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Ask Our Broker Real Estate Shorthand

QandA WITH PETER G. MILLER

Understanding What those Ads are Trying to Say
BY CHARLES SCUTT
CTW Features
What’s the Deal with
The shortest distance
Credit Repair Companies? between two points may be a
Can One Work for Me? straight line, but the shortest way
to stuff as much information into
a real estate advertisement is to
use acronyms.
Q: I’ve heard about credit repair
companies. How do they work and
are they worthwhile?
Take one look at a home for
sale ad or listing and you’ll quick-
ly discover an alphabet soup of
abbreviations and truncated
terms—from FDR to FSBO. But if
this industry idiom makes you
feel like an idiot, take heart – it’s
easy to learn the short-form lingo
commonly used today to market
and sell homes, say the experts.
“In any profession, there is a
‘shortcut language’ in use,” says
Larry Schooler, a trainer with
Wealth Intelligence Academy,
Cape Coral,Fla.“No matter what
the industry, jargon exists to
some degree.With the increasing
popularity of the Internet, text-
and instant-messaging, wireless
devices, and other abbreviated
forms of communication, a corre-
sponding increase in real estate
acronyms is natural and expect-
ed.
“More people are writing ads
See SHORTHAND Page 2

A: In the same way that you can’t

The Big Ideas Behind Small Houses
change history,you can’t undo past BY PAUL ROGERS
credit problems.What you can do is start a new pattern CTW Features
of credit responsibility by spending less, reducing debt,

paying on time and paying in full.
There are organizations that will seek to renegotiate
balances and terms with credit card companies and
other creditors.Whether non-profit or for-profit,it’s
important to ask about fees and charges.For instance,
how much of your first payment will go to creditors
and how much will go for credit repair services? What
about other costs?
First though, start by reviewing your credit report.
Get a copy without cost by going to www.annualcred-
itreport.com or call 1-877-322-8228. Look for out-of-
date items and entries that factually are incorrect.
In terms of credit reports,“out-of-date”typically
means seven years old for most items, 10 years for
bankruptcies.Inform credit-reporting agencies by certi-
fied mail with a return receipt requested if you find
negative items that are factually incorrect or out-of-
date. Send copies of receipts and checks and other evi-
dence to support your claim. Keep the originals for
your records.
No matter how bad your credit,don’t fall for credit
repair schemes.No, your credit will not be improved if
you complain about every negative item on your credit
report.No, you can’t apply for credit using an employ-
ee identification number instead of a social security
number. Such “file segregation“ schemes are illegal. If
bankruptcy or foreclosure looms, contact an attorney
or legal clinic immediately.
Q: My lender has suggested a loan program
that includes both a mortgage and a home equity
loan. I would borrow $308,000 in the form of a
fixed-rate first mortgage plus I would get a home
equity line of credit. As the mortgage is paid
down, the amount I can borrow on the home
equity loan increases. Is there a pitfall here that I
am missing?
A: You need to look at the specifics of the program.
Is the fixed-rate interest level the best available? How
does the rate for the home equity line of credit com-
See ASK OUR BROKER, Page 2
F
ive words you never thought
you’d hear from a homeown-
er: I need a smaller house.
Yet the concept of downsizing a
home – or doing more with less –
has been gaining favor since the
publication of architect Sarah
Susanka’s “The Not So Big House”
(Taunton,1998).
Susanka espouses the belief
that when smaller-scale homes
are done right,they are more liv-
able,enjoyable and socially
responsible than the ever-expand-
ing floor plans of today’s develop-
ments. (The size of the average
site-built home grew 8 percent
from 1998 to 2004, rising to near-
ly 2,350 square feet,according to
the U.S.Department of
Commerce.)
Jay Shafer has been a longtime
small-house devotee.Shafer,
owner of Tumbleweed Tiny
House Co., Sebastopol,Calif.,has
been building and living in hous-
es ranging from 50 to 750 square
feet since 1997. He lived in the
original 100-square-foot
Tumbleweed model for seven
years before switching to the
smaller 70-square-foot XS House
in 2004.The homes, he say s ,n o t
only suit a pared-down lifestyle,
they’re affordable,ecologically
responsible and simply easier to Tiny houses offer socially conscious living by using less building materials, land and energy.
care for.
“For me personally, my biggest homes. place but still live nearby. struction only, not for land.)
reason for living in a tiny house is People buy them as inexpen- On the idealistic side, they The drawbacks of a tiny house
that I haven’t got the time or sive vacation cabins or put them truly do afford more socially con- are obvious:It’s tiny – “great per-
patience to paint or maintain a in their backyards and use them scious living, using less building sonally, but not as good for
larger house,” he says. as art studios, writer’s garrets, materials, less land, less energy. guests,” Shafer says.
A strong mix of practicality home offices, guest rooms or Fully insulated, tiny houses are That being said, many of the
and idealism lies behind the drive close-but-independent living quar- easy and inexpensive to heat and structures sound smaller than
toward smaller homes. Indeed, ters for a college-age child or an cool, and they’re relatively inex- they feel. Opening the center of
Shafer says about half of the hous- aging parent.Tiny House Co., pensive to buy. Shafer’s models the houses, using a lot of win-
es he builds are for people who Buena Vista,Va., built one home range from about $23,000 to dows and maintaining unob-
intend to live in them full time as for a day nurse to have a private $42,000.A typical 20-foot by 24- structed throughways for traffic,
their primary structure. But half spot to stay overnight, and anoth- foot model from Tiny House Co. means they maintain a sense of
the buyers purchase the struc- er for a mother who wanted her runs about $39,000. (Those
tures to supplement their current handicapped son to have his own prices are for materials and con- See SMALL HOUSES Page 2

