Thought you could get by on buying your first place with just English under your belt?
Learn the native tongue of estate agents, and get the inside running on your journey to home ownership. Our Hamilton Branch Manager Joshua Leard has the cheat sheet you’ll need.
Asking price: The price at which the property is advertised. The final price may differ from this amount.
Assets: A list of items that are currently owned by someone – may include real estate, home contents, savings or superannuation, etc.
Auction: When a property is sold publicly. An auctioneer asks for bids on price until the highest price is reached. Often performed with a reserve price, which is a minimum price set by the seller. Once a bid is received above the reserve, the highest bid must be accepted.
Certificate of title: A government-issued certificate describing a title reference to a piece of land, the owner of said land and any encumbrances (like a mortgage) registered against the land.
Chattels: Property within a dwelling that can be moved but are considered as part of the property for the purposes of the sale, such as curtains, carpets, light fittings, etc.
Conditional approval: An initial notification from the bank of how much they could lend you, subject to certain criteria, such as the value of the house you’re looking to buy.
Conditional offer: An offer you make to purchase a property, which depends on other factors. These can include getting final loan approval, satisfactory builder’s report, etc. You or the seller can include as many conditions as you like.
Date of drawdown: The date your home loan starts (is drawn down). This is also the date your repayments and interest are calculated from.
Deposit: If your offer on a home is accepted, you’ll be asked for a deposit which may be between 5-20% of the purchase price. It counts as part of the overall payment. If using an estate agent, this deposit goes into an agent-operated trust account.
Equity: Work out the amount you still owe on your home loan. Subtract this amount from your home’s current market value – the resulting figure is your equity – the portion of your home you actually own.
Fixed Interest Rate: An interest rate that is set for a fixed period.
Lender’s Mortgage Insurance (LMI): A one-off payment made to a third party insurer in the event that your deposit amount is less than 20% of the purchase price of your home. LMI is designed to protect the lender should you not be able to continue to meet your repayments.
Loan repayment term: The length of time over which you agree to make repayments on your loan. You can choose your own term from 1-30 years when applying.
Loan to Value Ratio (LVR): The ratio of the amount lent to the valuation of the property. For example, if you have a home loan of $230,000 on a property valued at $260,000, the LVR is as follows – 230,000 multiplied by 100, then divided by 260,000 – 88.5%.
Market value: A price estimate on a property as of right now. Market value is the amount a buyer would be prepared to pay and what a seller would accept at a point in time.
Price by negotiation (PBN): A price reached as the result of negotiation between buyer and seller, usually with an estate agent as a go-between.
Price on application (POA): The withholding of a seller’s ideal price by an estate agent until it is determined whether a buyer is serious.
Principal: The total amount you borrow.
Settlement day: The date payment is made to the seller, and the day you legally own the property.
Variable interest rate: An interest rate that fluctuates according to market conditions. Sometimes known as a floating interest rate.
Vendor: The person selling the property
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