Busting Real Estate Jargon
There are countless terms in the real estate industry which can be confusing to both new comers and experienced buyers – as everyone’s buying experience is different. Here is my real estate jargon buster to help you through the home buying process.
Currently the media is emphasising the housing market is a ‘sellers market’– this is when the demand for property is really high and subsequently sellers can set higher price expectations. For buyers this means you will be competing against more people for the house you love.
The best time to buy is in a buyer’s market. This is when the demand for homes is less than the supply of houses for sale. With lower demand prices are usually lower and there is less competition, so you are more likely to get your dream home at the price you want.
When you are reading house listings there is a myriad of definitions which can make it difficult to gauge what the seller is asking for, such as;
- Asking price: The listed price of the property. The owner may be willing to negotiate so this may not be the selling price.
- Reserve price: The minimum price the seller is willing to accept at auction.
- Passed in: This happens at an auction when the highest bid doesn’t meet the reserve price and the house does not sell.
- Friendly Auction: submit your best offer on paper by a set date/time in order to ‘bid’ against other interested buyers. So it’s like an auction but without the audience – and the nerves!
- EOI- means expressions of interest. The agent is seeing what level of interest the house receives before setting a price.
And then when you finally find the house you want you may start to find yourself in unfamiliar territory, as a new realm of jargon becomes apparent! Some of the terms you may hear from your realtor include:
- Would you like the Contract of Sale? An agreement in writing that details the terms and conditions in regards to the sale/purchase of a property.
- Conveyancing: Traditional term for the legal work involved in the purchase and sale of a property.
- A common question asked at open houses is ‘Are your finances in order?’ They are asking if you have finance pre-approval to test how a serious buyer you are.
And lastly the one thing you want to avoid is gazumping. This is when a seller verbally accepts your offer on the house but later sells it to someone else who offers a higher price. To avoid this ensure that there are no delays in exchanging contracts – talk to your conveyancer or solicitor and ensure you ‘seal the deal’ as soon as possible.
Happy house hunting!