The language of real estate
Have a dictionary handy while figuring out the latest property opportunities
By Joanna Beresford 06/04/2009
“I keep trying to understand reality but it always defeats me. I reinvent the world so that I can handle it.” — Filmmaker Terry Gilliam
“Why don’t you write a story about real estate lingo? Nobody understands any of that stuff, and it changes all the time, and what’s with all the acronyms?” a friend asked recently.
It’s true. The language of real estate is as complex as the language of technology, or anatomy, or both, all scrolled into one long, legally binding document.
“If you do write an article like that, you’ve gotta start with the word ‘foreclosure,’” added my friend. “What does that actually mean?”
The word foreclosure refers to “a legal process whereby property pledged as security for a debt is sold to satisfy a debt in the event of a default in payments or terms.” This definition comes from a Web site called realestatewords.com.
To me, what this foreclosure definition highlights is the fact that a person whose home is in foreclosure never owned the home in the first place. The house is just a prop, a token that represents the value of a financial transaction between the lender and the lendee. It’s no revelation, but somehow reading and recording those words hammers home the tricky nature of real estate terminology.
What is it that the person whose house is in foreclosure didn’t actually own in the first place, anyway? You could say “real estate.” That term would refer to a resource that can be measured, often in terms of acreage, but also in terms of available area on an integrated circuit, or space on a real or digital desktop. “Real” itself is originally a legal term designating something fixed or permanent, like a wheat field, a barn or a stone wall. Over time we’ve come to think that the word “real” refers to anything that stays put and that almost everyone can agree upon and describe. But the word still, invariably, relates to ownership.
I have this neighbor whose 4-year-old spends most of his off-preschool hours with a guy named Tomi Brusco. No one besides the neighbor kid has ever seen Tomi Brusco because Tomi Brusco is an imaginary friend. But, while the neighbor kid’s little friend may be imaginary to me, his parents and his siblings, he’s real to the kid. That’s because Tomi Brusco belongs to the neighbor kid, or vice versa. So Tomi Brusco relates to ownership, which relates to 90 percent of the law, and the law defines 90 percent of what we relate to as real estate and its jargon. You see?
Consider this hypothetical turn of phrase: the house that my husband and I bought 10 years ago was purchased in his name. Now that we’re no longer married and he’s no longer making payments on the home because he lost his job, all the money, the furniture, the value that’s been invested in that property, is his to keep or to lose — unless I want to break in during the night or hire a really ferocious attorney. That’s because the house is “in his name.”
But, before you get too comfortable with the solidness of that pronouncement, consider this famous question: What’s in a name? That’s Shakespeare, as you probably already know, at his most ironic, scribbling down words for “Romeo and Juliet,” who could only belong to each other in death because their last names prevented an otherwise happy ending — or beginning.
The point is that the names of things — the language of real estate — is often misleading. A “short sale,” for example, generally takes an exceedingly long time to complete. “Newer” wood floors could mean that the floors are newer than the planet, which wouldn’t be very new at all, even if you’re a strict creationist. A realtor is not the same thing as a real estate agent (and don’t ask me why, I still confuse the terms, but I think it’s like the difference between a doctor and a nurse practitioner, or it might just be the difference between a gal who belongs to a sorority and one who doesn’t …)
Meanings, or at least inferences, don’t stay fixed even when the word fixed appears in the term. For example, people used to think that adjustable-rate mortgages (ARMs) were preferable to fixed-rate loans (no acronym here) because the ARMs allowed a buyer to get into a property at a low interest rate. And then, most often, suffer the consequences. These days we’re all wary of the adjustability that used to sound so attractive.
One cool thing I’ve realized this week is that the word “estate” itself has transformed. Estate used to refer to the land and castles and barns and servants’ quarters and thousands of acres that belonged to members of the gentry. Nowadays, even a pokey little condominium, apartment or saggy, mold-ridden fixer-upper is considered a piece of real estate. In a way, if that’s the case, we’re almost all gentry.
Contact Joanna Dehn Beresford at truwrite@yahoo.com.
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