Your friend mentions her house is “broker protected.” Your real estate agent casually mentions “CMA” and “MLS.” You drive by a sign for an “Open House” -- are you invited? Every industry and profession has its own language. But the world of “realtor-speak” can be particularly confusing, because it involves your most important, most tangible asset: your home. If you own a house -- or are looking for one -- you should know what everyone’s talking about, right? Realtors sometimes use “insider” jargon with homebuyers and sellers. We forget that not everyone is fluent in our language. So here are some terms and acronyms you may hear -- and here’s what they mean.
MLS: “Multiple Listing Service.” This is the database where properties and land are listed. It’s shared by all the real estate agents in a town or area.
CMA: “Comparative Market Analysis.” This term refers to a real estate agent’s analysis of the price of a property, relative to similar properties in a neighborhood or town. Short sale: Any sale of real estate that generates proceeds that are less than the amount owed on the property. This occurs when a lender and borrower decide that selling the property and absorbing a moderate loss is preferable to having the borrower default on the loan. It’s an alternative to foreclosure.
BOH: “Broker’s Open House.” Each town has a different day for brokers to tour homes on the market. Different parts of the country refer to this as a “caravan.” Some agents will allow client showings during this time.
“Brokers protected”: Someone is selling their own home (“FSBO” -- sorry, “For Sale By Owner”). The seller offers to pay a commission to the agent who brings the buyer.
Hubbard Clause: A seller accepts an offer, but the offer is contingent upon the buyer selling his or her own property. The seller’s house remains available for sale. If a second offer is presented to the seller, the first buyer has the opportunity to remove the Hubbard contingency and move forward to purchase the property (typically within 48 hours). If the buyer cannot move forward, the seller may move forward with the second offer. (NOTE: We know a lot about real estate. But we have no idea who “Hubbard” was!)
Under Contract: With signed contracts in place, all of the outstanding contingencies for the purchase of a property have been satisfied. The parties are now waiting to close the transaction. CTS: “Continue To Show.” There’s an accepted offer on a listing, but fully executed contracts may not be in place. Or there may be outstanding contingencies to be met.
Binder: An initial agreement to be superseded by a formal contract drawn by the seller’s attorney.
Good faith deposit: Typically a check for 1% of the offer.
Escrow: An item of value, money or documents deposited with a third party, to be delivered upon the fulfillment of a condition. For example, an earnest money deposit (funds that show a buyer is truly interested in a property) is put into escrow until the transaction closes, at which point it’s delivered to the seller.
KMS: Hey, that’s us! It stands for “KMS Team at Compass” -- your real estate advisory team. With over 130 years’ collective experience, we’re proud to give you superior service and honest, insightful advice. You know what that means: Whatever questions or concerns you have, we’re here for you. Contact us at 203-295-4375 or kmsteam@compass.com.
*BTW: FWIW means “For what it’s worth”!