Acceleration clause. Addendum. Amortization. Assignment. Oh yes, we’re talkin’ real estate jargon – and we haven’t even gotten through the A’s yet!
Real estate is one of those industries that can lay on the jargon pretty thick sometimes, and often, it just adds to a client’s confusion. Can we stop using some of these in client meetings? If you must, please make sure your client’s clear on what they mean, especially the following:
- Amortization – We just had to start with this one. When a loan is “amortized,” the principal is paid off, so amortization is the paying off of the principal; a simple concept, but shrouded by exotic financial lingo.
- Cloud on Title – Sounds like the title to a progressive rock album, doesn’t it? Clouds are irregularities that may cause someone to change their mind on whether or not they take over a contract; for instance, liens on a mortgage are one of the most common clouds.
- 442 – This is simply the final inspection on a new home before the closing, but it sounds like antiviral medication with that name; why not just tell clients there will be a final inspection on the home?
- Encumbrance – This one has an almost English ring to it, no? An encumbrance can be a mortgage, lease, easement or restrictions – it’s anything that affects or limits the fee simple title to a property. Why not keep things simple, and describe those aforementioned items as things that can affect the client’s fee simple title?
- Addendum – These are additional contracts that go into a real estate contract. So as with “442” and “amortization,” an elegant word seems to have bred with a simple concept.
Regarding jargon in general, Carmen Rodriguez, a Coldwell Banker agent in Edgebrook, put it best: “My job is to communicate and communicate well. I can’t do that if the people on the other end don’t get what I’m saying.”
Eve Bremen, the branch manager for Coldwell Banker Residential Brokerage’s Winnetka office, said often, the problem is not so much complex jargon, but open-ended terms that are used carelessly. For instance, the phrase “You’re Golden,” meant to indicate a client is set for mortgage financing, should be handled with care. Bremen said that in today’s financial environment, there are always caveats that could prove detrimental to the client’s chances at financing, so agents better watch what wording they use.
“You have to be careful with what you say,” she said.
Are there any terms that we missed? Do you avoid any jargon for clarity’s sake? Or is it more client’s misunderstanding of jargon that is the problem?