A-Z of Real Estate Part One

Agency Agreement –

The legal document binding you to your chosen agent.  Can be for any period of time and can be exclusive or open.  Typical in 2260, agency agreements are for 12 weeks and generally exclusive so you work with one agency but everything is negotiable. 

Buyer –

What it’s all about!  Finding the best buyer for a property, one who might pay a premium and accommodate the sellers’ terms and conditions.  Where will you find your buyer? 

Contract –

Prepared by a solicitor or conveyancer and must be obtained prior to listing the property for sale.  The front page will be completed except for the buyers information and the price paid.  Your real estate agent will provide a copy of this to any prospective buyers. 

Décor –

There are plenty of companies around to help you stage a home and a good staging company can put thousands onto your end sale price. You want to try to appeal to a broad spectrum so neutral colours are best.  You might love the purple wall, but we are not trying to appeal to You.  We want someone else imagining themselves living in the house. 

Exclusive vs Open –

legally binding agreement between seller and a real estate agency.  Do you want one agency overseeing your sale, or to open it up to multiple companies.  (p.s. – you want one!)  An honourable exclusive agent will always offer another agency the opportunity to bring through their own buyers. 

Fee or commission –

This is negotiable but really depends on your area and local customs in that area.  Don’t expect to get the best agent in town and then undercut their commission.  This person is about to negotiate on the price of your house!  Do you really want to pay peanuts (and get a monkey?) In California the fee is typically 5% or 6%. In London it ranges from 1.5% – 4%.  On the Central Coast it ranges from 2% – 4%.  Bear in mind that ½ % difference in commission for the right agent might ultimately put more in your pocket. 

Gap –

The difference between the buyers offer and the vendors expectation-and our job as agents is to close the gap. A good agent will negotiate a buyer UP to the vendor and not just sign paperwork at an unrealistic amount in order to secure the listing.

Handover –

When settlement occurs (typically after 42 days) the real estate agent receives legal notification from both buyers and sellers solicitor.  This is permission to release the keys to the purchaser and the deposit to the vendor.

Interest rates –

Shouldn’t affect your purchase.  1 or 2% difference in RBA rates should make little difference to whether you buy property.  Rates will fluctuate, your long term plan shouldn’t. Get a bigger picture and plan for your future. 

Junk –

Get rid of it!  It’s a great opportunity to have a clear out and no one can imagine living in your property if all they can see is knick knacks, old magazines, broken appliances or any other junk. Carol can advise if necessary.

Keys  –

When selling, you will need to provide a copy of your keys to your agent and those keys should be kept securely locked in the real estate companies key safe (withOUT your home address on them!)  When you purchase, some families  consider changing the locks for their own peace of mind.

Loan –

Make sure you have already spoken to a mortgage broker before you go house shopping.  You should not have to pay a fee to a reputable mortgage broker, and they should find you the best lender for your particular circumstance.  Ask Carol for recommendations.

For part two of everything real estate, coming soon!

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