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 SHORTHAND
CONTINUED FROM PAGE 1
using the same language they
use in these other forums.This is
a general societal trend that is
naturally expanding into the
business and investing world,”
Schooler says.“Why use 15 char-
acters when three will get your
point across? At the same time,
ask yourself,‘Will those three
characters really get your point
across to the audience you are
trying to reach?’ Brevity is only
efficient when it works.”
Diane Saatchi, senior vice
president with residential real
estate firm The Corcoran Group,
East Hampton, N.Y., says “The use
of acronyms and abbreviations in
real estate ads is largely the
result of the cost of ad space.The
high price has caused us to use
shortcuts to get lots of informa-
tion crammed into a few ad
lines.”
The downside, says Schooler,
is that if prospective buyers
don’t understand the acronyms,
“they might just skip over the ad
or misunderstand the actual deal
being offered. Buyers and sellers
need to be aware of the meaning
of various acronyms and abbrevi-
ations so they don’t waste their
time on properties or deals that
don’t meet their needs.”
To help decipher the vernacu-
lar, there are several recommend-
ed real estate resources, includ-
ing the free online acronym
guide at www.acronym-
guide.com,“Dictionary of Real
Estate Terms” (Barron’s
Educational Series, 2004), and
“Realty Bluebook” (Dearborn
Real Estate Education, 2003).
Schooler says you also can use
any search engine and type in
the acronym followed by the
words “stands for real estate.” For
example, typing in “FROG stands
for real estate” will yield “finished
room over garage.”
Additionally, a professional
real estate agent should take the
time to explain these common
acronyms, says Jonathan D.
Nicholas, regional director for
RE/MAX of Indiana, Indianapolis.
They also should make it a prac-
tice not to speak these acronyms
but alter their language to speak
the words in order to be more
easily understood, he says.
“Instead of telling a client that he
will ‘drop off the CMA prior to
putting the listing into the MLS,’
he should say,‘I’ll drop off the
comparative market analysis
prior to putting your listing into
our Multiple Listing Service.’”
Lastly, Schooler warns that
acronyms and abbreviations
should never be used in con-
tracts or any other official, legal
document. Before you close the
deal,“make sure everything is
spelled out and completely
clear,” he says.
© CTW Features
Ask Our Broker
CONTINUED FROM PAGE 1
pare with other home equity lines? Is there a prepay-
ment penalty for either loan? If yes,how much?
As well, consider your comfort level. Do you really
want so much debt – or potential debt? While the idea
of instantly available credit is attractive, the thought of
instantly available debt should be sobering.
Consumer Alert: Be wary if you receive an unsolicited
e-mail “IRS notification” stating that you’re owed a
refund.The IRS says,“do not click on links contained in
possibly questionable e-mails; instead,go directly to the
site already known to be genuine. For example,the
only address for the IRS Web site is www.irs.gov – any
other variations on this will not lead to the legitimate
IRS Web site.”For refund information, contact the IRS
directly at 1-800-829-1040 and ask for assistance.
Q: We want to buy a new house directly from a
builder. The house is a spec house with certain
upgrades. The price listed and quoted was dis-
counted and we signed a contract. Now the
builder says we have to use their mortgage com-
pany to finance the home or pay a higher price
for the house if we use our own financing. Our
financing is a better deal for us. What can we do?

