Realtors and representatives of financial institutions can often forget that some of the terminology used is unfamiliar to those outside their industry.
RE / MAX Southern Africa Regional Director and CEO Adrian Goslett encourages buyers and sellers to ask as many questions as they want to make sure they understand what they are getting into.
“Being uncertain about the terminology could potentially lead buyers and sellers to make less than ideal decisions about things that can have serious long-term financial implications. “The main function of a real estate agent is to assist buyers and sellers through processes that are unfamiliar to them. Customers should never feel uncomfortable asking as many questions as they want, ”he said.
To answer some of the questions buyers and sellers might have, RE / MAX of Southern Africa defines some of the most commonly used abbreviations in the real estate industry.
WIC / SQM / OSP
These abbreviations, and many more like them, are likely to be found in the description section of an online ad. Each of them describes certain characteristics of a house. Real estate agents often use abbreviations such as walk-in closet (WIC), square meter (SQM), and parking on site (OSP) to make listing descriptions shorter and easier to read.
It is not uncommon for the letters “POA” to appear in place of the entry price. Short for price on request, the term exists as a means of concealing the asking price from the general public and can be used for a variety of reasons, usually to ensure that only serious buyers contact them or because the seller would prefer it to remain private and would not want their neighbors, friends or family to know how much their home is worth.
An Offer to Purchase (OTP) is a legally binding agreement that sets out the terms and conditions of the real estate transaction between buyer and seller. The document includes questions such as amount of purchase, date of occupancy, business rent, fixtures and conditions of sale. Once the OTP has been concluded and signed by each of the parties, it becomes the deed of sale of the property.
When dealing with financial institutions, you may come across this term. The loan-to-value ratio (LTV) is a ratio used to describe the market value of the property relative to the loan amount you are entitled to. For example, if you buy a house for 1 million Rand but post a deposit of 200,000 Rand and take out a mortgage for the remaining 800,000 Rand, you will have an LTV ratio of 80%.
Short for Homeowners Association, the HOA exists to protect the interests of a resort or estate. Normally made up of owners within the estate, although sometimes managed by an outsourced management agency, the HOA is responsible for managing the estate’s finances, holding the AGM, and setting up and running the estate. application of the rules and regulations of the field.
While it may seem trivial to know what some of these abbreviations mean, others will have more important implications for the success of the transaction.
“Real estate agents are there to guide you. The more you ask your agent, the better informed you will be and it will help you make smarter decisions about your real estate investments, ”said Goslett.
Contact the editorial staff by e-mail: Marietta Lombard (editor) [email protected], or (journalists) Busi Vilakazi [email protected] , and Lebogang Sekgwama [email protected].