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How Using ‘jargon’ in Your Real Estate Business Can Lead to a Lawsuit

Whether you’re assisting a real estate seller or a buyer, your communication skills can create a positive experience or a negative experience for your client. Clear communication is also very important — so that everyone involved in a real estate transaction understands exactly what you’re telling them. 

‘Jargon’ can get in the way of effective communication. Put simply, jargon is the use of terms or phrases specific to an industry or profession — but that the general public, including your clients, will struggle with. 

One of the key problems with using jargon in real estate is that it increases the chances of miscommunication. Miscommunication can lead to misunderstandings . . .  and  misunderstandings can lead to lawsuits…

Here’s how you can avoid using jargon in your everyday real estate activities — and what the consequences might be if you don’t. 

Step 1 – Review the way you communicate  

Take a step back and reconsider all of your communications. Would the typical prospect really understand all the terms and phrases you’re using? 

This includes areas like:

  • Signage
  • Brochures
  • Website content
  • Emails
  • Telephone scripts 

It’s also important to consider the way you talk to people in person. Are you often using ‘real estate speak’ or acronyms? Are you talking to clients assuming they are real estate experts like you? 

When reviewing the way you communicate, ask yourself these questions:

  • Will my intended target audience understand what I’m saying? 
  • Can I adjust my communications to be clearer to non-real estate professionals? 
  • Am I using long sentences, complex words, or acronyms that I know as a real estate licensee, but others may not? 

Step 2 – Get an outsider’s perspective

The chances are your colleagues will completely understand what you’re saying, because they work in the same industry. They know the acronyms and phrases that are synonymous with real estate. That’s why it can sometimes be useful to get an outsider’s perspective. Ask someone outside of the real estate industry to read your communication materials to check for readability. 

Step 3 – Ask your clients if they understand 

Purchasing or selling a home can be a huge milestone in a person’s life. It’s your job, as the real estate licensee, to guide your clients through the process and to ensure there are no misunderstandings. 

  • Check with your clients each step of the way to confirm they understand what you (or another licensee) have told them, what they’ve read about the property, what the next steps are, what they can expect, etc.
  • This feedback loop can help you to identify terms or phrases that might be confusing, so you can explain them better next time to the next client. 

Get confirmation from your clients that they understand what you’ve explained to them in writing wherever possible. This could be via email or a signed acknowledgement. Documenting the conversations you have with your clients and good recordkeeping can be a savior if you ever find yourself facing a lawsuit sometime in the future. 

Step 4 – Use this checklist when preparing information for clients 

  • Avoid buzzwords

Buzzwords can sometimes seem pretentious, and they are very often used incorrectly, which can cause misunderstandings. For example, ‘paradigm’, ‘synergies’, and ‘cutting edge’.

  • Avoid acronyms 

Using acronyms can save effort in saying long and complicated names and terms. However, unless you know for sure that your audience knows exactly what you’re talking about, avoid them. Considering your audience is your number one priority. Common acronyms in real estate that you might want to spell out instead of abbreviating are:

  • MLS – Multiple Listing Service
  • FMV – Fair Market Value
  • LTV – Loan-to-value
  • FSBO – For Sale by Owner
  • CPM – Certified property manager
  • FDR – Formal dining room
  • FHA – Federal Housing Administration 
  • HB – Half bath
  • POA – power of attorney OR price on application 
  • HUD – U.S. Department of Housing and Urban Development 


  • Don’t use form numbers unless you also can explain what the form is

For example, in Nevada, don’t refer to a Form 547. Instead, describe it as the ‘Seller’s Real Property Disclosure Form’. In Texas, if you’re telling your client about the TXR 1925 Form, you should also tell them what the form is for — it’s a Buyer’s Walk Through Acceptance.

  • Don’t use long sentences in written communications

Ideally, a sentence will be no longer than one or two lines on a page. Long sentences often have superfluous words that don’t need to be there. Make sure your written communications are succinct and to the point. 

  • Practice using ‘Plain English’

If there is a shorter way to say something, do that. For example:

Utilize = Use

Adjacent to = Next to

Commence, Initiate = start

Designate = choose, appoint, 

Failed to = Didn’t

Obtain = Get

The U.S. Government offers some excellent Plain English Guidelines on the Plain Language website. 

Check Your E&O Insurance

If a client misunderstands you because you’ve used jargon, and decides to sue you when something goes wrong, you’ll be glad you have real estate errors and omissions insurance. Your insurer can help you defend a lawsuit, and E&O insurance is a critical tool to protect your business. At CRES, we offer E&O + ClaimPrevent® insurance which provides you with extensive coverage. You’ll also have access to expert real estate attorneys pre-claim, so you can get legal advice whenever you need it.. 

CRES is part of one of the largest insurance brokers in the world. That means we have access to more real estate E&O options than just about anyone else. Let us find you the best coverage for the best price.

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