Know the Meaning of Those Real Estate Terms
Yeats, Mike, Cromie, Mike, Daily Herald (Arlington Heights, IL)
Byline: Mike Yeats & Mike Cromie
We use acronyms everyday. IOU, TGIF, NASA and others have become a part of our language because they simplify communication by shortening lengthy phrases or titles.
As you go through the home buying or selling process, you'll run across acronyms commonly used in the real estate industry such as MLS, FSBO, PITI. However, unless you are familiar with the terms, they are just letters with no meaning. Here's an explanation of some of the more commonly abbreviated words you may see or hear.
FSBO: For Sale by Owner. This term is commonly used in the real estate industry when referring to a property in which the homeowner decides to sell their home without the assistance of a real estate professional.
MLS: Multiple Listing Service. Whether you are selling or buying your home, your real estate professional will more than likely use this service.
A Multiple Listing Service is comprised of a group of real estate brokers who have agreed to share their property listings. This listing is then provided to the group through a database or directory.
If you are buying your home, this is the service that your sales professional will use to search for potential homes for you to purchase. If you are selling your property, your real estate professional can list your home through the MLS.
RESPA: Real Estate Settlement Procedures Act. This act was designed to protect consumers from abuses by lending institutions. It requires lenders to disclose information to potential customers throughout the mortgage process.
Borrowers are to be fully informed about all closing costs, lender servicing and escrow account practices, and business relationships between closing service providers and other parties to the transaction.
For example, at the time you apply for a loan, the lender is required to give you a Good Faith Estimate of settlement (closing) service charges you will likely have to pay.
Another disclosure is the HUD-1 Settlement Statement that you receive at least one business day before the closing. …