Ever gone to a specialist in an industry and they use terms you really don’t understand? Or use acronyms like it is everyday day talk but leaves you scratching your head. “Hey mate, your overhead cam driver separator on the GNC has had it! Gonna need to order a new one” You nod your head out of fear of looking stupid but have no idea what they just said. We have all been guilty of it, but we need to understand exactly what is being said. So here are some quick bites on Real Estate industry speak you have probably heard but may not have understood correctly.
Offers versus Contract
An offer is just that, you the Buyer have made an offer to purchase the home under specific terms and conditions (eg: price, special clauses, deposit amounts, settlement period, etc). If the seller does not accept all your offer conditions but changes something (say the price) that is now a counteroffer and it is up to you the Buyer to either accept this, decline the counteroffer and withdraw or give a counteroffer of their own.
Remember it is only a contract if and when ALL parties agree to the terms and conditions, and until then it is only an offer and or counteroffer. (more about verbal and written offers here)
You may have seen marketing by Real Estate Agents noting the home sold with ‘Multiple Offers’. I never thought about this until a young lady said to me, would you not usually get multiple offers on a home over the course of the listing. Ah, good point.
Multiple offers are intended to mean the property received multiple offers to purchase at the same time. For example, after the first open home, three people submitted offers and so are in competition with each other – multiple offers. If a home received a single offer which didn’t succeed then received another offer three weeks later, this would not be considered multiple offers.
This one does have some people confused. Remember earlier we talked about offers, and once the offer is accepted by all parties, it becomes a Contract. The date this occurs is the Contract Date. Some people incorrectly believe it is when the home settles or when it goes unconditional.
I think the best way to view pre-approval is as an indication only. Yes, it is good to have a pre-approval as it shows you have taken steps to enquire as to how your finances fit. But pre-approval is not a guarantee whatsoever. The quality of the pre-approval can depend on many variables such as the questions the financier asked (did they have a good grasp of your situation), the information you supplied, changes in the financial climate etc. This is why we always suggest Buyers find a good Mortgage Broker as they should be able to give a good indication of the Buyer’s true position.
These are just a few quick real estate bites for now. If you have any terms you would like explained or even any you found to be misleading, please let us know. I am sure we will have another quick bites list very soon.
Written by Shawn Kristofer