.
DTI – Debt To Income
The debt-to-income ratio is what a lender uses to determine your eligibility for a loan and your maximum loan amount. The calculation is [monthly debt payments] / [monthly income]. The acceptable DTI amount varies depending on the lender and loan type, but generally it is difficult to get a loan if it is higher than 55%.
ETJ – Extraterritorial Jurisdiction
Extraterritorial jurisdiction is a note in the MLS to indicate if the home falls under any city jurisdictions, even if outside the city limits.
FEMP – Framing, Electrical, Mechanical, Plumbing
The FEMP inspection is done by the city during the home construction process when the frame is complete, inspecting the four different elements of the construction before the builder covers it up with drywall and insulation.
FHA – Federal Housing Administration
The FHA is responsible for the FHA loan, which is geared toward lower to middle-class home buyers and comprises approximately 15% of Fort Hood area loan originations.
FHAAR – Fort Hood Area Association of Realtors
FHAAR is the local Realtor association to which most agents in the area belong. It is responsible for training and MLS access.
FHFA – Federal Housing Finance Administration
The FHFA was created by Congress’s HERA bill in 2008 to oversee the secondary mortgage giants Fannie Mae and Freddie Mac.
FMV – Fair Market Value
FSBO – For Sale By Owner
Home sellers who decline to use a real estate broker to sell their home are termed “FSBOs”.
GRM – Gross Rent Multiplier
The GRM is a shorthand for analyzing the fair value and return of a rental. It is calculated by [purchase price] / [gross rents]. It is essentially the number of years that, if you had no expenses, you would earn back what you paid for a property.
HOA – Home Owners Association
HOAs are not common in the Fort Hood area. They are neighborhood organizations that charge a monthly fee in exchange for services, amenities, and regulations on the neighborhood.
HUD – Department of Housing and Urban Development
HVAC – Heating, Ventilation and Air Conditioning
The A/C, ducts, and heater in a home are termed the HVAC system.
IDX – Internet Data Exchange
Agents use an IDX to pull listings for sale from the MLS into their own brokerage or agent websites, like this one.
LE – Loan Estimate
Early in the loan process on a home, a lender is required to provide the Loan Estimate which breaks down the interest rate and fees. When shopping multiple lenders, it is important to compare their LEs, not necessarily just their interest rates.
LREA – Licensed Real Estate Agent
Texas requires sellers to disclose to buyers if they are a licensed real estate agent. The 1-4 Family Contract has an entire paragraph for that disclosure.
LTV – Loan to Value
The loan-to-value ratio of a property is the amount the lender is lending versus the property value. With the exception of financing the VA funding fee, most loans will not allow higher than a 100% LTV. LTV is calculated by [loan amount] / [appraised value]. Example: a home with a conventional mortgage of a 5% down payment has a 95% LTV. As you pay off your mortgage, the LTV shrinks over time until you paid it off entirely.
MIP – Mortgage Insurance Premium
Most loans without a significant down payment require mortgage insurance, which can add $100+ to the monthly mortgage payment. MIP is the term for mortgage insurance related to the FHA loan, while PMI is the term for other kinds of mortgage insurance like on conventional loans.
MLS – Multiple Listing Service
MLSs are the database that agents share and advertise their listings for sale to other agents. The Fort Hood area is within the CTXMLS. Agents pay $100s/yr in subscription costs to access the MLS. There are over 600 MLSs in America, and buyers and sellers want to make sure they are working with agents who are members of the MLS local to the area they are selling/buying.
MUD – Municipal Utility District
For developers who want to build faster than the city utilities can grow, they can build MUDs, which si a taxing district on their new neighborhood. Often, MUDs can result in $1000s/yr in extra property taxes for their residents, but is the only cost-effective means available to the developer to bring utilities to the neighborhood. After a set term, most MUDs are paid off and disbanded, often 30 or more years. Fort Hood has few MUDs, only in Three Creeks (Belton) and the yet-to-be-built Turnbo Ranch (Killeen).
NAR – National Association of Realtors
This is the national trade organization for real estate agents. Not all real estate agents are NAR members (especially commercial agents), but the vast majority are. Technically, a “Realtor” is a member of NAR, not just a real estate agent. Therefore, some Realtors are not real estate agents (like appraiser members of NAR), and some real estate agents are not Realtors.
PITI – Principal, Interest, Taxes, and Insurance
The components of most mortgage payments. Most lenders, in addition to getting paid principal and interest on the loan, collect taxes and insurance from the homeowner as well in order to ensure that the homeowner is paying taxes and insurance on their collateral, the home.
PMI – Primary Mortgage Insurance
Like MIP for FHA loans, mortgage insurance is generally required on all loans that have higher than a 80% LTV (or lower than a 20% down payment). It can add $100+ to the monthly loan amount. Unlike MIP, you can often remove PMI once you’ve paid off your loan sufficiently to have an 80% LTV.
REIT – Real Estate Investment Trust
“Reets” are a form of securitized real estate investment that folks can buy just like stocks. These entities are tightly regulated and require the REIT to issues at least 90% of profit back to shareholders. REITs can be a great way to get into real estate investing without the headaches.
REO – Real Estate Owned
Another term for foreclosures. This is a bank’s term for real estate that they own and are trying to sell.
