15 Common real estate terms that will help you when buying or renting a property
The legal jargon involved in the renting or buying of real estate can get confusing. It is especially tricky to make sense of for first-time buyers who wish to avoid costly pitfalls and mistakes. Most people leave the paperwork to a professional, but arming yourself with knowledge is always prudent. By learning about common real estate terminology, you are better empowered to navigate the process efficiently.
- Administration fee
This is the fee that covers the initial costs of processing a home loan application. This is charged by a moneylender, such as a bank. This fee might include other services, such as a property appraisal, credit report, or other costs.
- Asking price
An asking price is a price at which a real estate seller puts their property on the market. This price may fluctuate according to market trends and demands. Partnering with a real estate agent will enable sellers to determine a reasonable asking price.
A bond is a contract with a financial institution, such as a bank, that outlines the terms of your financing repayment. This is a lending agreement that refers to an amount borrowed against a property, where the property is used as collateral if repayments are no longer possible.
- Buyer’s market
A buyer’s market is a phase in which it becomes favourable to purchase real estate. Conditions that make it favourable for buyers include several homes for sale and low asking prices.
Equity refers to the difference in value between what the homeowner owes the bank and what the home is currently worth on the market.
- Estate agent
A real estate agent is a professional who represents buyers, sellers, or leasing parties when it comes to real estate transactions. They may also assist with property valuations and management. The right estate agent will offer invaluable insight and expertise on the current market and will assist with attaining the best possible outcome for your needs.
When buying, a deposit is a sum of money paid upfront as part of the purchase. This reduces the amount of money one must borrow. When renting, a deposit is paid upfront as security on the property and may be returned if the property is left in good condition after the tenant leaves.
- Home loan
A home loan is when a lender, such as a financial institution, funds the purchase of your property. This loan is then repaid over time.
The lease is the legal contract between a landlord and a tenant. This contract outlines the terms of the agreement for the duration of the rental period.
Levies are fees charged for people who own sectional title properties. These monthly contributions are managed by a body corporate and go towards running the complex or estate.
- Monthly instalments
Successive, fixed payments made on the same date each month to one’s home loan lender in order to settle one’s debt.
- Property valuations
This is a documented estimate of what a property is worth, prepared by a professional property valuer or certified real estate agent.
- Title deed
A title deed is a document that proves ownership of a property and contains all the details of the property.
These refer to services, such as electricity and water, that the government provides, which are usually charged and paid for monthly.
A “buyer beware” clause found in sale contracts means buyers purchase the property as is, and faults in the property must be mentioned upfront. Having a professional inspection done before buying any property will avoid pitfalls here.
If you are in the process of renting, buying, or selling a luxury home, then contact us at Fine & Country South Africa today. Our unparalleled marketing team and superior set of services are sure to impress you.