Acronyms of Real Estate: What Homebuyers Need to Know

Real estate is a regular smorgasbord of acronyms – everything from APR to REO. Here’s a list of the ones you’re likely to run into and what they mean when you’re buying or selling a house:

Acronyms You’ll Hear Associated with Real Estate Professionals

Real estate agents, builders and most other realty-related professions have numerous professional designations, all designed to set them apart from those who haven’t taken advanced courses in their fields. These designations don’t mean that professionals without letters after their names are not as experienced or skilled, but rather only that they haven’t taken the time to further their educations.

Read: How to Build Your Real Estate Team

Let’s start with the letter “R,” which stands for Realtor. A Realtor is a member of the National Association of Realtors, the nation’s largest trade group. NAR says it speaks for homeowners, and it usually does. But in that rare occasion when the interests of its members and owners don’t align, it sides with those who pay their dues.

Read: A Timeline of the History of Real Estate

NAR embraces a strict code of ethics. There are about 2 million active and licensed real estate agents nationwide, and 1.34 million can call themselves Realtors.

NAR members sometimes have the letters GRI or CRS after their names. The Graduate, REALTOR® Institute (GRI) designation signifies the successful completion of 90 hours of classroom instruction beyond the continuing education courses required by many states for agents to maintain their licenses. After the GRI, an agent may become a Certified Residential Specialist (CRS) by advancing his or her education even further.

black family touring a house to buy racial homeownership gap discriminationblack family touring a house to buy racial homeownership gap discrimination

Builders can obtain the GBI – Graduate Builder Institute – designation by completing nine one-day classes sponsored by the educational arm of the National Association of Home Builders. Those who pass more advanced courses become Graduate Master Builders, or GMBs. Remodeling specialists with at least five years of experience can be Certified Graduate Remodelers, or CGRs. And, salespeople can be CSPs, or Certified New Home Sales Professionals.

In the mortgage profession, the Mortgage Bankers Association awards the Certified Mortgage Banker (CMB) and Accredited Residential Originator (ARO) designations, but only after completing a training program that may take up to five years to finish. To start the process, CMB and ARO candidates must have at least three years’ experience and be recommended by a senior officer in their companies.

Acronyms Associated with Mortgage Lending

When obtaining a mortgage, you will be quoted an interest rate; however, perhaps the more important rate is the annual percentage rate, or APR, which is the total cost of the loan per year over the loan’s term. It measures the interest rate plus other fees and charges.

An FRM is a fixed-rate mortgage, the terms of which never change. Conversely, an Adjustable Rate Mortgage (ARM) allows rates to increase or decrease at certain intervals over the life of the loan, depending on rates at the time of the adjustment.

Female client consulting with a agent in the officeFemale client consulting with a agent in the office

A conventional loan is one with an amount at or less than the conforming loan limit set by federal regulators on Fannie Mae and Freddie Mac, the two major suppliers of funds for home loans. These two quasi-government outfits replenish the coffers of main street lenders by buying their loans and packing them into securities for sale to investors worldwide.

Other key agencies you should be familiar with are the FHA and the VA. The Federal Housing Administration (FHA) insures mortgages up to an amount which changes annually, as does the conforming loan ceiling. The Veterans Administration (VA) guarantees loans made to veterans and active duty servicemen and women.

LTV stands for loan-to-value. This important ratio measures what your are borrowing against the value of the home. Some lenders want as much as 20% down, meaning the LTV would be 80%. But in many cases, the LTV can be as great as 97%.

Private mortgage insurance (PMI), is a fee you’ll have to pay if you make less than a 20% down payment. PMI covers the lender should you default, but you have to pay the freight. Fortunately, you can cancel coverage once your LTV dips below 80%.

Your monthly payment likely will include more than just principal and interest. Many lenders also want borrowers to include one-twelfth of their property tax and insurance bills every month, as well. That way, lenders will have enough money on hand to pay these annual bills when they come due. Thus, the acronym PITI (principle, interest, taxes, and insurance).

Real-estate owned (REO) properties are foreclosed upon by lenders when borrowers fail to make their payments. When you buy a foreclosure, you buy REO. Short sales are not REO because, while they are in danger of being repossessed, they are still owned by the borrower.

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Acronyms You’ll Hear During an Appraisal

There is no acronym for an appraisal, which is an opinion of value prepared by a certified or licensed appraiser (though sometimes other types of valuation methods are used in the buying and selling process).

A Certified Market Analysis (CMA) is prepared by a real estate agent or broker to help determine a home’s listing price. A Broker Price Opinion (BPO) is a more advanced estimate of the probable future selling price of a property, and an automated valuation model (AVM) is a software program that provides valuations based on mathematical modeling.

AVMs are currently used by some lenders and investors to confirm an appraiser’s valuation, but they are becoming increasingly popular as replacements of appraisals, especially in lower price ranges.

