Buying a Home? Buzz Words to Look Out For

June 21, 2007— -- This story originally aired on October 7, 2005

Owning your home is often described as the "American Dream," but whether you want to buy a home or sell one, it's scary. With so much money involved, it's hard to know if you're getting the best offer for your home, or paying too much when you buy one.

There are a lot of tricks of the trade that can cost you time and money, starting with the language in ads. Real estate listings -- with words like cozy, charming and fantastic -- make everything sound great.

Phil Loriana -- who is not a real estate agent but used to work for them -- was candid with "20/20" about the apartments he shows and the descriptions used in listings. "You really have to have very little conscience, because you know that you need the sale," he said.

Loriana said certain words, like charming, don't mean what you think they do. "It means it's old, it's dark, it's dank and it's small," he said.

The ABC consultants who wrote the best-seller "Freakonomics" say Loriana is on to something. In their book, they explain that conventional wisdom is often wrong.

"Fantastic, charming, spacious, those are terms that are correlated with lower sales prices," said co-author Stephen Dubner.

Dubner's co-author, economist Steven Levitt, compared Chicago real estate listings to home sales, and found that you should expect problems when you see exclamation points and certain words like "charming," "spacious," "great neighborhood" and "fantastic" in real estate ads.

"The dead giveaway for a house that's in trouble is the exclamation point. When you've got exclamation points littered through the listing, that's probably a sign the house has problems," he said.

Many real estate agents told "20/20" Levitt is right that the meanings of certain words are stretched in real estate ads.

"Cozy most likely does mean small," said David Oppenheim of Halstead Properties.

"'Fantastic' is a lazy broker term. If you can't think of anything else, you tend to throw it in," Felicia De Shabris, a broker for Halstead.

By contrast, Levitt found that five descriptors were associated with higher prices: "state of the art," "gourmet," "maple," "granite" and "Corian" (that's a material for countertops).

We watched a real estate agent who was careful to mention some of these things when she was showing a property.