New to buying or selling? Feel like you’re dealing with a foreign language?
No need to fret, Red Fox is here to help. Let’s decode 10 commonly used terms in real estate lingo, shall we?
1. Vendor vs. Purchaser: The lead roles
Think of it as the Bachelorette of real estate, minus the drama and botox. Mostly. A vendor (Bachelorette) is the seller, and a purchaser (the suitor) is the successful buyer. Simple, right? Just two parties looking for their perfect match.
2. Appraisal: The first date
An appraisal is the equivalent of swiping right on an agent. You do your research, check out their bio, read their testimonials (wouldn’t that be useful on Tinder!) and decide who you think might be a fit for you and your home.
An appraisal appointment should feel like a casual, getting-to-know-you chat, not a proposition. If an agent is putting the hard word on you, it’s time to feign another appointment!
If all goes well, and there seems to be chemistry, by all means discuss getting exclusive (ie listing with them to sell). If the gut is screaming no, next!
3. Offer and Acceptance: The engagement
Here in WA, we use a Contract for Sale of Land or Strata Title by Offer and Acceptance to sell property. Or O&A for short. It’s the “Yes” that says, “Let’s do this!” Make sure you read it carefully; it’s more than a pinky promise, once signed it’s legally binding.
4. Conveyancer: The matchmaker
A conveyancer, or settlement agent as they’re also called, is the legal Cupid. A vendor and purchaser each have their own. Once a home is Under Offer, they, not the selling agent, take care of the legal transfer of the property. Make sure you seek out a good one.
5. LVR: The trust factor
Loan-to-Value Ratio (LVR) is basically how much you’re borrowing compared to the property’s value. Selling a home is like a trust fall – sellers want to know that the offer they accepted is going to hold up; the lower the LVR, the less risky it is for the vendor and lender to take the plunge. Most sellers look for an LVR of 80% or less. If you’re higher than that, you will likely need to pay Lender’s Mortgage Insurance or have a guarantor to offset the risk.
6. Easement: The neighbourly agreement
An easement is like sharing your Netflix password with your neighbour. It’s a legal right to use someone else’s land for something specific – often it’s a right of access to maintain and conduct repairs to the property or services. There are easement burdens and easement benefits – both can be on a title so clarify which is which is.
7. Off-The-Plan: The future fling
Purchasing Off-The-Plan is like buying concert tickets for a band that hasn’t released a song yet. You’re all in, but the show’s still in the making. And you’re not sure when it’s going to be. You cross your fingers and toes you’re gonna love it.
8. Subject to Sale: I want to be with you but…
…I need to extract myself from my other relationship first.
Subject to sale is when you make an offer on a property subject to the sale of your existing property. You need someone to fall in love with your ex so you’re free to move on to the next.
A Subject to sale offer typically has a two business day condition that allows another buyer to potentially claim the home you love if you haven’t yet sold yours. They often end in heartache – it’s worth discussing with an agent what it would mean to make a clean break first.
9. Stamp Duty: The dowry
Stamp duty is the tax the purchaser pays to seal the deal. It’s the real estate price for saying, “I do.” Unlike a marriage, though, you don’t get anything back for it. The State Revenue Office won’t pop around to mind your kids on date night. You’re paying tax for being fortunate enough to (borrow enough money to) buy a home.
10. Settlement Period: The final countdown
The settlement period is the time in between when an offer is accepted and ownership being officially transferred. If you’re the purchaser, you’ll sign paperwork, organise inspections, and arrange your move. If you’re selling, you’ll wait for the purchaser’s conditions to be satisfied, pack and say goodbye to your neighbours and home. It’s like waiting for the final episode of your favourite show: exciting, bittersweet, but hopefully, ultimately, rewarding.
And there you have it! You’re now equipped to navigate the labyrinth of some real estate jargon. Anything else you’d like demystified? Let us know!
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Wanting advice about your own specific home and circumstances? Call me now on 0405 812 273 – we’re here to help.
Red Fox are ratemyagent Agent of the Year award winners in Mount Lawley, Inglewood and Bedford. We specialise in the suburbs surrounding Beaufort Street and beyond.
