Demystifying Some Real Estate Terminology

"Valuation" versus "Market Appraisal"

 

A Valuation can only be performed by a licensed valuer. Banks often require a valuation to support their mortgage lending against a property. Courts may rely on a Valuation in property dispute cases.

A Market Appraisal is performed by a licensed or registered Real Estate professional and is an interpretation of the likely selling price of a property based on the agent's local knowledge and recent comparable sales. Each property is unique, so the Market Appraisal doesn't set out to be pinpoint accurate. Many factors influence the final sale price, so agents try to identify a price range that the property sits in.

When two or more people purchase a property together, they specify the nature of their ownership intentions on the Offer and Acceptance contract document, or at settlement.

Survivorship is a key feature of owning a property as joint tenants - meaning that if one person dies, the ownership of the property passes to the surviving owner or owners automatically. A common ownership arrangement for married couples.

Tenants in Common can specify a percentage share of ownership for each of the owners. Each owner's share can be left to named beneficiaries in a Will and not necessarily to the surviving owners. It's a common ownership arrangement for business partners.

This is a "No Price" marketing campaign. The upper price is uncapped and free to move upward in response to bidding competition between buyers. It is common for the real estate agent to run a blitz marketing campaign in the 30 days prior to the auction to ensure that many buyers are present on the day and competing to buy the property. The vendor is protected against low bids by setting a "Reserve Price". This is best done in discussion with the agent on the morning of the auction. The agent can give advice on setting the reserve based on feedback from buyers during the campaign. The seller is not obliged to accept offers below the reserve. The Auction format attracts attention to the property and focuses buyers to be there on the day. It can be sold before auction day if a good offer comes forward. Properties that fail to sell on auction day often sell shortly after as a result of the publicity generated by the auction.

 

Other forms of No Price marketing commonly used by real estate agents include:

 

"OFFERS INVITED"

"EXPRESSIONS OF INTEREST"

"CONTACT AGENT"

"SET DATE SALE", etc