Property 101: Your home-buying glossary

Published on 2nd February, 2023 at 10:33 am

If you’re getting ready to sign on the dotted line for your first house, make sure you understand all the terms beforehand.

Reading time: 3 minutes

In this article you’ll learn:

• The lingo of property buying so you can make informed decisions on your property-buying journey.
• How the building value calculator can help you spend correctly on your property insurance.

Asking price

This is the price the seller is asking for their property – the number you see in the ads – which may or may not be negotiable. The estate agent will be able to tell you by how much the seller would be willing to drop their asking price for a serious offer.

Buyer’s market

“A buyer’s market occurs when there are plenty of homes available, but not enough qualified buyers to ‘absorb’ them all. Housing supply is high while demand is low,” bond originator ooba CEO Rhys Dyer explains on its website. This usually means that homeowners are under pressure to accept lower prices, since the market is flooded with property for sale – and it’s a great market for first-time buyers.

If you’re looking to purchase a rental property, consider this first.

Conveyancing

This is the legal process of registering a property at the deeds office, and is done by a conveyancer, who is a specialist lawyer. It includes getting the deeds of sale in order, registering ownership and making sure all the finances and payments are in order.

Levy

If you’re buying a flat or a unit in a complex, it’s a sectional title property. Because of this, there are levies to pay – the fees the owner pays to the body corporate every month for the upkeep of the complex or building, including maintenance, insurance, rates and taxes. Make sure you factor it into your budget when working out what you can afford to pay for your property every month.

Market value

This is what a property is worth in relation to other similar properties in the same area. As a buyer, knowing the market value of the property you have an eye on will help when you negotiate a price.

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Mortgage bond

‘Mortgage bond’ and ‘home loan’ are often used interchangeably, but they are not technically the same thing. Your bond is the security agreement for your home loan and is registered at the Deeds Office by your conveyancer. It is a legal document in which you undertake to give the bank your property if you’re not able to repay your home loan. Your home loan is the money the bank is lending you.

Seller’s market

A seller’s market occurs when there are few properties listed for sale, but plenty of buyers ready to purchase. In other words, supply is low but demand is high,” says Dyer. This means you will have to compete with other buyers and could end up paying more than you budgeted for.

Voetstoots

Buying a property ‘voetstoots’ means you are taking it ‘as is’. That means you are buying it warts and all, and it protects the seller from liability for obvious defects. However, it does not shield the seller from hidden problems. “Voetstoots is not designed to shield sellers who engage in fraud or bad faith dealing by making false or misleading representations about the quality or condition of a particular property,” explains Seeff on their website. “Instead, it summarises the absolute need for a purchaser to examine, judge and inspect a property when considering a purchase.”

Looking to insure your new property? This building value calculator can help you get on track to insuring your property for its true replacement value.