When you're in the game of buying, renting, or selling property, you're bound to run into a bunch of new terms and phrases from the property world. It's essential for clients to know these terms to avoid any hiccups later on.
Property transactions can get pretty complex, which is why real estate pros are around. They're there to help folks navigate these deals.
Asking Price
The price established for a home, typically recommended by a real estate expert based on a competitive market analysis and agreed upon by the seller. Depending on market conditions, buyers can opt to submit offers either above or below the asking price.
Bond OriginatorA complimentary service aimed at helping buyers secure the best possible terms for their home loans. Bond originators offer various services to streamline the bond application process.
Conveyancer/Transferring Attorney
A legal expert responsible for managing all the necessary paperwork and legal aspects involved in property transfers.
Deposit
An initial sum of cash provided to the buyer upon the acceptance of a purchase offer. While not legally mandatory, a deposit, usually around 10% of the asking price, can enhance the attractiveness of a buyer's offer and facilitate obtaining the remaining financing.
House Price Appreciation
A growth percentage determined based on average house prices in a specific area, typically calculated at a national level. These averages offer insight into the potential future cost of a property. For landlords and tenants, they provide guidance on fair annual rental escalation.
Interest Rates
Various rates at which interest is calculated on debts, including home loans. Consumers should focus on the Prime lending rate, which serves as the baseline for bank loans, with the actual rate varying based on an individual's credit score.
Off-Market Sale/Pocket Listing
When a property is available for purchase but has not yet been publicly advertised or listed on property portals.
Pre-ApprovalA certificate issued by a bank, indicating a buyer's preliminary approval for a specific loan amount based on their financial capacity. Final loan amounts are determined after a property valuation and receipt of a signed Offer to Purchase.
Reserve Price
The minimum price set for a home when sold through an auction.
Sole Mandate
A written agreement designating a single agent with exclusive responsibility for a set period. Opting for a sole mandate can be more effective, as it allows one agent to secure the best possible sale and simplifies communication for sellers.
Turn-Key PropertyA property ready for immediate occupancy, requiring no further renovations or updates.
Unconditional Offer
An offer to purchase without any additional conditions, such as securing a home loan or selling the buyer's existing home.
Zoning
The classification of the type of property that can be developed on a specific plot of land, regulated by local planning authorities.
FICA
This acronym is a big deal in property transactions and beyond. It's about preventing money laundering, fraud, tax dodging, and identity theft.
FICA stands for the Financial Intelligence Centre Act of 2001, with some updates in 2017. It's part of a bunch of laws meant to keep the bad guys from messing with the financial system.
Under FICA, property folks, like estate agents, are specifically mentioned and have to follow rules like verifying client IDs, keeping records, and staying on the right side of privacy laws.
These rules apply to everyone involved – sellers, buyers, landlords, and tenants. They'll ask for proof of identity, where you live, and maybe stuff from the tax folks and your marriage papers if it's relevant.
The bottom line? FICA is all about keeping the local economy legit and making life harder for the bad guys who want to use the financial system for no good.