Other Terms to Know

If you hear the term MLS, you should know it stands for multiple listing service. An MLS is a database that allows real estate brokers to share data on properties for sale, making the buying and selling process more efficient. There are many benefits to both homebuyers and sellers utilizing an MLS, for more information on how to get your home available through an MLS, work with a real estate professional when selling.

Read: What Buyers and Sellers Need to Know About Multiple Listing Services

Did you know? has some serious MLS partnerships, no joke! When you start your home search on, you’ll see accurate property information quickly so you’ll never have to wonder if a home is actually available.

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However, not all properties for sale are listed on the MLS. A home may be a for-sale-by-owner (FSBO), if the owner is selling his or her property without an agent and bypassing an MLS listing. In addition, some agents fail to enter their listings in the MLS for days or weeks at a time in hopes of selling to a list of preferred clients.

Read: Advantages of Buying With or Without an Agent

Finally, you may find yourself buying into a homeowners association (HOA) when you purchase a house or condominium apartment. HOAs are legal governing bodies that establish requirements everyone must adhere to in order to keep the community it oversees running smoothly and ensure property values are maintained.

Lew Sichelman

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Syndicated newspaper columnist, Lew Sichelman has been covering the housing market and all it entails for more than 50 years. He is an award-winning journalist who worked at two major Washington, D.C. newspapers and is a past president of the National Association of Real Estate Editors.


6 Products You Need to Keep Your Home Germ-free and Sanitized in 2020


Looking to turn your house into a healthy haven to protect your family from COVID-19? Green Builder, an award-winning trade magazine dedicated to responsible and sustainable construction, has some ideas for you. The magazine has been named “Best Residential Trade Magazine” by the National Association of Real Estate Editors for seven straight years. Recently, managing editor Alan Naditz posted a list of eight “standout, pandemic-proof products” for a healthier home. We wanted to share our favorite products from that list with you:

Smart Toilet

Kohler’s new intelligent toilet, Eir, has a one-click sanitizer button that activates electrolyzed water and ultraviolet light to clean the unit for what Naditz said is “unparalleled hygiene” against bacteria and viruses. There’s a bidet function, too. It uses a water filtration system that removes impurities, residual chlorine and heavy metals. Also included is a heated seat, customizable cleansing, a night light, hands-free lid opening and closing, automatic flush and a remote.

kohler smart toiletkohler smart toilet
Source: Kohler

Read: Remodel Your Bathroom for Less Than $1,000

Open Sesame

The Wave Switch from Legrand allows you to turn lights on and off with the wave of your hand, minimizing the need to touch germ-prone surfaces. And, as Naditz points out, the switchless design makes it easy to turn on the lights when your arms are full or your hands are messy. It’s an easy, 15-minute do-it-yourself installation available in several colors. But, keep in mind, it does require a special wall plate.

legrand wave hand activated motion light switchlegrand wave hand activated motion light switch
Source: Legrand

Divide and Conquer

Bosch’s Climate 5000 series is designed for individual living spaces and rooms. It’s multi-part filtration system acts as a defense against allergens, odors, viruses and bacteria. In warm weather, the system sends inside heat outdoors. In cold months, it uses refrigerant that is naturally colder than outside temperatures to absorb the heat from outside and transfer it inside. The system does not require large-diameter duct work, so it can be retrofitted into existing homes with minimal construction.

A Clean Bathroom Leads to a Healthy Human

Broan’s Surface Shield Vital Vio® Powered exhaust fan has one light mode for standard illumination and another to kill bacteria. The modes can be run individually or together. The new model can be upgraded with an LED grille cover and light module, or you can install the unit with your choice of inclusions: just the fan, just the LED light, or just the standard bright while grille.

air exhaust fan filters germs and bacteria out of bathroom sanitized homeair exhaust fan filters germs and bacteria out of bathroom sanitized home
Source: Broan

Germ-free Surfaces

The World Health Organization says the coronavirus can live on stainless steel surfaces for days. Sounds like the perfect opportunity to try out a hands-free faucet! Sonoma Forge’s Sans Hands model features an electromagnetic sensor to turn the water on and off, and the finish has antimicrobial properties. When your hands approach the faucet, the magnetic field is interrupted which signals a valve to release the flow of water. When you move away, the water stops. Simple, clean and germ-free!

sonoma forge sink handless germ freesonoma forge sink handless germ free
Source: Sonoma Forge

Read: How Have Cleaning and Hygiene Habits Changed During COVID-19?

Pure Kills

Included with each of Carrier’s new flagship air conditioning and heat pump units is an air purifier that uses “capture and kill” technology to trap up to 95% of pollen, animal dander, bacteria and other pollutants. An electric charge then zaps the cell walls of the pathogens. Note: The purifier has not yet been tested against the novel coronavirus that causes COVID-19.

Lew Sichelman

See more posts by this author

Syndicated newspaper columnist, Lew Sichelman has been covering the housing market and all it entails for more than 50 years. He is an award-winning journalist who worked at two major Washington, D.C. newspapers and is a past president of the National Association of Real Estate Editors.