Property market lingo made real easy
What does the property market have in common with super-technical fields like microbiology or computer science? The field comes with a specific lingo - a set of words commonly used but less commonly understood. Here, we'll break down some of the commonly used terms to keep you informed and put you firmly in control of the property purchase process. While certain terms like bonds and interest rates are fairly widely understood, other terms are less clear in the mind of an average property buyer.
When you've found your perfect home, it's time to sign an offer to purchase agreement. This is a document outlining the terms and conditions of the property deal. It's important to make sure you read the document carefully and understand these terms, because an offer to purchase is a legally binding document and once you have signed it, you are committed to purchasing the property, provided that your home loan application is approved, if required. Similarly, if you are the seller, it's too late to get cold feet once you have signed on the dotted line.
If the property you are buying is not part of a complex or a block of apartments, then it is called a freehold property. This means that once the deal has gone through the deeds office, the new owner will assume all rights and responsibilities related to that property. If, on the other hand, you are purchasing an apartment or unit within a block or complex, it is likely to be a sectional title, which means that the property is divided into individual units and you assume ownership of your section only. Over and above the costs of owning your home, as a sectional title owner, you will also need to pay levies which cover the cost of maintaining and insuring the building. You'll also be required to abide by the rules of the body corporate.
The other, less common option that relates to apartments is that the unit may be part of a share block. This means that your investment does not make you the owner of your apartment - rather, you become a shareholder in the share block company and, as a shareholder, you have the right to live in your specific section of the building. It is important to note that buying into a share block is not as popular as buying a sectional title property.
When you are purchasing a property, you may be offered the opportunity to move into your new home before the sale has been passed through the deeds office (before transfer). If you accept this offer, you will need to pay occupational rent, which essentially means you are renting your new home from its previous owner until the paperwork is completed and the property is transferred into your name.
The transfer of a property always takes time. The best-case scenario is usually a few months, but this can be delayed as a result of either the buyer or seller not timeously doing something that they are required to do. For this reason, property sale agreements often have a mora clause built into them. The word "mora" simply means "delay" or "default", and the party who has not met their obligations becomes liable to pay hefty penalties to the other party. The idea behind the concept of mora is to ensure that the transfer process happens as quickly as possible so that nobody is inconvenienced.
If you have chosen to buy a freestanding house, you will need to make sure that you have home owner's insurance. This is different to insuring the contents of your home, and provides you with protection in the event of damage to the physical structure of your home and property. In the case of flooding, fire or a lightning strike, for example, you will be immensely grateful for your home owner's insurance.
There are a wide variety of other terms or phrases that you are likely to hear as you go through the process of finding and purchasing your dream home. The Jawitz Properties team believes that there is no such thing as a silly question and you can contact our team at any time to gain a better understanding of any term you may come across during the process of becoming a home owner.
Author: Jawitz Website