February 2024

What's your real estate IQ?

The real estate industry is chock full of complicated terms and acronyms. Reading a home listing or a real estate article can sometimes seem like everyone is talking in code.

If you already know your stuff, this game will be a fun way to test your knowledge. If you’re newer to the real estate landscape, this is the most fun you’ll have learning new terms.

Let’s get started:

1) What does APR stand for?

a) Allotted Piece of Real Estate
b) Annual Percentage Rate
c) All-Pro Receiver

Answer:

b) Annual Percentage Rate
An APR is the cost of a loan or other financing expressed as an annual rate, including the interest rate, points, broker fees and other credit charges.

2) What does FHA stand for?

a) First Home Applicant
b) Free Homeowners Association
c) Federal Housing Administration

Answer:

c) Federal Housing Administration
The FHA is part of the U.S. Department of Housing and Urban Development; it insures mortgages and loans made by private lenders.

3) What does FSBO stand for?

a) For Sale By Owner
b) Front, Side, Back, Outside
c) First Sale Before Occupancy

Answer:

a) For Sale By Owner
For sale by owner means a property is being sold by the property owner themselves instead of a real estate agent or other broker.

4) What does HOA stand for?

a) Homeowners Association
b) Housing Officers Administration
c) Hall of Acronyms

Answer:

a) Homeowners Association
An HOA is a group of homeowners living in a specific housing area who ensure that the provision and maintenance of community facilities and services abide by certain standards and guidelines.

5) What does ROI stand for?

a) Rent or Insure
b) Really Old Institution
c) Return On Investment

Answer:

c) Return On Investment
ROI is the profitability of an investment, including the purchase and sale of a home or a renovation.

6) What does PMI stand for?

a) Personal Monetary Investigation
b) Private Mortgage Insurance
c) Play Money Inventory

Answer:

b) Private Mortgage Insurance
PMI is insurance for conventional mortgage loans where the borrower has put down less than 20% of the total mortgage. Paying for PMI may mean your monthly payment increases based on your premium.

7) What does RTO stand for?

a) Rent To Own
b) Real Estate Tax Office
c) Ready To Order

Answer:

a) Rent To Own
A rent-to-own property allows renters to make monthly payments with the eventual option of buying the property and having those payments reduce the cost of the property.

8) What does ARM stand for?

a) Answer Reply Message
b) Actuarial Remittance Malpractice
c) Adjustable-Rate Mortgage

Answer:

c) Adjustable-Rate Mortgage
An ARM is a home loan where the initial interest rate is fixed for a period of time. After that, the interest rate changes periodically.

9) What does HVAC stand for?

a) Home Value And Compensation
b) Heating Ventilation and Air Conditioning
c) Hereditary Vascular Aortic Condition

Answer:

b) Heating Ventilation and Air Conditioning
HVAC on a property listing indicates that the property has systems throughout the house for warming and cooling the air as opposed to window units or other standalone appliances.

10) What does MLS stand for?

a) Multiple Listing Service
b) Mansion-Level Swimming Pool
c) Major League Soccer

Answer:

a) Multiple Listing Service
An MLS is a clearinghouse where real estate agents exchange information on property listings and share commissions with members who find buyers.

11) What does FRM stand for?

a) Free Roller Coaster Miles
b) Federal Retirement Management
c) Fixed-Rate Mortgage

Answer:

c) Fixed-Rate Mortgage
Unlike an ARM, a fixed-rate-mortgage rate never changes for the life of the loan.

12) What does FMV stand for?

a) Fair Market Value
b) Free Market Variance
c) Frontier Mountain Vacation

Answer:

a) Fair Market Value
The fair market value is the price for a property that would be agreed on by a willing buyer and seller who both know all the pertinent facts and are not under any pressure to buy or sell in a certain time frame.

13) What does OSP stand for?

a) Optimal Sales Practices
b) Official Seal of Purchase
c) Off-Street Parking

Answer:

c) Off-Street Parking
Off-street parking is not on public roads or streets. Instead, the space is specifically designed for parking and is separate from the regular flow of traffic.

14) What does CC&Rs stand for?

a) Covenants, Conditions and Restrictions
b) Compound Cost and Retail
c) Creedences, Clearwaters and Revivals

Answer:

a) Covenants, Conditions and Restrictions
Often referred to as homeowner association covenants or just covenants, CC&Rs are the HOA’s legal rights and obligations as well as the members’ rights and obligations.

15) What does PITI stand for?

a) Price In Taxable Income
b) Person In The Institute
c) Principal, Interest, Taxes and Insurance

Answer:

c) Principal, Interest, Taxes and Insurance
PITI are the four primary components of a monthly mortgage payment: principle, interest, taxes and insurance.

Thanks for playing! We hope you had fun and learned a thing or two.

A note from your lending specialist

Have questions about any of the terms in this article? Let’s chat. I’m happy to explain them in greater detail.

MAP6170248 | 01/2024

More from this month's issue