Real Estate Jargon Buster
Real estate, like any other industry or profession, has its fair share of jargon. Some of the terminology is easy to understand, some is not. In fact, even the easy stuff is not that simple if you are new to real estate, especially for those looking at buying their first home.
Below is a list of 10 terms used every day in the real estate world, which should be a good starting point for anyone who is new to property. To ensure that I have used the correct terminology, I have simply taken the terms as defined by the Real Estate Agents Authority (REAA). The REAA is the independent government agency that regulates the New Zealand real estate industry. Their job is to promote a high standard of service and professionalism in the real estate industry and help protect buyers and sellers of property. They also provide information for buyers and sellers, provide guidance for agents and deal with complaints about agents’ behaviour.
1. Agency agreement: A legally binding contract between the seller and the agent. It sets out the terms and conditions on which an agent is appointed, what the agent will do and what they will be paid. If you want to an agent to sell a property then you need one of these.
2. Appraisal: An agent must give the seller a written appraisal of their estimate of the sale price for the property. This must realistically reflect market conditions and be supported by comparable information on sales of similar properties.
3. Conditional offer: An offer to buy a property subject to stated conditions being met.
4. Deadline sale: Deadline sale is a sales method where a property is marketed for a set period with an advertised end date. The vendor is not obliged to accept any offers and can choose to accept an offer at any point during the listing period.
5. Freehold (or fee-simple): Freehold title gives the owner full ownership of the land.
6. Land Information Memorandum (LIM): This provides prospective buyers with important current and historical information that the local council knows about the property and land.
7. Rateable Value: The official estimation of a property’s worth on the market at the time it was valued, under the Rating Valuations Act 1998. Formerly called a “Government Valuation”.
8. Sale and Purchase Agreement Approved Guide: The Real Estate Agents Authority Guide provides information about sale and purchase agreements and the key things you should know. The agent must give both the sellers and the potential purchasers this guide before they sign an agreement.
9. Tender: A tender is a sale method where prospective buyers submit confidential written offers by a deadline.
10. Unconditional agreement: Where a buyer and seller have agreed to buy and sell a property without any conditions. A conditional sale becomes unconditional once all conditions are met.
More real estate jargon busters can be found on the REAA’s website -www.reaa.govt.nz/Pages/Glossary.aspx
If you need help on fulfilling your property dreams, please contact me.
Paul Gardiner - Residential Sales, Barfoot & Thompson
M: 021 220 6450
W: www.barfoot.co.nz/p.gardiner
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