A: The builder cannot force you to use a specific

lender or closing company, and likely did not.What
often happens is that a builder will say “we’ll offer a dis-
Real estate acronym cheat sheet count of x dollars if you’ll use Smith Lending and Jones
Here’s a list of common abbreviations and acronyms used in real estate ads and listings: Settlements.”You don’t have to take the discount, but if
you do then you also have accepted other term s .H ave
CAM – common area maintenance Hdwd – hardwood floors an attorney look at your contract and see if includes a
ECOA – Equal Credit Opportunity Act Hi ceils – high ceilings trade.
EAL – exclusive agency listing IOM – interest-only mortgage
EMF – electromagnetic field from power lines Lsd pkg – leased parking area Q: Does a private unit development have the
EMP – electrical, mechanical, plumbing LTV – loan to value right to charge late fees?
ERV – estimated rental value Nr bst schools – near the best schools
ESK – eating space in kitchen PITI – principal, interest, taxes and insurance
FDR – formal dining room PMI – private mortgage insurance A:If the CC&Rs – the covenants, conditions and
FMV – fair market value Pvt – private restrictions – allow it, then yes.A PUD really is like a
Frplc – fireplace SFT – single family detached type of government, and like any government it uses
Gar – garage TOD – time of delivery certain tactics to protect group interests.A late fee actu-
UST – underground storage tank ally is far better than foreclosure, something else likely
Gard – garden
WBF – wood-burning fireplace
GFE – good faith estimate to be allowed when late fee notices are ignored. If a
WI – walk-in
Grmet kit – gourmet kitchen PUD says you owe a late fee,take it seriously, just like a
tax notice.
© CTW Features

Peter G. Miller is the author of The Common-Sense

Mortgage and a veteran real estate columnist. Have a ques-
tion? Please write to peter@contentthatworks.com.

SMALL HOUSES
CONTINUED FROM PAGE 1
spaciousness.The structures max-
imize every square foot through a
variety of design tricks,like turn-
ing otherwise unusable space
under stairways into storage.
“The secret to a great tiny
house is knowing what’s neces-
sary and eliminating all the rest
… necessary for happiness,
because all those extras get in the
way,”Shafer says.“A sense of
space has much more to do with
the quality of a place than with
the quantity.A well-designed little
house can feel roomy and a poor-
ly designed mansion can feel
crowded.”
And if the space does get too
cramped,both Tumbleweed and
Tiny House models are designed
to be expanded easily.
The only real problems Shafer
has encountered in building tiny
houses are zoning restrictions
and building codes that some-
times set minimum size limits.
Many of the structures,however,
are sold on wheels, which often-
times puts them outside the juris-
diction of local housing authori-
ties.
To be sure,there likely isn’t to
be a rush of consumers looking
to ditch their bungalows and Tiny houses, ranging from 50- to 750-square feet, sound smaller than they
ranches for the square-footage appear.The houses maintain a sense of spaciousness with open centers,
equivalent of a modern master windows and unobstructed throughways.
bathroom. But Shafer, who hand-
crafts all his structures, has seen a One Tumbleweed home was the case,” Shafer says.“When I
significant increase in his busi- erected on a city rooftop,and built the first one, it seemed
ness.Tumbleweed builds about they easily could be used as infill novel, but now there are a lot of
five homes per year, up from one on small lots or clustered on a books out there on the subject
per year when he started the roof. and a lot of people interested in
company. And he sees more “I figured at some point some- small houses.”
potential in the future because of body out there would want small-
their versatility. er houses and it seems like that’s © CTW Features