Admit it. There are Real Estate terms that are just not that easy to understand even though you think you do. In fact, a lot of experts say that most of the time, buyers don’t really understand Real Estate jargon that are commonly mentioned or used. Here are some of those that you probably need to understand further.
Vendor Bid is one of those terms that many buyers find confusing. After all, it’s quite difficult to understand why the owner would even bid on their own house if they’re actually selling it. The truth of the matter is, Vendor Bid is a necessary tool to start the bidding and set a minimum number that the potential buyers would accept. In some areas, for instance, NSW, the sellers are allowed to have one bid while in Victoria and Queensland, they are allowed to bid more than one. Typically, the bidding would be done by the auctioneer on the vendor’s behalf and is clearly stated that it is indeed the seller’s bid.
You may have heard of the term “Cooling-Off Period” which is meant to protect buyers. This jargon basically means that buyers are given five days to think things through even after exchanging contracts – which means, they are allowed to change their minds. Cooling-Off Period is common in NSW and QLD when buying via private contract. However, here’s the catch: If you change your mind and decided to back out instead, the buyer will pay 0.25 of the total price to the vendor, which still costs a lot of money if you think about it.
Length of Settlement Period
Settlement date transpires the day the property is paid for by the buyer and the title is then, received. This means that the buyer is already in possession of the property. In areas such as NSW, settlement period begins six months after there was an exchange in contracts but it could also be negotiated. Most of the time, the negotiations happen when the vendor has not found a new home. It is also important to become aware when the stamp duty is due, and even if the settlement period extends, you will need to pay for it on the date it is due.
Company Title and Strata Title
Let’s say you’re buying an apartment, most likely it will be under company title or strata title. Company title basically means that you don’t have an individual title, rather you are paying for a share of a company that owns it. Strata title is different because the buyer is allowed to hold title over the apartment bought.