RESPA – Real Estate Settlement Procedures Act
RESPA is a consumer protection statute passed by Congress in 1974 that governs many aspects of agent and lender’s jobs, including advertising, referral fees, and buyer disclosures.
SFH/SFR – Single Family Home/Residence
A shorthand designating single-family homes or residences versus multifamily homes (fourplexes/duplexes) and commercial real estate.
TBBOR – Temple Belton Board of Realtors
The local Realtor association in Temple is TBBOR. Prior to the CTXMLS merger, TBBOR had its own MLS separate from FHAAR’s.
TAR – Texas Association of Realtors
The state chapter of NAR, responsible for a significant number of the forms that real estate agents use (along with TREC) as well as agent education like the convention.
TREC – Texas Real Estate Commission
The Texas governing body over real estate licensing and rules is called TREC. Some of the most important forms are created by TREC and publicly available. They also govern complaints against agents.
USDA – Department of Agriculture
USDA is responsible for the USDA loan, a 0% down payment loan available to first-time buyers outside more densely populated areas.
VA – Department of Veterans Affairs
Responsible for the VA loan to US active duty and veteran military.
VAR – Variable Rate Commission
In Texas, listing agents can offer different commissions to buyer agents in their brokerage versus those not in their brokerage. Because those commissions can affect the seller’s net on a buyer’s offer, listing agents are required to disclose to the buyer and their agent any listing that has a variable rate commission. Variable rate commissions are not common in the Fort Hood area, and likely only used in very specific circumstances.
VLB – Veterans Land Board
Falling under the Texas Land Office, the VLB is responsible for the Tex Vet loan to Texas military veterans and soldiers.
VOW – Virtual Office Website
VOWs are websites that customers can search homes. Unlike portals like Zillow or agent IDX websites, VOWs generally are designed for existing clients that have an actual buyer’s representation agreement already in place, and include logins. When inputting a listing, a broker can check whether or not the listing will be visible to VOWs, portals, or IDXs (it probably should be).
Real Estate Certifications
When looking up an agent, you may find that they have an “alphabet soup” of terms after their name and Realtor designation. These are usually references to certain certifications and designations. Depending on your needs, finding a Realtor with a specific area of focus can be a tremendous benefit. At a minimum, it often shows agents who are dedicated to their own education and self-improvement.
Many of these have annual dues, so it is rare to see an agent belong to more than a few. Most agents are selective about which organizations are their priority and network and learn within those few designations.
Conducted by the Real Estate Buyer’s Agent Council, this designation is designed for agents who specialize with buyers.
Conducted by the REALTORS® Land Institute, this designation is designed for agents who specialize in land.
Conducted by NAR, this certification is designed to train agents on serving the needs of clients from different cultures and being mindful of fair housing laws.
Conducted by the CCIM Institute, this designation is designed for agents who specialize in commercial properties.
Conducted by NAR, this designation is designed for agents who specialize in international clients.
Conducted by the Institute of Real Estate Management, this designations is designed for property managers. NARPM is another signficant trade organization for property managers.
Conducted by the Real Estate Business Institute, this designation is designed for real estate office and business managers and those on the operations side of brokerages and large teams.
Conducted by the Real Estate Business Institute, this certification is designed for real estate team management.
Conducted by the Residential Real Estate Council, CRS is a designation designed for generalized agents, and a common next stepping stone after an agent earns the GRI.
Conducted by The Counselors of Real Estate, this designation is highly exclusive and by-invite-only.
Conducted by e-PRO, this certification is designed to teach familiarity with modern tech products in the real estate space.
Conducted by the GAA, this designation is designed for appraisers.
Conducted by the Green REsource Council, this designation is designed for agents who want to fully understand energy efficient building and green real estate technology.
Conducted by state associations, this designation is one of the most basic building blocks to a well-rounded agent’s education and often the first designation earned by agents.
Conducted by the Real Estate Buyer’s Agent Council, this certification focuses on the needs of military buyers and sellers and the tools available to Service Members.
Conducted by the Women’s Council of Realtors, this designation is designed for improving one’s personal and professional habits.
Conducted by NAR, this certification is specialized training in created CMAs for clients and working with appraisers.
Conducted by NAR, this designation is not designed for real estate agents at all, but association executives (AEs), the CEOs of the associations like TAR, FHAAR, and TBBOR.
Conducted by NAR, this designation is designed for appraisers.
Conducted by the Real Estate Business Institute, this certification is for agents looking to improve their negotiation skills and learn new tactics.
Conducted by NAR, this certification is designed for agents who specialize in vacation homes, timeshares, and vacation markets.
Conducted by NAR, this certification is designed for agents who specialize in distressed homeowners negotiating short sales with lenders to avoid foreclosure.
Conducted by the Real Estate Business Institute, this designation is designed for listing agent specialists.
Conducted by SIOR, this designation is designed for commercial agents specializing in industrial and office space.
Conducted by SRES, this designation is designed for agents who specialize in senior communities, those neighborhoods restricted to homeowners age 50+ like Sun City in Georgetown, TX.
Every industry has its own lingo, and this is just a fraction of the jargon for the real estate industry, pertaining specifically to the Fort Hood area. Whenever you see an acronym or term that you do not understand, look it up or ask your agent!