Suburban Dictionary: Buyers’ Edition

Welcome to the Suburban Dictionary: Buyers' Edition! In this blog, we will decode some common real estate terms that every homebuyer should be familiar with. Whether you are a first-time buyer or a seasoned investor, understanding these terms will help you navigate the real estate market more confidently. So, let's dive right in!

Subject Removal: When you make an offer on a property, you may include subjects or conditions that need to be satisfied before the sale is final. Subject removal refers to the time period during which you and your realtor review and satisfy these conditions. This may include conducting a home inspection, obtaining financing approval, or reviewing strata documents, depending on the specific requirements of the purchase.

Underwriter: An underwriter is an individual or company responsible for assessing the risk associated with lending money for a mortgage. They review your financial documents, credit history, and other relevant information to determine if you meet the lender's criteria for a loan approval. Underwriters play a crucial role in the mortgage approval process.

Deposit: When you make an offer on a property, you are typically required to provide a deposit as a show of good faith. This deposit is held in trust and can range from a few thousand dollars to a significant percentage of the purchase price. The deposit is usually credited towards the purchase price upon completion of the sale.

Possession Day: The possession day is the date agreed upon by the buyer and seller when the buyer officially takes ownership of the property. On this day, the keys are handed over, and the buyer can move into their new home. It is essential to coordinate the possession day with your realtor and other parties involved in the transaction.

Due Diligence Phase: The due diligence phase is the period during which you have the opportunity to thoroughly research and investigate the property you intend to purchase. This may include reviewing property disclosures, obtaining relevant documents, and conducting inspections. It is crucial to use this time wisely to ensure the property meets your expectations and is a sound investment.

Leasehold vs. Freehold: These terms refer to the type of land ownership. Freehold ownership gives you full ownership of both the land and the property on it, typically for an indefinite period. On the other hand, leasehold ownership means you have the right to use the land and property for a specified period, usually subject to paying ground rent to the landowner.

Understanding these real estate terms is essential to navigating the homebuying process with confidence. We hope this Suburban Dictionary: Buyers' Edition has shed light on some of the commonly used terms and has empowered you as a buyer. Remember, if you ever come across unfamiliar terms, don't hesitate to ask your real estate agent for clarification. Happy house hunting!